Conga remains key for Newmont

Newmont Mining's (NYSE:NEM) $4.8 billion copper-gold project in Cajamarca Peru remains as one of the company’s priorities, but further development will be done on a very measured basis, said the company’s head of communications, Omar Jabara.

His comments come as a result of what he qualifies as a misinterpretation of Peru’s Prime Minister Juan Jimenez’s latest statement, which said that the Conga Project was no longer part of the government’s agenda.

Jabara explained that what the authority really meant was that the government needed to focus on how to boost Cajamarca’s economy, where Conga is located, instead of directing all efforts to Newmont’s proposed mine.

He emphasized that nothing has changed from what the company said in July during its second quarter earnings call conference, which is that further development of the Conga project will occur “. . .  only with local and national support and only if it can be done in a safe, socially, environmentally responsible manner with risk-adjusted returns that justify future investment.”

News outlets last week also reported on a poll in the Cajamarca region regarding the controversial project. According to the opinion survey, 78% of respondents were not in favour of Conga moving forward while 15% were supportive of it.

It wasn’t as widely reported, says Newmont, that 36% of the respondents said that while they are not in favour of the project advancing right now, they could change their position if certain guarantees regarding environmental protection and social benefits are put in place.

“That is why we remain focused on the construction of water reservoirs, the security and safety of the community, our employees and contractors is our first priority,” said Newmont in a press release.

The contentious Conga, which was to begin production in early 2015, but the project continues to be on hold until at least the end of 2013, was designed basically as an extension of the Peru's Buenaventura's nearby Yanacocha. That is Latin America's largest gold mine and it 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 South American country and has turned into a political minefield for the Humala administration with many in the opposition and within his own party calling for drastic changes to his handling of recent protests.