Crisologo Quispe says he halted operations at his gold mine in the Peruvian jungle in April after police used dynamite to blow up $350,000 loaders at a nearby site.
Quispe fired 17 workers and moved machinery elsewhere on concern his concession in 428 hectares (1,057 acres) of jungle bordering the Madre de Dios region of southeast Peru will become embroiled in a government campaign against illegal mining.
“I’m not operating for safety reasons until things become clearer,” Quispe said last month in an interview in Cuzco, where he’s applying for a mining permit. “I’m not illegal but I’m worried that what’s happening to the illegal ones could happen to me. The raids don’t differentiate.”
Quispe owns one of 58,000 small mine operations that the government says have signed up for a process to operate legally and abide by environmental, labor and tax legislation. The crackdown on another 30,000 has fed a slump in gold exports from Latin America’s largest producer. The government needs to streamline the permit process and stop attacking mines operating in areas where previously it encouraged mining, or it will face social conflict, according to Miguel Santillana, an economist at Lima-based Universidad San Martin de Porres.
Protests by mine owners and workers in April left one person dead in the jungle town of Mazuco as police sought to reopen a highway connecting Brazil with Peru’s Pacific coast. Police clashed with as many as 2,000 miners marching towards Congress in March in Lima.
Success Story
Mine operators that signed up for formalization before an April deadline have been granted amnesty to continue operating and have nothing to fear from the raids, which only target illegal mines, said Daniel Urresti, a retired army general who’s leading the crackdown.
Rising exports of copper and gold have helped Peru become South America’s fastest growing economy over the past decade, expanding an average of 6.3 percent a year. Gross domestic product grew 4.8 percent in the first quarter.
Santillana, who has advised mining companies on community relations in Peru, estimates there are as many as 550,000 people working in informal mine tunnels in the mountains and mining pits in the jungle. The formal mining industry employs about 180,000, according to the Energy and Mines Ministry.
President Ollanta Humala’s government passed legislation in April 2012 that gave small-scale mine operators two years to sign up for a six-step formalization process. The operators need to apply for certificates from five government entities, covering areas such as water, exploration, processing minerals and reforestation.
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