Violent protests halt $4.8 bn Peru mining project

Days of increasingly violent environmental protests forced the suspension of a $4.8-billion gold mining project in northern Peru operated by US mining giant Newmont, the mine said. The conflict goes to the heart of problem President Ollanta Humala faces in trying to balance the needs of the mainly poor people who elected him with the demands of the mining industry, Peru's main engine of economic growth. Protests throughout the Cajamarca department have been boiling over for almost a week, with a mob of some 1,500 demonstrators setting fire to a local warehouse and the main airport being forced to close. At least 10 people were injured on Tuesday's sixth day of protests against the so-called Conga Project, which Humala has so far backed. The protests brought the department to a near standstill. "For the sake of reestablishing tranquility and social peace in Cajamarca, it has been decided to suspend the project's activities," said a statement from the Yanacocha mine, operated by Newmont and local partner Buenaventura. The open-pit Conga Project, located some 3,700 meters (12,140 feet) above sea level, involves moving the water from four lakes high in the mountains into reservoirs the company would build. Protesters say the reservoirs do not adequately replace the lakes, which also provide groundwater for agriculture and to irrigate pasture fields for livestock. Cajamarca is Peru's leading dairy and livestock region, and the issue is of particular concern as a drought has forced water rationing for three months. Deputy environment minister Jose De Echave resigned on Monday, calling official environmental impact studies on the project "weak, outdated and lacking in credibility." The statement from Yanacocha -- the largest gold mine in South America, also located in Cajamarca department -- said the company was committed to entering new negotiations and seeking the "recovery of trust." "We reiterate that we will do our best and will comply with all requirements of the government of President Ollanta Humala for responsible mining," the statement said. "We pledge to work in order to create, in the short term, the conditions so that the state, private business and civil society may resume a relationship of transparency and respect for the benefit of Cajamarca and the country." Local officials, who support the strike, have repeatedly invited Humala to visit Cajamarca -- a department of 1.4 million -- but only Prime Minister Salomon Lerner agreed to make the trip, but only under certain conditions. Protests forced the closure on Monday of the airport in the city of Cajamarca as some 500 protesters besieged it and 100 passengers headed for Lima were left stranded. Cajamarca, known as the city where the last Inca emperor filled a room with gold to pay ransom for his release from Spanish conquistadores, is located 870 kilometers (550 miles) northeast of Lima. The Spaniards kept the gold and killed the Inca emperor.