Informal mining is the primary source of employment in Peru's Perejil Basin, proving income for food, schooling, health services, farming supplies, and household infrastructure, according to a 2012 baseline study conducted by Barrick.
In the Perejil basin, not far from Barrick’s Lagunas Norte mine in Peru, small scale coal mining is common, and often conducted without required permits or appropriate environmental, health, and safety measures. That, however, is changing, as Barrick works with the miners to help them legally formalize their activities.
More than 220 active small scale mines lie sprinkled across the steep slopes of the Perejil basin. The miners who toil there are organized into three main associations: Asociación de Mineros Artesanales del Alto Chicama (AMACHIC); Asociación Regional de Carboneros de La Libertad (ARCALIB); and Asociación Rayambal. In this region, only 58 percent of the population is of working age, and there is a high level of dependency on the ‘household heads’ to earn a living.
Small scale, or informal mining, is the primary source of employment, providing income for food, schooling, health services, farming supplies, and household infrastructure. A baseline study conducted by Barrick in 2012 found strong local support for informal mining, which also generates flow-on economic benefits in the region such as the creation of small businesses and shops.
Barrick saw an opportunity to help reduce the environmental impacts of informal mining by working with the miners to legalize their activities.
Nonetheless, more than 60 percent of informal miners interviewed for the study recognized that their activities have negative effects on the environment and human health. Key dangers facing the miners include cave-ins, the presence of explosive gases, flooding, and falls, the study found. Yet only 20 percent of household heads considered informal mining as high risk. At the same time, the miners recognized that, by disposing waste into rivers, they were damaging the environment. They also acknowledged that dust generated by their activities was impacting their health, as well as the health of the local population.
With this information in hand, Barrick saw an opportunity to help reduce the environmental impacts of informal mining by working with the miners to legalize their activities—a process known as “formalization.”
The Peruvian government had been moving towards formalization since 2002, but progress had been slow. In 2010, however, the terms and conditions for formalization were issued, including various permitting and accreditation requirements such as water and environmental approval criteria. Additional regulations were later issued to facilitate the process. The objective of formalization was to reduce environmental contamination, avoid inappropriate disposal of tailings, promote formal employment, eliminate child labor, avoid mineral loss, and increase the value of extracted minerals. This national policy provided the framework for Barrick’s initiative to support the formalization of informal mining.
In 2009, as the government began to advance its national policy for formalization, one of the three local informal mining associations, AMACHIC, approached Barrick to ask for support in undertaking the formalization process.
Following two years of discussions and relationship building, Barrick and AMACHIC developed a framework for action. With no successful examples of formalization in Peru, they were treading on new ground. The other two informal mining associations, ARCALIB and the Asociación Rayambal, remained on the sidelines observing the process to see how it progressed before committing to the same approach.
AMACHIC develops coal mining within the “Accumulation Alto Chicama” mining concession, a vast area that includes the Lagunas Norte mine footprint. After the baseline study was carried out, Barrick and AMACHIC signed an agreement in 2014 under which Barrick authorized coal mining in certain areas of its mining concession by AMACHIC. This was the first step towards in the formalization process. AMACHIC could then proceed with other formalization requirements, such as developing environmental management and safety plans, and obtaining final government approval.
Barrick played an important supportive role throughout the process, engaging continuously with both the informal miners and mining authorities. The Company reviewed AMACHIC’s formalization application, and helped the miners work with the mining authority. This required months of work to ensure the miners fully understood the layout and structure of their pits and tunnels, and to help the miners organize themselves into more efficient operational groups. Barrick also provided support with the technical documentation and mapping required for the application process.
AMACHIC’s formalization was approved in 2015. It covered 76 coal mines and benefitted approximately 500 families from 12 communities. ARCALIB, one of the other two local mining associations, is now initiating the formalization process, with Barrick’s support.