Newmont investing US$150mn in Conga this year but won't build mine without community support - CFO

Newmont Mining (NYSE: NEM) plans to spend US$150mn in 2013 on its 51.35%-owned US$4.8bn Minas Conga gold-copper project in Peru's Cajamarca region, CFO Russell Ball said Thursday at CIBC's 16th annual Whistler Institutional Investor Conference.

On an attributable basis, the company looks to invest US$80mn in equipment, US$40mn in reservoir construction and about US$30mn for community and social costs.

"We have downsized significantly, and we are reviewing capital cost estimates as we go forward," Ball said.

Newmont voluntarily suspended construction on the Conga project in November 2011 following violent protests which prompted the government to declare two states of emergency in Cajamarca, but has continued work on related reservoirs.

"Until we can generate acceptable project returns and we get local community and government support, we're not going to progress the project," Ball confirmed.

Newmont continues to follow its "water first approach" announced in August 2012 to focus first and foremost on the construction of four reservoirs it has agreed to build in Cajamarca to give community members a year-round supply of water.

"We do have about 2,000 people on site today building some of the sediment structures and reservoirs, and finalizing the camp construction," Ball said.

Conga is one of the biggest investment projects in Peru's US$53.7bn mining portfolio. Average output over the first five years is estimated at 650,000-750,000oz/y gold and 160M-210Mlb/y (72,575-95,254t) copper, at cash costs of US$300-400/oz and US$0.95-1.25/lb, respectively.

Local miner Buenaventura (NYSE: BVN) and the World Bank's International Finance Corporation (IFC) also hold a 43.65% and 5% stake, respectively, in the project's operator Yanacocha.

Newmont reports 2012 output of 5m gold ozs., 143m lbs. copper

Newmont Mining has announced a first-quarter gold-linked price dividend of $0.425 per share (subject to board approval), a 21% increase over the prior year quarter.

Author: Dorothy Kosich

Newmont Mining has forecast 4.8 million to 5.1 million ounces of gold production and 150 million to 170 million pounds of copper in its 2013 guidance.

The company said it anticipates 2013 all-in sustainable costs to be between $1,100 and $1,200 per gold ounce of production.

This compares to 2012 total attributable gold and copper production of 5 million ounces and 143 million pounds of copper, down from 2011 full year production of 5.185 million gold ounces and full year copper production of 206 million pounds.

Newmont also reported attributable gold and copper production of 1.3 million ounces and 42 million pounds for the fourth-quarter 2012, down from 1.304 ounces of gold production and 47 million pounds of copper output during the same period of 2011.

Consolidated costs applicable to sales for 2012 averaged between $670 and $680 per ounce for gold and $2.30 to $2.40 per pound of copper.

“In 2013, we will focus on mining fundamentals—from technical competency to safety and social responsibility—to lay the groundwork for a profitable group and more robust cash flow generation,” said Newmont President and COO Gary Goldberg.

“Our priority is to advance projects that deliver profitable production gains, including completing construction at Akyem and beginning production in late 2013, and advancing our stripping campaign at Batu Hijau to prepare for Phase 6 mining,” he added.

Newmont currently plans $2.1 billion to $2.3 billion in attributable capital expenditures, of which 40% is allocated to development capital. The company’s investment priorities including completing Akyem construction, finishing the Phase 6 stripping campaign at Batu Hijau during 2013 and 2014, and identifying the best paths forward for Conga in Peru and Tanami in Australia. The company expects 2013 capex to decline 20% from 2012.

Additional capital investment is also possible at the Merian project in Suriname pending the outcome of further discussions with the government and more project evaluation.

Source: Mineweb

Newmont CEO to step down in March

The world’s No 2 gold miner Newmont Mining on Monday said president and COO Gary Goldberg would take over from outgoing CEO Richard O’Brien on March 1, 2013, when O’Brien retires.

The company said Goldberg, who joined Newmont in December 2011 as executive VP and COO, has 30 years' experience in the mining industry.

"The board is confident in Gary's abilities to lead Newmont forward as CEO, continue to sharpen our plan, drive consistent execution and deliver value for shareholders in the years ahead. With three decades of experience in the mining industry, he has deep and proven operational expertise, strong strategic and analytical skills and outstanding leadership abilities," chairperson Vincent Calarco said.

Goldberg holds a Bachelor of Science degree in mining engineering from the University of Wisconsin-Platteville and a Masters degree in business administration from the University of Utah.

Goldberg also served as chairperson of the National Mining Association in the US from 2008 to 2010 and formed and led its CEO Safety Task Force.

Newmont has operations in the US, Australia, Peru, Indonesia, New Zealand and Ghana.

Edited by: Creamer Media Reporter

Peru to resume talks on Newmont’s $4.8 billion Conga mine

Peru's government is considering resuming talks with opponents of the $4.8 billion Minas Conga copper and gold mining project in the northern region of Cajamarca, Environment Minister, Manuel Pulgar Vidal, said in a TV interview on Sunday night.

The authority added the regional president of Cajamarca, Gregorio Santos, should participate in the talks, as he has been one of the most vocal adversaries of the Conga project, leading the latest protests against it.

According to the minister, Catholic priests Miguel Cabrejos and Gaston Garatea will restart negotiations with all the parties involve with the controversial project, majority-owned by Newmont Mining Corp. (NYSE:NEM).

