Peru proposes law to ground wildcat mining tools

Reuters Business News
Posted: Mar 18, 2011 2:41 PM
Peru proposes law to ground wildcat mining tools

LIMA (Reuters) - Days after a clash between wildcat miners and police left two dead in eastern Peru, the country's Environment Minister has proposed a law banning dredging equipment used to extract gold from the Amazon river basin.

The law proposed on Thursday aiming "to protect the environment and public health" in Amazonia will likely be debated in Congress next week. It is the latest phase of an assault on illegal mining launched just months before President Alan Garcia's term ends.

Earlier this month, the government sent 1,000 police and infantrymen to the Madre de Dios region, where around 10,000 people are part of an enormous, unregistered mining industry that has turned one of the world's most biologically diverse places into a mercury infused construction zone.

The troops began destroying boats and mining equipment, leading to a mass protest that escalated into violence on Tuesday, leaving two dead and more than 30 injured, some with bullet wounds.

The government forces stopped destroying equipment after a dialogue with protesters yielded an agreement to work to formalize the mining sector, according to local media.

But if passed, the proposed law would give the government broad power to ground mining equipment in the region.

Peru is the world's No. 6 gold producer and about 10 percent of its gold comes from Madre de Dios, near the border with Bolivia and Brazil.

Social conflict over natural resources has become a central theme in Peru's April 10 presidential race as a third of Peruvians live in poverty and many have been left out of a commodities boom that fueled a past decade of strong economic growth. Garcia is not eligible to run.

(Reporting by Caroline Stauffer and Dante Alva; Editing by Marguerita Choy)