by Philip Mattera
Newmont Mining is one of the world's largest gold mining companies and also one of the most controversial. Accusations of environmental and human rights abuses at its operations in countries such as Peru, Indonesia and Ghana have made the company a frequent target of corporate accountability campaigns for more than a decade. Despite its claims of being an ethical producer, Newmont has faced some of the most persistent opposition ever faced by a transnational corporation, especially in Peru, where the company has had to postpone a $5 billion project amid protests so intense that the government had to declare a state of emergency.
Newmont received the Public Eye award for corporate irresponsibility in 2009, and a 2012 report by the Zurich-based RepRisk ranked Newmont as the second most controversial mining company in the world.
Stock trader William Boyce Thompson formed Newmont in 1916 as a holding company for his mining investments. The name was derived from New York, where he conducted his business, and Montana, where he was born and raised. Newmont subsequently became an operating company as well, focusing on gold mining and then on copper, the latter through mines in South America and South Africa. Newmont later moved into Canadian nickel and gold mining in Nevada while taking over Magma Copper (subsequently sold). In 1977 a consortium led by Newmont acquired Peabody Coal from Kennecott Copper (sold in 1990).
In the early 1980s Britain's Consolidated Gold Fields acquired a substantial holding in Newmont but agreed not to seek majority control. A few years later, corporate raider T. Boone Pickens launched an unsuccessful takeover bid. A merger plan with American Barrick Resources, which had acquired the Consolidated Gold Fields stake, collapsed in 1991.
By this point, Newmont's operations were almost exclusively devoted to gold, and it had become North America's largest producer of that metal. It enhanced its position through the purchase of rivals such as Santa Fe Pacific Gold in 1997, Battle Mountain Gold in 2001 and Normandy Mining in 2002. The latter brought Newmont two mines in Ghana and made the company for a time the world's largest gold miner.
Environmental and Human Rights Record
Newmont's main business, gold mining and processing, is one of the most environmentally destruction industries on earth. Much of the company's activity involves huge open-pit mines that scar landscapes, while it use of cyanide leaching to process ore leads to frequent contamination of water supplies.
The controversies surrounding Newmont's practices intensified in 2004, prompting the Denver Post, the company's hometown newspaper, to publish a scathing series called the High Cost of Gold, which began with a story headlined "Denver-Based Mining Giant Newmont Gleams on Wall Street. But the Company is Tarnished by a Troubled Environmental Record." That record included the following:
United States. The Post report that Newmont had violated water-quality standards for at least four years, releasing greater-than-permitted quantities of contaminants such as arsenic and boron at its huge Lone Tree mine in Nevada. The paper quoted an environmental compliance officer who said she was fired by the company when she reported these problems to her boss. The company was also said to have tried to block a state investigation of the issue. In 2008 more than 150 representatives of native tribes staged a march from San Francisco and Denver to highlight their call for Newmont to reduce its mining impact, especially on Western Shoshone sacred places.
A 2011 report by Great Basin Resource Watch found extensive problems relating to water usage, water quality and mercury air pollution at Newmont's gold mines in Nevada. These included the Gold Quarry/Leeville/Carlin operation, which had received an EPA notice of violation in 2008 relating to the disposal of hazardous waste; the Twin Creeks Mine, where cyanide was found in groundwater monitoring wells near the tailings facility; and the Phoenix Mine, where acid drainage was severe. The report also noted that operations that had closed or were in the process of closing -- including Rain Mine, Lone Tree Mine and Mule Canyon -- were causing ongoing environmental damage.
Newmont's 51-percent subsidiary Dawn Mining was involved in a long-running controversy over the clean-up of its uranium operation in eastern Washington, which once served the U.S. government's nuclear weapons program. The Environmental Protection Agency sued Dawn and Newmont for the cost of removing tons of low-level radioactive waste. In 2011 Newmont finally agreed to pay for a majority of the estimated $193 million clean-up.
Peru. Newmont's huge Yanacocha open-pit mine, opened in the 1990s, was a prime example of the hazards of producing gold via cyanide leaching. An October 29, 2000 investigation by the Denver Post found that acid levels in some streams leaving the mine property were high enough to kill fish and harm crops and livestock. Anger at the company among local residents was compounded in June 2000, when a truck carrying mercury, a byproduct of gold production, from the mine spilled 330 pounds of the dangerous substance along 25 miles of roadway, sending eight people to the hospital and sickening many more. The company was fined $500,000 by the Peruvian government and later said it had spent $18 million in clean-up costs. According to the Denver Post article, the International Finance Corporation, a World Bank affiliate that owned a 5 percent stake in the mine, criticized Newmont for having no guidelines for transporting mercury and for being unprepared for such a spill.
