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INVESTMENT of US$150mn by Newmont Mining
Publish Date : 28-Jan-2013
CFO Russell Ball said during CIBC\'s 16th annual Whistler Institutional Investor Conference that US-based Newmont Mining will spend US$150mn in 2013 on its 51.35%-owned US$4.8bn Minas Conga gold-copper project in Peru\'s Cajamarca region.
The company will invest US$80mn in equipment, US$40mn in reservoir construction and about US$30mn for community and social costs on an attributable basis.
\"We have downsized significantly, and we are reviewing capital cost estimates as we go forward,\" Ball said.
Newmont voluntarily suspended construction on the Conga project in November 2011 after violent protests prompted the government to declare two states of emergency in Cajamarca. Then also it has continued work on related reservoirs.
\"Until we can generate acceptable project returns and we get local community and government support, we\'re not going to progress the project,\" Ball said.
Newmont keeps on follow its \"water first approach\" since August 2012 to focus first and foremost on the construction of four reservoirs which it has agreed to construct in Cajamarca to give community members a year-round supply of water.
\"We do have about 2,000 people on site today building some of the sediment structures and reservoirs, and finalizing the camp construction,\" Ball said.
Conga is one of the major investment projects in Peru\'s US$53.7bn mining portfolio. Average output over the first five years is estimated at 650,000-750,000oz/y gold and 160M-210Mlb/y (72,575-95,254t) copper, at cash costs of US$300-400/oz and US$0.95-1.25/lb, in that order.
Local miner Buenaventura and the World Bank\'s International Finance Corporation (IFC) also own a 43.65% and 5% stake, correspondingly, in the project\'s operator Yanacocha.
