While citizens of Boulder and Larimer counties battle horizontal fracking and the mess associated with it, countless communities in Latin America, Asia and Africa are trying to stop open-pit mega-mining in order to save their water.
With the price of gold nose-diving after last October’s high of $1,790/oz. to just above $1,200 on June 27 of this year, Newmont Mining revealed on June 12 that it would soon be laying off 33 percent of its Colorado workforce, overwhelmingly from its Greenwood Village corporate headquarters. Newmont CEO and President Gary Goldberg said, “Ultimately, we cannot postpone the work we need to accomplish now to create sustainable value for our stakeholders into the future.”
In others words, Newmont plans to generate more return on investment for stockholders by developing its mines more efficiently, bringing more gold and copper to market at lower production costs.
So, why then did Jim Cramer of CNBC’s Mad Money recommend that investors sell their Newmont stock on the same day as Newmont’s press release? Cramer said, “No, can’t be there. [I] don’t like Newmont Mining. I don’t like the gold miners and I don’t like the silver miners … but as they lift, you want to go [i.e., sell] because the mining costs are too high, and many things seem to go wrong [emphasis added] every time they’ve been extracting gold. I don’t like them.”
Newmont’s most ambitious undeveloped gold and copper holding, the Conga Project in northern Peru, is a perfect example of what can go wrong with mega-mining projects in environmentally fragile areas. Conga’s mineral wealth lies beneath pristine mountaintop wetlands that serve as the headwaters for five important river basins. Those rivers and mountain lakes supply clean water to thousands of farmers and villagers living below Conga.
So here is what puts the “con” in Conga. According to an August 2012 independent survey in the Peruvian El Comercio newspaper, 78 percent of the affected urban population opposes Conga, and 83 percent oppose it in the surrounding rural areas. Of course, those devastating numbers may be related to the shooting deaths of three protesters and one 16-year-old high school student, César Medina Aguilar, while he was merely going to the home of a classmate to lend him a book. All four were shot to death by Peruvian National Police and/ or military forces brought in by the federal government to quell anti-Conga demonstrations in the town of Celendin on July 3, 2012.
Not surprisingly, the energized local opposition has since vowed, “Conga no va!” meaning “Conga will not go forward!” Yet Newmont continues to say on its website, “Construction on the Conga project will only continue if it can be done in a safe, socially and environmentally responsible manner with risk-adjusted returns that justify future investment.” I think César’s family would say that Newmont is batting zero for three on those fronts.
Since 1992, when Newmont began building the Yanacocha gold mine, most Cajamarquinos have learned that mega-mining is incompatible with sustainable agriculture and reliable, safe drinking water. According to the nonprofit Earthworks, tests done by the mine and the Peruvian government of treated water coming from the Yanacocha mine have shown levels of arsenic and mercury that exceed World Health Organization standards.
Gianni Converso’s documentary Open Pit shows Yanacocha discharging “treated” water not fit for human consumption, laying off workers with elevated levels of mercury in the blood, and intimidating anti-mining protesters by hiring and transporting Peruvian National Police and allowing them to wear their government-issued uniforms and carry their government-issued weapons while being paid by Newmont to protect company property.
If Newmont leadership wants to garner confidence with investors and stakeholders, they should abandon the albatross around their neck that is Conga and pursue profits in socially and environmentally less risky places around the world.
Clifford has been a member of the Denver Justice and Peace Committee, a nonprofit organization working for lasting peace and economic justice in Latin America, since 1995. During the past year he volunteered with the legal and technical support nonprofit GRUFIDES in Cajamarca, Peru, and gave presentations to rural communities in Baja California Sur, Mexico, about the hazards of open pit mega-mining.