Peru To Restart Talks Over Newmont's Minas Conga
December 19 2011 - 12:14PM
Dow Jones News
The key players in the dispute over the stalled Minas Conga
copper-gold project are backing the restart of talks on Monday,
raising hopes that the conflict surrounding Peru's biggest mining
development can be resolved through dialogue.
A high-level government committee, led by Prime Minister Oscar
Valdes, traveled to the Cajamarca region on Monday to meet with
opponents of Conga.
Valdes is expected to discuss with opponents a proposal to hire
international consultants to review Conga's environmental impact
study, which was approved by the government in 2010. Valdes said
the consultation has to be impartial and start "as soon as
possible."
Conga is being developed by Minera Yanacocha SRL, which already
runs a large gold mine in the region. Yanacocha is 51.35% owned by
Newmont Mining Corp. (NEM), while Compania de Minas Buenaventura SA
(BVN, BUENAVC1.VL) has a 43.65% stake and the International Finance
Corp. owns the remainder.
The project has come under stiff opposition in recent weeks by
residents concerned about its potential environmental impact,
particularly its water use. The company denies that Conga will
damage local water supplies.
Yanacocha suspended work at Conga on Nov. 29 following days of
escalating protests.
The protests led President Ollanta Humala to declare a state of
emergency in areas that were paralyzed by the demonstrations. The
government's handling of the dispute was partially responsible for
Humala's decision last week to replace more than half of his
cabinet, including the prime minister.
Humala, a 49-year-old former army officer who took office in
July, said Sunday that "we are going to resolve Conga through
dialogue," newspaper El Comercio reported.
Omar Jabara, head of Newmont's corporate communications, said
the company supports the restart of talks.
"We welcome the establishment of the talks and believe that the
rational and responsible way to raise and resolve issues related to
Conga is through good-faith dialogue," Jabara told Dow Jones
Newswires on Monday. "We remain willing to play a constructive role
in the dialogue sponsored by the government, and we will
participate as directed by them."
Jabara said Newmont is open to the proposal to review Conga's
environmental impact study but added that it has already been
"extensively reviewed" during a three-year, public process.
Marco Arana, a high-profile environmental activist who helped
lead the protests against Conga, said that dialogue will be key to
resolving the dispute.
"I think we've reached a moment where we don't need more
demonstrations," Arana said during a recent interview. "What we
need are gestures of transparency, serious commitment and respect
from both sides."
While Arana said he supports the proposal to use international
consultants to review Conga, he added that he still does not
believe the project is environmentally or socially feasible.
Arana, a Catholic priest and head of the Tierra y Libertad
social movement, said that if dialogue does not resolve the
dispute, it could jeopardize other mining investments in Peru.
Mining companies plan to invest more than $50 billion this
decade in new mines and expansion projects. Over 18% of those
investments are aimed for Cajamarca.
"Cajamarca has a strong mining potential, but we have to discuss
how to do it well," Arana said.
Peru is the world's second-biggest producer of copper and sixth
biggest producer of gold. It is also a major producer of lead,
silver and zinc.
-By Ryan Dube, Dow Jones Newswires; 51-945 043 802;
peru@dowjones.com
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