Minas Conga is being developed in the Cajamarca region of northern Peru by Minera Yanacocha, of which Newmont Mining, the world's number two gold producer, holds a 51.35% interest and Compañía de Minas Buenaventura a 43.65%. The IFC owns the remaining stake.

Newmont had said it hoped to begin production either in 2014 or 2015, generating between 155 and 235 million tons of copper a year at the site, provided it gets permission from the Peruvian government.

The U.S.-based miner had proposed four high altitude lake reservoirs be substituted with artificial lakes, which triggered massive strikes and protests that ended up forcing Newmont to suspend the project in November last year and the Peru’s government to declare a state of emergency in the area.

Political minefield

The contentious Conga, which was to begin production in early 2015, was designed basically as an extension of the Peru's Buenaventura's nearby Yanacocha, Latin America's largest gold mine, which is approaching the end of its life.

Conga is 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.

The project is the largest ever single private investment in the country and has turned into a political minefield for President Ollanta Humala’s administration, with many in the opposition and within his own party calling for drastic changes to his handling of recent protests.

But negative reactions to mining projects are not unusual in Peru. Large-scale protests against exploration and extraction activities have swept the country in recent years, making of social conflicts the main risk for investors in the local industry.

Peru’s extractive sector, which accounts for some 60% of the economy, is expected to bring the country $50 billion in future investment over the next decade.

Newmont Q3 profit spirals on lower production, increased costs

Canada’s Newmont Mining, the world’s second-largest gold miner on Thursday reported a 26% drop in third-quarter profit as production slumped at its Indonesian and Australian/Pacific mines, and operating costs spiralled.

During the quarter ended September 30, the company’s Batu Hijau mine, in Indonesia, reported an 89% drop in gold production, and copper production decreased by 54% as a result of processing lower-grade ore.

Batu Hijau produced 7 000 oz of gold and 19-million pounds of copper at a cost of about $1 115/oz of gold and $2.38/lb of copper. Costs attributed to sales increased by 134% an ounce and 164% per pound of copper, owing to lower production and higher waste mining costs. Waste tons mined increased by 57% from the same comparable period a year earlier, as Phase 6 waste removal continued as planned.

Gold production from the Australia/New Zealand region decreased by 14% from the prior-year quarter owing to lower underground mining rates at Tanami, a delay in openpit ore production at Waihi and lower grades at Jundee and Kalgoorlie, partially offset by higher throughput at Jundee and higher grades at Tanami. The overall cost of sales per ounce increased by 36% year-on-year owing to lower production, higher operating costs, a stronger Australian dollar net of hedging gains and the impact of the carbon tax in Australia.

Newmont’s reported consolidated attributable gold production of 1.2-million ounces was down 5% year-on-year and copper production of 35-million pounds was down 38% from the prior-year quarter. Gold sales during the period were down 4% at 1.2-million ounces and copper sales were also down 27%, totalling 37-million pounds.

The average realised gold price for the three-month period was $1 659/oz and $3.55/lb of copper. This resulted in consolidated revenue of $2.5-billion, a decrease of 10% from the comparable quarter a year earlier.

Profit fell to $367-million or 74c per share, from $493-million, or 98c a share a year earlier.

"Balanced performance from our operating portfolio allowed us to deliver results that were on track with our expectations for the quarter with strong performances at both our Nevada complex, in North America, and Yanacocha, in Peru, offset by weaker performance in our Asia Pacific region, primarily at Boddington and Tanami in Australia," Newmont CEO Richard O'Brien said in a statement.

He added the company was seeing progress on its commitment to deliver profitable ounces from new projects, including our Akyem project, in Ghana, which was 65% complete and proceeding on budget and on schedule to begin production in late 2013, and in Nevada where the company’s Emigrant mine started production during the quarter.

Newmont now expected to come in at the low end of its production outlook for the year to produce 5-million to 5.1-million ounces of gold and 145-million to 165-million pounds of copper for the full year, and at the high end of its narrower cost outlook of between $650/oz and $675/oz (on a co-product basis), as a result of operational issues at Tanami, Boddington and Waihi.

Newmont also increased its copper costs outlook to between $2.20/lb and $2.35/lb, mainly owing to higher production costs from Boddington and Batu Hijau.

The company maintained its capital expenditure outlook at between $2.7-billion and $3-billion, or $3-billion to $3.3-billion on a consolidated basis.

The company had approved a fourth-quarter gold price-linked dividend of 35c a share, based upon the average spot price for the third quarter.

The company’s Toronto-listed shares shed 4.55% off its value to close at C$54.12 apiece on Thursday.

Edited by: Creamer Media Reporter

Gold at $2 000/oz 'not unreasonable' - miner Newmont's CEO

The head of Newmont Mining Corp, the world's No 2 gold producer, said on Tuesday the price of gold could top $2 000/oz, which would benefit Newmont shareholders whose dividends are linked to the price of the precious metal.

"Up is good," CE Richard O'Brien told participants at the Denver Gold Forum, as the gold price rose toward six-month highs above $1 700/oz.

Noting that Newmont's current yearly dividend of $1.40 a share represented a 3% yield based on the gold price, O'Brien said that at $1 800/oz, the dividend would be around $2 per share, or a 4% yield.

"And at $2 000, which is not unreasonable, the dividend would be $2.70 a share, which is a 5.4% yield," he said.

Gold has never reached $2 000. On September 6 last year, it reached an all-time high of $1 920.30/oz.

"If the price goes up, I think you will see us outperform the entire sector," O'Brien told the industry conference in Denver. His comments were webcast and monitored in New York.

