April 17, 2012 / 6:49 PM / 8 years ago

UPDATE 2-Newmont should improve Peru mine plan-auditors

* Government says to study auditors recommendation

* Mine would be most expensive in Peruvian history

* Local foes reiterate opposition

LIMA, April 17 (Reuters) - A team of independent environmental auditors said on Tuesday U.S.-based Newmont Mining Corp should make “substantive improvements” to its $4.8 billion Conga project in Peru, which has been stalled by community opposition.

The proposed gold mine, the biggest investment in the history of Peruvian mining, would replace a string of alpine lakes with reservoirs. Local protesters, led by the president of the northern Andean region of Cajamarca, say it would bring pollution or hurt scarce water supplies.

The Conga dispute has the highest profile of the more than 200 environmental conflicts that President Ollanta Humala is trying to solve to avert delays on Peru’s $50 billion pipeline of mining and energy projects.

“There’s no such thing as zero environmental impact. You need to find a balance between economics, the environmental, social needs and technical ones,” said Rafael Fernandez Rubio, one of three European environmental experts hired by Peru’s government to review Newmont’s mitigation plan for the mine.

Newmont has indicated it is willing to fine-tune its mitigation plan for the project.

It has also said the reservoirs would provide steadier supplies of water.

“Conga’s reservoirs would more than double the current water storage capacity and would provide a reliable, year-round water supply to downstream users, something they don’t currently have as a result of the dry season,” the company said.

Prime Minister Oscar Valdes, who the president promoted from interior minister in December and charged with quashing local opposition to the mine, told reporters the government will now review the 260-page report from the auditors, who analyzed the water component of Newmont’s 7,000-page mitigation plan.

Some of the recommendations by the auditors could drive up the costs of the project.

“It’s not our mission to say if the project is viable or not ... we’ve just tried to improve its technical aspects,” said another auditor, Luis Lopez Garcia. “Some measures could be implemented quite easily but others would require economic studies to see if they make sense.”

Mines and Energy Minister Jorge Merino Tafur said the independent review showed Peru was paying more attention to environmental concerns after centuries of mining that often went unchecked.

“I hope everyone understands that investments are very important but only when you take into account factors like water and sustainable development,” he said.

Gregorio Santos, the left-wing president of the region of Cajamarca, who has defied Humala’s calls to let the mine be built, reiterated his opposition to the project.

“The private sector in Peru must understand that you can’t cause enormous damage to ecosystems in the pursuit of big profits,” he said.

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