Three major Peruvian mining projects (Minas Congas, Rio Blanco, and Tia Maria) have been suspended due to regional protests. Together, the projects represent more than $6 billion in mining related investments. Newmont Mining values the Minas Congas gold project at $4.8 billion. China’s Zijin Mining owns Rio Blanco, a copper project with a $1.6 billion price tag. The $1 billion Tia Maria remains suspended while Southern Copper completes another environmental impact study (EIS).
Even though Newmont has conducted an extensive EIS at a considerable expense on its project in the Cajamarca region, locals are still worried about land and water. If investment fears continue to spread, Peru could see as much as $50 billion in mining investments evaporate.
The situation has created political turmoil for Peruvian President Ollanta Humala, a populist who took office five months ago with support from the protestors.
Humala recently replaced more than half his cabinet after his prime minister, Salomon Lerner, resigned. Lerner tried to negotiate with the protest leaders. His resignation triggered several more cabinet resignations. The cabinet of 19 has 10 new ministers, including those for mining, defense, and the interior. The new prime minister, Oscar Valdes, a former instructor who taught Humala at Peru’s military academy in the 1980s, has advocated a hard line against mining protesters. He has already reportedly asked prosecutors to arrest several protest leaders.