In a country that has bet everything on raw materials, the conviction that Pedro Castillo was ousted from the presidency under pressure from the gas and mining lobbies is repeated in every conversation in Cuzco. This is a region with large open pit mines for copper, zinc, nickel, gold and other minerals, and the country's main gas deposit, but many complain that the rents from minerals and hydrocarbons end up in Lima or the foreign.
“The gas is from Cuzco, but they sell it abroad and it doesn't arrive here,” said a merchant who sold cleaning products in the Cuzco market. He was referring to the gas extraction center in Camisea, in the Peruvian Amazon, on the other side of the 6,000-meter peaks of the Andean mountain range. "Castillo wanted the recovery of the gas and mining concessions," he added, while showing on a laptop images of the potato harvest in his community of Apurímac, an important front of protests, also in the conflict of the mega mine of Las Bambas, operated by the Chinese company MMG.
For the Quechua-Aymara, the hated mining and hydrocarbon concessions that are shielded by the Fujimori Constitution of 1993 constitute another chapter of the historical looting of the highlands. The outrage over gas is especially strong because, despite the investments in Camisea, the Andean south is not connected to the supply network by gas pipelines and depends on butane gas for heating or cooking. During the protests, a critical situation was reached in Cuzco due to this dependence on cylinder gas. “The price of the balloon (bottle) has tripled due to the blockades; and we produce the gas...", said one of the student leaders of the protest.
The exploitation of the Camisea gas is managed by a consortium of companies led by PlusPetrol Peru, owned by the widow of the Argentine businessman Luis Alberto Rey, with assets of more than 1,000 million dollars. The other partners include the US Hunt Oil and Spain's Repsol, whose image in Peru has not benefited in recent months from a serious oil spill in the Pacific.
The repeated refusals of the new president Dina Boluarte to resign are also explained here by the extraction concessions: “The right does not want Dina to resign. They need her to stay until 2024 and for her to sign mining and hydrocarbon contracts for a value of 54,000 million dollars, ”deputy Guillermo Bermejo said last month.
In reality, concessions are not the main reason for Castillo's fall from power. The contracts signed with mining companies such as Las Bambas or Antapaccay, from the powerful Swiss multinational Glencore, do not expire in the coming years. The Camisea gas concession, for its part, was signed in 2001 and lasts 40 years.
"Although many say so, Castillo was not about to renegotiate the concessions or the contracts," said economist José de Echave, who was vice minister of Environmental Management in the Ollanta Humala government (2011-2016). The perception that all wealth ends up in Lima is another half-truth. “Companies pay income tax; half stays in the Public Treasury, and the other half is distributed, ”explained Echave in an interview held in his office in Lima.
But, after 500 years of exploitation of natural resources in the Andean highlands, specific errors are part of a general success. The extraction model is indeed at the epicenter of the Peruvian political crisis and of the key demand of these protests: a constituent assembly to design a new Constitution.
Drafted in 1993, after the draconian war waged in the Andean highlands by President Fujimori, the Constitution elevates all concessions to constitutional status. “We are the only country in Latin America that protects with the Constitution the contracts that the State signs with private companies; This is how the hands of the Peruvian State are tied,” says Echave.
This explains the dependence on gas cylinders from the southern Andes. "In order for the territories to be connected through gas pipelines, political will is needed and that is not there, because those who control spending are private companies," explains Echave.
In neighboring Bolivia, on the other shore of Lake Titicaca, the state hydrocarbons company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), which has a monopoly on gas production and distribution, has connected millions of homes to the network at prices much lower than those of Peru. “Bolivia has achieved a massive gas connection. Not here, because that has to be done by the State. And unfortunately we have article 62 of the Constitution, which stipulates that the State cannot enter where private companies are”.
In the first phase of the 2021 electoral campaign, the winning party, Peru Libre, promised to follow the Bolivian model and increase the presence of the State in mining and hydrocarbons. But, faced with a boycott by Congress, Castillo backed down once in the presidency.
When the then prime minister of the former president, Guido Bellido, from the hardest wing of Perú Libre and based in Cuzco, threatened in 2021 to nationalize the Camisea business if the participating companies did not agree to renegotiate the conditions of its extraction, Castillo did not. support. "He was in the government, but not in power," said a Bellido collaborator in Cuzco. According to Echave, Bellido's threat in any case, more than a concrete proposal, “was a gesture with nothing behind it; a staging."
Despite the current truce, the possibility of a resurgence of pitched battles between police and peasants is real in the southern Andes. And this is also no stranger to the extractive economy. During the conflicts in mines such as Las Bambas, “the police forces were hired by the mining companies; this has affected the perception of the police in this conflict”, says Echave. Most of the 48 killed by police shots are of Quechua and Aymara origin.
