Mining Companies Facing Peruvian Difficulties

Since last autumn residents of the Peruvian region of Cajamarca – approximately 560 miles (900km) north of Peru's capital, Lima – have been protesting against Newmont Mining's “Conga project”. The American mining giant has been operating its nearby Yanacocha mine – one of the world’s largest gold mines – with great success; but Yanacocha's gold reserves have been decreasing.

Newmont has thus increased its exploration activities in the Conga region. They have found rich gold and copper ore findings, but Newmont has also got into disputes with residents in affected areas. Conga would be a very lucrative and cost-efficient project based on open pit mining, in contrast with an increasing number of mines around the world that rely on deep drilling. But there is a catch. The extraction of ore requires large amounts of water that would need to be tapped from a number of Andean lakes lying above the Conga mine. Environmentalists encouraged local citizens to protest, as these residents live off farming and are now worried about their future existence.

Production of gold and copper can cause water pollution, but some residents are also opposed to the construction of a pipeline system designed to divert seawater to the mine. Last November protests turned into riots, as people occupied public offices and the airport, with the government forced to declare a state of emergency in the region. The government also ordered a halt to the mine's construction. This order remains in place today. To be allowed to continue construction, Newmont has been requested to conduct a study showing the mine's potential environmental impact.

But despite the violence and noise generated by such protests, the mine has many supporters in Cajamarca. Many recognise the economic benefits that the mine could bring to the region and the country as a whole. Peru is immensely rich in natural resources, and has developed into one of the largest Latin American producers of gold, silver, copper, zinc and other important commodities. Yesterday some hundred supporters of the Conga project organised a long march to protest against the construction halt at Conga.

Meanwhile, a new conflict has flared up in the southern region of Espinar, which started at Tintaya mine operated by Xstrata. In recent days fierce protests have prompted violent clashes in which has resulted in the deaths of protestors and policemen. This is a very delicate political situation for president Humala, and one that requires a deft political touch.