Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Reuters reports political and community leaders in Peru’s Cajamarca region demanded on Wednesday that Newmont Mining and partner Buenaventura abandon their $4.8 billion Conga project after threeway talks with the central government failed.
The president of Cajamarca said massive protests will be held next week. In October, Newmont was forced to briefly shut down adjacent Yanacocha, South America’s largest gold mine over the protests.
Conga would be the biggest investment ever in Peru mining and is a crucial test for the country’s new president Ollanta Humala, who campaigned on ending conflicts over resources and giving local people a greater share of mining profits.
Reuters quotes Gregorio Santos, president of the region of Cajamarca: “Our demand is that the Conga project be suspended. It’s the request of the municipalities and the regional government,” adding that he would organize a massive protest in the region next Wednesday unless his request were honoured – which appears highly unlikely.
At least 200 communities nationwide in Peru have organized to stop mining or oil projects, usually over environmental concerns or to demand direct economic benefits in rural towns according to Reuters.
Yanacocha represents almost 25% of Newmont’s total daily gold output and yesterday RBC Dominion Securities cut its price target for Newmont citing rising labour costs, falling grades at aging mines, and unfavourable currency swings in countries in which it operates. The broker has a “sector perform-average risk” rating on the firm reported the Globe & Mail.
Image is of Cajamarca’s capital in Northern Peru.
2 Comments
Serminesincusa
Here we go one more time that on a country history like Peru with a rich Natural Resources endowment be in jeopardy! for a bigger investment ever in Peru mining.
Now come the reality test for the newest BS politician(demogogue to the poor people) and is a crucial test for the country’s new president Humala, who campaigned on ending conflicts over resources(internal Peru stuff) and giving local people a greater share of mining profits(internal Peru stuff), so I suggest do something with the money that the central goverment of Peru/Lima get from the miners an invest it LOCALLY not en LIMA to distribute among the corrups politics…and make these fellows understand that a mountain of gold needs another mountain of MONEY!!! to develop it!!!!
Sergio Pastor, Geologist
Juliopoterico
I think that the main problem about the social mining conflicts is to intent giving a solution in the same way of other times. Society evolves as well as individuals do.
In this regard, mining entrepreneurs and governments should have quantifiable tools previously assessed within an integral perspective. This integral perspective should include not only operational and economic issues but also sociocultural and environmental criteria, which have been practically neglected. There is a primary and managerial tool for this, such as quantifying positive and negative externalities from the mining projects, which either are or will in operation. This tool would be to work with early alerts!
So that, the conflicts mining could be considerably diminished if governments and mining entrepreneurs had these measurable control tools. Moreover, the evaluations should have a binding effect on the results. This would stop the enormous problems, which damage not only to multinational mining companies but also for Peruvian peoples as well.