On the Ground in the Battle Against Prohibited Mining

By Paula Dupraz-Dobias
Special to the Peruvian Times

HUAYPETUHE, MADRE DE DIOS, Peru — A combative voice on the local radio station summed up the temperament in this small frontline town, also known as the center of informal and illegal gold mining:

“Prohibiting mining will lead to poverty and delinquency. Do not let this happen. Let’s defend the future of our children and fight for a real formalization of mining, with social inclusion.”

In the days preceding the start of the latest general strike by illegal miners, opposed to the government’s efforts to formalize some of the estimated 70,000 workers nationwide, the atmosphere was tense, as locals presented their side of the story.

“You gave me a concession in the mining corridor, so just let me work in mining.” — Jorge de la Sota

The devastating results of informal gold extraction in Peru's fragile Southern Amazon jungle region

Aerial view of damage caused by informal gold extraction in Madre de Dios

Huaypetuhe was one of the first jungle areas exploited by migrant miners as early as the 1950s, when panning for the precious metal began along a tributary river of the same name. The talk here now among miners and traders is focused on falling production since the government introduced new legislation in May 2012.

Over the years, swarms of workers, especially from poor parts of Cusco and Puno, had been drawn here by rising gold prices and dreams of wealth.

Bans on the use of heavy machinery, restrictions on the quantities of gold extracted and recent police operations in nearby settlements, in which bulldozers, trucks and other mining equipment were dynamited, have heightened tensions in the area.

“Poverty cannot justify the consequences of illegal mining.” — Peru Environment Minister Manuel Pulgar-Vidal

A year ahead of the United Nations’ climate change negotiations, or COP20 in Lima, the government has given miners until April 2014 to register their activities in accordance with a series of laws covering land entitlements, and labor and environmental regulations.

The unnaturally glowing silt, produced by the dredging for gold in Madre de Dios.

According to a recent report by the Carnegie Department of Global Ecology, which studied the jungle from an airborne observatory, more than 50,000 hectares of forested lands and alluvial areas have been affected by unregulated mining, transforming huge swaths of the Peruvian Amazon into barren wastelands.

The devastation, easily viewed via Google Satellite maps, dramatically increased following completion of the Interoceanic Highway, which carved a direct route from Cusco into the depths of once-impenetrable forest.

In September, the Carnegie Amazon Mercury Project showed that illegal gold mining in Madre de Dios was exposing native communities to mercury concentrations at least five times the quantities considered safe by the World Health Organization.

But for many on the ground, mining has for years represented a means of survival and a way of life.

Commenting to this reporter about what he would tell the government regarding the new restrictions, Hueypetue lawyer Jorge de la Sota said, “You gave me a concession in the mining corridor, so just let me work in mining.”

Gregoria Casas Huamanhuillca - often referred to as "Aunt Goya" -  is portrayed in Peru's mainstream newspapers and magazines as the powerful matriarch of an informal family empire, which directs informal gold extraction that is decimating the fragile ecosystem of Peru's southern Amazon region.De la Sota is married to Joni Baca, and is the son-in-law of Gregoria Casas Huamanhuillca and Cecilio Baca Fernandez, who were among the earliest of workers to migrate to the area in 1952.

As a family, including Joni’s siblings, Marco, José Luis, Maruja and Violeta, they control much of the production of gold here through some 7,500 hectares of land recorded at Ingemmet, the national Geological Mining and Metallurgical Institute, including several government mining concessions.

Casas Huamanhuillca, Baca and several of their children were the target last year of a government investigation, and in July were cited by the Environmental Evaluation and Fiscal Office (OEFA) for allegedly having “medium- and large-scale mining activities without holding the appropriate environmental certification.”

De la Sota, speaking on behalf of his family’s activities, at his home set in the heart of his wife’s concession, explained how mining had evolved over the years.

