The costs of conflict: Financial consequences of Indigenous rights-related conflicts for mining firms in Peru
Year: 2026
Type: article
Abstract: Conflict between Indigenous communities and mining firms operating on their land often results in negative consequences for all parties, with Indigenous peoples suffering loss of life, land, and health, and mining firms incurring significant financial and operational costs. Despite a growing literature on the impacts of these conflicts on Indigenous communities and firm strategies to manage conflict, there remains a gap in understanding the magnitude of firms’ financial costs, their distribution across functions, and the potential for proactive engagement to reduce such impacts. This paper examines 28 cases of Indigenous rights-related conflicts for mining firms in Peru between 1996 and 2025, drawing on over 920 publicly available documents. Building on the cost typology developed by Franks et al. (2014), we systematically code financial costs by magnitude and business function, such as lost productivity (operations), personnel (human resources), and proactive investment (external affairs). Across cases, lost productivity emerged as the most frequent and expensive cost, followed by redress and capital losses, with total conflict-related costs exceeding $31.9B. We find that higher proactive engagement spending was associated with fewer and less severe disruptions, although managing conflict remains difficult because costs span multiple business functions. The findings contribute to the literature on mining conflict, social risk, and political risk by showing how localized conflict can trigger cross-functional cost cascades. They also suggest that firms, investors, and regulators should treat Indigenous rights-related conflicts as enterprise-level risks that require earlier engagement and cross-functional strategic planning.
Source: Resources Policy
Authors: Doron Tadmor, Witold Henisz
Institution: University of Pennsylvania
Language: English
Subfield: Building and Construction
Field: Engineering
Domain: Physical Sciences
Open Access status: hybrid
Estimated APC paid: $3,810
OpenAlex ID: W7172283392