Peru, Bear Creek in talks on controversial Santa Ana silver mine


LIMA, Oct 3 (Reuters) - Peru's government has restartedtalks with Bear Creek Mining Corp over the Canadiancompany's stalled Santa Ana silver project and hopes work on themine can resume, the mines minister said on Thursday.

"We hope that the Santa Ana issue, which is in thejudiciary, can be resolved as soon as possible so the silverdeposits can be exploited," Mines Minister Jorge Merino toldreporters. "The government is very willing to facilitateuntangling the project."

He said the administration of President Ollanta Humalawanted to reach a "friendly solution" through dialogue with thecompany.

Bear Creek was nearing construction on Santa Ana in 2011when deadly protests against the project led outgoing PresidentAlan Garcia to withdraw permission for the company to operate inthe area.

Bear Creek has challenged that revocation in local courtsand has said it would sue Peru in an international tribunalunder free trade protections unless it could recover the rightto proceed with Santa Ana.

The company has said that starting up Santa Ana in southernPeru was its top priority because it could help finance its moreexpensive $700 million silver project, Corani.

Last week, the government approved the environmental andsocial impact assessment for Corani, which is near Santa Ana.

It was unclear whether local residents, who once stagedlarge protests against Santa Ana because of fears the projectwould pollute water supplies, could be convinced to support it.

Merino said the Humala administration's emphasis onenvironmentally responsible mining and dialogue with communitieswould help ease opposition.

Peru is rife with social conflicts over natural resources.Anti-mining protests in recent years have derailed NewmontMining Corp's $5 billion Conga gold mine and SouthernCopper's Tia Maria copper project.

Bear Creek expects Santa Ana to produce some 5 millionounces of silver per year and Corani to produce about 13million.


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