Spot gold was up 0.4% at $1 731.20/oz in New York on Tuesday. The price has risen 2.5% this month to its highest level in six months.

Newmont's stock was up 1.5% at $52.14 in afternoon trading on the New York Stock Exchange.

Newmont introduced its gold price-linked dividend policy last year to attract investors, who are often more interested in buying physical gold than shares in the companies that mine it.

In July, Denver-based Newmont announced a quarterly dividend of 35c per share, payable on September 28. That represents an annualized dividend of $1.40 per share.

Source: Reuters

Anti-mining protests take a toll on Peru’s foreign investment

After almost a year of non-stop anti-mining protests in different regions of Peru, the country’s mining, oil and energy society (SNMPE) says investors have started looking for greener pastures and so mining investment in the South American nation is expected to fall 33% next year.

Instead of the lauded $6 billion in mining invested forecasted for 2013 earlier this year, SNMPE says the country’s sector will attract about $4 billion, according to the head of the mining committee at SNMPE, Eva Arias, as quoted by the state news agency Andina (in Spanish).

The delays to Newmont Mining's (NYSE:NEM) controversial $4.8 billion copper-gold Conga project in the Cajamarca region is only one of the factors investors are taking into account when rethinking their portfolios. Mostly they worry over the large number of mining projects dealing with social conflicts, such as Swiss based-Xstrata’s Tintaya copper mine, near Cuzco, in southeastern Peru.

Earlier this week, local newspaper Gestion reported that 15 large-scale and mid-size mining projects with a total investment of $17 billion were delayed between December 2011 and July of this year. The numbers do not consider Conga that, if included, would take the total up to $21.8 billion, according to the article (in Spanish only).

The projects include US-based Southern Copper's (NYSE: SCCO) Toquepala copper mine expansion in Tacna region, local miner Minsur's Mina Justa copper project at the Marcona property in Ica, Chinese company Nanjinzhao's Pampa del Pongo iron ore project in Arequipa and Toronto-based Sulliden Gold's (TSX: SUE) Shahuindo project in Cajamarca.

At least six of those 15 projects were scheduled to fire up operations this year, with the rest expected to start between 2013 and 2015. The majority have postponed the start dates by one or two years, according to the newspaper.

In response to the press reports, mines and energy minister Jorge Merino said the government has already approved $28 billion worth in project, which environmental impact studies (EISs) are underway.

The authority noted that the alleged delays reported in the media were related to "projects that have not completed exploration and that do not have an EIS," he told La Republica.

Peru is the world's second biggest producer of copper and silver and a major producer of gold, zinc, lead and other minerals. The country’s extractive sector, which accounts for some 60% of the economy, is expected to bring $50 billion to the local economy in future investment over the next decade.

Peru gold, copper mining opposition intensifies

Newmont Mining has been operating Latin America’s largest gold mine, Yanacocha, since 1993. The mine is nearing the end of its life and Newmont wants to develop the nearby $4.8 billion Minas Conga copper and gold project, which will be the biggest foreign investment in Peru’s history. But the project has run into intense local opposition and five people were killed during recent protests, causing the government to impose a state of emergency.

Opponents, led by Cajamarca’s president, contend that the project will harm scarce water resources in the area. Their position has clashed with that of Peruvian President Ollanta Humala, who officially announced his support for Minas Conga in late June. This conflict has become a high-stakes test of how Peru treats foreign investment. The country has more than $50 billion in mining investments in the pipeline and taxes from mining are a key source of government revenue.

Resolving the conflict is a major challenge for the one-year-old administration of Humala, whose approval ratings are declining even as the economy is projected to grow 5.5% this year and 6% in 2013.

While the country’s decadelong economic boom has lifted many Peruvians out of poverty, about 30% of the population is still classified as poor with poverty especially widespread in rural areas. When he was running for office, Humala was seen as a left-wing radical. He won last June’s election by promising he would ensure that the poor get the benefits from the country’s mineral wealth. But, once in power, Humala dramatically reversed course, pursuing orthodox free-market policies.

“We’re still defending the economic model,” said Claudia Cooper, research associate at University of the Pacific in Lima. In the early 1990s, Peru opened up its economy via market-oriented reforms, privatizing industries and taking steps to promote trade and foreign investment. This free-market and investor-friendly model, Cooper noted, is supported by the majority of Peruvians, but about a third of the population doesn’t want the country’s mineral wealth to be owned by foreign corporations such as Newmont, Southern Copper Corp. SCCO -1.41% , Anglo American UK:AAL +0.75% and Xstrata

The social conflict tied to Minas Conga is probably the highest-profile one in Peru now, but it’s certainly not the only one. For instance, in the south of the country, Xstrata has recently seen violent protests against its Tintaya copper mine, which the Anglo-Swiss firm wants to expand.

“You have to separate the economic issues from the political issues. Conga is more of a political issue,” said Guillermo Arbe Carbonel, an economist at Scotiabank in Lima.

He pointed out that while social conflicts make the headlines, very few mining projects in Peru have actually been stopped or suspended.

But Cooper is less sanguine. “The natural-resources environment has deteriorated a lot in the past six months,” she said. “They [the government and protesters] are negotiating and we are hoping that anger is going to diminish,” she said, referring to the Minas Conga conflict.

Ever since Peru opened up its economy in the early 1990s, its resources have drawn foreign mining firms. The country has rich deposits of copper, silver and gold, as well as lead, zinc, tin and iron ore.

