MAC: Mines and Communities

Peru says Cleaning Up Old Mines could Cost $1 Billion

Published by MAC on 2005-10-13

Peru says Cleaning Up Old Mines could Cost $1 Billion

Planet Ark (Reuters)

October 13, 2005

LIMA - Peru, which so far has collected $2 million from the private sector to clean up centuries of environmental damage at abandoned mines, needs up to $1 billion to do the job, a government agency said on Wednesday.

"We calculate that Peru needs between $500 million and $1 billion," Carlos Loret de Mola, head of Peru's National Environmental Council (CONAM), told reporters. The $1 billion figure is quadruple last month's World Bank estimate of $250 million.

Peru is the world's No. 3 copper and zinc producer and No. 6 in gold.

"We don't know the historical damage of other sectors. We're calling on sectors such as fishing, farming and industry to detail their impact ... to see where we can start the clean-up," he added.

Loret de Mola said Peru has so far spent $150 million on closing exhausted mines and cleaning polluted rivers and farmland. Many mines abandoned during an era of lax or nonexistent environmental laws still leak chemicals into the countryside because they were never properly closed.

US-based Newmont Mining Corp, which owns Latin America's largest gold mine. Yanacocha, Peruvian miner Buenaventura and South Africa's Goldfields last week put $2 million toward a clean-up fund.

The government says it will seek money from the World Bank and the Inter-American Development Bank to boost the fund.

Many poor farmers are against mining because they fear it will cause a loss of farmland, contaminate rivers and destroy their livelihoods. Partly as a result, Peru has faced a surge in anti-mining protests since 2003.

Miners counter that they are subject to stringent environmental laws and the successful closure of pits is planned even before production begins.

Nevertheless, Peruvian lawmakers are seeking to pass a new law that will make it easier to suspend miners' permits if they are judged to have contaminated the environment.

Business leaders say the law is unnecessary and that mining companies, which generate more than half of Peru's annual exports, have invested $900 million in more environmentally-friendly machinery and operations since 2001.

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