* First emergency of Humala's term over social conflict
* Gov't says protesters intransigent after mediation fails
* $4.8 bln mine by U.S. firm biggest project ever in Peru
By Terry Wade and Teresa Cespedes
LIMA, Dec 5 Peruvian President Ollanta Humala
declared a state of emergency late on Sunday to quell protests
against Newmont Mining's $4.8 billion Conga gold mine project
that have hobbled the region of Cajamarca for 11 days.
Humala, a former army officer, chided leaders of the
environmental protest as intransigent after weeks of mediation
efforts failed. His decree allows the military to help police
reopen roads, schools and hospitals shuttered for days by
rallies and marches against the proposed mine.
It was the first time in Humala's young presidency that he
has used extraordinary powers to defuse a social conflict over
mining in Peru, where disputes in some 200 communities across
the country threaten to delay billions of dollars in planned
mine and oil projects.
"Every possible means has been exhausted to establish
dialogue and resolve the conflict democratically, but the
intransigence of local and regional leaders has been exposed -
not even the most basic agreements could be reached to ensure
social peace and the re-establishment of public services," he
said on state television.
Humala, a former leftist, won the presidency in June on
promises to steer more social spending to rural towns to help
calm social conflicts over natural resources while assuring
companies their investments would be safe in Peru's surging
He has said the project by U.S.-based Newmont would benefit
all of Peru. It is the largest mining investment in the
country's history, with gold deposits worth about $15 billion
at current prices.
The impasse has highlighted Humala's struggle to neutralize
Peru's polarized political environment and govern as a moderate
who can simultaneously help the poor and please big business.
Humala has urged dialogue to solve the dispute, but nearly
a week ago the government was forced to ask Newmont to
temporarily halt work on the Conga mine after the protests
turned violent. Since then protesters have continued to march
and demand the government permanently cancel the project.
Prime Minister Salomon Lerner negotiated on Sunday for
hours with leaders of the protest, who say the mine will hurt
water supplies and cause pollution.
But Lerner could not reach an accord, prompting Humala to
invoke a state of emergency - a tool that his predecessor,
former President Alan Garcia, frequently used to quash
The state of emergency decree came after a protest against
a prison expansion project spiralled out of control on Friday
in the coastal city of Canete, killing one protester in a clash
with police that appeared to catch the government off guard.
Though the death was unrelated to hundreds of environmental
disputes nationwide that Humala has promised to end, it was the
first stemming from a protest since he took office in July.
A local environmental group, regional mayors, and the
president of the region of Cajamarca say the Conga mine would
displace a string of alpine lakes with reservoirs and hurt
farmers. Other protesters worry about not getting what they say
is their share of direct economic benefits from the mine.
Protesters have also criticized Humala for moving too far
to the right, embracing foreign investment, and supporting the
Conga project, which would generate thousands of jobs and
enormous tax revenues.
Some political analysts have worried that if Humala did not
act soon with a firm hand he would be continually tested by
left-wing protesters upset that he is governing as a moderate.
The government has urged Newmont to set up funds for social
and environmental programs in a bid to win support for the
Newmont has said its environment plan for the mine, which
was approved a year ago by the government, meets the highest
standards in the mining industry. It also runs extensive
community outreach programs out of its nearby Yanacocha gold
mine, some of which were developed after a mercury spill in
2000 that angered local residents.
The Conga project, which Newmont owns with Peruvian
precious metals miner Buenaventura, would produce 580,000 to
680,000 ounces of gold a year and open in 2014.
It has gold deposits worth about $15 billion at current
prices and sits 13,800 feet (4,200 metres) high in the Andes,
about 600 miles (990 km) north of Lima.
(Reporting by Teresa Cespedes and Terry Wade; editing by
Philip Barbara and Eric Beech)