Minas Conga is estimated to hold 6.1 million ounces of gold and 1.7 billion pounds of copper. Like the Yanacocha gold mine, the project is a joint venture between Newmont, which has a majority stake, and Compania de Minas Buenaventura BVN -1.32% , a Peruvian precious-metals company. International Finance Corp. also has a small stake.

On a recent July evening in Lima, Miguel Santillana drew a map of Peru and recounted its history since the Spanish defeated the Incas at the battle of Cajamarca in 1532, plundering their gold and bringing devastating smallpox to the Andes.

Santillana, an analyst at the Peru Institute who has also worked as a consultant for foreign mining companies, said there was bad blood from the beginning between the local community and the Yanacocha mine operators, as people in Cajamarca tend to associate mining with abuse of resources.

The current conflict over Minas Conga has much more to do with politics than environmental concerns and it’s an effort to redefine the country’s economic model, according to Santillana, who believes that political leaders in Cajamarca want to weaken Humala and redirect Peru toward left-wing policies like those pursued by Ecuador, Venezuela and Bolivia.

In late June, Newmont said in a statement that before it begins the construction of Minas Conga mining facilities, it will build water reservoirs that will benefit the local community. But this commitment failed to appease the project’s opponents and the conflict has escalated.

Xstrata and Newmont declined interview requests for this story. The office of Peru’s economy minister said he was unavailable for an interview in Lima in early July due to a previously scheduled trip to Asia.

Besides Minas Conga, there are several other major mining projects in Cajamarca and observers think their fate is intertwined. These include Rio Tinto’s UK:RIO +0.48% RIO -1.77% La Granja copper project, which the company describes as one of the world’s largest undeveloped copper deposits, and Anglo American’s Michiquillay copper deposit.

Analysts at Eurasia Group wrote in a June report that anti-mining opposition is unlikely to develop into a nationwide movement, but it does have the potential to delay or derail certain projects, which has happened in the past. For instance, Peru dropped Newmont’s Cerro Quilish project in Cajamarca in 2004 and Southern Copper’s Tia Maria project in Arequipa in 2011.

Javier Torres, an anthropologist with nonprofit group SER, said the Minas Conga issue is very complicated to resolve and very politicized. He thinks the government should suspend the project and have an open discussion with the local community. President Humala may address the issue in his message to the nation on July 28, Peru’s independence day.

“We have to win this political fight,” Cooper said. “We have to get consensus on how we want to grow.”

Source: Marketwatch

Newmont lowers gold, copper production guidance for 2012

Newmont anticipated lower gold and copper production during the second quarter and the first half of the year, as well as a decline in profits.

Newmont Mining Thursday narrowed its gold guidance from 5 million to 5.2 million ounces to a range of 5 million to 5.1 million ounces this year, due to lower tons mined at Tanami.

Attributable 2012 copper production is being lowered from prior guidance of 150 million to 170 million pounds to a new range from 145 million to 165 million pounds.

Attributable gold and copper production for the second-quarter 2012 was 1.18 million ounces and 38 million pounds, down 3% and 10%, respectively from the 1.22 million ounces and 42 million pounds reported during the second quarter of 2011.

For the first half of this year, Newmont reported attributable gold production of 2.49 million ounces, down from 2.56 million attributable ounces reported during the same period of last year. Attributable copper output was reported at 73 million pounds during the first six months of this year, down from 96 million pounds during the first half of 2011.

"As expected, our second quarter gold production was impacted by annual planned mill maintenance in Nevada and lower gold and copper production from Batu Hijau in Indonesia, as we continue with the planned stripping in Phase 6," said Newmont CEO Richard O'Brien.

FINANCIALS

Newmont reported adjusted net income of $294 million or 59-cents per share for the second quarter, down from $445 million or 90-cents per share for the second-quarter 2011.

Net income for the second quarter was $279 million, down 28% from $387 million in net income for the same period of last year.

For the first half of this year, Newmont reported an adjusted net income of $872 million or $1.76 per share, down from the adjusted net income of $958 million or $1.94 per share reported during the first half of 2011.

Net income for the first six months of this year was $769 million, down from $901 million reported during the same period of last year.

"Our capital expenditures are expected to be approximately $300 million lower than originally planned for the year, largely as a result of our slower development timetable at Conga in Peru," said O'Brien. ‘We also expect our advanced projects, exploration and G&A expenditures to collectively be approximately $100 million power this year."

Newmont is revising its 2012 attributable capex outlook from $3 billion to $3.3 billion to a range of $2.7 million to $3 billion. The revision is due primarily to the deferral of the development of the Conga project.

The board of directors approved a third quarter price-linked dividend payable of 35-cents per share.

Newmont mine protest clash turns deadly in Peru

Three people have died and many injured when Peruvian police clashed with protestors in the town of Celendin, who are opposed to Newmont's plans to build a $5bn gold mine.

Two people were killed and 21 were injured on Tuesday when Peruvian police clashed with protesters opposed to a $5 billion gold mine planned by Newmont Mining , a health official in the northern region of Cajamarca said.

Most of the victims were being treated in the city of Cajamarca and the town of Celendin where the clashes occurred - near where the U.S. company plans to build the biggest mine in Peruvian history, the official, Reynaldo Nunez Campos, said.

"There are two dead in Celendin," he said on RPP radio.

