Corporate Conquistadores: Peru’s Mineral Extraction Industry Boosts Economy While Rural Poor Continue To Suffer – Analysis

by COHA for Eurasia Review

Jul 23, 2013


When promoting the industry, many mining companies advocate employment opportunities for rural peoples. However, such opportunities do not provide sufficient wages, and workers are exposed to hazardous conditions. Since the physical capital used in mineral extraction is often imported and not developed within Peru, the industry fails to generate significant direct and indirect employment. Today, locals increasingly question whether mining corporations will follow through on their enticement of employment opportunities as, historically, the companies have not kept their promises of a bounty of jobs to follow. They began to doubt that jobs would materialize in 1992 when the Peruvian government, then under the control of President Alberto Fujimori, initially privatized their holdings on the mineral extraction industry. At that time the Shougang Corporation, a Chinese firm that purchased Hierro Peru in the Marcona region, fired local employees and brought in 350 of its own workers, causing widespread anger and distrust by local governments. [7] While companies have since pledged to prioritize jobs for local populations, the suspicion over promises of employment lingers and the nature of the business remains a disappointing source of quality employment opportunities. Simple government quotas or company employment policy cannot easily remedy the lack of available jobs in the mining industry, as it is an inherent complication of an economic system dominated by the extractive sector.


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