Minera Yanacocha is the largest gold mine in South America. After 10 years of exploration, feasibility studies started in 1990 for works at a pilot heap leaching plant. Due to the emerging markets debt crisis and Peruvian borrowers' reduced access to long-term credit, the company requested financing from IFC in 1993, the year operations began.
Since then, the mine has expanded significantly.
IFC Interest
The company’s equity is owned 51.35% indirectly by Newmont Mining of the United States, 43.65 % by Buenaventura of Peru, and 5% by IFC. Newmont’s Peruvian subsidiary operates the mine. IFC committed financing in 1993, 1994 and 1999. The 1993 and 1994 loans have been fully repaid. In June 1999, the IFC Board approved a further $100 million debt financing consisting of $20 million of A-loan and $80 million in B-loan for the accounts of participating commercial banks. The loans have been fully disbursed.
Environmental and Social Context
A mercury spill in 2000 signaled the start of CAO’s involvement in the Yanacocha project. CAO’s multi-year intervention has involved a number of the E & S issues that were initially identified by IFC and the company. These include water quantity and quality; water impoundments (process, storm water, and sediment ponds); natural ecosystems; handling of hazardous materials; occupational health and safety; emergency response; and social development in the area of mine influence.
Request to CAO
In March 2006, 30 canal users jointly submitted a request for CAO assistance in obtaining information about the current and potential impact of mining activity on the quantity of water in their canals, rivers and mountain streams.
Their petition to CAO expressed satisfaction with the collaborative water quality work that has been conducted to date, and a desire to continue this type of work through an independent organization such as the CAO.
CAO Action
In response to the canal users’ petition, CAO traveled to Peru in May 2006 to talk with canal users and mine representatives to assess the parties’ willingness to work collaboratively on strategies for sharing information about water quantity. During this trip, canal users agreed that their water quantity concerns should be addressed in a facilitated meeting at which all relevant information could be exchanged and discussed.
CAO returned to Cajamarca July 24 and 25, 2006 to facilitate an information sharing meeting involving the canal users who signed the petition and representatives from Minera Yanacocha’s technical water/environmental staff.
The meeting minutes and CAO recommendations for moving forward are available below.
Current Status
CAO has concluded its involvement in the petition.
