Jan. 17 (Bloomberg) — Peru will concentrate most of a 1
billion-sol ($394 million) government investment in reservoirs
and water-treatment projects near Newmont Mining Corp.’s $5
billion Minas Conga gold project in a bid to defuse opposition
to the mine, the National Water Authority chief said.
A drive to build 25 reservoirs will benefit 1,500 farming
families, irrigate 2,350 hectares (5,800 acres) of land and
boost crops 11-fold in the northern Andean region of Cajamarca,
where protests left five dead last year, Hugo Jara said.
Protests in Peru caused the suspension of mines being built
by Newmont, Southern Copper Corp. and Zijin Mining Group Co. as
the mining industry seeks to invest $53 billion in projects over
the next decade. Newmont last year said it will spend $65
million for reservoirs at the Conga project after President
Ollanta Humala halted construction at the mine.
“Conflicts have grown due to the intensity of mining
investment over the past 10 years even though mines don’t use a
great deal of water,” Jara said in a Jan. 14 interview. “The
highlands have been neglected in the past but that’s changing
now.”
Infrastructure investment seeks to store water in high
Andean communities in 159 watersheds during the rainy season to
provide a steady supply in dry months, Jara said. At least half
of Peru’s water flow, estimated at 1.77 trillion cubic meters a
year, ends up in the sea, according to the water authority.
Newmont will complete one of its reservoirs by the end of
July, spokesman Omar Jabara said yesterday in an e-mailed
response to questions.
Water Use
Peru’s mining industry, the world’s third-largest copper
and zinc producer, uses 1 percent of the country’s water
compared with agriculture’s 85 percent, Jara said. Companies
including Anglo American Plc and Southern Copper may prevent
future protests by using seawater, though it adds to the cost of
the project by having to build a coastal desalination plant and
pump it to the highlands, instead of local freshwater sources to
process copper, he said.
The water authority will also certify Andean farming
communities’ water rights, giving them greater legal backing
during negotiations with mining companies, Jara said.
Newmont “looks forward to additional infrastructure and
social investments by the government in the Cajamarca region.”
Jabara said. “We fully support the national and local
governments spending the substantial tax revenues paid by mining
operations for their intended use of funding economic,
infrastructure and social development.”
Newmont fell for a fifth session, losing 20 cents, or 0.5
percent, to $44.55 at 12:02 p.m. in New York trading. Cia. de
Minas Buenaventura SAA, a 59 percent partner in Conga, dropped
15 cents, or 0.4 percent, to $35.03.
To contact the reporter on this story:
Alexander Emery in Lima at
aemery1@bloomberg.net
To contact the editor responsible for this story:
Randall Hackley at
rhackley@bloomberg.net
