UPDATE 3-Peru clash over Newmont mine kills three

* First deaths in long-standing protest against Newmont

* Government suspends liberties in Cajamarca (Adds quotes, emergency rules)

LIMA, July 3 (Reuters) - Three people were killed and 21 injured on Tuesday when Peruvian police clashed with protesters opposed to a $5 billion gold mine planned by Newmont Mining , officials in the northern region of Cajamarca said.

The fatalities were the first in Cajamarca since protests against the mine started there late last year and the government has responded by suspending freedom of assembly to quell clashes between police, soldiers and protesters.

“I don’t think we Peruvians should tolerate bad apples who incite violence that ends up causing deaths,” Prime Minister Oscar Valdes said.

Most of the victims were being treated in the city of Cajamarca and the town of Celendin - the flashpoint of violence between 2,000 protesters and police and near where the U.S. company plans to build the biggest mine in Peruvian history.

The interior ministry said two of the injured were police officers who were shot by gun-carrying protesters who also threw rocks, damaged public buildings and were repelled with tear gas.

“Unfortunately there are three dead ... from gunshot wounds,” Miguel Castillo, a regional judicial official, said on RPP radio.

President Ollanta Humala, a former military officer, took office a year ago, urging mediation to solve hundreds of disputes over spoils from natural-resource projects.

However, he has since used emergency rules at least three times to end anti-mining protests in one of the world’s top metals exporters. Critics say the harsher measures are symptomatic of his drift to the right.

Official data show that at least a dozen people have died during Humala’s term in protests over natural resources, compared with 174 who were killed in similar circumstances from 2006 to 2011 on the watch of his predecessor, Alan Garcia.

Protesters have halted nearly all work at Newmont’s Conga mine since November, saying it would cause pollution, harm water supplies, and fail to bring enough local economic benefits.

The president of the region of Cajamarca, Gregorio Santos, who has been a strident critic of the proposed mine, accused Humala’s government of putting big miners ahead of poor peasants left behind by the country’s decade-long economic boom.


“This is the government we have - everything for miners and bullets for the people,” he said on Twitter. “Humala, this is the cost of defending the savage neoliberal economic model and multinational miners. This is the cost of not keeping your word.”

Humala has said the project is vital for Peru as it would generate thousands of jobs and huge tax revenues in one of Latin America’s fastest-growing economies. Getting the project built would send a strong signal to investors that the government won’t allow disputes over natural resources to further delay projects in its $50 billion pipeline of planned mines.

Once a firebrand leftist, Humala has irked traditional allies on the left by defending foreign investment and free trade since taking office a year ago.

Over the weekend, leaders of the protests, including Wilfredo Saavedra, a lawyer who once belonged to the Tupac Amaru insurgency, vowed to take tougher measures to stop the mine.

Protesters have expressed outrage that Humala gave permission a week ago to proceed with construction of the project after Newmont agreed to comply with a more stringent environmental mitigation plan recommended by outside experts. Humala’s green light ended a seven-month-long impasse over the mine’s future.

Newmont has agreed to build larger reservoirs that would replace two or more in a string of alpine lakes and guarantee year-round water supplies in towns that suffer during the dry season.

The company’s local office said the violence was unfortunate, but that it was “reaffirming its commitment to Cajamarca” and urged all sides to reach an understanding.

On Monday, Humala responded to threats of new rallies by saying protesters would have to “face the consequences” of their actions.

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 world’s second-largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain a decade-long economic boom has passed them by. (Reporting by Lima Newsroom; Editing by Christopher Wilson, David Brunnstrom and Lisa Shumaker)