Newmont Peru Gold Mine Costs to Rise on Government Report

Newmont Mining Corp. (NEM)’s suspended $4.8 billion gold mine in Peru will cost more to build because of the recommendations in a government-commissioned review, Environment Minister Manuel Pulgar said today.

Newmont, based in Greenwood Village, Colorado, must change the location of the reservoirs it plans to build at the Minas Conga site, Pulgar said.

“This will definitely increase project costs,” Pulgar said at a press conference in Lima. “It will be up to the company to make a decision.”

Peru suspended the project and commissioned a review after Andean farmers, concerned that the project would dry up water supplies, blocked roads and destroyed Newmont installations in November. Conga needs “substantive improvements” to gain approval, according to Rafael Fernandez, author of a government- commissioned study.

The 248-page report, which was published today on government websites and will be discussed in public hearings, showed Newmont’s original environmental impact study “meets standards,” Mining Minister Jorge Merino said today in an e- mailed statement.

Newmont has invested $800 million in the project. Newmont fell 0.9 percent to $47.89 at the close in New York. The stock has dropped 20 percent this year.

To contact the reporter on this story: Alex 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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