User:Egoli/sandboxyan

gold mine "Yanacocha" near Cajamarca (Peru)

collecting water containing the extracted gold

renaturalized area (Aug. 2005)

Yanacocha (Northern-Quechua [Quasamarka / Inkawasi]: yana = black; dark -- qotr'a / quĉa = lake; puddle; pond; lagoon) is a large open pit heap leach gold mine in the Northern Andes of Perú. It is situated at an altitude of approximately 4,700 metres, 48 km by road from the city of Cajamarca and 603 km north of the capital, Lima. It is the largest gold mine in South America even though output has halved over the past two years to 1.56 million ounces in 2007. As well as gold, the mine produces silver and mercury. Small quantities of mercury are not uncommon in epithermal gold deposits but at Yanacocha it occurs in sufficient quantities to be worth recovering. (See below for the 2000 mercury spill).

Ownership

The story of Yanacocha started with a joint venture called Cedemin between the French state-owned BRGM (Bureau de Recherches Géologiques et Minières) and Lima based Compañía de Minas Buenaventura, which staked some claims in Northern Perú. In 1984 Newmont Mining joined the joint venture and, with the International Finance Corp (IFC), they then established Minera Yanacocha.

In 1993 the French government announced its intention to privatise BRGM and to sell its Yanancocha holding to the Australian gold miner Normandy Mining (now, ironically, owned by Newmont). Newmont and Buenaventura immediately started legal action against BRGM, saying that the proposed sale to Normandy triggered their premptive rights in Yanacocha; in other words they had first claim on any such sale.

In 1998 the Peruvian Supreme court ruled in favour of Newmont and Buenaventura and fixed compensation to BRGM at US$109.3 million based on 1993 values. In 1995 BRGM asked the International Chamber of Commerce in Zurich to rule that the preemptive rights had not been triggered but in July 1999 the panel ruled against BRGM.

However, nothing daunted, BRGM filed a request for arbitration against the Republic of Perú with the International Centre for Settlement of Investment Disputes, an affiliate of the World Bank, claiming that the Peruvian courts had wrongly deprived it of its shares in Yanacocha and that compensation should be US$560 million based on 1998 values.

BRGM evidently thought this unlikely to suceed because on Dec 14th 2000 Newmont, Buenaventura, BRGM and Normandy reached a settlement whereby all pending litilation and arbitration claims would be dismissed, including claims by BRGM against the Republic of Perú. The BRGM shares were split between Newmont and Buenaventura to give the present ownership of 51.35% Newmont, 43.65% Buenaventura and 5% IFC.

A New York Times/Frontline World feature and video on this case throws an interesting light on how one has to do business in a less than scrupulous developing country, in particular with Alberto Fujimori's corrupt chief of intelligence, Vladimiro Montesinos. Strangely the report does not mention that Newmont and Buenaventura went to court to enforce their preemption rights, which were also upheld by the International Chamber of Commerce in 1999. A curious omission.

History

Newmont started exploration in the area in 1982, found the first deposit in 1986 and the Yanacocha joint venture started mining in 1993. This was one of the first major foreign mining investents in Peru for 20 years and in an area where the Sendero Luminoso (Shining Path) Marxist geurillas were very active. The operation consequently had to be heavily guarded by a paramilitary organisation that seemed to be composed largely of ex Peruvian Army marines and the operations were ringed by a series of lookout and guard towers. This evidently deterred any major attacks.

Exploration was more sucessful than expected and sales built up to 3.33 million ounces in 2005. A major factor in this buildup was the fact that the rock was very porous and did not need crushing before being dumped on the leach pads. However it seems that the bonanza days might be over because sales more than halved to 1.57 million ounces in 2007 (due to sequencing of mining) and although an improvement to 1.7 to 1.8 million ounces is forecast for 2008, a mill is close to completion indicating harder ore and expensive crushing and milling for at least part of the output in the future.

Geology and Infrastructure

The gold deposits of Yanacocha occur in a 10 X 4 km zone of altered rocks in a long belt of tertiary volcanics. They are epithermal and associated with silver bearing enargite and mercury. At least nine different districts have been identified. Copper mineralisation occurs at depth but it is not known whether it is economic

The Mercury Spill

On the afternoon of June 2nd 2000, two flasks containing mercury broke free on the back of a contractor's truck which was transporting the metal to Lima. Some 330 pounds were spilled along the road. Much of this was picked up by locals and several contracted mercury poisoning. Yanacocha immediately organised a clean-up and arranged treatment for those that were affected. National mining, health and environmental authorities were notified and the ministry of health brought in staff to help

Environmental and Social Issues

Unfortunately whenever an operation like the Yanacocha mine is established, two classes of people are immediately created, the haves and have-nots. The haves work for good wages at the mine or one of the many small service industries that serve the mine. The have-nots are the campesinos that do not have relevant skills, and are left to their impoverished lifestyle with no hope of gain except from compensation for any deleterious effect the mine might have on them, their families or land.

Yanacocha has had a troubled relationship with the local campesinos, partly over the mercury spill described above but mainly over the quantity and quality of water as much of the campesinos' supply comes from the area being mined

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 {Ingetec S.A. Ingenieros Consultores: Auditoría Ambiental y Evaluaciones Ambientales de las Operaciones de la Minera Yanacocha en Cajamarca - Perú 2003}

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.{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 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.,

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 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 raods to the pit demanding clarification of the death of Isidro. [1] [2]

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. [3]

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 Gufindes, 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. [4] [5] [6]

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. [7]

External links

• Web-Side of "Yanacocha" (Spanish)
• "Halting the rush against gold", the Economist, 3 Feb 2005
• "Peasants in Peru near showdown on mercury spill", Miami Herald, 5 March 2005
• "Yanacocha: Dividing and Polluting", Friends of the Earth
• "The Cost of Gold"-Jane Perlez (Multimedia), The New York Times, October 25, 2005
• "Behind Gold's Glitter: Torn Lands and Pointed Questions"-By Jane Perlez and Kirk Johnson (registration required), The New York Times, October 24, 2005
• "The Curse of Inca Gold", Frontline/World, October 2005
• 'The Curse of Inca Gold': Mining Peru's Wealth, NPR's Day to Day, October 25, 2005
• "Ingetec S.A.", Ingetec S.A. Ingenieros Consultores: Auditoría Ambiental y Evaluaciones Ambientales de las Operaciones de la Minera Yanacocha en Cajamarca - Perú 2003

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.

Category:Gold mines in Peru