The "popular vote" in Tambogrande, which lies in a fertile valley on Peru's arid desert coast some 630 miles (1,050 km) north of Lima, will give townsfolk chance to air their views on the $315 million metals project, which has been explored since 1999 by Canadian mining firm Manhattan Minerals Corp .

Manhattan Minerals is due to present an environmental impact report on Tambogrande in July and has until May 2003 to decide whether to launch open-cast development of the project.

But some residents fear it could pollute the river that irrigates the valley, a prime fruit-growing area particularly prized for mangoes and limes for domestic consumption in Peru and export. The area's fruit production is worth $105 million a year, said Mayor Rengifo.

Tambogrande is Peru's top producer of limes - a key ingredient of ceviche, the national dish of marinated raw fish. Opponents dressed up as limes have marched in the streets and posters blast the mine as an attack on Peru's favorite dish.

But the Peruvian government has refused to recognize the popular vote. State human rights officials, the church, Manhattan Minerals and the government have instead held talks with locals to seek a negotiated solution.

Police will closely watch the vote. Locals destroyed Manhattan's offices in February 2001 in a protest over the same project.

Manhattan says that Tambogrande's development will require investment of $315 million, $58 million of which has already been spent on studying the site's potential.

"While the outcome of this vote isn't binding and the process leading up to it has been politically charged, we are going to look at it carefully ... as a first step in presenting an environmental impact study in July," Roberto Obradovich, president of Manhattan's Peruvian unit, told Reuters.

He said Manhattan had offered to let townsfolk select an impartial international agency to review that study and was sure they would conclude "it is a clean project that would bring only development to Tambogrande."

PEOPLE AFRAID OF POLLUTION

Mining, Peru's biggest source of export income, is the backbone of Peru's economy and the motor of much needed growth as President Alejandro Toledo seeks to fulfill promises of jobs and prosperity for a country where more than half the 26 million population lives on $1.25 a day or less.

But Rengifo said: "We are afraid of pollution. Two-thirds of Tambogrande's 80,000 people live in the country and they rely on farming."

Charity Oxfam America and the Global Mining Campaign, a group of rights and environmental activists, have launched an online campaign to lobby Manhattan to leave Tambogrande alone. They said the mine could displace over half its residents.

"The struggle between the people of Tambogrande and the mining company is about more than just the choice between mining and agriculture," Oxfam America policy adviser Keith Slack said in a statement. "No mining project should operate without the consent of affected communities," he added.

A mining boom, fueled primarily by giant copper-zinc mine Antamina, is hoped to pull the economy out of a three-year slump.

Peru is Latin America's biggest and the world's No. 8 gold producer, the world's No. 5 copper producer and No. 2 silver producer.

But municipal authorities said while Lima might look the other way, Sunday's vote would be key for local officials in weighing whether to declare the valley off-limits for mining.

According to Manhattan, one of three zones it is now probing has an 8-million tonne layer of minerals with 5.2 grams of gold and 48 grams of silver per tonne.