Newmont's Peru ambitions take another knock as water authority rejects Yanacocha expansion

Peru's National Water Authority has rejected a permit for Newmont Mining (NYSE: NEM) to extend its Yanacocha gold mine, South America's largest.

Gato Encerrado reports ANA found that the Yanacocha Oeste project would pollute the Rio Grande river, which supplies water to 70% of Cajamarca's residents.

Yanacocha Oeste is 18 kilometres from the regional capital high in the Andes of northern Peru and calls for a new open pit to be constructed.

The operators had requested permission to dump mining waste into the river, but ANA found that Newmont and partner Compañía de Minas Buenaventura did not comply with 17 of the 30 directives issued by the authority.

Denver-based Newmont, the world's number two gold producer, and Buenaventura is advancing another project in the area called Minas Conga that has also run into stiff opposition.

Construction of the $4.8 billion gold-copper Conga mine has been suspended for more than a year after violent protests and blockades routes in and out of Cajamarca forced the government to declare a state of emergency.

Newmont recently announced that it will nevertheless spend $150 million on Conga this year.