Yanacocha cuts contractor

The owners of Yanacocha, South America’s largest gold mine, plan to trim costs by abandoning contract mining.

The giant heap-leach operation, situated in northern Peru, is expected to produce more than 1.6 million oz. gold in 1999.

Newmont Mining (NEM-N) owns 51.35% of the joint operating company, Minera Yanacocha, with 43.65% held by Lima-based Minas Buenaventura (BVN-N). The remaining 5% is held by International Finance Corp.

Switching to owner mining will save US15 per tonne, says Scott Barr, Newmont’s vice-president of South American operations. Since Yanacocha processes more than 50 million tons of ore annually, savings are expected to be US$7.5 million per year.

Yanacocha is already one of South America’s lowest-cost operations, having incurred cash costs of US$96 per oz. in the third quarter.

Minera Yanacocha will employ 1,130 miners, most of whom will be Peruvian.

Production in 2000 is expected to reach 1.7 million oz., and continue upward as the company develops the Quinua deposit. Currently, ore is mined from four pits.