An Indigenous community in Peru is proposing to buy part of a copper concession from MMG Ltd. and turn thousands of artisanal miners operating there into formal suppliers to the Chinese-owned company.

In what would be an unconventional solution to a longstanding dispute, the Pamputa community is offering to acquire mining rights to an area occupied by about 3,000 artisanal diggers and related workers, according to a document sent to MMG last month and seen by Bloomberg News. The community would commit to formalizing their operations, while MMG would agree to buy its production, according to the proposal.

Community and company representatives are scheduled to meet in Cusco on Friday to discuss the proposal as part of government-facilitated talks aimed at reaching agreements. MMG didn’t immediately respond to requests for comment.

High commodity prices and comparatively loose regulations have drawn hundreds of thousands of informal diggers to Peru’s metals industry in recent years. That in turn has fueled disputes over mineral rights. Large projects owned by MMG and other companies such as Southern Copper Corp. have been affected at a time when the global mining industry is struggling to meet copper demand growth driven by data centers and power-grid expansion.

In MMG’s case, artisanal workers operating on its Las Bambas copper concessions threaten to hold up the development of a third mining pit. The company has filed a slew of illegal-mining complaints against the workers as it seeks access to the area.

In Peru, the world’s third-largest copper producer, ownership of land is legally separate from the right to mine the minerals beneath it. In the case of the disputed Las Bambas site, Pamputa owns the land, where residents have farmed and herded livestock for generations, while MMG holds the state-granted concession giving it rights to exploit the copper below. The dispute over access to the community’s land has complicated MMG’s efforts to develop the pit.

Las Bambas, which accounts for almost 2% of global mined copper, cost $10 billion to build and is the largest single investment in Peru’s history. MMG, a unit of China Minmetals Corp., acquired the project from Glencore Plc in 2014, and production began in 2016.

MMG estimates that the artisinal workers have extracted roughly 90,000 metric tons of contained copper from the site.

Ore extracted by the informal miners at their quarry, known as Apu Chunta, is trucked more than 400 miles to processing plants. The resulting concentrate is sold to traders like Trafigura Group, IXM SA and Glencore, according to the community’s document.

Informal miners in Peru can operate through a controversial registry known as Reinfo, which industry leaders say has been used to shield illegal activity. Created about a decade ago as a temporary mechanism allowing small-scale miners to keep operating while they formalized, Reinfo has been repeatedly extended.

President Keiko Fujimori’s government is seeking to let Reinfo expire at the end of 2026 and replace it with a system giving registered informal miners two years to formalize.