News stories over the last week or so regarding our Conga project in Peru may have been confusing due to reports stating that we have suspended development of the project.
During our second quarter earnings conference call on July 27th, we updated the market by stating that Conga is still in our plans, but moving ahead on a very measured basis.
While we remain focused on the construction of water reservoirs, the security and safety of the community, our employees and contractors is our first priority. As we have repeatedly stated, further development of the Conga project will occur only with local and national support and only if it can be done in a safe, socially, environmentally responsible manner with risk-adjusted returns that justify future investment.
One recent news report, which quoted Newmont’s Chief Executive Officer, Richard O’Brien, saying that the conditions for advancing the Conga project at this time do not exist, was an acknowledgment of our need to pursue the “water first” approach as the best way to help create the necessary social environment for the future development of Conga. We are committed to this water first approach, which is consistent with what we said during our investor day conference on May 23rd, on our July 27th earnings call and in a news release on June 22nd.
News outlets last week reported on a poll in the Cajamarca region regarding the Conga project. According to the poll, 78 percent of respondents were not in favor of the project moving forward at this time, while 15 percent were supportive. Thirty-six percent of the respondents, however, said that while they are not in favor of the project advancing right now, they could change their position if certain guarantees regarding environmental protection and social benefits were put in place.
As is the case anywhere Newmont operates, our relationships with host communities and governments are extremely important to us. We hope to continue working cooperatively with the government of Peru and the local communities, as well as with the regional government, through the facilitation and dialogue process to develop a peaceful and amenable solution to the political, social and other issues that have led to protests and community unrest in the areas outside of Conga’s immediate area of influence. This includes continuing to support President Humala’s social inclusion plan, with responsible mining playing a key role.