The interior ministry said two police officers were shot by gun-carrying protesters, though it was not immediately clear if those killed were policemen.

Tuesday marked the first time rallies turned deadly in Cajamarca since protests started there late last year. Prime Minister Oscar Valdes said the government might suspend freedom of assembly to quell clashes between hundreds of police, soldiers and protesters.

"I don't think we Peruvians should tolerate bad apples who incite violence that ends up causing deaths," Valdes said.

President Ollanta Humala took office a year ago urging mediation to solve hundreds of disputes over spoils from natural-resource projects, but has since used emergency rules at least twice to end anti-mining protests in one of the world's top metals exporters. Critics say the harsher measures are symptomatic of his drift to the right.

Protesters have halted nearly all work at Newmont's Conga mine since November saying it would cause pollution, harm water supplies, and fail to bring enough local economic benefits.

The president of the region of Cajamarca, Gregorio Santos, who has been a strident critic of the proposed mine, accused Humala's government of putting big miners ahead of poor peasants left behind by the country's decade-long economic boom.

CRITICISM OF PRESIDENT

"This is the government we have - everything for miners and bullets for the people," he said on Twitter. "Humala, this is the cost of defending the savage neoliberal economic model and multinational miners. This is the cost of not keeping your word."

Humala has said the project is vital for Peru as it would generate thousands of jobs and huge tax revenues in one of Latin America's fastest-growing economies.

Once a firebrand leftist, Humala has irked traditional allies on the left by defending foreign investment and free trade since taking office a year ago.

Over the weekend, leaders of the protests, including Wilfredo Saavedra, a lawyer who once belonged to the Tupac Amaru insurgency, vowed to take tougher measures to stop the mine.

Protesters have expressed outrage that Humala gave permission a week ago to proceed with construction of the project after Newmont agreed to comply with a more stringent environmental mitigation plan recommended by outside experts. Humala's green light ended a seven-month-long impasse over the mine's future.

Newmont has agreed to build larger reservoirs that would replace two or more in a string of alpine lakes and guarantee year-round water supplies in towns that suffer during the dry season.

The company wasn't immediately available for comment on the violence.

On Monday, Humala responded to threats of new rallies by saying protesters would have to "face the consequences" of their actions.

Conga, which is partly owned by local miner Buenaventura , would produce between 580,000 and 680,000 ounces of gold annually.

Peru, which has vast mineral resources, is the world's second largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain a decade-long economic boom has passed them by.

Source: Reuters

State of Emergency declared in Peru after 3 killed in mining clash

Peru's government declared a state of emergency in three provinces after three people died and at least 21 suffered injuries Tuesday in a violent protest against a gold mining project that is the South American nation's biggest investment.

It was the second time in five weeks that the government has declared an emergency after anti-mining protests produced fatalities.

Justice Minister Juan Jimenez announced the emergency, which suspends civil liberties, after several thousand protesters attacked a provincial town hall and battled police and soldiers.

Police guarding the municipal building in Celendin, a town in the northern state of Cajamarca, fought back when the protesters attacked and later got help from soldiers, officials said.

Jimenez said two police officers and a solder were wounded by gunfire. Authorities did not say whether police or troops used their weapons.

Three male civilians were killed during the fight, at least two of them by gunshots to the head, Reynaldo Nunez, Cajamarca's health director, told The Associated Press by phone. Most of the injured had received blows, he said.

Nunez said he did not know whether police or soldiers were among the injured.

The local prosecutor said 15 people were arrested.

Celendin is a stronghold of opposition to the proposed $4.8 billion Conga gold mine, which many locals fear will hurt their water supplies. The mine's majority owner is Newmont Mining Co., a U.S. company based in the state of Colorado.

It is one of two main recent flashpoints of opposition against mining in Peru to fall under a government-declared state of emergency. The other is the highlands province of Espinar, near the former Incan capital of Cuzco. The government declared a 30-day state of emergency there on May 29 after two people were killed in a protest against a Swiss-owned copper mine.

In Cajamarca, protesters backed by the regional president, Gregorio Santos, have refused to accept a compromise on Conga proposed by President Ollanta Humala that his government says will protect water supplies.

The compromise includes the construction of four reservoirs to replace reservoirs that are to be destroyed by the project.

Celendin's town manager, Moises Silva, told the AP that violence broke out when construction workers arrived at the town hall and began kicking its main door, prompting police officers to fire tear gas.

"After that, a fierce battle began between the protesters and police, and also soldiers who intervened in support of the police," he said. "You could hear gunshots."

The violence came just days after Yanacocha, the company in charge of Conga, began work on the new reservoirs.

The anti-mining protesters accuse Humala, who was elected one year ago, of betraying a campaign promise he made in Cajamarca that access to clean water would come before mining.

The regional president, Santos, called Tuesday's deaths "the dramatic cost that is paid in politics when one doesn't keep one's word."

Humala's modified message after taking office and moving from left to center on the political spectrum holds that responsible mining can co-exist with environmental protection and provides important revenues that can help lift rural Peruvians from poverty.

Mining accounts for more than 60 percent of Peru's export earnings and has been the engine of a decade-long economic boom.

Leading foe rejects new plan for Peru mine

A prominent regional leader who has led protests against a $4.8-billion gold and copper mining project in northern Peru said he opposed a new offer made by President Ollanta Humala and Newmont Mining.

Under the new plan, reservoirs would be built to expand by 10 times the water storage capacity of existing lakes near the proposed site of the mine. With Humala’s backing, Newmont Mining said the reservoirs would address the concerns of residents that the Conga project could endanger water supplies.

