Protests in Peru halt planned $4.8bn gold mine

After six days of increasingly violent protests in northern Peru, US company Newmont said on Tuesday that it was halting construction of a planned $4.8-billion open-cast gold mine. "For the sake of re-establishing peace in Cajamarca, it has been decided to suspend the project's activities," said a statement from the Yanacocha mine, operated by Newmont and local partner Buenaventura.

The open-pit Conga Project involves moving the water from four lakes high in the mountains into reservoirs the company would build. Protestors say the reservoirs do not adequately replace the lakes, which also provide groundwater for agriculture and to irrigate pastures for livestock.

Cajamarca is Peru's leading dairy and livestock region, and the issue is of particular concern as a drought has forced water rationing for the past three months. Newmont, based in Denver, Colorado, is the majority owner of the Conga project, which was to begin production in 2015 and is an extension of Yanacocha, Latin America's biggest gold mine.

The company says it consulted local communities and that the Conga mine will generate thousands of jobs. Peru's deputy environment minister, Jose De Echave, resigned on Monday, calling official environmental impact studies on the project "weak, outdated and lacking in credibility."

The dispute is a test for President Ollanta Humala, who is trying to balance the needs of the mainly poor people who elected him with the demands of the mining industry, one of the engines of Peru's economic growth.