In 2004 thousands of local residents blockaded the mine, alleging that it was polluting local water supplies. As the confrontation continued, the company responded by cancelling plans to expand the operation. Tension between Newmont and the community remained high, and in 2007 the company was accused of spying on and harassing activists with the help of a private security firm operating under the code name Operation Devil. This prompted groups such as Oxfam America to call on Newmont to renounce such abuses.
In 2011 a sustainable development group called GRUFIDES filed a lawsuit against Newmont, claiming that the company and its partners obtained land illegally when the Yanacocha project started in the 1990s.
Earthworks, Oxfam America and other groups in the United States protested the company's announcement in 2011 that it was reviving plans to expand its Peruvian operations into Cerro Quilish, close to Yanacocha. Newmont abandoned that project but faced intensified protests when it proposed a $4.8 billion gold project in the nearby Cajamarca region. The open-pit Conga mine was to be the largest mining investment ever made in Peru, but it also involved the destruction of four alpine lakes. The opposition grew so strong that the Peruvian government, strongly in favor of the project, imposed a state of emergency. The project was put on hold in 2011, but the protests continued, including a 2013 action in which thousands of opponents circled one of the threatened lakes. In 2014 EarthRights International filed a request in U.S. federal court seeking information from Newmont on the violent police response to anti-Conga protests. The information was to be used in legal actions in Peru.
An indigenous woman named Maxima Acuña de Chaupe became a symbol of the protests after she resisted intimidation and beatings by those seeking to remove her family from land it has lived on since 1994. She also stood up to Newmont and its affiliates in court, winning an appeals court ruling.Yet she has been subjected to continuing harassment.
Indonesia. In the 1990s Newmont's PT Minahasa Raya operation in the province of North Sulawesi was the subject of reports that its toxic tailings were causing elevated mercury levels in Buyat Bay and that the company was ignoring the problem. In 2004 non-governmental organizations sent an open letter to the company outlining the worsening environmental situation. A few months later, an Indonesian government panel charged that Newmont had illegally disposed of waste laden with arsenic and mercury in the bay. The New York Times put the story on its front page, reporting that the company had been sued by local residents and might face criminal charges. Shortly thereafter, the government detained six Newmont officials, including two Americans, though one of the latter, Newmont's top executive in Indonesia, was released after a few hours. The others were held for a month.
In December 2004 it was revealed that the Newmont was aware for several years that the Indonesian mine was also emitting large quantities of mercury vapor into the air. Several months later, the Indonesian government proceeded with its criminal case, bringing charges against the company and its top executive in the country, Richard Ness. Newmont responded aggressively, filing defamation suits against some of its critics and refusing to participate in court-ordered settlement talks. The company distributed gold pins, designed to resemble AIDS ribbons, to its 14,000 employees worldwide so they could show solidarity with their colleagues in Indonesia. Responding in court to the indictment, Ness, stated: "There is no pollution. I don't know why I am sitting here."
While the criminal case proceeded, Newmont agreed to pay $30 million to settle a companion civil action that had been brought by the government. In doing so, it did not admit responsibility for any pollution. In April 2007, amid warnings in the international business press that a conviction could cause Indonesia to be shunned by foreign investors, the court acquitted Newmont and Ness. A few weeks later, Ness filed a lawsuit in Indonesia against the New York Times, seeking to get the newspaper to retract its reporting. The case was thrown out of court.
Ghana. In 2006 an alliance of environmental groups urged the World Bank's International Finance Corporation to postpone approval of a $75 million loan to a Newmont subsidiary for a project in Ghana until the company agreed to additional safeguards against water contamination and better compensation for the thousands of people who would be displaced. The IFC approved the loan without the additional conditions.
Groups such as the Concerned Farmers Association kept up their campaign to get the government to withdraw approval for Newmont's affiliate to mine in the Ajenua Bepo Forest Reserve. Anger at the company in Ghana intensified after a cyanide spill at its Ahafo gold mine in October 2009. The company was fined US$4.9 million for the incident. U.S. government cables released later by Wikileaks revealed that Newmont's handling of the cyanide leak was bungled.
