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Newmont's Peruvian gold project subject to new conditions
Alex Emery for Bloomberg
April 21, 2012
Newmont Mining Corp. (NEM)’s suspended $4.8 billion gold mine in Peru will be subject to “new conditions” that include the creation of 10,000 local jobs and a fourfold increase in reservoir capacity at the site to gain approval, Peruvian President Ollanta Humala said.
The company must pledge not to dry up highland lakes and invest in schools, irrigation canals and drinking water infrastructure in Cajamarca, a farming region in the northern Andes, Humala said in a speech broadcast yesterday on national television and radio.
Peru suspended the project and commissioned a review after Andean farmers, concerned that the project would dry up water supplies, blocked roads and destroyed Newmont installations in November.
The project, which has cost $800 million to date, will cost more to build because of the recommendations of the review, Environment Minister Manuel Pulgar said April 18.
“The people want to see that these projects benefit them directly,” Humala said. “We need to establish a new relationship between companies and the people to achieve understanding, mutual respect and social peace.”
The government published the 248-page report on official websites this week and began discussing its findings in public hearings yesterday, Cabinet Chief Oscar Valdes said in an e- mailed statement.
Cajamarca regional government official Gregorio Santos, who led protests against the project, refused to meet with government officials and pledged further protests.
“We are taking the report seriously and will carefully review the conclusions to understand what impact the recommendations might have on our existing project plans,” Newmont spokesman Omar Jabara said in an e-mail yesterday. “Conga’s reservoirs would more than double the current water storage.”
Newmont, based in Greenwood Village, Colorado, fell for a fourth session in five yesterday, losing 1.2 percent to $47.25 at the close in New York. The stock has dropped 21 percent this year.
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