Peru's Humala Sees Mining Conflicts Deepen, Growth Threatened
07 Dezember 2011 - 10:31PM
Dow Jones News
President Ollanta Humala, who campaigned this year on a promise
to end conflicts over mining in Peru, has instead seen a deepening
of the troubles.
The latest example is the fight over the giant Minas Conga
copper-gold project in northern Peru. Despite an end to violent
protests there against the greenfield project after Minera
Yanacocha SRL suspended work, opponents continue to push for a
definitive canceling of Minas Conga, Peru's biggest mining
project.
In a report Wednesday, BofA Merrill Lynch said recent protests
have threatened the security of mining investments in Peru, which
it called a key driver of recent growth.
"We estimate that a halt to new mining investments would shave
off 2.9 percentage points from GDP growth during the next two
years," it said.
In the last ten years the number of mining concessions in
Peru--one of the world's largest producers of gold, copper, silver
and zinc--have doubled, while government policies to avoid
conflicts haven't been developed, non-government organizations
say.
The nation's ombudsman says there were 227 active conflicts tied
to mining in October this year.
"Four months into the new government of Ollanta Humala there
have been a number of conflicts that have reached the crisis stage.
The question is why nothing has been done to avoid this," said Emma
Gomez, deputy director of non-governmental organization
CooperAccion, on Wednesday.
Anti-mining activists are meanwhile vowing to continue with
their opposition to the Minas Conga project, being developed by
Minera Yanacocha, which already runs a large gold mine in the
region.
Yanacocha is 51.35% owned by Newmont Mining Corp. (NEM),
Compania de Minas Buenaventura SAA (BVN, BUENAVC1.VL) has a 43.65%
stake and the International Finance Corp. owns the remainder.
Anti-mining activists are also threatening to try to stop other
large scale projects in the Cajamarca district, where Minas Conga
is located.
Minas Conga is only the latest in a series of mining projects in
Peru that have run into opposition, often driven by local
politicians seeking voter support.
Southern Copper Corp. (SCCO) had to suspend work on its Tia
Maria copper project earlier this year, while the government of
ex-President Alan Garcia suspended work on a project run by Bear
Creek Mining Corp. (BCEKF, BCM.V) in southern Peru following
protests.
Conga was scheduled to begin production in 2015, with average
output during the first five years of 580,000 ounces to 680,000
ounces of gold and 155 million to 235 million pounds of copper.
-By Robert Kozak, Dow Jones Newswires; 511 99927 7269;
peru@dowjones.com