Yanacocha

Yanacocha gold mine near Cajamarca, Peru

Yanacocha (Cajamarca Quechua: yana = "black, dark", qucha = "lake, puddle, pond, lagoon")[1] is a gold mine in northern Peru, considered to be the second largest gold mine in the world, producing over US$7 billion worth of gold to date. The 251-square kilometer open pit mine is situated about 30 kilometers (14 km straight line) north of Cajamarca, in high pampa, straddling the watershed. The World Bank Group'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 second largest gold mining firm. Newmont is the major shareholder together with Buenaventura, a Peruvian company.

Production

In 2005, Yanacocha aimed its production peak with 3,316,933 ounces (103,200 kg) of gold (INEI). Since then, production has fallen to less than half:[2]

According to Newmont Mining annual reports, from 2005 to 2011 production was not hindered by local protests apart from a short production stop in 2006 due to a road blockade.[3]

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 to 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. 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.

Collecting water containing the extracted gold

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)

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 border 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 there [in Washington] you'll remember your friends".

Environmental and social issues

Renaturalized area (Aug. 2005)

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. An independent environmental audit by a Colombian consultancy firm {Ingetec S.A. Ingenieros Consultores: Auditoría Ambiental y Evaluaciones Ambientales de las Operaciones de la Minera Yanacocha en Cajamarca - Perú 2003} may have found some water contamination above permitted levels, and did recommend many improvements to Yanacocha's environmental management practices. However, the study did not examine claims of impacts on wild life, plants, or livestock,.[4][5] Yanacocha did undertake to act on the 309 Ingetec recommendations. Based on an Ingetec review in April 2006, Yanacocha had fully implemented 137, made significant progress on 111, and had started to address an additional 45 of the recommendations - representing progress on 90% of the recommendations in advance of the agreed 2007 completion date.[6]

In 2004, more than 10.000 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.{Anaya, R. (2001). "Acute elemental mercury poisoning in three locations of the department of Cajamarca-Peru. In: Toxicology, Volume 164, Issue(1-3): p. 1-266, p. 69}. 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 the mediation talks failed to produce a settlement and the plaintiffs, eleven hundred campesinos, announced they would go ahead with their suit in Denver district court. The parties in the Denver cases agreed to binding arbitration and as of April 2009 all matters in the Denver cases were settled.[7] In 2008 the Peruvian Supreme Court upheld the validity of settlement agreements reached with some of the plaintiffs in the remaining Peruvian lawsuits prior to the filing of those suits and by the start of 2010 Newmont reported that claims of approximately 200 plaintiffs remain unsettled.[8]

The mercury spill also led to two separate complaints to the Compliance Advisor/Ombudsman (CAO) of the International Finance Corporation (IFC)/Multilateral Investment Guarantee Agency (MIGA). Starting in 2001 the CAO held a series of meetings with local stakeholders at which both concerns regarding the impacts of the mine were raised, and also suggestions made that a forum for transparent dialogue between the community and Yanacocha was needed. Out of the continuation of this process a Mesa (roundtable for dialogue) was formed. The CAO sponsored the 2003 water study, and continued funding the water monitoring program until 2006. In February 2006 the CAO published an "Exit Report" at the conclusion of its involvement. This report included a table summarizing progress made against the original concerns raised by the community in 2001.[9]

In the beginning of August 2006 protests broke out against the expansion of the company's Carachugo pit, building a dam (El Azufre) near in the village of Combayo. Inhabitants of Combayo blocked the roads leading to the dam, protesting against possible contamination of water supplies and expressing their disappointment in sharing in social and economical benefits of the mining project. The protests ended in clashes between Police and private Yanacocha security guards (FORZA) on the one hand and local farmers on the other. The clashes resulted in several wounded and one local farmer, Isidro Llanos Canvar, was shot dead. At the end of August 2006 Carachugo II was temporarily closed down for three days as local farmers blocked the entrance roads to the pit demanding clarification of the death of Isidro.

On 2 November, Edmundo Becerra Corina, an environmentalist and an opponent of Yanacocha’s gold mining project, was shot dead in Yanacanchilla, Cajamarca province. He had reportedly received several death threats because of his opposition to the expansion of the mining company’s activities in the region. The attack took place days before he was due to meet with representatives from the Ministry of Energy and Mines.

The Peruvian NGO GRUFIDES, an environmental organization with a strong anti-mining stance, investigated the killings and provided support for the families of those protestors that were injured and killed in the demonstrations in August. In November 2006 two members of Grufides, Father Marco Arana and Mirtha Vasquez reported receiving several (death) theats and were followed and filmed both at work and at home. An investigation by the Peruvian press uncovered that individuals with ties to the security firm FORZA, which Newmont hired to provide security at Yanacocha, were involved in the surveillance of the GRUFIDES staff members. Newmont however has denied any involvement in the harassment or surveillance. In response to the threats Amnesty International issued an urgent action stating that “their lives, and those of others associated with GRUFIDES, may be in danger.

On the 15th of June 2007 several local farmers, under which two minors, were injured and taken into custody by public and private police forces paid by Yanacocha in the village of Totoracocha. The farmers were occupying heavy machinery of the mining cooperation as they were protesting against an absence of payment for construction work they had been carrying out for Yanacocha.

References

  1. ↑ "Vokabular / Simi Taqe / Simi Taqi / Simikuna / Shimikuna" Wortschatz, gesammelt von Philip Jacobs; runasimi.xls; http://www.runasimi.de/main-de.htm
  2. ↑ Newmont Mining, Annual Reports 2005-2011
  3. ↑ Newmont Mining, Annual Reports: 2007 page 12, 2010 page 18
  4. ↑ "Halting the rush against gold", the Economist, 3 Feb 2005
  5. ↑ Report Of The Presentation Of The Final Report Of The Ingetec Environmental Operations Audit
  6. ↑ "AUDIT AND ENVIRONMENTAL EVALUATION - INGETEC", Yanacocha,
  7. ↑ US Securities and Exchange Commission, Form 10-Q for the quarter ending September 30, 2009, p.43
  8. ↑ US Securities and Exchange Commission, Form 10-Q, for the quarter ended March 31, 2010 p.34
  9. ↑ Exit Report Regarding two complaints filed with the CAO in relation to Minera Yanacocha Cajamarca, Peru, February 2006

External links

Anaya, R. (2001). "Acute elemental mercury poisoning in three locations of the department of Cajamarca-Peru. In: Toxicology, Volume 164, Issue(1-3): p. 1-266, p. 69.

Coordinates: 6°58′49″S 78°30′18″W / 6.98027°S 78.50487°W