Bloomberg News

Newmont May Shut Yanacocha Gold Mine Amid Protests

August 28, 2006

Newmont Mining Corp. (NEM:US) may shut down Peru's Yanacocha gold mine, the world's second largest, as protesters demanding jobs and clean water blocked roads leading into the complex, a company spokesman said.

Denver-based Newmont, the world's No. 2 gold producer, suspended construction on its $173 million Carachugo deposit, slated to become one of five open-pit operations at Yanacocha in 2007, after villagers blocked access to the mine, spokesman Ricardo Morel said in a phone interview. Clashes with police at the mine this month left one dead and over a dozen injured.

``We can't put our personnel at risk if these roadblocks continue,'' Morel said from the Andean city of Cajamarca, 560 kilometers (350 miles) northwest of the capital, Lima. ``We're always ready to hold talks, but these protesters haven't shown much of a will for dialogue.''

Yanacocha, which produced 3.3 million ounces of gold in 2005, accounts for half of Newmont's total output and is Peru's largest exporter. Peru is the world's No. 5 gold producer.

Newmont shares fell 95 cents, or 1.8 percent, to $51.56. Shares have risen by about a third over the past 12 months.

Gold futures for December delivery dropped $0.90, or 0.1 percent, to $623.00 an ounce on the Comex division of the New York Mercantile Exchange. Gold prices have jumped by half over the past 12 months.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Laura Zelenko in New York at lzelenko@bloomberg.net


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Companies Mentioned

  • NEM
    (Newmont Mining Corp)
    • $19.05 USD
    • 0.55
    • 2.89%
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