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Miners can be successful in Argentina, Peru - gold CEOs

The Minas Conga project is far from dead as Newmont Mining and Buenaventura invest $150 million in construction of reservoirs to hold freshwater to augment local community water supplies.
Author: Dorothy Kosich
Posted: Tuesday , 26 Feb 2013

RENO (Mineweb) -

Gold mining CEOs with operations in Peru and Argentina told the BMO 22nd Global Metals & Mining Conference in Hollywood, Florida, that political risks in both nations can be overcome.

Peruvian gold miner Buenaventura CEO, Roque Benavides, says he is confident the controversial $5 billion Minas Conga copper-gold project will gain local acceptance, and that “we will have surprises from Yanococha in the future.” A joint venture between Newmont Mining and Buenaventura, Yanococha is Peru’s largest gold mine.

During a presentation Monday to the BMO Global Metals & Mining Conference, Benavides recalled a history of opposition to large mining companies investing in Peru in the 1990s.

For instance, Benavides noted the lucrative Yanacocha was Peru’s first major mining project in 24 years due to terrorism activities in the region.

Benavides says a marked contrast in mining attitudes can be found in other operations in which the company is involved, such as the Cerro Verde copper/molybdenum located in Arequipa, which has a more educated population than the poor rural population of Cajamarca in which Minas Conga is located. Poor people in the rural areas of Peru usually want to benefit financially directly from new mining projects, he observed.

Cerro Verde also won social acceptance in Arequipa after the company helped modernize a sewer system, Benavides recalled. He suggested the now underway construction of reservoirs on the mining property could boost local freshwater supplies, which may help gain more community acceptance of the mining project.

Meanwhile, Peter Marrone, CEO of Yamana Gold, told the institutional investors and mining analysts attending the conference that while “Argentina is a poster child for bad public relations," he contends the biggest risk in doing business in the country is inflation, not geopolitical issues.

Marrone said the Argentine government has eased some of the restrictions it imposed on currency exchange last year, which has helped Yamana become “very successful in moving our money.”

He observed that the Kirchner Administration is trying to manage its currency value issues over a longer period of time in order to not discourage further foreign investment. Nevertheless, Marrone stressed inflation still remained the most important risk when doing business in Argentina.
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