Yanacocha

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Yanacocha is a gold mine in central Peru, considered one of the biggest and most profitable in the world producing over US$7 billion worth of gold to date. The 251-square kilometer open pit mine is situated about 18 kilometers north of Cajamarca, in high pampa, straddling the watershed. The World Bank's International Finance Corporation (IFC) provided loans totaling US$150 million for development and has a 5% equity investment in Yanacocha, which is run by the Newmont Mining Corporation, a Denver, Colorado-based company that is the world’s largest gold mining firm. Newmont is the major shareholder together with Buenaventura, a Peruvian company. In 2004, Yanacocha produced 3 million troy ounces (93,000 kg) of gold.

[edit] Ownership

Before 1994 the mine was co-owned by Newmont, Buenaventura (a Peruvian mining company), and Bureau de Recherches Géologiques et Minières (BRGM), a French government-owned company. This partnership collapsed in 1994 after BRGM tried to sell part of its shares in the company to an Australian company which was a rival of Newmont. Newmont and Buenaventura would both go to court to challenge the trade.

Larry Kurlander, then a senior executive at Newmont, claimed the French President Jacques Chirac had sent a letter to then Peruvian President Alberto Fujimori asking him to intervene in the court case in favor of the French owned company. Kurlander had been sent by Newmont to Peru in order to try and get a favorable outcome for Newmont in the dispute. The legal battle would eventually make it all the way up to the Peruvian Supreme Court.

During this period Kurlander acknowledges having met with Vladimiro Montesinos, the Peruvian intelligence chief who has since been found guilty of embezzlement, illegally assuming his post as intelligence chief, abuse of power, influence peddling and bribing TV stations. [1] [2] However, Kurlander claims that he did nothing illegal and that the French government were taking similar steps in trying to contact Montesinos. The French ambassador to Peru Antoine Blanca denies this, pointing to the fact that Montesinos was on the CIA payroll and thus would naturally side with the U.S-based company.

After the fall of Fujimori in 2000 a number of videos Montesinos had taped of himself meeting with several domestic and foreign leaders and offering bribes and accepting them had emerged. In October 2005 Frontline in co-production with The New York Times found a February 1998 recording of a telephone conversation between Montesinos and Kurlander. The following is an excerpt from the tape:

Kurlander:...we have a very serious problem in Peru with our company (Newmont) and Minera Buenaventura so I have enlisted the support of some of my friends from a variety of intelligence communities. I need it especially because the other side (the French government) has been acting quite strangely.

Montesinos (to interpereter): Tell him that I am perfectly aware of the problem he has and the people he represents have with the French, as well as the problem he has with the judiciary.

Kurlander: So now you have a friend for life. I want a friend for life.

Montesinos (to interpereter): I thank you very much for what you have just told me and well you already have a friend. Tell him I'm going to help him with the voting. I would like to know the tricky practices of the French. The French Connection!

Kurlander: The French Connection!

(laughter) [3]

Along with this telephone conversation, Frontline and The New York Times also re-broadcast three other videos. One was filmed in April 1998 and shows Montesinos talking to "Don Arabian", the CIA station chief in Peru, in an attempt to get CIA to pressure the U.S to back Newmont in the case. In the video Montesinos claims to have found e-mails from Paris to Peru of French officials trying to influence the court to get a decision favorable to France.

Another video recorded in May 1998 shows Montesinos meeting with Peruvian Supreme Court Justice, and former classmate, Jaime Beltran Quiroga. In it Montesinos states that state interests are at stake in the case between Newmont and BRGM. He tells Quiroga that if the decision goes to Newmont that the United States will back Peru in its boarder dispute with Ecuador which had a few years ago exploded into the Cenepa War. He also tells Quiroga to deny any connection with him to the press. Quiroga would later play a crucial role in the case, his vote would be the deciding vote in the Newmont victory. After the video was first broadcast in Peru in 2001, on a Peruvian local television station the French Ambassador Antoine Blanca was quoted as saying "Now I know why Newmont won".

In the final July 1999 video, Montesinos is again seen with the now departing CIA station chief "Don Arabian" giving him a gift and thanking him for the help he has given Peru stating "[W]e hope that when you're back their [in Washington] you'll remember your friends".

[edit] Environmental Issues

Local environmental activists claim that the mining operations, which use large quantities of a dilute cyanide solution, have contaminated the water sources, leading to the disappearance of fish and frogs, illnesses among cattle, air pollution, and loss of medicinal plants. These findings were confirmed by an independent environmental audit by a Colombian consultancy firm.

In 2004, people living in the Cajamarca area protested the expansion of Yanacocha onto nearby Cerro Quilish, a mountain that supplies water to Cajamarca. In response to public outcry, Newmont announced that further exploration would be suspended.

Newmont has also been involved in an ongoing conflict over damages resulting from a mercury contamination. On June 2, 2000, 151 kilograms of the toxic metal were spilt while being transported by a contracted truck from Yanococha to the Pacific coast, contaminating the town of Choropampa and two neighboring villages. According to government estimates, more than nine hundred people were poisoned. After losing a three-year fight to keep the lawsuit out of US courts, Newmont announced at the end of 2004 that it would participate in settlement talks before two retired Colorado judges. But mediation talks in January failed to produce a settlement and the plaintiffs, eleven hundred campesinos, announced they will go ahead with their suit in Denver district court.