Peru has a long mining history dating back to the pre-Inca era. In the first few centuries of colonization, substantial quantities of gold, silver and mercury were mined. In the early 17th century, the major silver mines were almost depleted.
In spite of Peru’s long-standing mining history, the sector has really boomed since the early 1990s. The reason, however, is not the discovery of new deposits. It is the combination of high prices for raw materials and new mining technologies allowing for the exploitation of previously inaccessible or economically unprofitable areas, together with institutional reforms of both the mining sector and the overall economy, that have made mining in Peru so appealing to investors.
The extractive sector started to play a decisive role in economic growth, supported until today by foreign investment and an export-oriented economy. Consecutive governments have since continued to enhance Peru’s profile as a país minero with a view to acquiring fresh capital for the national economy.
Today, Peru is still a mining superpower. Mining accounts for about 60 per cent of exports and is the country’s major source of foreign currency. Peru is the world’s second producer of silver and the sixth producer of gold, and is second only to Chile when it comes to the world’s copper reserves. The five major mining multinationals worldwide (Glencore, BHP Billiton, Rio Tinto, Vale and Anglo American) all operate in Peru.
In spite of the huge investments in the country, its mineral wealth does not have the hoped for effects. “A Peruvian is a beggar sitting on a mountain of gold” is a well-known saying. The soil abounds with resources and yet it does not benefit a large part of the population. The enormous expansion of extractive operations has a huge socio-cultural, economic and ecologic impact. At the end of 2014, over 25.7 million hectares of Peru’s territory were granted as mining concessions, corresponding with 20% of the country’s area! As early as 1999, about 55% of the 6000 peasant communities were somehow affected by mining activities.
Mining is now expanding into areas traditionally inhabited by indigenous peasant communities. It is threatening their traditional ways of life based on agriculture and stock breeding. Besides, there is a notable expansion of mining into areas with vulnerable ecosystems such as the highland paramos, which are crucial to the water supply of farming lands and the local population, as well as of lower towns and the dry coastal region.
In addition, the territories where mining concessions were granted often have a cultural and historic value for their inhabitants. Not surprisingly, mining expansion results in social conflicts and political debates concerning the relation between mining, human rights, environmental aspects and development. Despite the high number of social clashes the government fully supports the mining sector.
President Ollanta Humala continues the above mining policy in spite of promises made during his election campaign of a better regulation of the foreign (mining) companies. Indeed, in June 2014 a set of measures was approved that was to weaken environmental and social legal provisions and made a wide range of procedures for companies less stringent. With its main competitor Chile hot on its heels, Peru prefers to remain the mining sector’s best friend.
CATAPA’s Peruvian commitment focuses on two emblematic mining cases in the northern Andes, viz. Conga in Cajamarca and Rio Blanco in Piura. Through our partner organizations we support the local social groups and the population who are questioning the unlimited and badly regulated expansion of mining operations. The ecological and social costs of the extraction of ores and minerals are indeed mainly borne by the locals. They are faced with a variety of problems such as water pollution, expropriation of lands, social conflicts and criminal charges against social leaders and protests. By supporting our partner organizations and delegating South collaborators to Peru we try to enable the people to make their voice heard.