Gold Mining

Mining News Watch #15

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Report #15 // January 28, 2015 – March 17, 2015

Top Stories

  • Antonio Fernández Jeri has been appointed as the new High Commissioner of Mining Formalization and the Interdiction of Illegal Mining.

  • The Amazon Conservation Association issued a new map showing that gold mining-driven deforestation grew by 226.5 hectares between October 2014 and February 2015 in the buffer zone of the Tambopata National Reserve.

  • A new report found that miners from Ecuador are using a series of underground tunnels to smuggle illegal gold from the Amazonas department of Peru.

Deforestation

  • A new analysis conducted by the Amazon Conservation Association (ACA) found that, despite government efforts to crack down on illegal gold mining, mining-driven deforestation in the buffer zone of the Tambopata National Reserve in Madre de Dios grew by 226.5 hectares between October 2014 and February 2015.[1] This deforestation is the equivalent of 310 soccer fields in just four months.

Formalization Process

  • The Presidency of the Council of Ministers (PCM) appointed Antonio Fernández Jeri as the new High Commissioner of Mining Formalization and the Interdiction of Illegal Mining. Fernández is the third person to hold this title, following Augusto Soto Castagnola and Daniel Urresti. He is now responsible for coordinating and overseeing the implementation of the national strategy to combat illegal mining.[2]
  • More than 2,000 informal miners met in Arequipa to demand a more efficient formalization strategy, under the leadership of economist Hernando de Soto of the Institute for Liberty and Democracy (ILD), a think-tank that focuses on helping developing countries modernize their economies. The new “true formalization” process will supposedly be more supportive of miners enrolled in the process and will include a plan to protect and remediate the environment. In contrast to the present formalization process, the plan will also contain different procedures for miners depending on region (coast, mountains, or rainforest). The proposal is set to be completed in 45 days and then sent to the Executive for approval.[3,4]
  • The regional president of Madre de Dios, Luis Otsuka, met with Peruvian President Ollanta Humala to address the issue of mining formalization. Prior to the meeting, the general manager of the regional government of Madre de Dios declared the process a “failure” in need of “integral revision.”[5] Otsuka reported that the first meeting with Humala yielded positive results in that the two leaders definitively agreed that the formalization process must be amended in order for “real” formalization to occur.[6] More concrete changes will likely develop out of further meetings, during which Otsuka hinted that the two will discuss amending Supreme Decree 016-2014, a controversial law regulating fuel supply, which Otsuka says negatively affects the region’s economy.[7]
  • To date, only eight mining companies have successfully completed the formalization process in Peru, all in the department of Puno. Around 70,000 miners initially registered for formalization.[8] Still, no informal miners have been formalized in Madre de Dios.
  • The Public Defender (Defensoría del Pueblo) analyzed the efficacy of the government’s strategies to eliminate illegal mining, including formalization and remediation of the environment. It found that the most significant difficulties were minimal budget dedicated to formalization, lack of qualified leaders and personnel, inadequate planning, and insufficient supervision.[9]

Illegal Gold Smuggling

  • A report aired on Peruvian news program Panorama showing that illegal miners from Ecuador are extracting gold from Peruvian territory in the Amazonas department through a series of 150 underground tunnels which are up to two kilometers long. The tunnels are used both to extract gold and to transport it illegally, and are used by both Peruvian and Ecuadorian miners.[10] The government plans to intervene in the area through raids on illegal mining operations and inspections of key checkpoints in the area.[11,12]
  • The President of the Central Reserve Bank of Peru denounced Bolivia for exporting US$1 billion more in gold in 2014 than the country has the capacity to produce. Analysts suspect that the gold was sourced illegally from Peru and then smuggled over the border due to inadequate customs control.[13]

