According to records from Peru’s National Forestry and Wildlife Service (SERFOPR), until the end of December 2016, illegal miners have deforested 30,000 hectares of the Amazon rainforest in the buffer zone of the Tambopata National Reserve (Madre de Dios region), in Peru. What once was the habitat for a vast array of plants and animals, is now a cemetery of logs and mud.

The degradation of the Peruvian Amazon by illegal miners is quite serious.

This figure increases if we consider illegal activities in the jungle area of Puno, Cusco, San Martin and Amazonas.

Illegal miners have settled in the Tambopata area for 30 years, making deforestation a lucrative business by utilizing sophisticated machinery. They first clear the forest and then dig to extract gold using mercury, which they then sell in Puno, Lima or the neighbouring country of Bolivia. They even legalize the activity by selling their gold to legal miners in Peru. It is estimated that this activity produces 16 tonnes of gold per year.

The illegal mining sector has the necessary means and organization; it doesn’t comply with the law (State controls). This activity is also carried out in the regions of Puno, Arequipa, Ica (Nazca), La Libertad and Piura (where in 2005, the mining company Manhattan Minerals of Canada decided not to work on the Tambogrande mine site due to the opposition by the indigenous people. Today, most of those opponents practice informal artisanal mining extracting gold without following environmental and security standards).

Social and Health Issues

Many illegal miners, despite having the economic means to formalize their activities, decide not to do it, since they would rather avoid paying taxes and don’t comply with the environmental and social controls carried out by the State. Their operations are developed in very remote areas and their activities are mixed with the presence of brothels, bars and delinquency. The recruitment of minors for brothel activities is another great social problem that has to be addressed. It is estimated that there are about 400 teenagers being exploited in the so-called “prostibares”.

Another problem is related to the threat to the health of workers and people living in small villages surrounding mining areas, due to the absorption of mercury, arsenic and lead.

Aerial view showing how deforestation has altered the Amazon.

In addition, waste obtained from these heavy metals is thrown into the rivers, which is very concerning since the Amazonian population bases its diet on fish. Sixty per cent of fish that are consumed in Madre de Dios, have a mercury content above the permissible limits indicated by the World Health Organization.

The Carnegie Institute study also evaluated the residents of the city of Puerto Maldonado, where 78 percent of adults showed mercury levels in their hair three times the permitted limits.

The State does little to repress this illegal activity that is severely damaging one of the lungs of the world, poisoning its soil and generating social issues.

The police destroy the machinery used by illegal miners in the Amazon rainforest of Peru.

The government carries out some actions to combat this activity, but due to the lack of logistical and economic resources, it has not managed to halt it. When illegal mining areas are found, police destroy their machinery and equipment, but almost no one is arrested. However, the names of the “gold czars” that have yearly incomes of millions of dollars are well known, but that money is managed clandestinely, and is not part of the banking system. The economic power they have allows them to finance strikes against the government, opposing formalization.

We call the attention of world organizations to support to combat the deforestation of the Amazon, which is one of the few places in the world that is still home to unique wildlife and flora. It seems as if the lung of the world is doomed to disappear.

By: Víctor Mendoza Pérez

Torata is a small agricultural town in Peru, located only 6 km from the Cuajone minesite. Its people are very friendly and the town is well lit at night. In Torata, you can breathe pure air and enjoy crystalline streams formed from melting snowfall. One can drink the water directly out of these streams and breathe the fresh air that surrounds this beautiful town that seems to have stopped in time and where old customs are still upheld. People are very kind and very welcoming; if they see a stranger, they do their best to treat them well and feel welcome, no matter where the person comes from. Torata is definitely a piece of heaven, where one can enjoy delicious food, feel welcome, and where landscapes seem to have been taken from a science fiction movie.

What makes the existence of a town like Torata special? It is not the attributes mentioned above, nor is it its history or beauty! Torata, compared to the thousands of small towns that exist in Peru, is located only 6 km from a large minesite called Cuajone, as well as its mineral concentrator plant. The Cuajone minesite is mainly engaged in the production of copper and other by-products. The Cuajone minesite is one of the main copper producers in Peru, and has been operating for several decades.

Much is said on how mining and agriculture cannot go hand in hand, but this example of the Cuajone Minesite and Torata prove that wrong. To date, Torata has not registered any cases of pollution or diseases in its population due to a minesite and a concentrator plant situated so close. The relationship between the workers of the Cuajone Minesite and the inhabitants of Torata is excellent, and they have become strategic partners. People from Torata have improved their quality of life by having the opportunity to direct their businesses to the workers of the minesite, as well as their families. It is not uncommon for inhabitants from Torata to visit the mine campsite to offer their products for sale, such as cheese, honey, guinea pigs, wine, etc. It is not only the good relationship between the two parties that should be emphasized, but the fact that the workers of the minesite feel so identified with this small community (Torata) that, out of their own pockets, they support them during difficult times. It is admirable to see how the minesite workers and their families can comfortably walk in the village of Torata without the need for bodyguards or the fear of being attacked or be seen with contempt. It is quite the opposite, where both workers and family members are welcomed with open arms.

