ANALYSIS-Miners invest big in Peru, signal end of crisis

* Xstrata, Chinalco and Anglo American among top investors

* Govt. says outlays to hit $30 bln over eight years

* Miners expect to see rise in social conflict

AREQUIPA, Peru, Sept 18 - Mining companies in resource-rich Peru, buoyed by rising metals prices, are aggressively investing in new mines and confidently betting the global economic crisis is nearly over.

The investments are among the first in the sector since metals prices collapsed last year and show that projects that had been delayed are back on the agenda.

Construction is set to start on Chinalco's $2.2 billion Toromocho copper project next year, while work at Xstrata's $5.1 billion Antapaccay and Las Bambas projects is scheduled to begin in the last quarter of next year and 2011, respectively.

Miners are expected to plow $30 billion in projects over the next eight years, according to Peru's trade ministry, in developments that were on display this week at the 29th biannual Perumin mining convention in Arequipa.

"There is a sense of optimism, a desire to return to work, to restart projects and to mine more," said Hans Flury, president of the National Mining, Petroleum and Energy Society in Peru.

PLANNED PROJECTS

Besides Chinalco and Xstrata, a number of other big foreign firms and local Peruvian miners have said they are planning to invest big in Peru in the coming years.

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"They have made enormous investment announcements ... things that a few years ago would have been unthinkable and that affirm Peru's position as an attractive place to invest," said Pedro Sanchez, the country's mining and energy minister.

Anglo American said this week it expects capital expenditures of between $2.5 billion and $3 billion for its copper project Quellaveco, which is forecast to start production in 2014. The company has not yet set a start date for construction.

Peruvian miner Milpo, one of the country's largest zinc and lead companies, said it plans to invest $300 million to develop its polymetallic Hilarion project.

Milpo has said construction on the development, which is in the studies stage, could start as early as next year.

MORE MONEY, MORE PROBLEMS?

But as investments in Peru rise, mining companies are bracing for a parallel increase in community opposition to their projects.

"There's a direct correlation between investment and conflict," said Carlos Santa Cruz, Newmont Mining's vice president of operations in South America.

Large investments lift the hopes of people living in areas close to operations, he said.

"And one mining company, or two mining companies, cannot meet the expectations of an entire region," said Santa Cruz.

Conflicts between communities and mining companies are common in Peru, where they often delay production and in some cases, have forced projects to be scratched altogether.

Gerald Wolfe, president of Chinalco in Peru, said he considers social problems to be the biggest, single risk of mining and that he sees no easy solution.

"Largely, people outside of Lima, in the poorer parts of the country, really feel -- rightly or wrongly -- that they are not receiving their fair share of the benefits of mining," said Wolfe.

He added: "I don't see protests stopping any time soon."