A main mountain road leading to Morococha Photo: Ding Gang/GT

Chinalco workers overhauling an excavator.

 
 
Driving eastward from Peru's capital Lima and up a winding mountain road, you will see Morococha, a city located 4,500 meters above the sea level.

Houses are built of mud bricks or stone blocks with iron sheets covering on top, and some are on the verge of collapse. Dirty water flows into low-lying lands, shaping many filthy pools.

However, less than seven kilometers away, a new town is emerging. Built by the Aluminum Corporation of China (Chinalco), houses with orange roofs stand in line, surrounded by snow-covered mountains. Clean brooks crawl around the town and flow into lakes where waterbirds play on the surface.

At the entrance stands a gymnasium that can house 5,000 people. Four pop music concerts have been held in the gymnasium since it was built last year.

The new town Carhuacoto is equipped with all the facilities indispensable for a modern city such as a hospital, church, market, primary school, nursery, police station and city council. There are 12 playing area specifically for children, and special paths for the disabled.

Six years ago, Chinalco purchased the Toromocho copper mine in Morococha, which made the small town in the Andes famous and attracted wide attention as to whether the Chinese company would be able to handle the relocation work of more than 5,000 residents in the old town.

Better life

Silvia's husband works in the copper mine and the eldest of her three daughters is at university. Their new home has two large rooms, one used as a grocery store and the other as their living room. The family has access to tap water, TV cable and Internet, which were not available in the old town.

"There is even no clean water in the old town, not to mention any place for entertainment. Chinalco bought our old house and gave us a new house here. It's tidy and we have a nice environment for living," the 41-year-old woman told the Global Times.

Peru is rich in mineral wealth. But it was a regular practice for mining companiesto pay a low amount of money to local residents for displacement, leaving them to fend for themselves. Chinalco is the first company in South America that has built a new town for relocation purposes.

The copper mine is scheduled to be put into production at the end of this year and will expand to the old town in seven years, but Chinalco has proceeded with the development of the mine and the construction of the new town simultaneously.

"We decided to push ahead with building the town as scheduled even when the mine's production had to be delayed," Huang Shanfu, president of Minera Chinalco Perú S.A., Chinalco's Peru subsidiary, told the Global Times.

As local residents had been troubled with unclean water for decades, Chinalco built a small water treatment plant for them. They are given ownership of their new house when they move in, while most residents could only rent a house in the old town.

Gilo, who recently moved to Carhuacoto, has a tailor shop in the old town and a job in Chinalco's copper mine. He moved because most residents had already shifted to the new town, which made it hard for him to sustain his business, Gilo told the Global Times.

A total of 1,050 houses have been built and 790 have been filled, accounting for 82 percent of the old town's population, Alvaro Barrenechea, a local Chinalco employee, told the Global Times.

Alvaro said some of those remaining in the old town say they want more compensation from Chinalco, which is commonly seen in Peru's mine development.

Recently the Peruvian congress passed two bills, which said the old town of Morococha is no longer suitable for inhabitation and named the new town as the capital city of Morococha district. This provides more legal support for Chinalco's relocation efforts.

Chinalco's investment would help enhance local employment and improve residents' living conditions, which lays a good foundation for the region's future development, Ezio Buseli Canepa, vice president of Chinalco's Peru subsidiary, told the Global Times.

New model

Localization is a principle that Chinalco has stuck to from the very beginning. About 98 percent of Chinalco's employees in Morococha are locals and the project managers have multi-national backgrounds, with only five Chinese executives.

Despite these efforts, Chinese companies still face multiple problems when investing in Peru. Chinalco is seeking to make residents remaining in the old town to move out by legal means and Shougang Hierro Peru SAA has seen occasional strikes.

"They are creating a new model as they strive to figure out solutions to various problems (they meet in operating outside). That's why they have attracted so much attention from their peers," an employee of a foreign-invested company in Peru, who requested anonymity, told the Global Times.

Hard path

The Toromocho mine boasts a copper reserve as much as 19 percent of China's total reserves and can produce around 250,000 tons of a year, one-third of China's annual output.

However, investing there was no easy task. "Chinalco is a latecomer and the mines that are easy to develop have already been claimed by other foreign companies. We were left with no better option," Huang said.

Hundreds of years of mining has not really benefited local residents. Some miner families have garnered massive wealth through their industrious work, but live in dire poverty themselves for generations.