China’s mining operations in Peru ignore safety rules
From Reuters, Peru miners feel oppressed by China’s Shougang

SAN JUAN DE MARCONA, Peru, July 21 (Reuters) – The residents of Marcona, a desolate, dying port on Peru’s Pacific coast, are not exaggerating when they say they feel abused.

In a town surrounded by desert and with only four hours of water a day, a Chinese-owned iron ore mine is the only source of employment and workers there complain of health risks, low wages and frequent accidents, some of them fatal.

China has billions of dollars of investments in South America ranging from Bolivia to Brazil, but none appear as troubled as Shougang Hierro Peru SA (SHP.LM: Quote, Profile, Research), owned by China’s state-run steel maker Shougang Group.

Peruvian officials, miners and environmental groups accuse it of failing to meet its investment obligations, alienating workers and threatening China’s reputation in its search for raw materials in the resource-rich region.

“Shougang has turned us into slaves,” said Carolina Collantes, an impoverished sweet seller whose husband works 15-hour shifts at the mine for $13 a day. “Marcona has become a source of cheap labor to feed the iron ore production.”

The average miners’ salary in Peru is $33 a day, according to Peru’s National Society of Mining, Petroleum and Energy. In addition to the deplorable safety record and sub-par pay, Shougang has not invested in the local infrastructure.

Peru’s experience with Shougang is sobering for Latin America, which sees fast-growing China as a key source of investment. Countries in the region have signed a variety of trade and tourism deals with Beijing.

The article states that Shougang agreed to invest $150 million over the next three years, but spent only $35 million, preferring to pay a $14 million fine, according to Peru’s government.

“We thought it would be so different. Chinese investment is the big hope for Latin America, isn’t it?”

Not if what you expect is American and European-type investment.