Peru to increase public spending in mining regions to curb social conflicts

LIMA (Reuters) - Peru will increase public spending in mining regions in a bid to de-escalate social conflicts that have impacted mining output, Finance Minister Oscar Graham said on Tuesday.

Peru is the world's No. 2 copper producer and mining is a key source of tax revenue.

But recent disputes between miners and local communities have forced two key copper mines to temporarily halt operations this year, accounting for a combined 1.5% of the country's gross domestic product.

"Considering the issue of social conflicts we are going to pass a decentralized investment package in mining zones," Graham said at the opening of a conference organized by Peruvian mining chamber SNMPE. He did not give a figure for the proposed public spending.

Mining in Peru is concentrated in the historically impoverished Andean region. Local communities there, many of them indigenous, have long complained they have failed to benefit from the mineral riches.

Leftist President Pedro Castillo was elected last year with massive support in mining regions.

MMG Ltd's (MMLTF) Las Bambas copper mine suspended operations on April 20 after two local communities entered company property. Operations remain suspended.

Southern Copper Corp's (SCCO) Cuajone mine resumed operations this month after a 50-day halt.

(Reporting by Marcelo Rochabrun; Editing by Alistair Bell)