Aniket Pujari(Bloomberg) — A multi-billion-dollar gold project owned by the world’s biggest bullion producer has been invaded by illegal diggers in northern Peru, according to a top government official.
Newmont Corp.’s stalled Minas Conga project in the Cajamarca region “is being partially exploited by illegal mining,” Prime Minister Ernesto Alvarez told reporters Friday. Newmont didn’t immediately comment.
Denver-based Newmont is the latest global company to face informal miners as near record prices increase incentives for diggers in poor rural areas of the country. Southern Copper Corp., First Quantum Minerals Ltd. and MMG Ltd. have said illegal miners are operating on their concessions, delaying progress.
Development at the estimated $4.8 billion Conga project was halted shortly after receiving environmental permits in 2010 in the wake of farmer opposition that spiraled into violent protests. Newmont still holds the mineral rights.
“When legal mining that meets high standards is not developed, it cedes the space to illegal mining, which pollutes and uses violence,” said Alvarez, the top deputy to interim President Jose Jeri.
Peruvian authorities are grappling with how to deal with the surge in illegal mining. The government supported the extension of a controversial permit known as Reinfo that allows informal diggers to operate with loose requirements. Peru’s mining industry chamber SNMPE heavily opposes Reinfo.
“It was said about Conga that it shouldn’t happen because local communities preferred agriculture,” Alvarez said. “Now, the rivers that originate in the Conga area are being contaminated by the mercury used in illegal mining. It’s a macabre situation.”
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