It is time to get rid of the myth that mining and agriculture cannot operate in the same area. Torata and the Cuajone minesite have proven coexistence possible. If mining companies operate responsibly and use the latest technology available, there would be no problems with the surrounding communities, and it would be easier to gain their trust. The next step is to definitively to make local communities feel part of the process and show them support. The only way to create a win-win scenario is to have an attitude of cooperation within the mining company towards the community and vice versa. Only then will we generate sustainable development and large investment for the benefit of all.

By: Víctor Mendoza Pérez

Indigenous people participate in topography works, opening roads for mining projects.

As in many countries in the world, creating new jobs in Peru is costly and depends on economic growth. In most mining projects in Peru, it isn’t possible to offer direct employment to all community members in the area-of-influence of a mining site. For this, Indigenous Communal Enterprises are created to provide employment to the majority of a local population.

The Supreme Decree No.004-92 TR of February 20th, 1992, which regulates economics in the general law of indigenous communities, has enabled mining companies and communities to reach agreements for the creation of jobs. These include the provision of goods and services to companies, for which they receive training and support for the operation of communal enterprises.

Since the Agrarian Reform Law was introduced in the 1970s, indigenous people joined indigenous communities to manage agricultural and livestock production. This phenomenon occurred only in areas where farms used to operate.

Most of the mining sites are located at altitudes that exceed 3,000 meters above sea level, where agricultural production is limited and only potatoes, oca, quinoa, etc. are cultivated. There is no large-scale cattle ranching; there are few herds of cows, sheep, alpacas and llamas. Under these difficult circumstances, indigenous people have to look for jobs in order to survive, and the presence of a mining project represents a great opportunity. One of the greatest difficulties is lack of mining training to be able to work in the production process, which is why companies train them – through a communal enterprise- to carry out minor jobs during the learning process. There are communal enterprises that already provide services for civil engineering works (construction of irrigation canals, small dams, transportation of minerals, transportation of personnel, among others).

Over the years, indigenous people have learned to use heavy equipment and now work in the mining site operating dumpers, drills, shovels, etc. Some of them have become experts in tunnel construction; others have been trained in maintenance of heavy machinery, welding, electricity and other activities involved in the production process. Peruvian mining companies recognize the importance of hard-working indigenous people who have contributed to Peru’s mining development for centuries.

Communal enterprises have become job generators for thousands of indigenous people in Peru. In the photo, Minera Milpo provided machinery to the communal enterprise of San Francisco de Asís de Yarusyacán, Pasco.

Due to the fact that there are only few indigenous people working directly for a mining company, communal enterprises have become very important. They serve as a generator of jobs and a source of economic income for thousands of indigenous families. There are areas where indigenous people encourage the presence of mining companies, such as Pasco, Apurimac, Amazonas. In Pasco (located 4,400 meters above sea level), there are mining sites that have been established since the colonial period (from 1600), where several generations of indigenous people have left the fields to work for a mining company.

Indigenous enterprises have become a project for the development of indigenous communities:

“The example of the Rancas Communal Enterprise of Multipurpose Services, which started operating 25 years ago, shows the capacity of community members from all over Peru, who, with their beliefs, customs, religions, etc., were able to agree on the clear idea of community development, invested a working capital and set up a business activity. We represent the communities who stopped protesting in order to formulate a proposal.”

Jhoel Rivera Santiago, President of the National Federation of Communal Enterprises of Peru and General Manager of the Rancas Communal Enterprise of Multipurpose Services (Cerro de Pasco)
in an interview with the Regional Communication Network

Women have also partnered to form small communal enterprises of goods and services. Some of them carry out cleaning tasks in the camps and offices, others provide laundry services and design safety clothing to sell to companies.

There are successful communal enterprises that turn over several million soles a year. Only a few have failed largely due to mismanagement of the enterprise concerned.

Communal enterprises sign contracts with mining companies through certain agreements, that allow them to guarantee permanent contracts and generate jobs for community members, who at the same time are partners of these enterprises. This represents a good example that can be replicated in other extractive, industrial and productive activities.

By: Víctor Mendoza Pérez

Peru is one of the most attractive countries in South America for mining. For 2017, the Peruvian mining portfolio consists of 46 mining projects with an estimated investment of over US$47 billion as indicated by the Minister of Energy and Mines, engineer Gonzalo Tamayo Flores, in a recent meeting with Peruvian executives.

