Ben Sharples - http://www.miningnews.net/StoryView.asp?StoryID=64673

Thursday, 31 August 2006

NEWMONT Mining says it has signed an agreement to end a blockade of its Yanacocha gold mine in Peru, while over the border there has reportedly been a “breakthrough” in contract negotiations at BHP Billiton’s Escondida copper mine in Chile. The gold major said the agreement was signed by a delegation from Yanacocha, the Peruvian Government and representatives of protesting community members, who were reportedly demanding jobs and clean water.

Newmont suspended mining and construction activities at Yanacocha amid safety fears as a result of the week-long blockade but said the temporary halt in operations is not expected to “materially impact” the mine’s operating performance or results.

Described by Newmont as the company’s “jewel in the crown”, Yanacocha is expected to produce around 2.7 million ounces this year and 2.5Moz next year. Newmont said it would re-start mining and construction activities as soon as “safe passage” to the mine site was re-established.

Newmont holds a 51.35% stake in the project, with Peruvian mining firm Compania de Minas Buenaventura owning 43.65%, and International Finance owning the remaining interest.

Yanacocha is no stranger to conflict, with protestors reportedly clashing with police earlier this month, leaving one person dead and more than a dozen injured, while workers walked off the job in April demanding better benefits.

Newmont has forecast production in the order of 5.9-6.2Moz this year from its mines worldwide at average costs of $US290-310 per ounce.

Elsewhere, a preliminary agreement is reportedly in place that could end the three week-long strike at BHPB’s Escondida mine. According to a Westpac Commodity Daily report a union vote is expected to be held on Thursday.

The world’s largest copper mine has been hit with strike action from workers demanding a pay rise, and is currently running at 40% of nameplate capacity.

It produces about 3500 tonnes of copper per day at full production and was shut down two weeks ago, but partial production resumed after unions agreed to a fresh round of negotiations.