WRAPUP 1-Peru's leftist government says pulling in investment
* Humala government says getting $5.7 bln new investment By Terry Wade and Teresa Cespedes LIMA, Sept 28 (Reuters) - Peru's leftist government is attracting billions of dollars in foreign investment, will build new energy projects and try to avert social conflict over natural resources, the prime minister said on Wednesday. Salomon Lerner, a businessman who was the architect behind President Ollanta Humala's election in June, said companies have pledged $5.7 billion in investments in the last few days, mainly in the mining, natural gas and hydroelectric sectors. The investments equal about 4 percent of gross domestic product and are a sign that Humala, a former military officer who once railed against capitalism, has reassured investors by appointing conservatives to run the central bank and finance ministry. "We are very enthusiastic about these visits by important companies," Lerner told Peru's foreign press association. But he made clear that the new government is focused on fighting poverty and wants to make sure rural towns get a slice of the country's natural resources boom. Mining and oil projects, he said, "need to be for the well-being of everyone, not just one company," said Lerner, who was behind a new law that raised taxes on mining companies. Despite the changing tax environment, Brazil's Votorantim, the world's No. 3 zinc producer, plans to invest $3.2 billion in Peru over the next five years, mostly on its existing zinc operations and a lead refinery, Lerner said. Votorantim controls Peruvian miner Milpo (MIL.LM) and operates the Cajamarquilla refinery in Peru, a top metals exporter and one of the world's fastest-growing economies, forecast to expand about 6 percent this year. He also said a private company, which he declined to name, will soon announce a $1.7 billion investment to build a 750 megawatt hydroelectric plant in the jungle region between the Apurimac and Ene rivers known as the VRAE. Lerner said the state would likely invest a stake in the project, in part because the VRAE is a virtual no-man's landnrife with coca leaf plantations and cocaine production. Grupo Brescia, a Peruvian conglomerate, will also invest 800 million in a nitrates and natural gas project, he said. TRYING TO BROKER A PEACE Lerner, who took the job running Humala's cabinet in July, is trying to avert a massive protest that is slated to start on Monday against Southern Copper (SCCO.N), one of the world's top copper mining firms. Authorities in Tacna region say they want Southern Copper, a unit of Grupo Mexico, to stop using groundwater that it relies on to operate two copper mines -- Toquepala and Cajone. Tacna's president, Guillermo Chocano, said miners in the desert region should rely on desalinated seawater instead. He and provincial mayors have said they will strike starting on Monday to press their demands. Leaders in the region say they need more water for agriculture and residents. But Lerner said the strike, which would likely block roads and access to mines, will be averted and water deliveries to one of the world's biggest copper miners will not be affected. "We are ready to open a working group on this," Lerner told reporters. "The strike won't go forward." If the protest is called off it would be a crucial success for the government, which was elected on promises to calm debilitating social conflicts over natural resources in Peru that often turn deadly and delay new mining and oil projects. Humala this month passed a "consultation law" that aims to make mining companies and communities negotiate settlements to thorny environmental and economic issues, but it has not been implemented yet. Southern Copper, which declined to comment, runs the Ilo smelter in Tacna and the Toquepala and Cajone mines. It is currently trying to expand Toquepala and win approvals for another mining project, Tia Maria, which has faced strident opposition over water supplies.
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