Shared water, shared responsibility, shared action: Cerro Verde, Peru

  • Share

Water scarcity affects more than 40 per cent of people, a figure that is projected to increase as a result of climate change. By 2050, it is projected that at least one in four people will be affected by recurring water shortages. Ensuring universal access to safe and affordable drinking water by 2030 requires greater investment in infrastructure, sanitation facilities and hygiene programmes at every level. All ICMM members implement the 10 principles that underpin our Sustainable Development Framework. Principle 6 requires companies to continually improve their environmental performance which includes water management.

When the UN’s Sustainable Development Goals (SDGs) officially came into force in January 2016, the nations of the world committed to mobilise efforts to end poverty, fight inequalities and tackle climate change. Business has a significant part to play, alongside governments and civil society, in creating pathways for a greener, safer and sustainable future for us all. Metals and minerals are essential to almost all aspects of everyday life; they enable farming, healthcare, communications, construction, transport and energy and water supply. And they will arguably become more important as they help to deliver the infrastructure required for a low-carbon future. This is one of a series of case studies gathered as part of joint paper with IFC to show how through collaboration comminities, governments, and industry can work together to manage shared water risks.

As unplanned communities were growing on the outskirts of the Arequipa city in Peru, water storage and treatment facilities struggled to keep up. About 90 percent of municipal wastewater was discharged directly into the Rio Chili – causing concerning levels of fecal coliform exposure for humans, agriculture and livestock.

Freeport’s Cerro Verde mine has been a member of a multi-sectorial water users committee since 1983, which enabled the company to better understand local stakeholder needs. As a result of these relationships, Freeport representatives were able to engage directly with farmers, water utility company, water authority and social groups to better understand these challenges and help work towards solutions. Through this dialogue, Cerro Verde agreed to co-finance two dams to better regulate the Rio Chili system, as well as a potable water plant. Then, when social groups began advocating for waste water treatment in the city of Arequipa, Cerro Verde was able to seize an important business opportunity to facilitate its mine expansion plans while also contributing to sustainable development.

Cerro Verde agreed to build a $500 million waste water treatment plant for the city within the mine concession. In exchange, Cerro Verde would receive a portion (1m3/second) of the treated wastewater for mining operations.

Today, Cerro Verde has an agreement with the local water utility (SEDAPAR), which is owned by the district mayors of Arequipa, to operate the plant.

Finding opportunity; creating broader benefit

With the commissioning of the wastewater treatment plant in 2015, approximately 99 percent of city sewage is now treated, up from just 10 percent in 2013. Fecal coliform counts in the river have been significantly lowered, reducing incidents of water- borne illness and improving agricultural outputs.
Meanwhile Cerro Verde’s mine expansion project was completed on schedule and on budget, without any days lost to social protest and now has a secure water supply for its expanded operations.

“This project showed us that companies can be really good partners to resolve environmental problems and create win-win solutions,” noted James Fernández, former President of SEDAPAR’s board. “In this case the environment benefits, water users benefit and mining benefits. It’s a virtuous circle.”

The mine’s relationship with local stakeholders continues to improve as the company maintains its participation in the water users committee. Through the building of shared infrastructure, the bonds have been further strengthened.

The ongoing dialogue means that all sides are able to clear the air before minor issues become major problems. “There may be disagreements from time to time, but there appears to be sufficient trust in the company to enable issues to be dealt with proactively, preventing issues from escalating into conflict,” said Julia Torreblanca Marmanillo, Vicepresidente Asuntos Corporativos, and Sociedad Minera Cerro Verde.

As climate change continues to impact the region and water scarcity becomes increasingly acute, Cerro Verde has committed to continued participation in the committee. This will help avoid future conflicts with local farmers and other stakeholders.

Keeping everybody on board, over and over

This effort required intensive engagement and was not without its challenges. One of the biggest issues was the changeover in key stakeholders driven by the electoral cycle.

From the point of exploring the feasibility of a wastewater treatment plant in 2010 through to the commissioning of the plant in 2015, several key roles changed hands, including agency staff and the elected mayors who own SEDAPAR, the partnering utility.

Keeping people informed and the project moving forward while getting new people up to speed on past discussions and decisions was a challenge. It meant that the plant construction approvals took longer than initially projected. However, it also facilitated the licensing of the mine expansion, since many more stakeholders were well informed and participated in the evaluation and approval process.

“The key is to be transparent and work with government and communities all together,” said Julia Torreblanca. “This helped us understand the priorities of the community and helped people understand how authorities and the mine could support those priorities.”