PERU | Artisanal gold mining produces 40 tons per year
Informal mining remains a challenge. The Peruvian Society of Environmental Law (SPDA in Spanish) estimated that approximately 40 annual tons of gold produced by hand are exported from Peru. In 2018 this would have represented about 28% of the national gold production.
Since 2002, there has been a Law for the Formalisation of Artisanal Mining that has helped, in part, to mitigate the environmental effects caused. However, according to Solidaridad, this process has not had adequate economic incentives and there is a lack of regional government engagement.
Gonzalo La Cruz, Solidaridad Regional Director, believes that the main focus of informality is on 88% of informal miners who operate in third-party concessions. For him, there are three paths to follow. "One, that these miners continue doing it badly under the risk that the activity is not sustainable. Two, that the big company takes them out of the concession, and three, the most appropriate, that they align with the company and form part of their value chain ".
The mining company Yanaquihua (Arequipa) followed the latter and managed to formalize 350 miners. "Now they have grouped together, they have a corporate name, they comply with all environmental safety regulations and they work hand in hand with the company," says La Cruz.
The model is sustainable because it presents a win-win. Since the artisanal miners work as third parties for Yanaquihua, the production of gold has doubled and 50% of the extracted is thanks to the work of the miners in the veins, part of the process that demands specialised labor.
12% of excavators that are not near a concession have it more difficult.
La Cruz indicates that the only way to streamline the process is to form a grouping. One of the biggest problems is that they do not have financing. "They create cooperatives, but financial entities only give them individual credits. Each one contributes S/. 800 or S/. 1,000 ".
One solution, he says, would be the revenues coming from the same value chain. "Mining pays 3% of the FOB value for royalty. If we reallocate 0.5% of the gold that comes from the informal sector, we would have resources to reinvest in the process. They would collect between US$ 5 million and US$ 10 million”, he said.
- The departments where artisanal mining is concentrated are Ayacucho, Arequipa, Huancavelica, Apurímac, Cusco, Puno and Madre de Dios, in the south.
- Solidaridad, together with the Dutch embassy, seeks to formalise 50,000 artisanal and small-scale miners (ASM).