Newmont's Response to Bloomberg Markets Magazine Story

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02/19/2013

On February 13, 2013, Bloomberg Markets magazine published a story about conflicts in South America related to natural resource development projects. The story featured Newmont’s proposed Conga copper and gold project in Northern Peru, near our existing operations at Yanacocha.

There were a number of features of the article that neglected to provide a complete picture.  Below we detail some of those omissions and provide additional information that was left out of the story.

 

Lakes and Water

Totoracocha Lake  —  The story prominently featured stark images of Totoracocha’s drying lakebed, falsely claiming the lake was drying due to blasting at Yanacocha. What the story neglected to mention is that drying and shrinking lakes are a natural occurrence at this elevation and location in Peru during the dry season. The photos used in the story were taken right at the beginning of the wet season, not enough time for Totoracocha Lake to naturally refill following a 6-month dry season. You can see images of Totoracocha Lake taken on February 15, 2013, showing the lake full of water, as opposed to the very beginning of the rainy season in October of 2012 when the photos for the Bloomberg story were taken. 

Four Lagoons, Four Reservoirs  —  The story discussed the Conga project’s plan to replace four lakes — which contribute minimally to down gradient stream flows during the 6-month dry season — with four engineered reservoirs. The reservoirs provide two benefits over the lakes. First, is that the reservoirs will more than quadruple existing water storage capacity. Secondly, the reservoirs will provide year-round water availability to downstream users. The lakes only provide a source of water for downstream users when water overflows into the receiving streams, which is limited to the rainy season. During the dry season, the natural geologic materials underneath the lakes severely restrict the amount of water that seeps into the ground and reemerges as water flow available to downstream users. Hence, the lakes are a very limited source of water during the dry season when downstream users need it the most. In addition to increasing the overall water storage capacity, the reservoirs will significantly improve the provisioning of water to communities since flows from the reservoirs will be regulated by engineered outlets that provide for the controlled and safe release of water, year-round.

Mine Water Use  —  The story stated that Conga will consume 2 million cubic meters of water a year. The vast majority of this amount will be recycled or treated and tested to meet applicable water quality standards before being released to downstream users. The water needed for the proposed processing operations will be repeatedly recycled and reused. The recycled water will be stored separately from rain water captured by the upper reservoir, which will have a capacity of 7,600,000 cubic meters. Fresh water in the upper reservoir will be utilized as “make-up” water for the limited losses and consumption associated with the processing operations and will also be used to fulfill community and social development commitments during operations. Water availability shortages in the Cajamarca region are the result of inadequate water storage facilities to capture and store water during the rainy season for use during the dry season. This is in part why we are pursuing a water-first approach focused on building reservoirs that will more than quadruple water storage capacity in the area. The first of these reservoirs, Chailhuagon, is expected to be complete during the second quarter of 2013 and will have a capacity of 2,600,000 cubic meters, more than double the current capacity of Chailhuagon lake. More information about Conga’s water plan can be found at this link. In the City of Cajamarca, the water shortages are attributable to a combination of inadequate storage, treatment and distribution systems. In 2012, Yanacocha committed US$10 million for improving the existing water storage, treatment and delivery systems for the city of Cajamarca.  This work is in progress.

 

Protests and Violence

July 3, 2012  —  The story recounted the tragic events of July 3, 2012, when a large group attempted to storm the municipal building in Celendin — which is more than 60 kilometers away from the Conga project — in order to attack the municipality. The story notes that violence broke out when unidentified protestors fired weapons at police and soldiers. Regrettably, the confrontation escalated resulting in the tragic and unnecessary deaths of four individuals in Celendin and one in Bambamarca due to similar circumstances. Our hearts and prayers are with the families who lost their loved ones in that needless violence. Since protests began in late 2011, Newmont has been unwavering in its commitment to peaceful dialogue, and we have strongly condemned any violent and dangerous activity that jeopardizes the protesters’ safety and the safety of others.

Newmont is an active participant in the Voluntary Principles on Security and Human Rights (VPSHR). Shortly after the tragic events in Celendin and Bambamarca, Newmont contacted the majority of the VPSHR participants in the government and non-governmental organization pillars, as well as other stakeholders, to answer questions, provide additional information and listen to suggestions.

Siege of Cajamarca  —  While the story discusses the protests organized against Conga in 2011, the author neglected to mention that those protests also involved physically attacking unarmed Conga employees with whips and sticks, in addition to setting equipment and facilities on fire. Moreover, in November 2011, bands of protesters set up roadblocks around the City of Cajamarca preventing traffic and supplies from getting in or out the city. The siege lasted 11 days and caused widespread shortages of food and fuel before the central government had to declare a state of emergency to restore order and protect the general public. Those leading the protests included former members of the outlawed Tupac Amaru (Marxist-Leninist) terrorist organization, which was responsible for countless deaths during Peru’s civil war in the 1980s and 1990s.

Economic Recession in Cajamarca  —  There’s been a very real economic impact from the roadblocks and protests. Not only were 5,000 Conga employees laid off, 77,000 jobs in the Cajamarca region have disappeared as a result of the roadblocks and protests, scaring away tourists and investors. While the economy in the rest of Peru is rapidly expanding, thanks in large part to natural resource development projects, Cajamarca is in recession.  

Newmont acknowledges the need to improve our relationship with the people of Cajamarca and engage in more meaningful dialogue with all stakeholders. This is something we continue to work on and encourage feedback from our stakeholders regarding our efforts. We also believe it is important to ensure all the facts are present when discussing a topic as important as water and the future of mining in Peru. For more information about the Conga project, please visit this link at our website.