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Peru Activists: Newmont's Minas Conga Project Remains Unfeasible

04/23/2012 | 12:50pm US/Eastern

--Mine opponents say Newmont's Minas Conga remains unfeasible

--Opponents of project are evaluating new round of protests

--President Ollanta Humala backs mine project, but urges changes

By Ryan Dube

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Opponents of Newmont Mining Corp.'s (>> Newmont Mining Corporation) $4.8 billion Minas Conga copper and gold project in Peru continue to reject the enterprise despite efforts by the government to decrease its impact on the environment and improve its social benefits.

On Friday, President Ollanta Humala said that the company must carry out a number of changes to the project, which was suspended in November, before it can proceed. The changes include increasing the supply of water, creating a fund for social programs and providing large-scale employment to local residents.

The changes were recommended in a review of Minas Conga's environmental impact study by three international consultants that were hired by the government. The review, which was released last week, is intended to resolve concerns about the project's impact on the environment.

Minera Yanacocha, the company developing Minas Conga, has said it is evaluating the recommendations. Newmont has a 51.35% interest in Yanacocha, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake in Yanacocha. The International Finance Corp. has a minority stake.

Marco Arana, a former Catholic priest and one of the main opponents of Minas Conga, said that Humala's speech showed "good intentions," but opponents still reject the project.

"There is no possibility that this project can go ahead over the next few years without creating a grave social conflict," Arana told Dow Jones Newswires on Monday.

He said that authorities from throughout northern Peru's Cajamarca region, where Minas Conga is located, are meeting to discuss Humala's proposed changes. "But without a doubt they still reject the viability of the project," Arana said.

Arana added that a new round of protests in Cajamarca may be announced this week.

Prime Minister Oscar Valdes said that the government will inform residents in Cajamarca about the proposed changes to Minas Conga. "We don't work for Marco Arana. We work for all of Peru," Valdes told reporters on Monday.

Meanwhile, another strong critic of Conga, anti-mining activist Wilfredo Saavedra, also continues to reject the project. "Ollanta Humala has shown his true face as a loyal servant of the multinationals," said Saavedra in televised comments.

Gregorio Santos, the president of Cajamarca's regional government, who has also been a staunch opponent of Minas Conga, was not immediately available for comments.

Yanacocha hopes to have production up and running at Minas Conga by the end of 2014 or early 2015. Average annual output during the first five years is seen at 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper.

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

-By Ryan Dube, Dow Jones Newswires; 51-945 043 802; peru@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

04-23-12 1249ET

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