Dallas, Texas 02/04/2014 (FINANCIALSTRENDS) – Compania de Minas Buenaventura SAA (NYSE:BVN) which holds 43.65% stake in the Minera Yanacocha along with Newmont Mining (NEM) which holds 51.3% stake is currently facing protests from settlements around the region.
Minas Congo mine on hold
The project which already costs $5B has stopped production since the last few months of 2011. The mine located in the Cajamarca district of Northern Peru has seen violent protests by locals. Compania de Minas Buenaventura SAA (NYSE:BVN) along with NEM has time and again addressed the concerns of these protestors.
The cause of the clash of interests between the mine operators and the people is the problem of water supply quality being affected.
Compania de Minas Buenaventura SAA (NYSE:BVN) as well as NEM have already built reservoirs to help improve or maintain the quality of water. However, these solutions have not proved to be effective and protests have continued. This has meant that all works at this mine now stand suspended.
Suspension continues despite announcements of reviving production
Compania de Minas Buenaventura SAA (NYSE:BVN) had earlier in the second week of January reported that the gold mine at Yancocha would contribute to its guidance of same production in 2014, as in 2013, when the gold mining company produced 900k oz. However, Compania de Minas Buenaventura SAA (NYSE:BVN) expects that the silver production would increase substantially.
Minas had faced trouble at its Orcopampa mine as well. A 17-day strike at this site had seen the production of gold in the fourth quarter drop. Silver output however saw an increase from 20M to 20.5M due to the higher production in the Uchucchacua mine.
Peru, the South American mineral rich country is currently in political transition state, due to elections. Therefore, most mining firms located in the region are waiting to take a policy decision, once the elections complete their course and new leaders takeover the country’s administration. NEM and BVN too are expected to decide on the course of action on the Yanacocha mine after 2015.