Newmont’s Conga mine could remain halted until 2018

Newmont’s Conga mine could remain halted until 2018

Output from Conga was supposed to replace production from the nearby Yanacocha mine (pictured), which is running out of gold.

Newmont Mining Corp's (NYSE:NEM), (TSX:NMC) proposed $5 billion Conga copper and gold project in Peru could remain halted another four years, Seeking Alpha reports.

The mine, originally scheduled to begin production next year, has been a source of controversy in the Andean country, with opponents worried it would pollute and drain local water supplies and the government openly supporting the mine— the largest ever single private investment in Peru.

The project, located roughly 3,700 meters above sea level, was approved in 2010 by then-president Alan Garcia's government, also involves local companies Buenaventura and Yanacocha.

Newmont decided to halt Conga’s construction work in November 2011 after violent protests led by governor Gregorio Santos forced the country's government to declare a state of emergency.

Social pressure continued during 2012, 2013 and early this year, with Peru’s government hiring international consultants to report on report on the viability of a new water strategy proposed by the company and, eventually, ordering order a suspension of all work at the site, except for the construction of water reservoirs.

Fresh threat

The project’s future became more uncertain last week as Conga’s main opponent, Gregorio Santos, was re-elected for the second four-year term to head the gold-rich Cajamarca region, where the mine is situated.

In an open letter to the community released late on Friday, the company's local subsidiary, Minera Yanacocha, said it would keep pushing for support for the project.

"We express our interest in continuing to invest in Peru and especially the Cajamarca region," the letter said according to BNamericas.

The project has the potential to generate up to 350,000 ounces of gold and 120 million pounds of copper a year, during its 19-year life.