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Socialist Castillo sweeps Peru’s key mining regions

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Peru’s key mining regions overwhelming supported socialist Pedro Castillo, who looks on track to win the Andean country’s tight presidential election and has pledged to sharply hike taxes on firms operating in the world’s no. 2 copper producer.

The high support in districts where key mines are located underscores how tensions have burst through after years of conflict between mining firms and the local communities who often say they are left behind and do not share in the wealth.

In mining provinces such as Cotabambas, Espinar and Chumbivilcas, over nine out of 10 people voted for Castillo, election data show, propelling him to a narrow but sustained lead ahead of conservative rival Keiko Fujimori.

Those regions are home to major mines such as the huge Las Bambas copper mine, operated by China’s MMG Ltd, Glencore’s Antapaccay and Constancia of Canada‘s Hudbay Minerals. In Chumbivilcas Castillo won 96.5% of votes.

“The people have awakened,” Castillo told supporters on Thursday night. He has previously criticized mining firms for “plundering” the country’s wealth and has maintained taxation on mineral profits will have to rise sharply to raise funds.

Overall, the election data showed that Castillo received more than 65% support in at least 10 provinces where key copper, gold, silver, and zinc mines are located, giving him a strong mandate in those areas to push reforms.

The election has not yet officially been called, but Castillo is expected to hold on to his narrow 50.2%-49.8% lead after gaining strong support from poor rural areas with pledges to redraft Peru’s constitution and redistribute mineral wealth. (Graphic: Peru: Mines and votes – https://graphics.reuters.com/PERU-ELECTION/yxmvjaerepr/chart.png)

 

Fujimori, a divisive but market-friendly candidate, had looked to lure support from mining regions with a pledge to give funds raised from mining directly to local communities, but the move appears to have fallen short with voters.

Castillo meanwhile promised a far larger shake-up, with plans to retain up to 70% of mining profits, which he wants to invest in healthcare and education reforms, especially in mineral-rich areas that have high poverty rates.

Mining firms have largely waited on the sidelines to see how things shake out, hopeful that a split vote and fragmented Congress, where no party will have a majority, will help temper any sharp reforms.

“We need to recognize what happened here and that what has led to the polarization is the frustration of years due to the political instability and the inefficiency of the state,” said Roque Benavides, president of Buenaventura mining firm.

He denied that the issue was with the mining industry, though said that firms could be compelled to make voluntary contribution payments in discussion with a new administration.

“I feel that the political circumstances could lead us to that a little. But nothing will be achieved if there is not efficient spending and investment,” he added

The mining sector represents some 60% of Peru’s total exports and will be key as the country looks to bounce back from the world’s deadliest per capita COVID-19 outbreak, which has triggered an economic collapse and sharp rise in poverty.

The strong support for Castillo was not only in areas where large mines are already developed, but also where new mining sites are being built, an analysis of the data showed.

He received some 86.3% of he vote in the southern district of Torata, where Anglo American and Japan’s Mitsubishi are developing the $5.3 billion Quellaveco copper mine, set to begin production in 2022.

In the area of Haquira, home to a $1.8 billion planned project by Canadian First Quantum, 96% of the residents chose Castillo over Fujimori.

 

(Graphic: Castillo v Fujimori – https://graphics.reuters.com/PERU-ELECTION/yxmvjabwzpr/chart.png)

 

(Reporting by Marco Aquino; Editing by Adam Jourdan and Marguerita Choy)

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Brazil’s Vale says output begins at Reid Brook nickel deposit in Canada

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Vale’s Voisey’s Bay nickel mine in Northern Labrador has started the production at its Reid Brook deposit, the Brazilian miner said in a securities filing on Tuesday.

Vale said the Canadian Reid Brook and Eastern Deeps mines are likely to produce 40,000 tonnes of nickel by 2025.

 

(Reporting by Carolina Mandl; editing by Jason Neely)

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EU, U.S. agree to talk on carbon border tariff

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The United States and European Union agreed on Tuesday to hold talks on the bloc’s planned carbon border tariff, possibly at the World Trade Organisation, EU chief executive Ursula von der Leyen said.

