A 4.8 billion US dollar gold and copper mining project, Peru's biggest such investment, has been closed after increasingly violent protests by highlands peasants who fear for their water supply.
At least 20 people, including eight with gunshot wounds, were injured in clashes between opponents of the Conga project and police who used firearms, Cajamarca state regional health director Reynaldo Nunez told Canal N television. He said one person was in critical condition and the injured included police.
"After discussions with the government, it was agreed that to help restore public order, the project would be suspended," said Newmont Mining spokesman Omar Jabara.
US-based Newmont is the majority owner of Conga, which was to begin production in 2015 and is an outgrowth of Yanacocha, Latin America's biggest gold mine. However, leaders of the open-ended protest against the planned mine that began on Thursday in the northern state bordering Ecuador said they would not halt the action until the project is cancelled.
Cajamarca's president, Gregorio Santos, said that opponents want "a legal document that definitively eliminates" the project.
At a Lima news conference, prime minister Salomon Lerner did not answer a reporter's question of whether the suspension was temporary or definitive. The protests have been increasingly violent, including vandalism on the mine's property.
The Yanacocha consortium, which includes the Peruvian company Buenaventura Mining and the International Finance Corporation, said in a statement that the suspension was "required" by the government "for the sake of re-establishing tranquillity and social peace".
Mr Lerner, appearing at a the news conference with Newmont Vice President Carlos Santa Cruz, said the government would involve the local population in decisions involving mines to "dispel all doubts and guarantee, as a priority, water for human consumption".
Local protest leader Milton Sanchez was not appeased. He said: "We regret that the government's reaction came after the spilling of blood in which today we have 17 wounded. We peasants of Cajamarca feel tremendously defrauded by (President) Ollanta Humala and really consider him a traitor."
Mr Humala, a centre-left politician, had told Cajamarca residents before his June election that he would guarantee their water supply and said it was more important to him than gold.