Newmont accepts stricter conditions for Peru mine

LIMA Fri Jun 22, 2012 10:12pm EDT

Police officers guard machinery of Newmont's proposed $4.8 billion Conga gold mine to protect it from protesters near the Cortada lagoon in the Andean region of Cajamarca November 24, 2011. REUTERS/Enrique Castro-Mendivil

Police officers guard machinery of Newmont's proposed $4.8 billion Conga gold mine to protect it from protesters near the Cortada lagoon in the Andean region of Cajamarca November 24, 2011.

Credit: Reuters/Enrique Castro-Mendivil

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LIMA (Reuters) - Newmont Mining said on Friday it has accepted a stricter environmental mitigation plan for its $4.8 billion Conga gold mine and could resume work on the massive project.

Conga, the biggest mining project ever proposed in Peru, has been stalled since November because of ongoing protests by community groups who say it would hurt water supplies and cause pollution.

Newmont said that before the mine is built it will first build reservoirs that will guarantee year-round water supplies in towns that currently suffer shortages.

In an attempt to quell protests, the government had hired outside experts to recommend improvements to the company's own environmental impact plan.

President Ollanta Humala said on Thursday that Newmont had "finally identified" with the recommended changes that urged the company to build larger reservoirs that would replace two or more in a string of alpine lakes.

Humala is slated to address the issue on Saturday in a nationwide address where he is expected to call for more mediation to calm dozens of social conflicts over the spoils of natural resources.

"We have ratified our decision to implement the recommendations international auditors made to the environmental impact study for the Conga project," Newmont's head of South America, Carlos Santa Cruz, said in a statement.

"We share the government's call for dialogue, for the vast majority of civil society in Peru," Santa Cruz said in reference to local political leaders in the northern Andean region of Cajamarca who are leading protests to halt the mine. Gregorio Santos, the president of Cajamarca, did not immediately react to Newmont's announcement.

Conga, which is partly owned by local miner Buenaventura, would produce between 580,000 and 680,000 ounces of gold annually.

Peru, which has vast mineral resources, is the second largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain Peru's decade-long economic boom has passed them by.

(Reporting by Terry Wade and Marco Aquino; editing by Carol Bishopric)

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