Protests continued both against the proposed Akyem project and the existing Ahafo mine. In March 2010 a group of farmers issued a public statement accusing the company of "acts of intimidation and harassment." Similar accusations appeared in a 2012 report by a group called Livelihood and Environment Ghana. Production at Akyem began in 2013.
Over the years, Newmont has at times had conflicts with its unionized employees in the United States. In 1985 the company's Magma Copper unit pressured workers to accept 20 percent wage and benefit cuts. In 2003 members of Operating Engineers Local 3 at Newmont's Carlin mines in Nevada staged work stoppages during contract talks (Reno Gazette-Journal, March 29, 2003). They rejected the company's contract offer and picketed the company's headquarters in Denver before finally settling with management in 2004. The company has also faced labor disputes abroad, including a walkout at its Indonesian unit in 2011.
Newmont's U.S. operations have a checkered record on mine safety. In 2003 members of Operating Engineers Local 3 walked off the job to protest safety violations. In 2009 Newmont's Carlin operation in Nevada was one of 15 operators warned by the Mine Safety and Health Administration that they each had a pattern of violations that could lead to an agency order to stop production. Later that year, the Federal Mine Safety and Health Review Commission approved more than $500,000 in penalties against Newmont's Midas Mine in Nevada in connection with the 2007 death of an underground gold miner.
A 2013 MSHA report on a fatality at Newmont's Exodus mine in Nevada concluded that the accident occurred because management failed to ensure that established safety procedures were being followed.
The controversies surrounding Newmont's Yanacocha mine in Peru are not limited to environmental and human rights issues. In fact, the way in which the company gained control of the operation has been the subject of allegations of corruption. According to a 2005 investigation by the New York Times and PBS Frontline, there was evidence that Newmont enlisted the help of Peru's secret police chief, Vladimiro Montesinos, to win a legal dispute that arose when the French government, a partner in the project, decided to privatize its holdings. Newmont was said to have been investigated by the U.S. Justice Department for violating the Foreign Corrupt Practices Act, but the case was reportedly dropped because of a lack of cooperation from the Peruvian government.
Newmont's subsidiary in Peru was one of the mining companies that took advantage of a practice adopted during the administration of President Alberto Fujimori in the 1990s under which the firms could avoid paying taxes and royalties to the government if they reinvested their profits. When commodity prices soared in the 2000s, the policy provided a windfall for the corporations. A 2009 report by the UK group Christian Aid found that Newmont's non-payment of royalties deprived the government of more than US$96 million over a two-year period, while the non-payment of taxes had resulted in savings to the company of US$118 million in the period from 1994 to 2006.
In the late 1990s Newmont was sued by a regional government in Indonesia for about US$8 million in taxes and damages the company was alleged to have owned on waste rock and soil removed from the company's mine site in Sulawesi. In 2000 Newmont agreed to pay about US$500,00 to settle the case (Wall Street Journal, April 20, 2000).
Groups such as the Progressive Leadership Alliance of Nevada have criticized Newmont and other mining companies for aggressively using loopholes to avoid paying millions of dollars in state taxes in Nevada.
Other Information Sources
Violation Tracker summary page
Watchdog Groups and Campaigns
JATAM - Mining Advocacy Network (Indonesia)
Key Books and Reports
Conflict Management and Corporate Culture in the Extractive Industries: A Study in Peru by Caroline Rees, Deanna Kemp and Rachel Davis (John F. Kennedy School of Government, Corporate Social Responsibility Initiative Report No. 50, September 2012).
Environmental Problems at Newmont Mines in Nevada (Great Basin Resource Watch, January 2011).
Environmental Rights Defenders at Risk in Peru (Front Line Defenders, June 2014).
Free, Prior and Informed Consent in Africa: An Emerging Standard for Extractive Industry Projects by Emily Greenspan (Center for Public Interest Law and Oxfam America, 2014).
Indigenous Rights Risk Report for the Extractive Industry-U.S. (First Peoples Worldwide, October 2013).
Mining Conflicts Around the World: Common Grounds from an Environmental Justice Perspective (EJOLT Report No. 7, September 2012).
“The Myth of Ethical Gold” by Stephanie Boyd (New Internationalist, September 2014).
Undermining the Poor: Mineral Taxation Reforms in Latin America (Christian Aid, September 2009).
Last updated February 13, 2015