Protesters opposed to the Tia Maria mine in Arequipa, Peru, have clashed with riot police. Four deaths reported so far. The government declared a state of emergency in the region. They’ve suspended some constitutional rights, including the rights to assemble and travel.

What makes this all the more tragic is that the company already put a 60-day halt to the project. Management sought dialog, to sort out the problems. The opposition pressed ahead with further aggressive tactics. Now the company will surely be blamed for the deaths.

Here’s what investors need to know:

  • The government is pro-mining. It may suppress this unrest, but that won’t resolve the issue. Don’t bet on Tia Maria advancing any time soon.
  • Other mines in the same province are operating normally. It would be a mistake to write off the whole province, but it’s important to be extra careful investing in the region.
  • Peru has seen this sort of thing before. Large mines still get built. It would be an even bigger mistake to write off the whole country.

Bottom line: when you invest in companies operating in Peru, ask management about its community relations. Don’t invest unless they can convince you they have strong local support.