November 3, 2011
The Peruvian Minister of Mines and Energy Carlos Herrera told Congress on Wednesday that the $4.8 billion Minas Conga mine project would not continue without the approval of the local community. “Projects should be approved by the people who will be affected by them," said Minister Herrera. Accompanied by the ministers of agriculture and the environment, Minister Herrera traveled to the project site in the northern Cajamarca region late Wednesday to negotiate an accord between the American mining company Newmont Mining and the local community.
Minas Conga is being developed in collaboration with Peruvian mining company Buenaventura and is expected to produce between 580,000 and 680,000 ounces of gold per year, starting in 2015. But local residents are concerned that the mine’s proximity to a water basin will cause pollution and sap vital water supplies. Responding to protests by local communities, some of which turned violent, Minister Herrera told Congress that "the position of the government is that it wants investment, but not at any price."
While it is unlikely that the project will be abandoned, Prime Minister Salomón Lerner Ghitis said on Wednesday that the government will carry out a "strict" evaluation of the mine’s environmental impact. On the other hand, the National Mining, Oil and Energy Society (SNMPE) said the government “cannot allow small, violent groups to impede inclusive development and private investment." An Americas Quarterly article to be released in the Fall issue on November 9 ("Do Chinese Mining Companies Exploit More?") looks at the labor rights and environmental records of Chinese mines in Peru.
As the world’s sixth largest gold producer, mines like Conga have fueled Peru’s stunning 7 percent annual growth rate. At the same time, President Ollanta Humala has made social inclusion a priority for his administration, promising to resolve the countless social and environmental conflicts plaguing Peru—many of them over mining and oil projects. President Humala will address the issue of responsible investment and social inclusion at the Americas Society and Council of the Americas Latin American Cities Conference in Lima tomorrow.