Production, he said, was simplified with the arrival of heavy machinery in the 1990s. State backing and easy credit offered by suppliers such as Volvo and Skandia, meant that everyone began to buy heavy machinery, leaving behind the pan and shovel.

“According to international conventions, men cannot be treated like beasts, and be made to carry heavy weights,” he said. “The new machinery was there to avoid this.”

Environment Minister says no room for flexibility   LIMA, PERU - Environment Minister Manuel Pulgar-Vidal says that the state needs to be inflexible in dealing with those who abuse the law on illegal mining.  In a meeting with Peru’s Foreign Press Association on Tuesday, Oct. 15, 2013, Pulgar-Vidal admitted that illegal mining had been tolerated for the past 40 years in Peru.  “We need to get used to working within the law, meaning that someone cannot be justified to be a small operator if he has a dredge worth $750,000,” the minister said. “Similarly, one cannot be justified if he has trucks or if the given operation generates some 50 million soles in four years.”  Pulgar-Vidal’s comments were made days after El Comercio reported that Gregoria Casas Huanmanhuillca of Huepetuhe in Madre de Dios had earned some 46 million soles in sales of gold since 2008.  Legislation introduced in May 2012, forbids the use of heavy machinery in artisanal mining. A number of highly publicized police and military operations in Madre de Dios during the last week of September destroyed dozens of unsanctioned heavy machines, including trucks and bulldozers.  Pulgar-Vidal said that a culture of informal workers had emerged from poverty, but that, “Poverty cannot justify the consequences of illegal mining.”  “Illegal mining generates more poverty than the poverty that had originally existed,” he said.  — Paula Dupraz-DobiasPeru’s government, however, considers the use of heavy machinery illegal in these areas for smaller scale mining operations.

The family’s home is separated from the center of the village by a wide sandy basin and a glowing trickle of a river — a garbage strewn stretch with an intoxicating stench and vultures looming overhead.

An endless series of gold trading posts, small bodegas and cheap hostels align a urine-streaked main street. It is a vivid image of a 21st century frontier town, just a five hour drive from Madre de Dios’ capital, Puerto Maldonado.

Gold traders lament about falling volumes of gold, saying that miners and traders alike are having a difficult time complying with the government’s new standards.

Hilder, a twenty-something Cusqueño, working at a friend’s gold buying business on the main drag, described how many of the poor people who had come here for the gold, have since moved elsewhere.

People here repeatedly alluded to miners migrating to wilder, less controlled areas, including alluvial, forested and protected areas.

One such place is La Pampa, a sprawling putrid tent town that sprouted in the last couple of years directly along the Interoceanic Highway. It is now notorious for under-aged human trafficking and ecological devastation. Quincemil and its backlands, is yet another example.

Nonetheless, Hilder said that at his business, approximately two kilos of gold is processed every couple of days from miners in the vicinity. Much of the ore comes from settlements a few hours beyond Huaypetuhe, set along the enlarged riverbank, in places such as Choque, Delta 1, Delta 2 and Delta 4, which all lack an effective presence of state authority.

Getting into the area requires driving in the Huaypetue River’s shallow brown stream. Vehicles that attempt to transit over the shores instead, often get stuck in the unnaturally glowing silt, produced by the dredging for gold.

Local buyers receive the gold, which is then transported by car to Puerto Maldonado, Cusco or Lima, before being exported, often by other firms.

(Armored vehicles carrying gold from Huaypetuhe are sometimes targeted by bandits.)

In spite fo the millions of dollars generated by illegal gold extraction, the overriding reality in Huaypetuhe is one of poverty.

Poverty is the overarching reality in Huaypetuhe, despite the booming extraction of gold.

Payments are made directly into miners’ accounts in Cusco and elsewhere, or serve as credit to pay for machinery, as there are no banks in Huaypetuhe. De la Sota said such complex accounting is often misinterpreted by authorities as money laundering.

