Peruvian gold rush reveals state weaknesses
By Naomi Mapstone in Puerto Maldonado
Published: February 3 2011 17:17
Rogues and plunderers have been drawn to Peru’s Amazon for centuries by the legend of Paititi, the Inca’s lost city of gold.
But the jungles that border Brazil and Bolivia have never faced a threat of the magnitude that sky-high gold prices, improved infrastructure and weak state regulation and law enforcement are posing today.
Authorities say that at least 200 people are arriving every day to join the ranks of “informal” miners who have destroyed more than 18,000 hectares of jungle.
Many come from poorer mountainous regions of Peru, believing Madre de Dios to be a modern-day El Dorado or Klondike, “where gold is scattered on the soil for anyone to claim”, says Victor Zambrano, a local farmer turned activist, who works to protect the Tambopata wildlife reserve.
Mr Aguirre, activists and residents interviewed by the FT report anonymous private investors from Peru, Mexico, Brazil, China and Korea are also mining illegally, using heavy machinery to speed the pace of destruction.
Oswaldo, an informal miner who has worked small concessions for years by hand, says the new breed of miner has significant financial backing and employs armed guards. “They are destroying everything with their machines. The rivers are polluted. All of our complaints to government are ignored. We’ve seen officials paid off in gold.”
Gold production out of Madre de Dios doubled to 2.5m grammes since last February, when Antonio Brack, environment minister, published a decree to create mining exclusion zones and crack down on the use of mercury and dredging.
Production fell briefly after the decree and violent protests by thousands of informal miners across Peru that left six people dead. But the amount of gold coming out of Madre de Dios has rebounded steadily ever since; it now supplies almost a fifth of all gold from Peru, the world’s sixth biggest producer.
Mr Aguirre says these official figures vastly understate the amount of ore being pulled out of the jungle, however. He wants the central government to declare a state of emergency to deal with the devastation brought on by rapid migration, clearfelling of forests and the use of mercury to extract gold.
From the air, the chains of deep clay pits left behind by informal miners are open sores on a dark green jungle canopy that is home to more than 1,000 species of bird, 200 mammals and 15,000 flowering plants.
Ramshackle camps set up by miners are another kind of sore – a crazy patchwork of blue tarpaulin or sheet metal rooftops, amid the urban detritus of motorbike workshops and brothels.
“This is where you see the great weakness of the Peruvian state,” says Mr Zambrano. “The laws are there, but they don’t apply them. The controls over environmental impacts, profits from illegal mining, are weak, no one wants to assume responsibility.”
While Bolivia and Colombia have sent in armed forces to drive out informal miners in the past year, the Peruvian state’s “inertia” has given miners unfettered access to Madre de Dios’s riches without formal concessions, environmental impact statements or taxation concerns, Mr Zambrano argues.
Mr Aguirre agrees that the miners have operated largely at will, but believes the solution lies in “formalising” the workers rather than confrontation.
Juan Carlos Navaro, acting head of Caritas, a Catholic non-government agency, says institutional weakness, a lack of political will and a lack of resources have exacerbated the problem.
“The state has to find a way to control the profits flowing out of the industry,” he says. “And it has to tackle the mercury problem. There are studies showing people who have lived in Puerto Maldonado for six months who have mercury contamination.
“We think there are at least 30,000 informal miners operating in Madre de Dios. Our concern is, how is this going to affect the environment? And how will it affect the lives of these people working with mercury in the open?”
But the jungles that border Brazil and Bolivia have never faced a threat of the magnitude that sky-high gold prices, improved infrastructure and weak state regulation and law enforcement are posing today.
“The sad history of Madre de Dios is one of extraction,” José Luis Aguirre, regional president of Madre de Dios, a state in Peru’s south-east, tells the Financial Times. “Seventeen tonnes of gold is officially known to leave Madre de Dios each year. But the majority of the mining industry here is informal – we estimate it must be 30 or 40 tonnes.”
Authorities say that at least 200 people are arriving every day to join the ranks of “informal” miners who have destroyed more than 18,000 hectares of jungle.
Many come from poorer mountainous regions of Peru, believing Madre de Dios to be a modern-day El Dorado or Klondike, “where gold is scattered on the soil for anyone to claim”, says Victor Zambrano, a local farmer turned activist, who works to protect the Tambopata wildlife reserve.
Mr Aguirre, activists and residents interviewed by the FT report anonymous private investors from Peru, Mexico, Brazil, China and Korea are also mining illegally, using heavy machinery to speed the pace of destruction.
Oswaldo, an informal miner who has worked small concessions for years by hand, says the new breed of miner has significant financial backing and employs armed guards. “They are destroying everything with their machines. The rivers are polluted. All of our complaints to government are ignored. We’ve seen officials paid off in gold.” Gold production out of Madre de Dios doubled to 2.5m grammes since last February, when Antonio Brack, environment minister, published a decree to create mining exclusion zones and crack down on the use of mercury and dredging.
Production fell briefly after the decree and violent protests by thousands of informal miners across Peru that left six people dead. But the amount of gold coming out of Madre de Dios has rebounded steadily ever since; it now supplies almost a fifth of all gold from Peru, the world’s sixth biggest producer.
Mr Aguirre says these official figures vastly understate the amount of ore being pulled out of the jungle, however. He wants the central government to declare a state of emergency to deal with the devastation brought on by rapid migration, clearfelling of forests and the use of mercury to extract gold.
From the air, the chains of deep clay pits left behind by informal miners are open sores on a dark green jungle canopy that is home to more than 1,000 species of bird, 200 mammals and 15,000 flowering plants.
Ramshackle camps set up by miners are another kind of sore – a crazy patchwork of blue tarpaulin or sheet metal rooftops, amid the urban detritus of motorbike workshops and brothels.
“This is where you see the great weakness of the Peruvian state,” says Mr Zambrano. “The laws are there, but they don’t apply them. The controls over environmental impacts, profits from illegal mining, are weak, no one wants to assume responsibility.”
While Bolivia and Colombia have sent in armed forces to drive out informal miners in the past year, the Peruvian state’s “inertia” has given miners unfettered access to Madre de Dios’s riches without formal concessions, environmental impact statements or taxation concerns, Mr Zambrano argues.
Mr Aguirre agrees that the miners have operated largely at will, but believes the solution lies in “formalising” the workers rather than confrontation.
Juan Carlos Navaro, acting head of Caritas, a Catholic non-government agency, says institutional weakness, a lack of political will and a lack of resources have exacerbated the problem.
“The state has to find a way to control the profits flowing out of the industry,” he says. “And it has to tackle the mercury problem. There are studies showing people who have lived in Puerto Maldonado for six months who have mercury contamination.
“We think there are at least 30,000 informal miners operating in Madre de Dios. Our concern is, how is this going to affect the environment? And how will it affect the lives of these people working with mercury in the open?”
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Copyright The Financial Times Limited 2011.
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