For 2 global miners, ‘profitable production’ has meant devastation

Partners in Pollution

Since 2000, the Batu Hijau copper-gold mine on Sumbawa Island in Indonesia has dumped 720 million tonnes of toxic tailings into the Senunu Bay in the Indian Ocean. Until 2016, the mine was majority owned and operated by the US company, Newmont Mining Corp, which controlled 48.5% of the economic interests. Together with Japan’s Sumitomo Corporation, they held over 70% of shares in the project.

After 16 years of mine waste dumping, both Newmont and Sumitomo sold their ownership stakes in Batu Hijau in November 2016, simply walking away from an environmental disaster of massive proportions. Now Newmont and Sumitomo are teaming up again; this time, at the Yanacocha mine in Cajamarca, Peru.

On June 20th, Newmont announced that Sumitomo had purchased a 5% stake in the controversial Yanaococha mining company for US $48 million. The stake was previously held by International Finance Corporation (IFC), the private sector branch of the World Bank. The IFC announced it had ended its 24 year relationship with Minera Yanacocha in December 2017.

The new arrangement means Newmont continues to hold a 51.35% a majority share in Yanaococha mining, together with Peruvian company, Buenaventura (43.65%) and Sumitomo (5%).

Yanacocha and Batu Hijau: Dominating and Destructive

The massive Yanacocha gold mine in the arid Andean Highlands of Cajamarca, Peru, has contaminated critical water sources in the region and had devastating impacts on local sustainable livelihoods. The mine’s unpopularity has sparked broad based resistance to Newmont’s plans to expand operations, first to Cerro Quilish and later at the proposed Conga project. The mining company and state’s attempts to quell opposition have resulted in allegations of human rights abuses and violence. Subsistence farmer, Máxima Acuña de Chaupe, has refused to cede her land to Newmont for the Conga mine, and has faced nearly a decade of harassment, abuse and legal persecution. Despite the hold on development of the Conga project for now, the addition of Sumitomo suggests Newmont isn’t planning on leaving Cajamarca any time soon.

Like Yanacocha, the Batu Hijau mine is also known for the litany of documented environmental harms starting almost at the outset of operations in 2000. Just over one year into operations, a pipeline that transported mine waste from the production site to the ocean broke, dumping tailings into an area of fragile coral reefs. Indonesian environmental group, WALHI, reported reduced fish populations, water pollution, and impacts on local fisheries and livelihoods. The project has also been criticized for destroying rainforest, protected bird habitat and key biodiversity areas. In May 2011, the local West Sumbawa government appealed to the Indonesian government to not renew the mine’s permit to dump, but they were ignored. That same year, Newmont secured financing from a consortium of banks including Goldman Sachs Lending Partners LLC and BNP Paribas SA to expand the polluting mine.

Ocean Dumping

The practice of dumping mine waste into the ocean was outdated when Batu Hijau began operating back in 2000. Today it is one of just seven mines still dumping mine waste into the sea. Earthworks and the Ditch Ocean Dumping coalition is leading a  growing movement demanding the practice be phased out once and for all.  

In its statement announcing the sale, Newmont executive vice president for strategic development, Randy Engle said, “We had a long and productive partnership with Sumitomo at Batu Hijau in Indonesia, and we look forward to working with them and Buenaventura to advance the next generation of profitable production at Yanacocha.” Unfortunately, when it comes to Newmont and Sumitomo, ‘profitable production’ has meant devastating consequences for ecosystems and the people that depend on them. Communities and civil society groups are watching closely to see if Sumitomo and Newmont will finally take responsibility in Peru by respecting human rights and communities’ right to say no to Conga or other mining projects, ending pollution of scarce water supplies, and ensuring fully funded closure and reclamation for the Yanacocha mine.