Anglo American says it is worried about delays at new Peru copper mine

LIMA, Oct 7 (Reuters) - Global miner Anglo American said on Friday it was worried about potential delays at its new Quellaveco mine in the Peruvian Andes, after the government signaled it might take a second look at its water permits.

"Some of the positions we have heard from the government regarding the issuance of water licenses for Quellaveco, they obviously generate worry," Claudia Vivanco, Anglo American’s corporate manager in Peru told Reuters.

Peru is the world's No. 2 copper producer and Anglo American's Quellaveco mine is the largest new project set to start commercial operations this year, with an investment of $5.5 billion. Once operational, it will produce around 300,000 tonnes of copper annually.

But Anglo American and Peru's mining sector are worried that a start of commercial operations will be delayed after Peru's ministry of agriculture said it would review Quellaveco's water permits, over concerns from local farmers that it may deprive them of water.

"The government cannot chance technical decisions based on political pressure," Peru's mining chamber SNMPE said in a statement.

Vivanco said Quellaveco had already obtained its water licenses based on a process that was "technical, transparent and public" and that the questions now raised were not sustained by facts. Large-scale mining generally requires significant amounts of water.

"We are looking for a balance between responsible extraction and the continuity of (local) farming," the agriculture ministry said in a statement on Friday, adding it was respectful of private investment.

The water permit, the ministry said, allows Quellaveco to use 22 million cubic meters of water from two rivers that also flow onto Peru's Tambo Valley, where farmers have expressed worry.

Anglo American said worries were unfounded and that its principal source of water is not suitable for agriculture.

"We trust that the government will make the best decisions to benefit the country's development and within the rule of law," Vivanco added. (Reporting by Marco Aquino Editing by Marguerita Choy)