U.S. President Joe Biden met European Commission President von der Leyen and European Council President Charles Michel on Tuesday for a summit tackling issues from trade to the COVID-19 pandemic.

The leaders also discussed climate change policy, including the EU’s plan to impose carbon emissions costs on imports of goods, including steel and cement, which the Commission will propose next month.

“I explained the logic of our carbon border adjustment mechanism,” von der Leyen told a news conference after the summit.

“We discussed that we will exchange on it. And that WTO might facilitate this,” she said.

Brussels and Washington are keen to revitalise transatlantic cooperation on climate change, after four fractious years under former president Donald Trump.

On Tuesday, they outlined plans for a transatlantic alliance to develop green technologies and said they will coordinate diplomatic efforts to convince other big emitters to cut CO2 faster.

But the EU border levy could still cause friction. A draft of the proposal said it would apply to some U.S. goods sold into the EU, including steel, aluminium and fertilisers.

Brussels says the policy is needed to put EU firms on an equal footing with competitors in countries with weaker climate policies, and that countries with sufficiently ambitious emissions-cutting policies could be exempted from the fee.

The United States and EU are the world’s second- and third- biggest emitters of CO2, respectively, after China.

A draft of the EU-U.S. summit statement, seen by Reuters, repeated commitments the leaders made at the G7 summit at the weekend to “scale up efforts” to meet an overdue spending pledge of $100 billion a year by rich countries to help poorer countries cut carbon emissions and cope with global warming.

It did not include firm promises of cash. Canada and Germany both pledged billions in new climate finance on Sunday, and campaigners had called on Brussels and Washington to do the same.

The draft statement also stopped short of setting a date for the United States and EU to stop burning coal, the most polluting fossil fuel and the single biggest of greenhouse gas emissions.

Brussels and Washington said they will largely eliminate their CO2 emissions from electricity production by the 2030s.

 

(Reporting by Kate Abnett, additional reporting by Valerie Volcovici; Editing by Marguerita Choy, Andrew Heavens and Barbara Lewis)

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U.S. fine Air Canada $25.5 milliom over delayed refunds

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The U.S. Transportation Department said on Tuesday it was seeking a $25.5 million fine from Air Canada over the carrier’s failure to provide timely refunds requested by thousands of customers for flights to or from the United States.

The department said it filed a formal complaint with a U.S. administrative law judge over flights Air Canada canceled or significantly changed. The penalty is “intended to deter Air Canada and other carriers from committing similar violations in the future,” the department said, adding Air Canada continued its no-refund policy in violation of U.S. law for more than a year.

Air Canada said it believes the U.S. government’s position “has no merit.” It said it “will vigorously challenge the proceedings.”

Air Canada obtained a financial aid package this spring that gave the carrier access to up to C$5.9 billion ($4.84 billion) in funds through a loan program.

The carrier said it has been refunding nonrefundable tickets as part of the Canadian government’s financial package. Since April 13 eligible customers have been able to obtain refunds for previously issued nonrefundable tickets, it said.

The Transportation Department disclosed it is also “actively investigating the refund practices of other U.S. and foreign carriers flying to and from the United States” and said it will take “enforcement action” as appropriate.

The administration said the Air Canada penalty sought was over “extreme delays in providing the required refunds.”

Refund requests spiked during the COVID-19 pandemic.

Since March 2020, the Transportation Department has received over 6,000 complaints against Air Canada from consumers who said they were denied refunds for flights canceled or significantly changed. The department said the airline committed a minimum of 5,110 violations and passengers waited anywhere from five to 13 months to receive refunds.

Last month, a trade group told U.S. lawmakers that 11 U.S. airlines issued $12.84 billion in cash refunds to customers in 2020 as the coronavirus pandemic upended the travel industry.

In May, Democratic Senators Edward Markey and Richard Blumenthal called on carriers to issue cash refunds whether flights were canceled by the airline or traveler.

($1 = 1.2195 Canadian dollars)

(Reporting by David Shepardson in WashingtonAdditional reporting by Allison Lampert in MontrealEditing by Matthew Lewis)

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