Mercury Regulation

  • A new peer-reviewed study by the Royal Society of Chemistry found that mercury pollution from illegal mining sites moves rapidly downstream and can impact communities as least 560 kilometers (350 miles) away. According to the study, communities along the Madre de Dios River and its tributaries are at risk and should avoid regular consumption of carnivorous fish.[14,15]
  • The Alliance for Responsible Mining (ARM) has developed a new “fairmined” mining standard in an effort to promote sustainable mining. Currently, the AURELSA mine in Madre de Dios is one of the only companies in Peru to achieve the fairmined standard. To get the fairmined certification, a mining company must reduce their mercury emissions by 60 to 90 percent, ensure that chemical waste is disposed of safely, and guarantee worker’s rights. Buyers of fairmined gold pay a premium of ten percent which is then reinvested in the company and the interests of the local community.[16]

Other

  • Inspectors from the National Customs and Tax Administration (Sunat) seized 2,507 gallons of diesel fuel that was being transported along the Inambari River in Madre de Dios without the required documentation, destined for illegal mining operations.[17] A second seizure occurred a few weeks later, coordinated by the regional police and Sunat, during which 1,800 gallons of fuel were confiscated along the Madre de Dios River.[18] Sunat says it has increased its operational actions along the rivers and tributaries in the region.
  • The Magistrate Control Office (OCMA) found that the chief judge and president of the Court of Madre de Dios, John Russel Hurtado Centeno, was running an illegal mining camp called “Guadalupe” while simultaneously serving in the court system. He has been suspended indefinitely from his position while investigations continue.[19]
  • The Peruvian government found that gold production in the country fell by 6.7% in 2014 relative to 2013, yet Peru is still the sixth largest gold producer globally. The decrease is likely due to lower production in the largest mine in the country, Yanacocha.[20] Additionally, it is estimated that gold production in Madre de Dios will fall by 20% in 2015, largely due to the government’s offensive on illegal mining in the region.[21]

Notes: The ACA Mining News Watch focuses mostly on issues pertaining to the Peruvian Amazon and may not cover issues related to non-Amazonian parts of the country. We would like to credit ProNaturaleza’s “Observatorio Amazonia” as our primary resource for articles related to illegal mining in Peru.

Featured image credit: Gobierno Regional de Madre de Dios GOREMAD

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Image #1: Gold Mining Deforestation Continues to Expand in La Pampa (Madre de Dios, Peru)

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Image of the Week #1 highlights that gold mining deforestation continues to expand in the southern Peruvian Amazon (Department of Madre de Dios). Most notably, the image illustrates that much of the most recent (2013 – 2015) deforestation occured a) in an area known as La Pampa, b) outside of the legal mining corridor, and c) within the buffer zone of the Tambopata National Reserve.

2015_MDD_MAAP_a1_v6_rose1
Image of the Week 1a. Deforestation in the mining corridor of Madre de Dios in the southern Peruvian Amazon from 2000 – 2015. Key data sources: MINAM, SERNANP, ACCA, Hansen/UMD/Google/USGS/NASA, USGS

Map Description: 

Background map is a Landsat 8 image (30 m resolution) from February 2, 2015. Green indicates forest cover. Note there is some cloud cover. Data is from USGS.

Black indicates areas that were deforested as of 2000 according to data from the Peruvian Environment Ministry (MINAM 2009). Yellow, orange, and red indicate areas that were deforested from 2000 to 2012 (each color covers a four year period) (Hansen MC et al. 2013 Science 342: 850–53; Data download).

Purple indicates areas that were deforested between January 2013 and February 2015 based on our analysis of Landsat imagery using CLASlite forest monitoring software.

Data for secondary roads is from Conservación Amazónica-ACCA.

The mining corridor indicates the zone that the Peruvian Government has delimited as potentially legal for mining activities, but only if miners succesfully complete a multi-step formalization process for each project. Data is from ACCA.

Protected areas data is from SERNANP. Dark green indicates established protected areas and light green indicates their buffer zones.

The majority of the forest loss shown on the map is associated with gold mining activity, although some is also associated with the recently paved Interoceanic Highway and its growing secondary roads network.

According to a recent study published in PNAS by Greg Asner et al., the gold mining deforestation in this region increased from 10,000 ha in 2000 to 50,000 hectares (ha) in 2012. This deforestation was concentrated in two primary areas: Huepetuhe/Delta-1 and Guacamayo (A and B on the map, respectively).

