PERU: Mining Groups Struggle to Operate

 
Julia Guarniz, a street vendor in the Peruvian highland village of 
Choropampa, watches blankly as a seven-vehicle convoy thunders past. "They scare 
me," she says, pointing at the "hazardous materials" signs on the sides of the 
juggernauts. "When I see them, I worry that it might happen again."
Similar convoys carry toxic material through the village several times a day 
on the degraded highway that runs 600km from Yanacocha, the world's most 
productive gold mine, to the port of Callao in Lima.
Five years ago this week, one truck spilled 150kg of liquid mercury over more 
than 20km of the road. Attracted to what looked like "a liquid mirror", the 
residents of Choropampa collected the mercury and took it home, unknowingly 
exposing themselves to the highly toxic substance.
What has happened since depends on who is telling the story. Newmont, the 
world's biggest gold miner and Yanacocha's owner, says it has faced up to its 
responsibility, pumped millions of dollars into clean-up and compensation, and 
put in place fail-safe safety standards.
The villagers do not deny the pay-outs, but say they are still suffering from 
Newmont's negligence. Thousands complain of neurological and skin conditions, 
and they say the medical insurance they have been given does not cover the cost 
of their prescriptions. That insurance runs out this year.
Hatred for the mine runs deep. It is difficult to find a resident who will 
acknowledge having received compensation.
The facts may be settled in Denver, Colorado, Newmont's home town, where 
1,100 Choropampa villagers are pursuing the miner through the courts.
Ken Crowder, a lawyer representing the victims, says the first cases may be 
heard this year, potentially providing the basis for a group settlement.
What is indisputable is that, for many, Choropampa remains a symbol of a 
perceived environmental and social myopia among international mining companies 
operating in Peru and their failure to secure a "social licence" from local 
communities.
This was powerfully illustrated last September, when a proposed expansion of 
Yanacocha met such fierce opposition that the project was abandoned. Local 
residents claimed that mining Cerro Quilish, a mountain overlooking the town of 
Cajamarca, would have contaminated their drinking water. Newmont says it has 
scientific studies to disputes this.
But that misses the totemic importance of the battle, fuelled by a feeling 
among some locals that the company has not given enough to the community.
"Quilish became an icon," says Emilio Horna, mayor of Cajamarca. "Newmont 
didn't explain enough what they wanted to do."
Guy Landsdown, Yanacocha's operations manager, says the miner "has got a lot 
of work to do on the social front". Newmont has joined several local "dialogue 
roundtables". In Minas Conga, a new project, it has managed to develop good 
community relations.
Even Yanacocha's opponents concede it has improved environmental standards. 
Last year it spent $50m (€41m, £28m) on a reverse osmosis plant to clean 
discharged water, $20m on dams to prevent sediment seeping into rivers, and 
$6.5m on other environmental programmes.
The company has also created about 4,500 jobs in Cajamarca, one of Peru's 
poorest regions. It estimates that another 24,000 local jobs depend on the mine. 
The investment is welcomed by many: Ama Cajamarca, a group funded by the local 
chamber of commerce, attracted 10,000 locals to a recent demonstration in 
support of Yanacocha.
But it has also spawned deep resentment. This is due in part to the 
phenomenal growth of Yanacocha, from producing 81,000oz of gold in 1993 to 
3.017m oz last year. The town of Cajamarca has swelled from a population of 
40,000 in 1990 to 240,000. House prices are soaring, traffic is heavy and there 
are significant problems with delinquency and prostitution.
Yanacocha's story is far from unique. In February, Manhattan Minerals of 
Canada ditched plans for a $400m polymetallic mine at Tambogrande in the north, 
saying it could not find a senior partner because of protests against the 
project. Industry insiders say Tambogrande was poorly handled by an 
inexperienced company, but the most recent confrontation came at a project 
widely seen as a paradigm of best practice: BHP Billiton's Tintaya copper 
mine.
The Anglo-Australian group won praise in December 2003 from both industry and 
such activist groups as Oxfam by signing an agreement with 37 local 
organisations, committing itself to give 3 per cent of its annual operating 
profits to the local community.
But last week BHP was forced to suspend operations at Tintaya, Peru's third 
biggest copper mine, after protesters raided the site, demanding the company 
spend more on improving local roads. A government-led negotiating team is now 
trying to mediate.
In Cajamarca, all sides agree that the tension can be resolved. Marco Arana, 
a Catholic priest and one of the leaders of the protests against Cerro Quilish, 
says the mercury spill need not leave an indelible mark on Yanacocha's 
record.
"We could turn Choropampa into a model of environmental care, with a proper 
clean-up and good healthcare," he says. "But if Newmont doesn't change, I fear 
there may be violence here."

• 116 Human Rights
• 182 Health
• 183 Environment