Perth, WA -- (SBWIRE) -- 12/01/2011 -- Thousands of people in northern Peru are protesting against plans for a huge open-cast gold mine in the high Andes. Schools and business were closed and buses were off the streets on Thursday in the Andean city of Cajamarca, about 900km northeast of Lima, in a protest against the $US4.8 billion ($A4.9 billion) Conga Project run by US-based Newmont Mining Corporation. The open-pit gold and copper Conga Project involves moving the water from four lakes located high in the mountains into reservoirs the company would build. People in the Cajamarca region say the proposed Conga mine will cause pollution and destroy water supplies. Locals say plans to replace the lakes with artificial reservoirs are inadequate. There are also fears that pollution from the mine could affect agriculture and livestock. The company behind the project, the Newmont Mining Corporation, says its plans have been drawn up in consultation with local communities and meet the highest environmental standards.

The owners of the Conga Project said in a statement that the building was set ablaze. They complained that police stood by idly and that the Cajamarca regional president, Gregorio Santos, led the trespassing protesters. The mine is located in the northern highland state of Cajamarca. The protests have been slowly mounting since mid-October despite efforts of President Ollanta Humala's government to mediate the conflict. They complain he has reneged on campaign promises to protect their water. According to analysts, failure by Humala to contain the protests may discourage mining projects expected to invest $50 billion over the next decade. Newmont fell $1.58, or 2.4 per cent, to $64.21 at the Nov. 23 close in New York.

The Conga Project would be the biggest mining investment in the country's history. Protesters last month destroyed $2 million of earth-moving equipment at the Minas Conga project, which is being developed by Newmont and partner Cia. de Minas Buenaventura SAA, which owns 44 per cent of Newmont’s neighbouring Yanacocha mine. Yanacocha is the largest gold producer in Latin America and had output of 1.46 million ounces of gold last year. Yanacocha is slated to boost output to 2.5 million ounces by 2017 by tapping new underground ore reserves at the open-pit deposit. Peru is the world's No. 2 producer of copper and No. 6 gold producer. Mining is the motor of its economy, accounting for 61 per cent of exports. Work at the mine, which employs 6,800 people, was halted as a precautionary measure on Wednesday. Peru's left-wing President, Ollanta Humala, has approved the Conga mine, which would be a major source of government revenue, but this stance has been criticised by some of his supporters.

International Mineral Mining Development Holdings perceives the protests as a mixed blessing for Peruvian mining companies, and believes that sustainable small to mid-scale mining is the way forward. “Massive strip mining operations can devastate local environments and communities if executed irresponsibly. It is our mission to enable successful mining operations that have minimal negative effects on the environment while building thriving local communities.” Stephen Boyd - Senior Metals and Mining Strategist, International Mineral Mining Development Holdings.