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REPORT: Newmont Mining's Conga Project Could be Delayed another 4 Years

Things are beginning to look grim for Newmont Minings (NYSE:NEM) (TSX:NMC)Conga project in Peru.The $5 billion gold and copper mine, which was originall...

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|Oct 16|magazine4 min read

Things are beginning to look grim for Newmont Mining’s (NYSE:NEM) (TSX:NMC) Conga project in Peru.

The $5 billion gold and copper mine, which was originally scheduled to commence production next year, is expected to be delayed another four years following the re-election of Gregorio Santos, the project’s main opponent.

The four-year delay will have a significant impact on Newmont, according to SeekingAlpha, as production from Conga was anticipated to replace production from its nearby Yanacocha mine, which is running out of gold. The company’s Merian gold mine in Suriname is a possible replacement in the medium term.

Although the project was approved in 2010, Newmont suspended construction in 2011 following violent protests (lead by Santos) as opponents feared the mining project would pollute and drain the country’s local water supplies.

The project, which is the largest single private investment in Peru, has the potential to generate up to 350,000 ounces of gold and 120 million pounds of copper a year, during its 19-year life. 

The company’s local subsidiary, Minera Yanacocha, sent an open letter to the Cajamarca community on Friday, stating it would keep pushing for support for the project.

"We express our interest in continuing to invest in Peru and especially the Cajamarca region," the letter says.

Newmont currently holds a 51.35 percent stake in the project, with Buenaventura owning 43.65 percent and the World Bank’s International Finance Corporation owning five percent.