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UPDATE 1-Newmont tries to manage costs at delayed Peru mine
March 14, 2012 / 7:38 PM / 6 years ago

UPDATE 1-Newmont tries to manage costs at delayed Peru mine

* Cost impact study to be finished in coming weeks
    * Newmont to invest "last drop of sweat" in stalled project


    LIMA, March 14 (Reuters) - Newmont Mining Corp. is
reevaluating the cost of its delayed Conga gold and copper
project, the costliest mine ever proposed in Peru, the company's
senior vice president in South America said on Wednesday.	
    The project, launched with an announced investment of $4.8
billion last year, has been stalled since November due to
opposition from farmers and local government officials, costing
the company millions.	
    "Obviously the paralyzation is having an impact... in the
first few days we said it was around $2 million per day but we
have reduced activity to control costs," said Carlos Santa Cruz,
Newmont's top executive in Peru and regional vice president.	
    He said the company had terminated contracts with some 6,000
people in order to lower financial pressures on the site in the
northern region of Cajamarca.	
    "We hope to finish the evaluation in the next few weeks to
see what the impact from the paralyzation will be," Santa Cruz
told journalists. "Obviously having indefinite costs and
expenditures isn't feasible."	
    Newmont and its Peruvian partner Buenaventura
 are waiting for the government's go ahead to restart
construction after a team of international experts weighs in on
the project's environmental impact study, which was approved by
the previous government.	
    "We have completed all the legal requirements and we've even
taken on an additional administrative process to generate more
confidence," Santa Cruz said, referring to the audit that is
expected to be completed the first week of April.	
    Local political leaders want to stop the mine from being
built, saying it would replace a string of alpine lakes with
artificial reservoirs and cause pollution. They have said they
will not accept the opinion of the audit, calling it biased.	
    Newmont says the reservoirs will provide additional water
for farmers in times of drought and that its environmental
impact study complies with the highest international standards.	
    President Ollanta Humala, a one-time radical who abandoned
his leftist discourse before taking office in July, says he is
committed to seeing the project through.	
    He appointed new ministers with a more law-and-order bent in
December to clamp down on the protests that could threaten $50
billion in investment destined for Peru in coming years.	
    But Humala also wants to ensure mining companies are
socially and environmentally responsible and risks losing
support among Peru's rural poor if he appears too lenient with
foreign companies.	
    Many analysts consider Conga to be the Andean country's most
pressing domestic issue.	
    Santa Cruz said Newmont is committed to seeing the project
through and to continuing its nearly two-decade-long history of
operating in Peru.	
    "We are going to invest the last drop of sweat we have, the
last bit of energy so that this project advances," he said.

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