But in a telephone interview, Gregorio Santos, president of the Cajamarca region, said Humala and Newmont had both lost credibility. Santos said he and other opposition leaders in northern Peru were sticking to their demand that an independent environmental impact study be carried out before the project goes ahead.

The Cajamarca region is where Newmont operates the Yanacocha open-pit gold mine, one of the largest in the world.

“Humala says he wants dialogue, but he has not listened to the people of Cajamarca,” Santos said. “Now we don’t believe him, and he is only repeating the words of economic power groups.”

In an address to the nation Saturday, Humala said the Conga project would go forward and promised that water supplies would not be compromised.

“Water comes first, that’s the condition,” he said. “My government would never permit the development of any mining project that exposes the population to the loss of water or the lack of quality standards required for human consumption.” '

Mining has been a prime engine of Peru’s stellar economic growth over the last decade, luring billions of investment dollars amid a global commodities boom. Humala has said he needs the taxes and royalties from the Conga project, which was approved by his predecessor, to help pay for ambitious social programs.

Observers say the project is also a gauge of Humala's commitment to foreign investment despite his leftist rhetoric during his successful presidential campaign last year.

Colorado-based Newmont says the mining design is sound and there is no need for the months-long delay that would result from carrying out another environmental study. Company Vice President Carlos Santa Cruz said recently that Newmont was willing to address any mistakes of the past, reach “a new state of understanding” with residents and contribute to a $49-million social works fund.

Peasant protests over mining projects in Cajamarca in December and in Espinar province to the south in May prompted the government to declare states of emergency, suspending the right to assembly and other constitutional protections. Unlike with the standoff in Cajamarca, protesters against the $1.5-billion Espinar project proposed by Swiss-based Xstrata are negotiating with the company.

“We will not accept Conga," said Santos, the regional president. "There are projects in Peru that are just going to sit there because the people feel they would mean abandoning their natural resources. Cajamarca will continue resisting.”

Newmont accepts stricter conditions for Peru mine

Newmont Mining said on Friday it has accepted a stricter environmental mitigation plan for its $4.8-billion Conga gold mine and could resume work on the massive project.

Conga, the biggest mining project ever proposed in Peru, has been stalled since November because of ongoing protests by community groups who say it would hurt water supplies and cause pollution.

Newmont said that before the mine is built it will first build reservoirs that will guarantee year-round water supplies in towns that currently suffer shortages.

In an attempt to quell protests, the government had hired outside experts to recommend improvements to the company's own environmental impact plan.

President Ollanta Humala said on Thursday that Newmont had "finally identified" with the recommended changes that urged the company to build larger reservoirs that would replace two or more in a string of alpine lakes..

Humala is slated to address the issue on Saturday in a nationwide address where he is expected to call for more mediation to calm dozens of social conflicts over the spoils of natural resources.

"We have ratified our decision to implement the recommendations international auditors made to the environmental impact study for the Conga project," Newmont's head of South America, Carlos Santa Cruz, said in a statement.

"We share the government's call for dialogue, for the vast majority of civil society in Peru," Santa Cruz said in reference to local political leaders in the northern Andean region of Cajamarca who are leading protests to halt the mine. Gregorio Santos, the president of Cajamarca, did not immediately react to Newmont's announcement.

Conga, which is partly owned by local miner Buenaventura , would produce between 580 000 oz/y and 680 000 oz/y of gold.

Peru, which has vast mineral resources, is the second largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain Peru's decade-long economic boom has passed them by.

Source: Reuters

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Minas Conga Project:

Conga Project - Water First, mine later

Peru's Humala says water guaranteed near Newmont mine

Peruvian president Ollanta Humala said on Saturday Newmont Mining would ensure ample water for towns near its proposed Conga gold mine, and that his government would not allow new mines to open if they hurt water supplies.

U.S.-based Newmont on Friday accepted a stricter environmental mitigation plan for its mine, which will now require total investments of $5 billion, making it the most expensive mine in Peruvian history.

Newmont said that before the mine is built it will first build larger reservoirs that will guarantee year-round water supplies in towns currently suffering shortages. The bigger reservoirs are expected to add up to $200 million to the project's original $4.8 billion price tag and take up to two years to build.

"We can and will make sure the company guarantees water supplies. This is my promise to Cajamarca," Humala said on Saturday. "My government won't permit the development of any mining project that exposes the local population to water shortages or to water that doesn't meet quality standards for human consumption."

The larger-capacity reservoirs were recommended by outside experts hired to improve upon Newmont's own environmental impact plan in an attempt by the government to quell protests that have stalled work on the mine since November. The water project would replace two or more in a string of alpine lakes.

"We have ratified our decision to implement the recommendations international auditors made to the environmental impact study for the Conga project," Newmont's head of South America, Carlos Santa Cruz, said on Friday.

"We share the government's call for dialogue, for the vast majority of civil society in Peru," Santa Cruz said in reference to local political leaders in the northern Andean region of Cajamarca who are leading protests to halt the mine.

Gregorio Santos, the president of Cajamarca, criticized Humala on Saturday and reiterated that Conga "isn't viable." Santos' term ends in 2014.

Conga, which is partly owned by local mining company Buenaventura , would produce between 580,000 and 680,000 ounces of gold annually.

