2ND UPDATE: Peru Priests Hold Talks In Minas Conga Mining Dispute

07/09/2012| 06:50pm US/Eastern

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--Peru priests held talks in Minas Conga mining dispute

--No agreement was reached at meeting, more expected to be held

--Priests call meeting "positive"

 
   By Robert Kozak 
 

(Updates throughout and adds comments)

LIMA--Talks led by two well-known Catholic priests with community leaders in the Cajamarca region of northern Peru ended Monday with no agreement on the outstanding issues surrounding the Minas Conga copper and gold project.

Participants in the meeting said they didn't rule out more taking place soon and the priests leading the talks called the meeting "positive."

The talks were called to restore peace following violent protests against the Minas Conga project. Parts of the Cajamarca region remain in a state of emergency, declared by Peru President Ollanta Humala last week following protests in which five people died and more were injured.

Priests Miguel Cabrejos and Gaston Garatea met with antimining activists, including the regional president of Cajamarca, Gregorio Santos, who is one of the main leaders of the protests.

At a press conference Mr. Santos called the meeting "productive."

Opponents of the Minas Conga copper and gold mine project have marched for weeks, pressuring the government to kill the project. President Humala has supported the approximately $5 billion project run by Minera Yanacocha, majority-owned by Newmont Mining Corp. (>> Newmont Mining Corp).

Police in Cajamarca last week briefly detained antimining activist Marco Arana, a former priest, who now leads a left-leaning political party known as Earth and Liberty. Mr. Arana said Monday that more protests are expected to take place later this week in Cajamarca.

Antimining protesters attacked and destroyed government buildings last week.

Opponents want the government to cancel Minas Conga, saying it will hurt water supplies. The company plans to build reservoirs in order to ensure more water is available.

The government and Minera Yanacocha called a temporary halt to work late last year following protests but have since said the project will proceed.

Bank of America Merrill Lynch Global Research said in a report Monday that the government appears to be stepping back from its hard-line stance against protesters, and appears willing to make further concessions.

"We believe that an outcome in which the government decides to withdraw permission for Conga in the face of its inability to control protests is possible and would not be well received by markets," it added.

Eurasia Group said Monday in a report that "The Ollanta Humala administration remains strongly committed to advancing Minas Conga at all costs. It is not only the country's largest FDI project, but the government views this as a test case that could shape other social conflicts affecting mining investment."

Peru is one of the world's largest producers of gold, copper, zinc, silver and other minerals.

Production at Minas Conga is slated to have an average annual output of 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper during its first five years.

Minas Conga is 51.35%-owned by Newmont Mining, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake. International Finance Corp. holds the rest.

Write to Robert Kozak at robert.kozak@dowjones.com

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