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.
Protest at Conga mine, October 2013.
Newmont Mining’s (NYSE:NEM) partner in Peru, Minera Yanacocha, said about 750 protesters entered land owned by the company (in Spanish) Thursday evening, destroying a telephone tower and abducting a contract security guard, who was freed early Friday.
Police are still holding four individuals, one of whom was allegedly carrying a revolver, in connection with protests held yesterday in the Conga region of the company property.
“Yanacocha reiterates its respect for all types of social expressions, providing they do not affect the integrity of people, private property, or the development of infrastructure that is a common good for all of Cajamarca,” the company said.
Newmont halted Conga’s construction in 2011, saying it would focus on winning the support of local communities.
Minera Yanacocha, one of the two local companies working with Newmont in the endeavour, has been holding talks with communities close to the proposed gold and copper mine, hoping to persuade them to support the project.
The local company already operates the Yanacocha gold mine in northern Peru, Latin America’s largest, located next to the proposed pit.
Protests against Conga, the largest ever single private investment in Peru, are nothing new. In 2012, a violent demonstration left a number of people dead and forced President Ollanta Humala to order a suspension of all work at the site, except for the construction of water reservoirs.
Located roughly 3,700 meters above sea level, the $5 billion project was approved in 2010 by then-president Alan Garcia’s government, and the current administration has continued to support it.
The mine, capable of producing up to 350,000 ounces of gold and 120 million pounds of copper per annum with a 19-year life of mine, was supposed to begin production in early 2015. But after years of disruptions, Newmont warned last April that it was willing to reallocate capital to projects in other countries such as Australia, Ghana, Indonesia and the US.
All Newmont has officially said about this in the past three months is that a restart at Conga is “not imminent.”
Peruvian miner Buenaventura is also involved in the project, holding close to 44% ownership in the venture.