Humala also said he would lift emergency rules that several weeks ago banned freedom of assembly in the southern region of Cusco over protests against Xstrata's Tintaya copper mine. All sides in that dispute over voluntary contributions to the municipality of Espinar are now in settlement negotiations.

Peru, which has vast mineral resources, is the second-largest producer of copper and sixth-largest of gold, but many mining communities are poor and complain Peru's decade-long economic boom has passed them by.

Source: Reuters

Newmont 'identifies with' Peru mine requests -Humala

Peruvian President Ollanta Humala said on Thursday Newmont Mining has "finally identified" with stricter environmental mitigation plans the government requested for the Conga gold mine project.

Humala did not say if the company had specifically told the government that it would accept calls for a more demanding environmental plan and move forward with the $4.8 billion project, which would be Peru's largest mining investment ever.

Conga has been stalled since November over protests by community groups who say it would hurt water supplies and cause pollution. The government has sought to mitigate the conflict by asking Newmont to make slight changes to its proposal.

"We welcome the fact that they have finally identified with our proposal," Humala told reporters when asked if Newmont had accepted recommendations to build larger reservoirs that could replace two or more alpine lakes.

Newmont, which says the project would guarantee year-round water supplies in towns that currently suffer shortages, declined to immediately comment on Humala's statement.

In an attempt to quell the protests against the mine, the government hired outside experts to recommend improvements for the project's environmental impact plan.

Conga, which is partly owned by local miner Buenaventura , would produce between 580,000 and 680,000 ounces of gold annually.

Newmont said last month that it would take a decision in late June on whether to push ahead with the project.

Peru, which has vast mineral resources, is the second largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain Peru's decade-long economic boom has passed them by.

Source: Reuters

Peru threatens to arrest pregnant antimining protesters

Peru threatened to arrest pregnant women who marched o n Tuesday against a $4.8-billion gold mine, prompting critics to ridicule the government over its latest heavy-handed tactic to quash antimining protests.

Ana Jara, Peru's minister of women and vulnerable populations, said pregnant protesters would be putting their unborn babies at risk by going to a rally against the mine US-based Newmont plans to build in the northern region of Cajamarca. She accused organisers of using pregnant women as shields to prevent police from breaking up protests now stretching into their 20th day.

In spite Jara's warning, dozens of expecting mothers marched in the northern region of Cajamarca on Tuesday, joining other protesters who say the mine would hurt water supplies and cause pollution.

President Ollanta Humala, a former military officer, took office in July urging mediation to calm hundreds of disputes nationwide over the spoils of natural resources that could delay billions in investments. But he has rankled lawmakers who say he has become impatient with intransigent protesters and too willing to rely on a firm hand to maintain order.

"The participation of pregnant women in public protests is intolerable and cannot be justified ... this puts the body and the health of the fetus at risk," Jara said on RPP radio.

She said the penal code carries a sanction of three years in prison for people who mistreat an unborn baby. Peru, like many primarily Catholic Latin American countries, has strict laws against abortion in most cases.

"We aren't going to sit here and do nothing ... we have coordinated with the attorney general's office to guarantee the integrity of the babies," she said.

The company has said it was willing to improve its environmental mitigation plan for the mine, which Humala says would generate thousands of jobs and enormous tax revenues in one of the world's top metals exporters.

Work on the mine has been stalled since November, but the company is expected to announce plans to move ahead with the project sometime this month.

The government has tried to isolate the protesters as far-left "extremists." Jara was teased over her comments by many who sympathized with the women's right to march.

"Minister Jara: If I'm ovulating and participate in a march, would I also be committing a crime by putting a possible conception at risk?" tweeted Maritza Espinoza, a journalist who tweets as @mareshu.

Others quickly sent around a link to a video showing Humala's wife, Nadine Heredia, speaking at a political rally for her husband while six-months pregnant.

"It's a crime!" journalist Gerardo Cardenas, who tweets as @Gerardo_M, said today of Heredia's 2010 speech.

Some critics said that, according to Jara's logic, pregnant women should be prohibited from walking on the street because they might get hit by a car and hurt their fetus.

Humala's government has struggled to calm some 250 disputes over natural resources in Peru and at times has suspended freedom of assembly in a bid to end antimining protests. His approval rating fell to 45% this month, below 50% for the first time ever as he tries to manage the disputes.

Police last month arrested a provincial mayor for leading a protest against global miner Xstrata in the southern region of Cusco. The mayor was jailed for several days before the judiciary ordered he be freed, saying he had been wrongfully imprisoned. Justice Minister Juan Jimenez criticized his release.

At least ten people have died in disputes over natural resources since Humala took office in July. At least 174 people died in similar protests during the government of his predecessor, Alan Garcia.

Edited by: Reuters

Peru Anti-Mining Movement Gains Steam

Gregorio Santos, president of the Cajamarca region, in a speech during a rally Tuesday, called on Peruvians to overthrow the Humala administration for supporting development of the $4.8 billion Minas Conga project, which will be the largest mining investment ever in Peru.

"What do we do when the president doesn't keep his word?" Santos asked. The crowd of anti-mining protesters responded, "We get rid of him!"

"What do we do when the president doesn't honor his commitments?" Santos yelled. "We get rid of him!" the crowd responded.

Protesters, who say that Minas Conga will cause environmental damage, succeeded in stalling the project last year, forcing the government and owner Newmont Mining to suspend work to carry out new environmental studies.