More recently, the deforestation has largely shifted to La Pampa (C on the map). This shift is particularly important because La Pampa is within the buffer zone of the Tambopata National Reserve and outside of the designated mining corridor. Using CLASlite, we detected 1,711 ha of deforestation in La Pampa between 2013 and 2015.

Zoom View of La Pampa

2015_MDD_MAAP_b1_v2_zoom
Image 1b. Zoom view of La Pampa mining zone within the buffer zone of the Tambopata National Reserve. Key data sources: MINAM, SERNANP, Hansen/UMD/Google/USGS/NASA, ACCA, USGS

Image 2b is a zoom view of the La Pampa area provided to better illustrate the most recent deforestation within the Tambopata National Reserve buffer zone. As noted above, using CLASlite we detected 1,711 ha of deforestation within the La Pampa area between 2013 and 2015. That is the equivalent to more than 2,300 soccer fields.

Note that much of the most recent deforestation is within 6 km of the Tambopata National Reserve.

Near Real-time Monitoring

2015_MDD_MAAP_c1_v3
Image 1c. Near real-time deforestation monitoring in La Pampa. Key data sources: SERNANP, USGS, ACCA

Thanks to a series of relatively cloud-free Landsat images, we were able to conduct near real-time analysis with CLASlite during 2014 and 2015.

For example, we found that between mid-October 2014 and early February 2015 (about four months) there was deforestation of 226.5 ha in La Pampa within the buffer zone of the Tambopata National Reserve. That is the equivalent to 310 soccer fields, a rate of over 2.5 fields a day.

Prior to that time period, we found that between mid-August  and mid-October 2014 (abount nine weeks), there was deforestation of 431 ha in La Pampa.

Citation

Finer M, Novoa S (2015) Gold Mining Deforestation Continues to Expand in La Pampa (Madre de Dios, Peru). MAAP: Image #1. Link: https://www.maapprogram.org/2015/03/gold-mining-deforestation-expand-peruvian-amazon/

Mining News Watch #14

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Report #14  //  December 17, 2014 – January 27, 2015 

Top Stories

  • The new regional president of Madre de Dios and former mining leader, Luis Otsuka, met with President Ollanta Humala to begin discussions of key mining-related issues.

  • To combat the exportation of illegal gold from Peru to other countries, a bill has been sent to Peruvian Congress that calls for increased documentation and verification of the legal origin of mineral products.

  • A pilot reforestation project will soon begin in Madre de Dios with the goal of reforesting 800 hectares of land degraded by illegal mining operations.

Formalization Process

  • The chairman of the Energy and Mines Committee of Peruvian Congress, Rubén Coa, reported that its working group is drafting a multiparty law aimed at supporting artisanal miners enrolled in the formalization process as part of their priority agenda for the coming year. The initiative will include tax benefits for miners undergoing the process and increased training on how to adapt their work to meet environmental standards.[1]
  • After finding that around 60 Peruvian gold exporting companies are suspected of selling illegallyextracted gold, the Peruvian government sent a bill to Congress with a series of measures to strengthen the National Tax Administration’s (Sunat) powers to apply increased control on the marketing of mineral products. The new provisions would require exporters to verify the legal origin of the gold they are selling through documentation so that Sunat can follow up on the origin of the product if necessary.[2,3]
  • According to a report done by the Public Defender (Defensoría del Pueblo), a total of seven mining companies have successfully completed the formalization process, all in the department of Puno. The report noted that 43 mining companies are having difficulties completing the second to last step of the formalization process, which involves acquiring authorization for the use of water in the mining concession.[4]
  • The Public Defender has developed a series of recommendations to accelerate the formalization process, including involving the Presidency of the Council of Ministers (PCM) in resolving land use conflicts, prioritizing current formalization applications, working with the new regional government leaders in developing draft environmental remediation strategies for areas impacted by illegal mining, and improving the budgetary and logistical aspects of formalization.[5,6]
  • The new regional president of Madre de Dios and former mining leader, Luis Otsuka, met with President Ollanta Humala to discuss issues of priority to the region, including finding an effective process to formalize artisanal mining.[7] Otsuka commented that his administration will “unconditionally support” the efforts of the Executive to eradicate illegal mining so that the economy of the region may advance.[8]

