Critics contend $350 million Yanacocha gold extraction plant to be inaugurated Aug.13 is an environmental disaster in the making

The Yanacocha gold mine — the largest gold mine in Latin America and the second largest in the world — will inaugurate a new $350 million gold processing plant Aug. 13, setting off alarm bells for environmental NGOs and local farmers who fear that the mine’s expansion will only generate more contamination and health problems for the residents and their livestock.

Roque Benavides, the Peruvian Buenaventura Mining Co.’s general manager, announced the processing plant’s opening date last Wednesday.

According to Benavides, the Gold Mill plant – under construction since 2006 – will enhance the processing efficiency of more metallurgically complex transitional sulfide ores, expand future reserves, improve financial returns, and extend the mine’s operating life.

“Gold Mill is the plant where transitional ores will be processed,” Benavides told state news agency Andina, “meaning those that can’t be poured into the large oxide pools that already contain sulfide ores.”

The Yanacocha mine’s huge open pits and towering heaps of cyanide-laced ore cover more than 22,000 acres of land near Peru’s northern mountain town of Cajamarca, one of Peru’s poorest agricultural regions.

The mine, which is run by the world’s largest gold mining firm — the Colorado-based Newmont Mining Co. — and co-owned by the Peruvian Buenaventura Mining Co. and the World Bank, is expected to generate 1.8 million ounces of gold in 2008.

“Surely, with the Gold Mill plant, we will start to increase our production by next year and stabilize at 2 million ounces for the next few years,” said Benavides.

But though Newmont sees Yanacocha as its “crown jewel” — the mine contributed 22 percent of the 7 million equity ounces of gold sold by Newmont in 2004 and has generated over $7 billion since 1992 — local farmers see the new processing plant as more bad news.

Because the mountain contains abundant bits of porous low-grade ores — so small they are called “invisible gold” — it can be mined profitably only by using a low-cost yet environmentally risky method known as the cyanide heap leach method, which involves blasting mountains then culling the gold with cyanide diluted with vast quantities of water.

Critics, such as the Peruvian NGO Grufides, have claimed for years that the mine — a concession allegedly granted by the Peruvian government after it accepted bribes from Newmont and without consulting local communities — has generated irreversible environmental damage in Cajamarca and many of the neighboring communities.

Though mining in Peru accounts for almost half of its annual $8 billion in exports — it produced 6.9 percent of the world’s gold in 2007 — it has repeatedly failed to invest in the mining communities where companies have often caused irreversible environmental damage by contaminating rivers and land. Protests are frequent as environmentalists and community leaders try to protect their land, health and future.

Since the Yanacocha mine was established in 1992, revenues have increased, but farm production has dropped and local farmers have complained of streams drying up or filling up with murky sediments and foul-smelling and rancid tasting yellowish or brownish water that often carries surface contaminants such as trash or sewage. The Yanacocha mine’s waste, which has affected people’s and animal’s health as well as the flora, flows directly into waterways that are the only source of water for various communities.

These findings were confirmed by an independent environmental audit by a Colombian consultancy firm, Ingetec S.A. Ingenieros Consultores, in 2003 for the Ministry of Energy and Mines.

Newmont is involved in an ongoing conflict over damages resulting from a mercury contamination after 151 kilograms spilled from a truck in the small town of Choropampa in June 2000. People gathered the toxic metal — many with their bare hands — believing it might contain gold. According to the Peruvian government, more than 900 people were poisoned.

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