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Fluor gets go-ahead to start work on Minas Conga project

Bnamericas Published: Thursday, November 03, 2011
US-based Fluor (NYSE: FLR) has received notice to proceed with works on US-based Newmont Mining's (NYSE: NEM) 51.35%-controlled Minas Conga gold-copper project in Peru's Cajamarca region, the former said in a statement. However, on Thursday afternoon, local press reported that Newmont had halted all activities at the mine site due to community opposition. The decision to stop development is a preventive measure against the threat of violence as the deadline to remove equipment and personnel from the mine camp - set by local communities opposed to the project - expired on Thursday. Minas Conga will cost US$4bn-4.8bn to develop, making it the biggest investment project in Peru's mining portfolio. Local miner Buenaventura (NYSE: BVN) has a 43.65% stake in the project to be developed through Yanacocha, which has the same ownership structure. Fluor was awarded the engineering, procurement and construction (EPC) contract for Minas Conga and has taken part in the previous four stages of project development. Minas Conga involves two open pit mines including waste rock handling and ore stockpiles, a process facility to treat copper/gold ore to produce concentrate, infrastructure including tailings management, water management, mine facilities, associated roads and access ways, camps and offices. The project was approved by the boards of Newmont and Buenaventura in late July and production is scheduled to start in 2015. Average output at Minas Conga over the first five years is estimated at 650,000-750,000oz/y gold and 160M-210Mlb/y (72,575-95,254t) copper at cash costs of US$300-400/oz and US$0.95-1.25/lb, respectively. Fluor also announced that a JV between its infrastructure business and Brazil's Odebrecht was awarded the earthworks contract for Minas Conga. Fluor is the majority partner and booked approximately US$1.7bn and US$580mn for the respective scopes of work.

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