Remediation

  • The Ministry of the Environment, MINAM, will begin a pilot reforestation project in Madre de Dios funded by the Inter-American Development Bank (IDB), which seeks to reforest 800 hectares of land degraded by illegal mining operations. The IDB also plans to coordinate with the Ministry of Agriculture to remediate mercury-contaminated soils in the region.[9]
  • A bill has been sent to the Peruvian Congress with provisions to create an environmental remediation fund under MINAM for areas affected by illegal mining from the funds accrued through sale or auction of confiscated illegal mining products.[10]
  • The Minister of Energy and Mines, Eleodoro Mayorga Alba, met with regional and local authorities in Madre de Dios to discuss the implementation of a project aimed at soil remediation and alternative energy development in the region.[11]

Illegal Mining Raids

  • Approximately 500 kilograms of illegal gold were seized by SUNAT during raids in 2014, with a total value of $17 million. According to SUNAT, in the last year imports of mercury used for gold mining declined 38% and fuel purchases decreased 35%, both of which may also be indicators that illegal gold production is decreasing.[12]
  • There were 50 raids on illegal mining operations during 2014, conducted by the National Police and the Armed Forces. The High Commissioner of Mining Formalization and Interdiction of Illegal Mining, Augusto Soto Castagnola, hopes to double this statistic in 2015.[13]

Other

  • Heavy rain, in combination with the effects of illegal mining on the stability of the soil of the region, led to a landslide in the town of Pampas in Madre de Dios.[14] Seven people are still missing as search and rescue attempts continue.[15]
  • An article by the Peruvian weekly Ojo Publico revealed that 35 metric tons of illegal Peruvian gold made its way to Miami for distribution in refineries in the United States. The gold had been smuggled from Madre de Dios to Bolivia, then to Lima, and then to Miami. Customs officials have valued the illegal gold trade in Peru at $3 billion.[16]
  • The Peruvian Society for Environmental Law (SPDA) has published an educational storybook called “The Golden Invasion” about the ravages of illegal mining. The book is aimed at increasing Peruvian citizens’ awareness of the hazards associated with illegal mining such as mercury pollution, and how citizens can face these threats through promoting sustainable activities.[17]

Notes: The ACA Mining News Watch focuses mostly on issues pertaining to the Peruvian Amazon and may not cover issues related to non-Amazonian parts of the country. We would like to credit ProNaturaleza’s “Observatorio Amazonia” as our primary resource for articles related to illegal mining in Peru.

Featured image credit: Archivo-El Comercio Peru

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Mining News Watch #12

Posted on by dcadmin
Report #12  //  October 16 – November 19, 2014 

Top Stories

  • The second round of regional presidential elections in Madre de Dios is likely to take place on December 7th. Both candidates are strong proponents of small-scale mining and have clashed with national government formalization efforts.

  • Of the 70,000 informal miners that began the formalization process, around 25,000 have completed the first step of the process and are eligible for eventual full legalization.

  • Two major police and military raids were carried out in the illegal mining zone “La Pampa,” with the goal of eradicating illegal mining from the Tambopata National Reserve buffer zone by the end of the year.

Madre de Dios Regional Election

  • The second round of regional presidential elections in Madre de Dios is likely to take place on December 7th; however, this date still awaits confirmation from the Executive branch[1]. The two run-off candidates are Luis Otsuka, a notorious opponent of the formalization process and the leader of the mining federation of Madre de Dios, and Simon Horna, a proponent of informal mining who played an important role in the miners’ strike that took place in April[2].
  • The Minister of the Environment, Manuel Pulgar Vidal, expressed concern about the outcome of the election due to the fact that several of the candidates promote illegal mining. He made no mention of any candidates’ names, but encouraged voters to make an informed decision when returning to the polls[3].
  • The Ministry of Energy and Mining (MEM) issued a new map showing that Otsuka owns a mining concession that overlaps partially with a native community located outside the authorized mining corridor[4,5,6].