Political analysts say there is little chance of a break in the democratic order in Peru, even as various anti-mining protests gain strength and turn violent. Still, the protests pose a significant challenge to Humala's presidency, who took office nearly a year ago on a leftist platform and adopted center-right economic policies in one of the world's leading producers of precious and base metals.

Members of the executive branch said the administration will remain firm in its market-friendly policies, and late Tuesday, the office of the president of Congress called on the nation's chief prosecutor to charge Santos with inciting rebellion.

Chief prosecutor Jose Pelaez said in a broadcast interview Wednesday that there will be an investigation into Santos' statements.

Santos said that he was merely expressing his opinion and hadn't committed any crime. He also charged that the Humala administration wasn't carrying out its campaign promises, including calling a constituent assembly to change the nation's constitution.

In a Twitter message Tuesday, Humala defended his mining policies, saying, "We are going to carry out the grand transformation of Peru with a firm hand, persistence and without fear or abrupt decisions."

Political analysts say that many of those on the left who supported Humala in the elections last year now feel betrayed by the government's turn to the right.

Three left-leaning members of Humala's Gana Peru coalition defected this week, saying they disagreed with the government's economic policies and its support for mining.

"The conflicts could reproduce themselves in other zones," said political analyst Santiago Pedraglio. "The president hasn't explained why he changed his policies and many people who helped bring him to power feel betrayed."

Observers add that Santos' call for an insurrection is more likely a political strategy aimed at raising his profile as an "outsider."

University of Lima political scientist Luis Benavente said that Santos is seen as likely to run for president in 2016 when Humala is barred by law from holding a second consecutive term.

Still, analysts are concerned that the anti-mining protests in Peru could snowball.

"The protests could escalate and have a domino effect. What Santos is trying to do is to create a power vacuum," Benavente said, adding that presidents in Venezuela, Bolivia and Ecuador captured power by running against the status quo and sometimes leading street protests.

The Humala administration has adopted a strategy of cracking down hard on violent anti-mining protests, while offering to negotiate with local authorities to find solutions to their demands.

So far about 14 people have been killed in various anti-government protests since the Humala administration took over.

Anti-mining activists in conjunction with some politicians in recent months have enveloped Peru in a series of often violent demonstrations against the mining sector, including against mining operations of Anglo-Swiss company Xstrata in southern Peru.

In a statement Wednesday, Newmont Mining said, "We believe dialogue and constructive engagement is the best and most productive way to address issues around mining investment and development. Last week more than 10,000 people came out to demonstrate that they want a future based on progress and development. Their voices also should be heard and are just as important."

Source: Foxbusiness.com

Newmont cuts spending on Peru mine project

Newmont Mining Corp said on Wednesday it will cut capital spending on a controversial gold mine project in Peru by two-thirds for the 2012/13 period because of delays caused by government and environmental reviews.CEO Richard O'Brien told investors in a New York presentation that the company will now spend $440-million on the Conga project over the next 18 months, down significantly from the $1.5-billion it had previously budgeted.

Newmont, the world's second-largest gold producer, is still evaluating the mine plan, after reviews by the Peruvian government and an independent panel of experts, which have recommended certain changes.

The company is expected to make a final decision by the end of June on whether to go ahead with the project, which has sparked protests over the issue of water supplies for local farmers and communities.

Newmont cuts spending on Peru mine project

Newmont Mining Corp said on Wednesday it will cut capital spending on a controversial gold mine project in Peru by two-thirds for the 2012/13 period because of delays caused by government and environmental reviews.CEO Richard O'Brien told investors in a New York presentation that the company will now spend $440-million on the Conga project over the next 18 months, down significantly from the $1.5-billion it had previously budgeted.

Newmont, the world's second-largest gold producer, is still evaluating the mine plan, after reviews by the Peruvian government and an independent panel of experts, which have recommended certain changes.

The company is expected to make a final decision by the end of June on whether to go ahead with the project, which has sparked protests over the issue of water supplies for local farmers and communities.

Edited by: Reuters

Minas Conga is indicative of a national problem, Buenaventura CEO says

The difficulties surrounding the development of the US$4.8bn Minas Conga copper-gold project in Peru's Cajamarca region are indicative of a national problem, according to the CEO of local precious metals miner Buenaventura (NYSE: BVN), Roque Benavides.

US-based Newmont Mining (NYSE: NEM) controls 51.35% of Conga, while Buenaventura and the World Bank's International Finance Corporation hold 43.65% and 5% stakes, respectively.

"What is happening is a national problem... it's not an exception; it's a national problem that we want to solve," Benavides said.

The environmental impact study (EIS) for Conga was approved by authorities in October 2010 and the company received all the pertinent licenses to start construction.

"Suddenly, anti-mining residents and authorities said that it could not go ahead," Benavides said. "This indicates a problem between the national and regional governments, and not a company problem."

Newmont was forced to suspend construction in November last year due to increasingly violent protests against the project.

"We're expecting to make an announcement regarding the development of Conga in the next few days," Benavides said.

Conga will provide more and better quality water, additional opportunities for small and medium-sized companies and include infrastructure badly needed by the communities, according to Benavides.

Peru cannot allow the suspension of projects such as US-based Southern Copper's (NYSE, BVL: SCCO) Tía María or Canadian firm Bear Creek Mining's (TSX-V, Lima: BCM) Santa Ana. By allowing such events, "we're benefitting other countries," Benavides said.

Conga is the largest project in Peru's current mining portfolio, which stands at US$53.391bn.