Peru's long and winding road to mining formalization

Los Andes published an opinion piece on Tuesday explaining why the central Peruvian government has struggled so much in its campaign against illegal mining in the country. According to the author, it all comes down to politics, especially local politics. Although the federal government in Peru steadfastly opposes illegal mining, the regional governments do not have the same executive legal authority or financial resources. As a result, while the regional governments receive orders from on high in Lima, they do not have the capacity to carry them out. Furthermore, as the other explains, these regional governments are also beholden to their political base, and the informal miners are acutely aware of their own political power to block the government’s mining formalization initiatives.

In related news, GlobeNewswire published a revealing, in-depth analysis of Inca One’s business model. According to its CEO Edward Kelly, “Inca One is not a traditional mining company.” The Canadian-based company has a gold milling plant in Peru that services the country’s artisanal miners. Kelly added, “The fact is - our business model is not easy to build or copy – because it involves relationships based on trust with miners, metallurgists, labs, truckers, chemical companies, shippers, security firms and government agencies. That trust takes years to build.” This article provides an interesting look at Peru’s artisanal mining industry.

In other mining-related news, protestors from the Valle del Tambo in the region of Arequipa have gone on an indefinite strike to protest the Tia Maria copper and silver mining project. According to Jesus Cornejo, the leader of the protestors, they are speaking out against the environmental damage that the mine will cause to the area, and are calling on the Peruvian government to do something before it is too late. The Telesur report noted that in 2011, the Tia Maria project was put on indefinite hold after violent protests broke out. However, in August of last year, the Peruvian Mines and Energy Ministry gave the mining project the environmental go-ahead.