Formalization Process

  • The Council of Ministers approved a package of measures aimed at improving the government’s strategy for small-scale and artisanal mining formalization. One of the initiatives gives informal miners operating in areas without a concession the opportunity to acquire a formal right to continue mining[7].
  • Of the 70,000 informal miners that began the formalization process, around 25,000 have completed the first step (taxpayer registration) and nearly 15,000 have completed the second step (established ownership of their mining concession or have been granted permission from the owner to conduct mining activity). In Madre de Dios, the largest obstacle to completing the process is that most mining concessions overlap with forest concessions, and these overlaps must be corrected through the Ministry of Agriculture (MINAGRI)[8].
  • Once officially formalized, miners will be eligible to benefit from programs such as Switzerland’s Initiative for Responsible Gold. The initiative allows formalized miners to sell their gold for the best price in Switzerland, and will be able to recover the General Sales Tax for exporting their gold[9].

Illegal Mining Raids

  • Minister of the Interior Daniel Urresti declared that illegal mining in the largest mining zone in Madre de Dios, known as “La Pampa,” will be completely eliminated by the end of this year[10]. To this end, a 300-man police base in Mazuko (officially named the Interinstitutional Complex Against Crime) is currently up and running and seven police checkpoints are in the process of being installed along the Interoceanic Highway[12].
  • Two major police- and military-led raids took place in La Pampa over the past month, resulting in the destruction of mining equipment[13,14,15,16].
  • In a smaller raid conducted by police working at the new police base in Mazuko, a vehicle found to be illegally transporting 72 gallons of petroleum to an illegal mining camp was seized along a highway near Puerto Maldonado[17].

Other

  • The Presidents of Peru and Ecuador met during the eighth binational Cabinet meeting, where they defined common protocols to use against illegal mining. The two governments agreed to develop a binational strategy that would address the formalization of mining, the exchange of information about the flow of fuel used in mining from one country to the other, and mining activities in water bodies[18].
  • A report published by the Agency for Supervision of Forest Resources and Wildlife (OSINFOR) found that the forest concessions in Madre de Dios have served as a check to illegal mining. The owners of forest concessions, in many cases, are defending their land from infiltration by illegal miners. The report also found instances in which concessions are not being managed correctly, leading to complex issues with overlapping forest and mining land rights[19].

Notes: The ACA Mining News Watch focuses mostly on issues pertaining to the Peruvian Amazon and may not cover issues related to non-Amazonian parts of the country. We would like to credit ProNaturaleza’s “Observatorio Amazonia” as our primary resource for articles related to illegal mining in Peru.

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Mining News Watch #11

Posted on by dcadmin
Report #11  //  September 18 – October 21, 2014 

Top Stories

  • In the October 5th  regional elections, none of the candidates for President of Madre de Dios surpassed the 30% threshold needed for victory, thereby forcing a second round between the top two vote-getters, both of whom oppose the government’s current strategy regarding the formalization process and major raids of illegal mine sites.

  • The latest key deadline (October 9) in the ongoing formalization process has passed. For this deadline, proposals for legislative modifications were due and miners were required to finish several key steps of the process (including taxpayer registration). For the former, a number of key modifications have been introduced by the national government.

  • The first known seizure of undocumented mercury occurred in October, marking a potentially important precedent.

Madre de Dios Regional Elections

  • On October 5th, elections were held for regional president in all departments across the country. In Madre de Dios, Luis Otsuka fell a hair shy of the 30% needed for victory with 29.3% of the vote[1,2]. Simón Horna came in second with 26.2% of the vote. The second round between Otsuka and Horna will likely take place on November 8th.
  • Luis Otsuka is currently the president of the Mining Federation of Madre de Dios (Fedemin) and has been a fierce critic of the national’s government’s current formalization approach[3]. Otsuka took an active role in the miners’ strike that took place in September 2013, in which he expressed that the government’s formalization strategy will not work, and that the mining camp raids are damaging to commerce in the region[4]. The President of the Chamber of Commerce in Madre de Dios described Otsuka as “very radical” and expressed concern that confrontations would increase and investment would decrease if he was elected[5].
  • Simón Horna is also sympathetic to mining interests but is considered to be less radical than Otsuka. Horna has stated that he opposes the government’s policy of raiding mining camps in Madre de Dios and expressed how previous raids have been a “complete failure,” causing the region’s economy to fall dramatically[6].

