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News Release

Major Gold Project Implodes in Peru: Community Succeeds in Opposing Controversial Gold Mine

MININGWATCH CANADA ~ OXFAM AMERICA ~ MINERAL POLICY CENTER

Tambogrande, PERU – Community members, joined by human rights and environmental advocates, today hailed a major precedent in their push for recognition of community rights in places where multinational corporations seek to operate.

The Peruvian government found that Canadian mining company Manhattan Minerals failed to meet criteria necessary for digging a proposed open-pit gold mine where the village of Tambogrande currently stands. The town of 16,000 residents is located in the heart of one of Peru's most productive cultural areas.

"Now the area's farming economy can flourish without the immediate threat of mine waste contaminating precious water supplies," said Payal Sampat of Mineral Policy Center.

Manhattan staked its future on the controversial Tambogrande gold mine proposal – which has been strongly opposed by local residents concerned about water contamination and other effects on the area's precious agricultural economy.

"Manhattan and other Canadian mining companies are always saying they respect their host communities. But obviously they have to be forced to do so," said Jamie Kneen of MiningWatch Canada.

In rejecting Manhattan's proposal, the Peruvian government cited the company's inability to demonstrate sufficient assets and processing capacity to manage the project. Manhattan's stock value already plummeted 41% in one day at the beginning of December, after Peruvian officials refused to extend the company's December 1 deadline for providing proof of financial solvency.

"This is really a win-win situation," said Keith Slack of Oxfam America. "The people of Tambogrande get to protect their way of life and the global mining industry avoids a big black eye."

The Tambogrande proposal gained renown in June 2002, when 93 percent of voters in a community referendum voted against opening the area to gold mining.

Residents have been united against the project since it was first proposed in1999, due to concerns about mine waste endangering the San Lorenzo Valley's water supplies and rich agricultural economy. The area's agricultural production is valued at approximately US$2 billion, employing 15,000 locals. Residents also opposed Manhattan's plan to relocate 1,500 families in order to make way for the enormous open-pit mine.

A peaceful three-day strike was held last month by community residents to express continued opposition to the project. The strike culminated in a massive rally attended by 10,000 people in the main square of Tambogrande.

In order to retain its ownership option in the project, Manhattan was required to demonstrate by December 1 its possession of US$100 million in assets and an operating plant with processing capacity of at least 10,000 tonnes per day.

"This case offers valuable lessons for the mining industry and reveals that poor industry practices are not a thing of the past," said José de Echave of Peru's CooperAcción. "The population's conviction in defense of its rights, buttressed by national and international solidarity, prevented Manhattan from developing a project that would have trampled on human rights."

Tambogrande's story builds on a trend of communities throughout the developing world demanding prior informed consent before multinational mining companies can start mining. For example, residents of a community in Argentina's pristine Patagonia region held an overwhelming public vote in March against a gold mine proposed by U.S.-based Meridian Gold.

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CONTACTS:
Keith Slack, Oxfam America (English): 1-202-496-1308
Jamie Kneen, MiningWatch Canada (English): 1-613-569-3439
José de Echave, CooperAcción (Spanish with translation available): +51 1-444-0316
Whitney Painter, Mineral Policy Center (English): 1-303-903-9119