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Talks break down over Newmont mine in Peru

Mon, 19 Dec 2011 20:12 GMT

Source: reuters // Reuters

* Cajamarca governor wants other protesters present in talks

* Government wants int'l body to review Conga project

* Pres. Humala shuffled Cabinet after five months in office (Adds quotes, context)

By Caroline Stauffer and Omar Mariluz

LIMA, Dec 19 (Reuters) - A new round of talks to end a bitter dispute over Newmont Mining's $4.8 billion Conga gold project in Peru appeared to break down on Monday after the prime minister excluded environmental activists from the mediation effort.

Mayors and the governor of the region of Cajamarca criticized Prime Minister Oscar Valdes for refusing to let Wilfredo Saavedra and other leaders of the Environment Defense Front of Cajamaraca participate in the talks.

"What happened is that Valdes wouldn't tolerate more participation," said Gregorio Santos, governor of the region of Cajamarca. "He doesn't want to listen to anybody."

Valdes, a former military officer, was promoted a week ago in a Cabinet shakeup by President Ollanta Humala that critics said would lead to crackdowns on protesters and less willingness to use dialogue to solve hundreds of environmental disputes nationwide.

Valdes was promoted from the post of interior minister after he led a crackdown that froze the assets of regional leaders in Cajamarca, detained high-profile protesters, and imposed a state of emergency to show the government would not tolerate protests that could delay projects in Peru's $50 billion pipeline of new mines.

The government has tried to sideline Saavedra, who spent a decade in prison for belonging to the Marxist Tupac Amaru insurgency that was active in the 1990s. He was detained by police two weeks ago and released.

Valdes lifted the state of emergency on Thursday after Santos and local government leaders called off their rallies and agreed to resume stalled talks.

"What happened is unfortunate, we've asked for more time to talk," Valdes said after the meeting.

He wants local officials to sign an agreement establishing that an international body would review the environmental impact study for the controversial project, which would replace a string of alpine lakes with reservoirs.

Protesters who fear the Conga gold mine, if built, would disrupt their source of water caused Newmont and its Peruvian partner Buenaventura to temporarily halt work on the Conga project in early November.

Newmont has said its environment plan for the mine, which was approved a year ago by the previous government, meets the highest standards in the mining industry and would ensure year-round water supplies. It says local residents lack water during the dry season.

"We remain willing to play a constructive role in the dialogue sponsored by the government, and we will participate as directed by them," said Omar Jabara, a Newmont representative.

The standoff over Conga has challenged Humala's young presidency as he was supported largely by the rural poor in a June election and promised to hold miners to better social and environmental standards in a country with a 30 percent poverty rate.

"We know there have been many mistakes in the past in Peru and much needs to be corrected," Valdes told Santos during talks.

Humala's popularity fell below 50 percent for the first time of his five-month-old term, to 47 percent, a poll by Ipsos Apoyo said on Sunday. The majority of Peruvians approved of the Cabinet change and 73 percent backed the state of emergency implemented in Cajamarca. (Editing by Terry Wade and Jim Marshall)