June 5, 2012 / 11:22 PM / 5 years ago

UPDATE 1-Defections over tough tactics sting Peru's Humala

* Humala's drift right risks eroding sway in Congress

* Prime Minister says Newmont project likely to proceed

* Humala says won't be deterred by protests (Adds quotes, details throughout)

By Patricia Velez and Terry Wade

LIMA, June 5 (Reuters) - Three legislators have quit President Ollanta Humala's Gana Peru party and more departures are possible as his crackdown on anti-mining protests and drift to the right erode his working majority in Congress.

The departing lawmakers on Tuesday accused Humala of spurning traditional allies on the left, courting big business and - most importantly - using force instead of mediation to quell vexing social conflicts over the spoils of mineral wealth.

Widespread conflicts over mineral resources threaten to delay some of the $50 billion in investments Peru has lined up for a sector that drives 60 percent of exports in one of Latin America's fastest-growing economies.

The president's far-left father, Isaac Humala, known for ornery comments and conspiracy theories, has called his son a sellout and warned that his presidency will be a failure.

Critics say Humala has abandoned the left.

"Promises made during the electoral campaign have been systematically ignored by the government," Javier Diez Canseco, one of the three dissident lawmakers, said in Congress.

But Prime Minister Oscar Valdes said the 30 percent of voters on the left who once formed the core of Humala's constituency need to recognize he must govern for all Peruvians - regardless of their political stripe.

"Humala isn't just governing for the people who voted for him. He is governing for 100 percent of the Peruvians. The 30 percent can't impose its will on the 100 percent," Valdes told Peru's foreign press club.

Humala won the presidency a year ago by shedding his hard-line image and recasting himself as a moderate leftist who could please foreign investors and spread the country's growing wealth to help the poor.

He took office as the most popular Peruvian leader in decades, promising to neutralize a polarized political landscape and slash the poverty rate, now at 27 percent.

The defections on Tuesday left Humala's party with 43 of 130 seats in Congress. Though Humala has relied on 20 seats from the Peru Posible party for a working majority, he will now have to look to the right-wing party of former President Alberto Fujimori for help in passing bills.

Political analyst Fernando Tuesta said more lawmakers might leave the ruling party.

"There will be more departures in the future if the government loses the political capital to manage severe social conflicts," he said in a column in the newspaper La Republica.

HUMALA SAYS 'EXTREMISTS' WON'T STOP HIM

Despite the party's turmoil, Humala still has an approval rating of more than 50 percent in a country where his predecessors plumbed lows of less than 10 percent in polls.

The economy is growing 6 percent a year, inflation is low, and the government says it is investing in poor rural areas that were overlooked in a decade-long boom. Public investments are on track to rise by 30 percent this year and social welfare spending by 60 percent.

Relying on votes from Fujimori's party would draw criticism from the left, but since taking office Humala has repeatedly said he has abandoned all political ideologies to lead as a pragmatist.

Critics say Humala, a former military officer, is too quick to rely on authoritarian tactics and has criminalized protests stemming from 250 environmental disputes nationwide over water, oil, mining or pollution. The judiciary has arrested local political heads for leading rallies against mines owned or planned by global miners Xstrata and Newmont.

The government said on Tuesday it was confident Newmont would go forward with the most expensive mining project in Peruvian history despite protests over water.

Prime Minister Valdes has blamed left-wing ideologues for fomenting the protests, and some of those leftist leaders are widely expected to make their own presidential bids in 2016.

"There are political movements that don't want dialogue and that want to cause disorder," Valdes said. "We prioritize dialogue but we also must act firmly to defend the state."

Humala took office in July 2011, urging mediation to calm hundreds of disputes nationwide over the spoils of natural resources. Those efforts have averted some clashes with police who were sent in to clear roadblocks set by protesters.

But at least 10 people have died in disputes over natural resources under his watch and dozens of police have been injured. Similar clashes killed at least 174 during the tenure of Humala's predecessor, Alan Garcia.

Humala said the government would redouble efforts to invest in infrastructure, lure investment, and fight extreme poverty.

"We are going to build Peru together. It's not easy to build when others want to destroy. It's not easy to reach an understanding with people who are extremists, but it's possible," Humala said at an event on the poor periphery of Lima where water lines have been installed for the first time. "We'll do this whether extremists like it or not." (Additional reporting by Teresa Cespedes and Marco Aquino; editing by Gunna Dickson and Andrew Hay)

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