IFC-funded goldmine shut down by local protest

22 November 2004

Following two weeks of protests and road blocks that shut down the city of Cajamarca in September, Peruvian minister of energy and mines Jaime Quijandría Salmon withdrew the Newmont Mining Company’s permit for mining on Mount Quilish. The Yanacocha gold mine, which is the largest in Latin America is operated by Newmont Mining Company and receives 5 per cent of its funding from the International Finance Corporation (IFC).

Community organisations consider the minister’s announcement a major victory in their long struggle to protect the watersheds at Mount Quilish. According to a 2002 report by Project Underground, the mine has caused a number of devastating environmental and social problems ranging from severe water contamination and a major mercury spill, to an upsurge in prostitution, alcoholism and domestic violence.

In 2001 a complaint was filed to the Compliance Advisor Ombudsman (CAO) on behalf of a local farmer’s group (see Update 30). It alleged “numerous egregious violations of IFC and World Bank social and environmental safeguard policies, most notably the mine’s failure to consult with the affected community as part of the environmental impact assessment process and its refusal to recognise the peasant community as an indigenous people.” Civil society groups were frustrated with the way in which the CAO, which purports to respond “quickly and effectively to complaints from affected communities” handled these complaints, largely limiting its actions to the establishment of a local dialogue process.

refusal to recognize the peasant community as an indigenous people

The withdrawal of the permit for mining has therefore been strongly welcomed by local communities. “This act makes history because the just demands of the people have been heard by the authorities” community organisation GRUFIDES said.

Local people intend to resume their protest if Mount Quilish is not declared a mining-free area within the next two months. The agreement signed by protest organizers and the minister of energy and mines states that Newmont will have to win the consent of the community if it wants to pursue its goal of mining on Mount Quilish. It will also need to fund an independent hydrological study to determine what impacts mining would have on Cajamarca’s water supply and water quality.

Jaime Quijandría has since ended his term as energy and mines minister in order to take a seat on the board of the World Bank as representative of Peru, Argentina, Chile, Bolivia, Paraguay and Uruguay.