Newmont Suspends $4.8 Billion Peru Gold Mine on Protests
Newmont Mining Corp., the largest U.S. gold producer, said it suspended a $4.8 billion gold project in Peru after anti-mining protests left at least 17 wounded and two arrested today.
The stoppage was decided “as required by the government of Peru and for the sake of reestablishing tranquility and social peace,” Denver-based Newmont said today in an e-mailed statement. Newmont said it will seek talks with the government and communities opposing the mine.
Farmers concerned that Minas Conga may dry up water resources blocked roads and destroyed Newmont’s installations during a six-day protest that President Ollanta Humala said may derail $50 billion in mining investment over the next decade. Villagers battled police and smashed company offices in the northern Andean region of Cajamarca, 560 kilometers (350 miles) northwest of Lima, according to Lima-based Radioprogramas.
”Mining projects must be conceived as part of development and agreement with the population to clear up all distrust and guarantee water priority for human consumption,” Humala’s cabinet chief Salomon Lerner said today at a press conference at the Presidential Palace in Lima.
Deputy Environment Minister Jose de Echave resigned yesterday to protest the government’s backing for the project, which seeks to produce 680,000 ounces of gold and 235 million pounds of copper annually. Peru is the world’s third-largest copper miner and No. 6 in gold.
Lost Business
The protests, which forced airlines to cancel flights to Cajamarca’s airport, are causing $10 million a day in lost business in the dairy and the tourism industries, according to the Lima Chamber of Commerce. Cajamarca is a dairy, livestock and farming region.
“We can’t allow Peruvians to be taken hostage by groups that just preach violence,” Pedro Martinez, president of the National Society of Mining, Petroleum & Energy, told reporters in Lima today. “Without peace there will be no development.”
Newmont rose 0.1 percent to $65.29 in New York.
Gold futures for February delivery advanced 0.3 percent to $1,718.90 an ounce at 1:30 p.m. on the Comex in New York.
To contact the reporter on this story: Alexander Emery in Lima at aemery1@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
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