Newmont project in Peru

LIMA: Townspeople in northern Peru are demanding an end to construction of the $4.8 billion Minas Conga gold mine because they fear it will threaten local water supplies, residents said on Tuesday.

US-based Newmont Mining is developing Minas Conga, which would be the largest investment in Peru's mining history, through its local affiliate Yanacocha, along with Peruvian precious metals miner Buenaventura.

"We reject the presence of Yanacocha's Conga mining project because it is located at the start of a water basin," said Milton Sanchez, head of a civic group that has organized community assemblies in the area.

Yanacocha officials said they rejected the "violent attitude" of the townspeople who were allowed to enter the mine on Monday to complete an inspection. The company said three workers were injured during protests.

The protests came just a week after locals blocked access to Newmont's Yanacocha gold mine. Anti-mining protests could test leftist President Ollanta Humala, who took office in July promising to better spread the benefits of a commodities-fueled economic boom to Peru's poor rural hinterlands.

Minas Conga is expected to produce between 580,000 and 680,000 ounces of gold per year starting in 2014.

Peru is the world's No. 6 gold producer and the second largest copper producer.

"We will give the company eight days to evacuate from the site," said Sanchez, saying locals would block roads to prevent workers from entering the Minas Congas site