Peru carries out largest raids to date in Madre de Dios

This past week, the Peruvian government carried out its largest series of raids yet in the illegal mining hotbed of Madre de Dios. The AP explained that this was just the most recent of 60 raids carried out in the region since 2014, when the government finally decided to get serious in cracking down on illegal mining. In this most recent operation, the Peruvian authorities also targeted several dozen brothels, where underage women become trapped in the sex trade.

More than 1,000 police and military officers participated in the raids, destroying some 179 camps and $3 million worth of gold-mining machinery. Juan Antonio Fernández, the high commissioner for illegal mining interdiction, told the press that the purpose of the government’s operations is to control illegal mining and related criminal activities, such as human and sex trafficking, in the Madre de Dios region.”

El Comercio explained that the Peruvian government understands that its frequent yet expensive raids are not enough to stop illegal mining. However, for the time being, these raids are the only tools that the government has to check the growth of illegal mining.

Despite the tremendous environmental and social costs of illegal gold mining, the Peruvian government feels that it is powerless to shut it down. So long as gold mining remains profitable, desperate people will continue to illegally mine gold in the Peruvian Amazon.

Despite these ill-begotten gold mining gains, leading (and legitimate) Peruvian mining company Buenaventura reported a $293 million loss in the 4^th quarter of 2015, due to lower gold prices and production. Reuters noted that its analysts had predicted just a $9 million loss for the company.

Colombian oil workers feel the pinch of oil crisis

On Friday, Colombian state-owned oil company Ecopetrol announced that it would cut 3,000 oil sector jobs, people whom the company hires via contractors, due to its budget cuts. According to Campetrol, this new announcement brings the total number of jobs lost because of the country’s oil crisis to 6,000 in this year alone, in addition to the 40,000 people who lost their jobs over the last year and a half. El Heraldo also reported that, according to unnamed sources, Ecopetrol plans to shut down 5 oil fields in the country that can no longer be exploited profitably.

Colombian Labor Minister Luís Eduardo Garzón told Caracol Radio that oil sector workers have been hit hard by the crisis in the industry. He said that 10,000 contractors have lost their jobs due to the sharp decline in oil exploration. Garzón added that he does not yet know what will happen to the workers at the Rubiales oil field, which will be taken over by Ecopetrol later this year.

In related news, Caracol Radio also reported that 75% of the oil drills in Colombia are no longer running. Campetrol president Rubén Darío Lizarralde stressed to the news outlet that one of the main indicators of the health of the oil sector is drilling, and drilling in the country has almost completely shut down.

Portafolio reported on a presentation by leading Colombian economic analysts. The conclusion was blunt: Colombia needs to find something to replace its oil revenue, because in the short term it is gone, and in the long term, it isn’t coming back. The experts argued that Colombia needs to find a way to build a just and sustainable tax regime.

Petro-Perú spilled 3,000 barrels of crude in the Peruvian Amazon

Earlier this week, Peruvian state-own­ed oil company Petro-Perú announced ­preliminary figures regarding how many barrels of oil were spilled in the Peruvian Amazon because of breaks in its oil pipeline. Approximately 3,000 barrels of crude spilled from the pipeline, half the amount of oil that it regularly transports each day. The oil has since traveled into the Chiriaco and Morona rivers. Peruvian environmental regulator agency OEFA emphasized that, “It's important to note that the spills...are not isolated cases. Similar emergencies have emerged as a result of defects in sections of the pipeline.”

In mining-related news, Newmont mining company CEO Gary Goldberg spoke in Lima about the Peruvian mining industry. He argued that the sector needs more transparency, not just from mining companies, but also from the Peruvian government and civil society. He also stressed that in order for mining investments to be successful, there needs to be strong social acceptance of the mining projects.

Lastly, Peruvian civil society organizations called on the International Council for Mining and Metals (ICMM) to encourage Peruvian mining companies to pay more attention to environmental issues. They also asked for greater respect to communities’ rights to prior consultation and the protection of human rights.

Colombia recorta presupuesto estatal debido a crisis petrolera

Esta semana, el presidente de Colombia Juan Manuel Santos anunció un recorte de un 3% del presupuesto del gobierno debido al colapso en los precios globales del petróleo. El petróleo representaba el 20% de los ingresos del gobierno, entonces el gobierno ha tenido que ajustarse el cinturón para adaptar a esta nueva realidad económica.

Lo sorprendente es que los ministerios de defensa y hacienda recibirán la mayoría del recorte, aunque el gobierno colombiano enfatizó que no se tocarán fondos destinados a operaciones militares y policiales. El Espectador también mencionó que este es la tercera ronda de recortes, después de que se cortó el presupuesto dos veces el año pasado, y es muy posible que este no sería la última recorte.

En una noticia relacionada con el sector petrolero, la Corte Constitucional de Colombia ordenó la suspensión de las actividades de exploración petrolera de la petrolera canadiense Pacific E&P en el bloque Quifa en el departamento de Meta. La Corte dijo que la petrolera había vulnerado el derecho de consulta previa de un grupo indígena ubicado en la zona del proyecto. El reporte también mencionó que las cosas no van bien para Pacific E&P, como que la petrolera también tiene que entregar a Ecopetrol su bloque Rubiales después del primer semestre de este año.

Colombia slashes budget due to oil crisis

The Colombian government made news earlier this week when Colombian President Juan Manuel Santos announced an additional 3% cut to the government’s budget this year because of the collapse in global oil prices. Oil used to account for 20% of the Colombian government’s revenue, so the government has had to tighten its belt in order to adapt to the new economic reality.

Surprisingly, the Colombian defense and finance ministries will bear the brunt of the budget cuts, though the Colombian government stressed that financing for police and military operations will not be touched. El Espectador also noticed that this is the third round of budget cuts, after two rounds of cuts made last year, and it might not be the last.

In oil-related news, the Colombian Constitutional Court ordered the suspension of Canadian oil company Pacific E&P’s oil exploration activities in the Quifa oil field in Colombia’s Meta Department. The Court ruled that the oil company infringed on a local indigenous group’s right to prior consultation. The report noted that things are not going well for Pacific E&P, as the oil company is also scheduled to hand over its highly profitable Rubiales oil field after the first half of this year.

Petro-Perú slapped on the wrist for Amazon oil spills

The Peruvian mining and energy regulatory agency Osinergmin fined Peruvian state-owned oil company Petro-Perú $3.6 million for two oil spills in the Amazon jungle. Peru reports explained that the fine was specifically for Petro-Perú’s failure to install brackets on the specified sections of the Northern Peruvian Pipeline as well as not completing a risk-management study.

Osignergmin cautioned that further fines could be levied against Petro-Perú depending on the results of investigations into the pipeline oil spills. At the very least, Petro-Perú president Germán Velasquez seemed appropriately remorseful, saing, “What happened is horrible … but we are acting to remedy it. Petroperu will not stop until there is not a single drop of oil left. And in each of these events, we are going in with medical equipment.

El Comercio also reported that, according to Velásquez, several Petro-Perú officials have already been fired as a result of the oil spills. Furthermore, the oil company has already initiated a top-to-bottom review of the Northern Peruvian Pipeline to ensure that these spills do not recur.

In mining-related news, La República reported that Peruvian preseidential candidate Alan García that, if elected president, he would invalidate the decrees that the Humala Administration has issued to formalized small and artisanal miners. He argued that these norms “had demonized and persecuted small and artisanal miners because they had turned them into money launderers.” García announced that he would roll back the law to the regulations that had existed during his presidential administration.