The Peruvian government seems to be trying to jawbone the shuttered Minas Conga gold mine forward, declaring yesterday that if Newmont Mining agrees to various social spending schemes and local partner Minera Yanacocha hires various small businesses at the project, the miner could get a green light to operate again in 2014.

A Peruvian Cabinet minister said he met with leaders of 32 communities in the Cajamarca region that would be affected by Conga and reported they were "unanimous" in supporting the mine's restart. Opposition leaders were reported to be "no longer relevant." Although it's more than just wishful thinking on the government's part the project will advance, it's not likely to be as smooth a process as this update suggests.

Peru previously issued similarly upbeat prognostications for Southern Copper's stalled Tia Maria copper project. Tia Maria was halted in 2011 after violent clashes left three people dead, so just saying the opposition has been marginalized doesn't make it so.


After Southern submitted its environmental impact statement, Peru's minister of energy and mines said earlier this year that a "social license" from the people could allow operations could start up again at the $1 billion mine. 

While the government hopes to issue an environmental permit so that work can begin anew, hundreds of people turned out in protest at a public meeting, clashing with riot police on the streets of Cocachacra. 

Miners around the world are running into staunch opposition from indigenous peoples who worry the operations will ruin water supplies, kill off flora and fauna, and upset their religious and cultural way of life. Barrick Gold has been stymied in Chile; Yamana Gold  stumbled in Argentina at its Agua Rica project, though it has since restarted; Taseko Mines is battling for its New Prosperity mine in British Columbia; and Northern Dynasty is on the brink of despair at its Pebble project in Alaska.

Newmont Mining, which owns 51% of Minas Conga, might find itself in a position similar to Southern Copper if it gains a "social license" for Minas Conga. The project was originally scheduled to begin production in early 2015 and was designed as an extension of local mining giant Buenaventura's nearby Yanacocha gold mine, the largest such mine in Latin American but one that is approaching the end of its life. Yet opposition has been fierce and work came to an abrupt halt in 2012. Since then, Newmont has been working with locals to meet their objections.

Peru is looking for both Minas Conga and Tia Maria to spearhead a resurgence in its $55 billion mining pipeline. Where projects have ground to a halt elsewhere in Latin America, the Peruvian government is looking for miners to bring some $14 billion worth of investments to the country next year.

Conga alone is expected to require $5 billion worth of capital, making it the largest-ever single private investment in the South American country. In return, it's estimated the project is capable of producing as much as 350,000 ounces of gold and 120 million pounds of copper annually over the 19-year life of the mine. 

The government may give Newmont Mining the green light to start, but that doesn't mean it has cleared a path to riches. Minas Conga could still be a sore spot for the miner as it moves ahead in 2014.

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The article Can Newmont Mining Get Conga Moving Again? originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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