One buyer in Puerto Maldonado spoke of how illegal miners, who lack the required documents to sell gold, now accept payments below the going gold price. Ronny Mendoza, owner of gold trading firm, Oryjuñuy, in the province’s capital, said that local jewelers do not seem to be subject to the same legal restrictions as traders, and buy from sellers who may not comply with the necessary documents.

A gram of gold in Huaypetuhe was selling at the end of September for 110 soles, or about $41, roughly 30 percent below the world price. The difference goes to intermediaries and traders, before being exported, mostly to the United States and Switzerland, according to De la Sota.

According to government figures reported in September by international labor think-tank, Vérité, Madre de Dios produced $848 million in 2012 and that in the previous year, some 97 percent of the gold produced in that state was illegal.

(Following the initial contact made with the Casas Baca family by this journalist and El Comercio in Huaypetuhe, Gregoria Casas Huamanhuillca revealed to the Peruvian daily that between 2008 and 2013, she had sold 470 kilos of gold worth some 46 million soles).

Everyone here, as well as in Puerto Maldonado, nonetheless suggested how the landscape had changed over time. Hilder remembered how 10 years ago, “There was a lot more vegetation. But (the miners) don’t plant any trees, which they should,” he said, “none at all.”

After the many years that Yoni Casas Baca’s family business has grown since her parents began as goldpanners, she said they have also contributed to the local economy.

“So many people are involved in mining in Huaypetuhe,” she said. “We don’t just fill their pockets. (Our employees) work hard. They grow with us. Who could earn 3800 soles a month without an education, or proper documents? We give work to so many people.”

Jorge Merino, the mining and energy minister acknowledged in a talk with the Peruvian Foreign Press Association earlier this month that Peru faced a real social issue as it pushes forward with formalization. He said that for every one of the estimated 70,000 informal miners is supporting four other people, in addition to their families, indirectly, through spending on goods and services, in the community.

The logistical infrastructure, which has burgeoned in and around Huaypetuhe, is a clear indicator of this network. A majority of the town’s 7000 inhabitants lack access to running water and electricity. But as I entered the community, I counted some 19 gas stations, servicing a battalion of trucks, bulldozers and excavators used in the extraction of gold deposits along the devastated riverbed and surrounding lands.

Dozens of long wooden boats, some bound together to carry vehicles of all sizes and weights, charge disproportionate tolls to transport everything from cars to oil tankers 200 meters across the Inambari River, which separates Huaypetuhe from the Interoceanic highway, in Mazuko.

The Baca Casas clan is annoyed by what they see as unjustified government restrictions on their family business, which held titles and mining concessions, as well as the first environmental operating agreements (PAMA) in Madre de Dios. They maintain they are providing work to entire families and reject earlier government accusations that they engage in illegal child labor.

De la Sota said that Peruvian labor laws effectively permitted 16 year-olds to work in mining. “The problem is a social one,” he said. “Those children who come here arrive on their own feet.”

He feels that the Baca Casas family has been unfairly targeted and that foreigners too, including the Chinese and Koreans, who are allegedly implanted in areas around Quincemil, should also be investigated.

While the government attempts to impose new regulations, there is also a sense among those involved in mining that more should be done to help, not hinder, the lives they have carved out for themselves in this Amazon frontier. The state, De la Sota says, should specify what types of new technologies miners should use and assume greater responsibility for introducing them.

Hilder, the Huaypetuhe gold buyer, agreed. “There should be more assistance from the state to tell people how they should work, and to receive guidance from specialists,” he said. “Here people have had their own way of working, and it didn’t matter what they did to the land and to the river.”

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One Comment

  1. If the government really wants to control this out of control mining operation, it could simply setup a roadblock on the only road into this area. Restrict the transportation of petroleum fuel into the area. Within a few weeks the use of all heavy machinery would be stopped. Also prohibit any transportation of mercury into the region. Within a few months the illegal miners would more willing to learn how to mine for gold in a more environmentally way. If not, then maybe it is not economically feasible to mine for gold in the region of Peru.

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