Newmont could redirect Conga billions to Ghana if delays continue
Newmont Mining Corp. (NEM), world number two gold producer, said on Wednesday it has options to spend its capital elsewhere to meet production targets if its Conga project in Peru does not restart.
Dow Jones Newswires reports Ghana would be the focus of Newmont's expansion to up gold production from 5.2 million ounces to 7 million ounces by 2017. The company already operates the Ahafo mine in the African country and is developing the Akyem project:
"We are working with local and regional government about accessing the water situation," John Seaberg [head of investor relations] told Dow Jones Newswires on the sidelines of the Mining Indaba conference. But if the project is delayed for a very long period of time, "we do have other options in our portfolio…where we can redeploy our capital," if needed.
Peru’s Prime Minister said in January the stalled Conga project will be developed as the government could end up with a “huge” compensation payment if the $4.8 billion mine does not go ahead.
Newmont stopped construction of the copper-gold project in November after violent protests in the poor Cajamarca region of northern Peru.
In January Peruvian officials also announced a programme of social and infrastructure investments in Cajamarca aimed at winning over local protesters, led by Cajamarca’s Maoist governor Gregorio Santos. The protesters say Conga will destroy the environment by transforming four high Andean lakes into reservoirs for mining operations.
Conga has gold deposits worth about $15 billion at current prices and would be the biggest investment ever in Peru mining.