Peru’s Minas Conga Project Gets Attention After Humala Comments

December 31, 2013 6:42 pm3 commentsViews: 389

Cajamarca lakesOne of Peru’s biggest mining projects returned to national headlines this week after President Ollanta Humala appeared to distance his government from the project.

A dispute over the development of the $5 billion Minas Conga copper and gold project, located high in the Andes of Cajamarca region, dominated Peru’s political agenda during Humala’s first year in office.

Cajamarca officials and anti-mining activists led large protests that managed to bring the project to a halt, despite receiving government approval. Opponents of the mine are concerned it would hurt Cajamarca’s water supply — the initial project included draining three Andean lakes, one to be used as a tailings dam.   Yanacocha and the government have argued that the project won’t hurt the local water supply. Yanacocha is currently building a reservoir, redirecting the water from one of the lakes to ensure a steady supply of water.

Humala has been a strong supporter of Minas Conga, which is owned by Yanacocha, a joint venture co-owned by Denver-based Newmont Mining and Peru’s Compañia de Minas Buenaventura.

His support of the project led to his first cabinet shuffle, only months into his administration, when hard-liners in his government demanded faster results from his premier Salomon Lerner Ghitis and other cabinet members.  However, the new premier, Oscar Valdes, made little headway with the Cajamarca protesters, who accused the government of acting in favor of private interests over those of Cajamarca citizens.

Last week, the head of the government’s conflict resolution office, Vladimiro Huaroc, said that communities originally opposed to Minas Conga are now willing to accept the project. Huaroc said that Minas Conga could restart work in 2014.

When asked about the project during a televised interview late Sunday, President Humala said that it is in the hands of the private mining companies that own Minas Conga.

Humala added that his government is more interested in providing services to the people of Cajamarca rather than the development of Minas Conga. He said the project is “irrelevant to the history of the country,” adding that “it’s a private sector decision whether [the project] goes on or not.”

The comments have been criticized by opposition politicians, who say the mining project is important for providing jobs, infrastructure, tax revenue and a boost to Cajamarca’s economy.

Humala’s comments also drew a reaction from the chief executive officer of Buenaventura, Roque Benavides. “It certainly isn’t trivial for us,” Benavides was reported saying by local media. “That is what we, Newmont and Buenaventura, believe at Yanacocha.”

“As well, it also isn’t trivial for Cajamarca,” Benavides added. “It is the only region in Peru that is in a recession. That means fewer jobs and opportunities for Cajamarquinos.”

Meanwhile, financial news website Barron’s questioned whether the companies, even if they do get community approval, will want to go forward with the project in 2014 given the decline in metals prices.

“With all the problems gold miners faced in 2013, the pushback many received from those living near the mines probably ranked near the bottom of the list, especially since it gave companies like Newmont Mining… ready excuses to cut back on spending,” the article said.

“[W]ith the price of gold tumbling —SPDR Gold ETF (GLD) has dropped 28% this year— what if Newmont and Compañia de Minas Buenaventura aren’t ready to get working?”

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3 Comments

  • Mr. Hanna A. H. Neirouz

    Thanks

  • Mr. Hanna A. H. Neirouz

    Regards,

  • Why not just wait until the metal prices are lower, the U.S. dollar is worth less….. then nobody will care about a mine there, and the people of Cajamarca can go on with their recession and later, depression and lack of foreign financed infrastructure….as the miners say “chau, Peru”.