Peru's Yanacocha To Seek 'Alternatives' To Resume Work On Stalled Mine Project
First Published Sunday, 22nd April 2012 03:00 pm - © 2012 Dow Jones
LIMA -(Dow Jones)- Minera Yanacocha, owner of Minas Conga copper gold project, said late Saturday that it will seek technical and economic "alternatives" in order to allow work to resume on the stalled $4.8 billion project.
Violent protests by anti-mine groups late last year led the administration of President Ollanta Humala and Newmont Mining Corp., (NEM) which runs Minera Yanacocha, to put a halt to work on the project in the Cajamarca region of northern Peru.
Following the release on Tuesday of a report on water use at Minas Conga carried out by three international consultants, President Humala on Friday suggested the project could proceed if the company complied with changes suggested by the experts.
"The report by the international experts has ratified unquestionably the environmental impact study, or EIA, approved by the Peruvian government in October, 2010. While the experts have proven that the EIA meets with national and international standards, we recognize that every study can be improved," Yanacocha said in its statement.
Opponents fear building the mine will hurt water supplies, although Yanacocha has said it will build reservoirs to allow greater water supplies.
In its most recent statement Yanacocha said it will again evaluate "technical and economic alternatives."
Economists say cancelling the project would send a bad signal to investors. Peru is one of the world's largest mining countries for copper, gold, silver, zinc, tin and other minerals.
Gregorio Santos, president of the Cajamarca regional government, said there is a lack of confidence in Minera Yanacocha by local residents.
"More than the environmental issue is the one of a lack of a social license, of the approval of the communities. This doesn't change the situation," Santos told RPP radio on Saturday.
A national survey conducted by pollster Ipsos-Apoyo of 1,213 persons from April 18 to April 20 found that 60% believe that Santos' opposition to the Minas Conga project is based on political interests, while 27% believe it is based on environmental concerns. That poll, which has a margin of error of 2.8 percentage points, was released Sunday.
Yanacocha hopes to have production up and running at Minas Conga by the end of 2014 or early 2015. Production is seen at an average annual output during the first five years of 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper.
Newmont has a 51.35% interest in Yanacocha, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake in Yanacocha, with the International Finance Corp. holding a minority stake.