Reuters quoted Peruvian president Ollanta Humala said Newmont Mining would ensure ample water for towns near its proposed Conga gold mine, and that his government would not allow new mines to open if they hurt water supplies.

US based Newmont on Friday accepted a stricter environmental mitigation plan for its mine which will now require total investments of USD 5 billion making it the most expensive mine in Peruvian history.

Newmont said that before the mine is built it will first build larger reservoirs that will guarantee year-round water supplies in towns currently suffering shortages. The bigger reservoirs are expected to add up to USD 200 million to the project's original USD 4.8 billion price tag and take up to two years to build.

Humala said "We can and will make sure the company guarantees water supplies. This is my promise to Cajamarca. My government won't permit the development of any mining project that exposes the local population to water shortages or to water that doesn't meet quality standards for human consumption."

The larger capacity reservoirs were recommended by outside experts hired to improve upon Newmont own environmental impact plan in an attempt by the government to quell protests that have stalled work on the mine since November. The water project would replace two or more in a string of alpine lakes.

Mr Carlos Santa Cruz Newmont head of South America said "We have ratified our decision to implement the recommendations international auditors made to the environmental impact study for the Conga project."

He said that "We share the government call for dialogue, for the vast majority of civil society in Peru."

Mr Gregorio Santos the president of Cajamarca criticized Humala on Saturday and reiterated that Conga isn't viable. Mr Santos' term ends in 2014.

Conga which is partly owned by local mining company Buenaventura, would produce between 580,000 and 680,000 ounces of gold annually.

Source - Reuters

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