LIMA (Reuters) - Peruvian police and protesters opposed to an irrigation project in the country’s South clashed

on Thursday, killing one man and injuring 18, as President Alan Garcia faces a new conflict over natural resources in the surging economy.

The country’s human rights office said the skirmish occurred before dawn in the town of Espinar, 400 miles south of Lima. Police fought with protesters who say the Majes-Siguas II irrigation project will leave Espinar without water, said Silvio Campana of the rights office, which tries to mediate conflicts. The man who died was a bystander.

The project calls for a dam and water system capable of irrigating 95,000 acres of agricultural land in the region of Arequipa.

Peru’s government has encouraged the growth of export-oriented agricultural farms and the petroleum industry to diversify the economy, which traditionally has depended on mining and is forecast to grow abut 7 percent a year.

But dozens of conflicts over natural resources have weighed on Garcia, whose disapproval rating is near 60 percent. Last year, three dozen people died in a clash over land in the Amazon jungle where indigenous tribes oppose oil exploration.

Water is a sensitive issue in Peru as desert covers its Pacific Ocean coast, where most of the population lives, and its Andean glaciers are melting because of climate change.

PRIVATE CONSORTIUM

While the government has issued a decree guaranteeing their water supplies, residents of Espinar are upset that the state investment agency awarded a concession on Monday for the project to a private consortium called Angostura-Siguas without listening to their concerns.

“The province of Espinar has its own needs that have never been considered,” said Nestor Cuti, who leads the group of protesters and wants Garcia’s prime minister to open a dialogue to end the standoff over water.

“With this concession were are condemned to have a lack of water for life,” Cuti said.

Prime Minister Jose Chang said the protests must stop before the government agrees to go to the negotiating table.

He said protesters had tried but failed to take over the nearby Tintaya copper mine of global metals firm Xstrata. Tintaya is an important mine in the world’s No. 2 copper-producing country.

“We are sure we will be able to reach a solution that will be just for the town of Espinar,” Chang told reporters.

Finance Minister Ismael Benavides, who was sworn in on Tuesday by Garcia, represented the government’s investment agency as the head of its water projects at a ceremony on Monday when the contract was awarded.

“I understand the worries about water among the people,” Benavides said on Thursday on RPP radio. But he added: “This project is going to generate 150,000 or 200,000 jobs, and I’m sure much of them will go to Espinar.”