Formalization Process

  • Small-scale miners had until the deadline of October 9th to submit their taxpayer registration as part of the first step of the formalization process. Those who failed to do so by this date are unable to continue with the process[7]. It has been reported that over 27,000 out of a total of 70,000 miners submitted their taxpayer registration by the deadline, leaving a large number of miners who will be unable to continue with the formalization process[8].
  • The exact numbers of miners in each region who were able to submit their registration by the deadline have not been released. However, two weeks before the deadline Sunat reported that 83% of miners in Madre de Dios had been successfully enrolled in the formalization process[9]. This may have led to the large voter support of pro-mining candidates, since registration was needed in order to vote.
  • October 9th was also the deadline for legislative proposals to be submitted that would amend the formalization process. The High Commissioner of Mining Formalization and Interdiction of Illegal Mining, Augusto Soto, announced the imminent publication of a set of standards that will ease the requirements for informal miners who wish to formalize that has been developed by his multi-sectoral committee[10].
  • The Ministry of Energy and Mines presented a project to modify the General Law of Mining in order to facilitate the formalization process. The general goal is to prevent speculation of mining concessions by raising the cost-per-hectare of concessions, reducing the size of concessions, and reducing the mining plant size needed in order to qualify as a small artisanal miner[11].
  • The Executive Branch has proposed an initiative that will amend Article 307 B of the Penal Code, which criminalizes illegal mining. The modification would punish any landholder who encourages, promotes, facilitates, or authorizes the crime of illegal mining in a mining concession on their land with a prison sentence of up to ten years[12,13].
  • The Executive Branch has also proposed legislation that will require miners to prove lawful origin of commercial mining products and register mining machinery. The initiative also proposes to create a Fund for Environmental Remediation for environmental damage caused by illegal mining[14].

Mercury

  • Nearly two tons of mercury destined for illegal mining were seized in Lima after it was determined that the company in possession of the chemicals was not operating under several Legislative Decrees that require companies marketing or transporting chemical inputs used in illegal mining to be licensed by Sunat and enrolled in the Register of Controlled Goods[15].
  • An Internet petition has been signed by 5,000 Peruvians to bring the Minamata Agreement, an accord signed by more than 90 countries aimed at reducing mercury usage, to Congress for discussion. The acceptance of this agreement would help the Peruvian government manage mercury usage more carefully, to avoid letting it get into the hands of illegal mining camps[16].

Other items

  • In Madre de Dios, there are only three public prosecutors to address the nearly 2,500 reported environmental crimes. Of this total, only 300 crimes have been processed and 10 sentenced[17].
  • The Agency for Assessment and Environmental Control (OEFA) has given regional government bodies, the Ministry of Energy and Mines, and the Directorate General of Captains and Coastguards until October 15th to report their enforcement of environmental activities executed by small scale miners between July and September of this year[18].
  • The Peruvian Society of Environmental Law (SPDA) and the Ministry of the Environment (MINAM) published a book entitled The Reality of Illegal Mining in the Amazon Countries. The book analyzes the problems faced by Ecuador, Colombia, Venezuela, Peru, Brazil, and Bolivia that adversely affect the environment. The goal of the work is to better understand the problem of illegal mining, not only in Peru, but in the entire Amazon basin, and to compare the initiatives taken by other countries to address it[19].
  • The Ministry of Energy and Mines (MEM) reported that national gold production fell 16.23% this August in comparison to last August, making it the ninth consecutive month that production has dropped. Gold production is estimated to close 2014 with a total drop of 20% from the year before and maintain its decline until 2016 due to the shorter life of larger mines and the policies and raids inflicted by the government against informal mining[20].

Notes: The ACA Mining News Watch focuses mostly on issues pertaining to the Peruvian Amazon and may not cover issues related to non-Amazonian parts of the country. We would like to credit ProNaturaleza’s “Observatorio Amazonia” as our primary resource for articles related to illegal mining in Peru.

Featured image credit: ANDINA

Download the complete report in PDF