Heavily outnumbered police holed up in their barracks Friday in this paralyzed regional capital during a second day of rioting by indigenous protesters opposed to a planned silver mine in Peru's southern highlands.
The mostly Aymara Indians had been peacefully demonstrating for more than two weeks demanding Peru's government revoke the license for the Canadian-owned Santa Ana mine, mainly with a blockade that paralyzed commerce at the nearby Bolivian border crossing.
The protest by some 10,000 people from both sides of the border turned violent Thursday when rioters attacked the tax office in Puno, hauling files and furniture into the street and setting them ablaze. Protesters smashed windows at other public buildings and banks and burned several vehicles.
Private and public businesses were shuttered Friday along with schools, restaurants and markets. Protesters set fire to a customs warehouse, destroying at least 20 cars. Firefighters were unable to extinguish the blaze because police were absent.
"They've retreated to their posts and aren't going into the streets by order of Lima," a police officer told The Associated Press by phone, speaking on condition he not be quoted by name because he wasn't authorized to give public statements.
The vice president of Bolivia's trucking association, Erland Melgar, told the AP that about 600 trucks, many carrying food exports to Peruvian ports, were stranded on the Bolivian side of the border and about 180 on the Peruvian side.
The silver mine in dispute is owned by Bear Creek Mining Corp., a company based in Vancouver, British Columbia, that says it has invested $25 million in the project and had hoped to begin production next year.
Protesters say they fear the mine will contaminate Lake Titicaca, hurting fishing and farming.
Bear Creek's director, Andrew Swarthout, said the mine would have no impact on South America's biggest lake, which straddles the border between Peru and Bolivia. He said it isn't in the same drainage basin as Titicaca.
Swarthout told the AP the project is supported by local communities and would directly benefit with 1,000 jobs. The mine would use toxic cyanide to separate out the silver in what Swarthout called a common and proven technology. An environmental impact statement is under government review.
The trouble in Puno comes less than two weeks before Peru's June 5 presidential run-off election.
The strike's leader, Walter Aduviri, told Radioprogramas radio that if mining and oil exploration are not halted in Puno there will be no voting in the region.
"I didn't make the decision, the people did," he said.
That could hurt the leftist candidate in the election, former army officer Ollanta Humala, for whom Puno is a stronghold. Humala is less business friendly than his opponent, Keiko Fujimori, who has a slight lead in opinion polls.
Humala says that if elected he would seek to make mining companies pay higher royalties _ and make natural gas cheaper for Peruvians. Fujimori, daughter of imprisoned former President Alberto Fujimori, supports the status quo, which has been favorable to mining investors.
Companies have pledged more than $40 billion in investments in Peru's mining sector in the coming decade. Peru is a top exporter of gold, silver and copper, and mining accounts for 68 percent of its export revenues.
Officials in President Alan Garcia's government have said it would be unconstitutional to meet the protesters' demand and cancel mineral concessions.
"There are many companies watching this situation," Bear Creek's Swarthout said. "If we run into serious problems and are not able to complete our investment on this project or another couple of projects that we're looking at, other companies are going to take pause as well."
Peru's recent mining boom, spurred by a spike in global commodity prices, has underpinned an economy that averaged 7 percent growth annually over the past decade.
An economist who follows mining's impact, Epifanio Baca of the DESCO think tank, said the Puno unrest is only the latest expression of growing discontent with a government that "has continued to grant mining concessions automatically without any consideration for the opinions of local authorities or communities."
In Puno province alone, mining concessions nearly tripled in area to 6,330 square miles (1,640,000 hectares) from 2002 to 2010, Baca said.
Last month, the government suspended the Tia Maria copper mining project in neighboring Arequipa province after three protesters died in clashes with police. The peasants opposed to the Southern Peru Copper Corp. project feared it would contaminate their water.
Associated Press Writers Franklin Briceno, Martin Villena and Frank Bajak in Lima, Peru, and Paola Flores in La Paz, Bolivia, contributed to this report.