Newmont Mining Optimistic $5B Peru Gold Mine to Take Off 2015

Amid weeks of environmental protests, U.S. gold miner Newmont Mining Corp. announced its $4.8 billion gold project in Peru will push through as scheduled in 2015.

In November 2011, Newmont Mining Corp.'s Minas Conga copper and gold project encountered protests from the community, forcing the US gold producer to suspend operations. Protesters claimed the project will damage their water supplies. However, observers and critics said the protesters and their claims were being used for political ambitions by the various local politicians, including the regional governor of Cajamarca.

To appease the community and prevent the potentially damaging protest action to develop into a wide-scale conflict, Newmont Mining Corp. will increase its $37.7 million investment in social programs and review consultants' recommendations on environmental studies, Carlos Enrique Santa Cruz, senior vice-president of Newmont Mining Corp.'s operations in South America, said.

"We can improve the project and work with a broader population to make the benefits felt," Santa Cruz said. "The project is a great opportunity and mining investment is fundamental."

Newmont Mining Corp., which operates the nearby Yanacocha mine, had already invested some $200 million in the Conga project. But it has lost $2 million a day since the November suspension because of the protest actions.

Some 580,000 ounces to 680,000 ounces of gold and 155 million to 235 million pounds of copper are expected to be produced from the Minas Conga copper and gold project annually from 2015 for 19 years. The Peruvian government stands to receive royalties and taxes amounting to some $3 billion.

The planned $37.7 million additional investment will be spent to build roads, schools and social programs in the Cajamarca region, a fact sheet provided by Newmont Mining Corp. said.

Santa Cruz noted the Peruvian government will consult a panel of international experts and organize a 40-day consultation to assess and evaluate Conga's environmental impact to the community.