Mining giant Anglo American has reached a $3.3 billion agreement with Peru to exploit the Quellaveco copper deposit after more than a year of talks, energy and mines minister Jorge Merino said Friday.
Merino said he hopes the agreement, which includes pledges to protect the environment and support the local community, will be a model for another massive mining project that has faced violent opposition.
The Quellaveco deposit, in the Moquegua region about 1,200 kilometers (745 miles) south of Lima, is estimated to hold nearly a billion tons of copper and molybdenum, used mainly to strengthen other metals, like steel and cast iron.
Neither Peru nor Anglo American has specified the duration of the $3.3 billion investment, but the mine is expected to go onstream in 2016 and produce 220,000 tons of copper a year for 40 years.
The agreement "fulfills the new conditions imposed on mining companies by the government (to promote) harmonious long-term co-existence," Merino said.
The regulations require companies to guarantee the local population access to water, to protect the environment, and to employ people in the local community or help create jobs indirectly.
Anglo American will also create a special fund of more than $300 million, aimed at financing infrastructure and agriculture projects.
Merino said he hoped a similar agreement could be negotiated for US-based Newmont's planned Conga gold mine, in the northern Cajamarca region. The $4.8 billion project has been dogged by months of demonstrations by local communities who fear the mine will pollute lakes and rivers.
Recent clashes between protesters and police left five people dead.