Peru Cabinet chief out; interior minister steps in

[December 12, 2011]  LIMA, Peru (AP) -- Peruvian Cabinet chief Salomon Lerner resigned Saturday after less than five months in the post and was replaced by the interior minister, who inherits an unresolved dispute over the country's biggest mining investment.

The reason for Lerner's resignation was not explained, but he was recently involved in failed attempts to negotiate an end to protests that stalled the $4.8 billion Conga gold mining project, which has been plagued by increasingly violent protests.

His resignation letter, posted online by the newspaper La Republica, does not make direct reference to the conflict but hints Lerner was unhappy with the government's handling of it.

As Cabinet chief, Lerner wrote in the 1 1/2-page resignation letter, "our direct mandate has been dialogue and the seeking of consensus to avoid confrontation between Peruvians."

After just one day of talks that Lerner led with local officials who fear the Conga project could taint and diminish water supplies affecting thousands, President Ollanta Humala on Dec. 5 called a state of emergency in four affected northern provinces for 60 days.

Lerner's replacement, Interior Minister Oscar Valdes, is a 62-year-old former army officer who quit the military as a lieutenant in 1991 and became a successful executive at various businesses in the southern coastal city of Tacna, most recently a trucking company and pasta producer. Humala, 49, was a student of Valdes in the 1980s at Peru's military academy.

Humala, who canceled a trip to Argentina for the Saturday inauguration of President Cristina Fernandez, met with Valdes for four hours Saturday but did not comment publicly.

"There is no crisis, only a readjustment in the Cabinet," Valdes told reporters after the meeting.

He said the government would turn "neither to the left or the right" but hew to its centrist approach.

A successful businessman of Jewish descent, Lerner was twice campaign manager for the center-left Humala, a former army officer who lost the 2006 race and then won election last June after toning down his once passionate pro-socialist message.

The fate of the Conga project, whose principal owner is U.S.-based Newmont Mining Corp., is considered key to prospects for other mining investments in Peru, which gets 61 percent of export income from the sector.

A windfall tax that the industry agreed to, and that Lerner played a key role in brokering, is helping to underwrite social welfare programs that Humala promised during the election campaign.

[Associated Press; By FRANKLIN BRICENO]

Associated Press writer Frank Bajak contributed to this report.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.