Rising informal gold output highlights the 'cosmetic' solution

28 June 2015

The first four months of the year have seen a sharp rise in informal gold production in Madre de Dios. According to Antonio Fernández, the new ‘czar’ in charge of sorting out informal mining, this has been the bi-product of the continuing state of siege in several provinces of Arequipa that has sought to control protest over the proposed Tia Maria mine. Fernández claims that last year’s much-publicized attacks destroying machinery could not be continued this year for lack of police, and this was because of their diversion to Arequipa. The first assault of this type this year took place on June 25 in northern Peru. The informal sector is said by the authorities to produce some 10% of the country’s gold output, though it could well be more.

What is striking about this development is the speed with which production can resume. Anecdotal evidence tells of machinery hidden in sheds and wheeled out under cover of darkness to carry on pumping.

This underlines yet again the inadequacy of the overall policy on informal mining. Force on the one hand has failed to stop the resumption of production, and the cost to the wellbeing of the local populations has been high. On the other hand, incentives to formalise have not been accompanied by adequate provision to clean up or protect. And small farmers whose livelihoods are being destroyed by environmental damage remain as vulnerable and uncompensated as ever. Implicit is the unreal assumption that paper compliance can turn an enterprise into a non-polluter, when there is neither proper support nor monitoring.

Further, the purchasers of gold remain keen to buy. As the Director of the NGO CooperAcción, Julia Cuadros, says “[The government’s] failure is due to it not being able to look at the problem as a whole. It is important to intervene and discipline the [small] illegal miners, but that is not enough because for gold, there is an entire [business] chain” (http://www.telesurtv.net/english/news/Peru-Links-Found-Between-Illegal-Mining-and-Foreign-Companies--20150616-0038.html). There is still no sign of a coherent and sustainable policy to deal with a humanly and environmentally critical situation, producing what Ms. Cuadros calls ‘a cosmetic solution’.

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