Local Community Impact

However, in recent years, there have been several social conflicts with the communities surrounding the projects, which have led to the rise of dialogue roundtables, in which community representatives sit with mining and federal authorities to solve the community’s complaints, most with successful results. There are three projects that have not had the expected success to obtain a social license; these are, Santa Ana (Ag), Minas Conga (Ag) and Tía María (Cu) projects.

Several factors and mistakes occurred, including a bad relationship with the communities and the politicization of the claims (all unjustified and without technical support). Members of far-left groups, who are remnants of subversive groups, have found a good place to develop their proselytizing work with the argument that mines will contaminate and affect agricultural sectors.

The Minister stated that there are 23 projects that have an approved Environmental Impact Assessment (EIA); however, several of the approved projects are waiting for commodity prices to improve in order to start their construction, while others are pending a social license from the surrounding communities.

Peru is successful in attracting mining investments due to the presence of many deposits located in the Andes Mountains, and due to being in a very interesting and competitive position based on low production costs. Peru offers some of the lowest costs in the world for labor and electric power (where more than 50 percent is generated by natural gas from Camisea). The tax stability that mining companies can establish with the development of projects also fosters investment in this South American country.

In spite of metals prices affecting the world mining sector, in the last three years mining projects with great potential have been brought on line, placing Peru as one of the world’s leading metals producers and thus, contributing to the national economy. This refers to the Constancia (Cu) project of Hubday Minerals that began its production with a US$1.7 billion investment. The US$4.6 billion expansion of Cerro Verde (Cu) increased its production to 600 million pounds of copper and 15 million pounds of molybdenum. This mine will be one of the main copper producers in the world and expects to produce 1 billion pounds of copper and 23 million pounds of molybdenum per annum at peak capacity.

Toromocho (cu) of Chinalco Mining Company is in the process of an expansion with an estimated capital expenditure of US$3.5 billion dollars, and expects to produce 275,000 metric tons of copper once commissioned.

The main projects include:

• Quellaveco (Cu) – Anglo American,
• Shahuindo (Au) – Shauindo,
• Corani (Ag) – Bear Creek Mining,
• Tambomayo (Au) – Buenaventura Mining Company,
• Pukaqaqa (Cu) – Milpo Mining Company,
• Crespo (AU/Ag) – Ares Mining Company,
• Pampa de Pongo (Fe) – Jinzhao Mining Peru,
• Magistral (Cu) – Milpo Mining Company,
• Tía María (Cu) – Southern Peru, and
• Minas Conga (AU) – Buenaventura Mining Company.

The last two have not yet obtained a social license due to the pollution-related protests carried out by the local population. Both conflicts have been politicized by the intervention of far-left groups, which makes their viability difficult.

In addition, there are three projects currently under evaluation by the Peruvian Environmental Authorities, having already submitted their EIA’s. These are:

• Santa Ana (Ag) – Bear Creek Mining,
• San Gabriel (Au) – Buenaventura Mining Company and
• Ariana (Cu/Zn) – Ariana Mining Operatios.

The most important aspect for the future of mining in Peru is that there are 20 projects under the exploration process, several of which are megaprojects. Included in this list are projects such as

• Michiquillay (Cu) – Private Investment (Proinversión);
• Rio Blanco (Cu) – Río Blanco Copper,
• La Granja (Cu) – Rio Tinto,
• Los Chancas (Cu) – Southern Peru,
• Zafranal (Cu) – AQM Copper Peru,
• Galeno (Cu) – Lumina Copper and
• Cotabambas (Cu/Au/Ag) – Panoro Apurimac.

Other small projects under exploration, totaling an investment of over US$22 billion, include:

• Mina Justa (Cu) – Marcobre,
• Hierro Apurimac (Fe) – Apurimac Ferrum,
• Hilarion (Cu) – Milpo Mining Company,
• Quechua (Cu) – Quechua Mining Company,
• Haquira (Cu) – Antares Mining Company,
• Los Calatos (Cu – Mo) – Hampton Peru Mining Company, and
• Fosfatos Mantaro (Phosphates) – Mantaro Peru,

It is also worth noting that some mining companies that are currently operating are undergoing expansions of their existing installations, such as

• Mina Toquepala (Cu) – Southern Peru,
• Bayovay (Phosphates) – Miski Mayo Mining Company,
• Marcona (Fe) – Shougang Hierro Peru,
• Toromocho (Cu) – Chinalco Mining Company,
• Cerro Verde (Cu) – Sociedad Minera Cerro Verde (finished) and
• El Porvenir (Zn) – Milpo Mining Company.

Peru is an attractive country to develop mining projects and as a testament to this fact, Peru was nominated to host the 27th World Mining Congress to be held in 2018.

By: Víctor Mendoza Pérez