Peruvian Mining Contracts Will Include Environmental Fund
Peru’s government, which seeks to curb anti-mining protests that threaten to derail $50 billion in mining investment, said companies must set up an environmental conservation fund as part of future contracts.
The government will also create an office in charge of settling social conflicts related to mining and other industries, the Andean country’s cabinet chief Oscar Valdes said today in a presentation before Congress. He didn’t provide details on the environmental fund.
Protests by farmers last year halted projects by Newmont Mining Corp. (NEM), Southern Copper Corp. (SCCO), Anglo American Plc (AAL) and Bear Creek Mining Corp. (BCM) Opponents to Newmont’s suspended $4.8 billion Minas Conga gold mine staged marches in the northern highland city of Cajamarca this week.
“The environmental guarantee fund will be used in case of any damage done to the natural surroundings,” Valdes said. “The government’s plan for responsible mining with the joint participation of the state, the community and investors will be fundamental to make mining investment viable.”
Newmont, which halted work in November at Conga, Peru’s biggest investment project, will pay more than $2 billion in taxes over the life of the mine, the company said in a statement today. Newmont will invest $37.7 million in roads, schools and social programs in the Cajamarca region, according to a fact sheet from the company.
“The efforts of the government and Newmont sound like a step in the right direction to quell some of the demands of the protestors,” Bret Rosen, a strategist at Standard Chartered Bank in New York, said in e-mailed comments. It will take time “to calm the demands of the anti-Conga movement and allow the project and others in the country to proceed without the specter of other outbursts of protests and violence.”
Newmont rose less than 1 percent to $62.10 at the close in New York. The stock has gained 6.8 percent over the past 12 months.
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