Peru: Conga Mine Moves Forward

By Cecilia Remón

Three foreign experts appointed by the Peruvian government turned over a highly-anticipated evaluation of the controversial Conga copper-gold mining project on April 18, but despite its recommended changes, opposition over the project’s potential social and environmental impacts continue.

The US$4.8-billion project, owned by US mining company Newmont, Peru’s Buenaventura and the International Finance Corporation, a World Bank affiliate, sparked massive protests from residents in the northern Andean department of Cajamarca in recent months due to threats to their water supply. The company has proposed building reservoirs to replace the four natural lagoons that thousands depend on, so that it can drill for gold.

Last November, amid large demonstrations that drew international attention to the country, whose successive governments have touted as an ideal destination for international investments, the Environment Ministry said in a report that there were major holes in the environmental impact study approved Oct. 2010, such as a lack of a review of the impact on the region’s delicate ecosystems.

The protests shook up President Ollanta Humala’s government when Cabinet chief Salomón Lerner and other ministers, including the environment minister, resigned.

To calm the situation, in January, the newly-appointed Cabinet leader Óscar Valdés said Spanish engineers Luis López García and Rafael Fernández Rubio and Portuguese geologist José Martins Carvalho were named to review the project and would submit a report in April.

Zero impact does not exist

In a press conference, Fernández Rubio said that a “zero impact” mining project does not exist.

“There is a need to find equilibrium and ways of compensation so the result fulfills economic, social, environmental, and technical” pillars so that the benefits of the gold and copper resources can be taken advantage of, while water sources are ensured.

The new environment minister, Manuel Pulgar-Vidal, said that the company must uphold those standards if it wishes to continue with the project.

Two days after the report was presented, President Humala, who was against the project during his electoral campaign last year, said the experts were tasked with verifying that environmental guarantees were possible, “clearing up doubts and guaranteeing that the population has more and higher-quality water and that this resource can generate better conditions for personal, family, local and regional development.”

Humala said that the government would guarantee that Cajamarca residents would have safe and available water.

Former Environmental Management deputy Minister José de Echave said that after months of investigation “and payments of thousands of dollars, they have said almost the same thing” as the Environment Ministry’s November report, when Ricardo Giesecke headed that ministry.

Both parties said the potential impact on the surrounding area would have to be determined.

One of the ministry’s recommendations, with which the experts coincided, was that two of the four lagoons that would be emptied may not be used as a waste pit, and that further environmental and social analysis must be carried out to determine where to put those deposits.

It also said that the environmental and social costs of the project in its construction, operation and closing phases are still unclear.

Humala said the company would have to pay into a social fund that would be used for the poorest population in the area.

Monitoring necessary

The President said the government “has a fundamental role in guaranteeing the new way of mining in Peru, under new rules.”

Ex-Minister Giesecke applauded Humala’s promise for a mining that takes social and environmental impacts into account and called for a constant monitoring of the impacts in order to build local communities’ trust.

Yanacocha, the consortium that would run Conga, and also runs the eponymous gold mine with the same name nearby, one of the world’s largest gold mines, said in an April 21 statement that the experts had “undoubtedly validated” the government’s October 2010 approval of the environmental impact study, although it recognized that it must improve and evaluate how to move forward with the project.

But social license is still a problem, and a glaring hole in the experts’ report.

Leaders of the 13 Cajamarca provinces have a truce with the government until May 31 for Humala to declare the project unviable. If that request is not heeded, they say they will start an indefinite strike.

The growing conflicts around the environment in Peru need deep reforms, and they must be determined and implemented in a democratic and peaceful way, said De Echave.

“What’s true is that if the reforms don’t go through, the conflicts will continue to increase in number and intensity.”

Court weighs in

The same day the experts’ report was handed in, Peru’s Constitutional Court threw out the Cajamarca regional government’s order in December 2011 declaring the use of riverheads in the region off-limits for the Conga project. The court said the regional government does not have the power to issue such an order.

Still, the ruling stated that “in Peru, history has shown that large segments of society have been ignored and made invisible … there was no care at all for their voices to be heard, or to recognize them in debates on development and how to achieve it.”

“The state failed to effectively find a solution for such conflicts in various situations and as a result they have escalated until they have become true social demands,” it said.

The court pointed to the lead contamination caused by the La Oroya smelter, operated by US company Doe Run; the 2000 mercury spill in the Cajamarca village of Choropampa due to Yanacocha’s safety failures, and the June 2010 collapse of a Peruvian mining company’s tailing dams in the central highland village of Huachocolpa, which contaminated two nearby rivers.

“These dramatic cases manifest the intensity of the damages caused and the understandable fear and suspicion that mining projects cause in the populations near these projects,” said the court. “As a result, resistance to these projects has a history that cannot … be overlooked. The distrust of these mining projects shouldn’t been seen as an expression of intolerance or intransigence. It is just a predisposition that is a consequence of a community’s experience. Ignoring it or underestimating it does not mean the problem will go away.”