Peru's struggle with illegal mining

This week, several media outlets published photos documenting the devastation that illegal mining in Peru has wrought on the Peruvian Amazon. Newly-released satellite images show the scale of the growth in deforestation from 2014 to 2015. In just one year, in the La Pampa region of Madre de Dios, over 750 hectares of forest have disappeared. All of this is a consequence of illegal gold mining in the area.

White TelesurTV focused on the high-level impact of illegal gold mining, Bloomberg published a photo essay documenting the personal side of the Peruvian government’s campaign against the illegal mining industry. Bloomberg’s photos show the Peruvian soldiers involved in the raids on the illegal mining camps, as well as the miners left behind, and the devastated local landscape.

In related news, Peru this week ratified the Minimata Convention, an international convention governing the use of mercury in mining. The convention gradually prohibits the use, manufacture, and export of products with mercury, and will enter into effect in 2020.

In other mining-related news, Glencore, one of the world’s largest mining companies, announced that it would reduce its global production of zinc by 500,000 tons and suspend its operations in the Iscaycruz mine in Peru. Glencore explained that it made this move in order to preserve the value of its vast mineral reserves at a zime of very low zinc and lead prices.

Santos warns that Colombia's economy could worsen in 2016

Earlier this week, Colombian President Juan Manuel Santos warned to reporters that Colombia might perform worse economically in 2016 than it did in 2015, due to the continued global slump in oil prices. Reuters noted that the Colombian government has been forced to slash its GDP growth productions for both 2015 and 2016 because of the low oil prices.

Santos told reporters that, “Hard times are waiting. Next year will also be a very difficult year in a fiscal sense. We could touch bottom next year.” Nonetheless, he stressed, “But we will get out of the storm stronger.”

La República interviewed Global Reporting Initiative CEO Michael Meehan about the biggest challenges facing the Colombian economy. He explained that although there are more companies interested in investing in Colombia now, thanks to the advances in the peace negotiations, it is still a process. Meehan believes that the biggest challenge for the Colombian economy is the uncertainty regarding the post conflict.

In mining-related news, El Espectador spoke with Charles Burgess, the CEO of Texas Colombia mining company, a large player in the Colombian emerald industry. He explained that his foreign investors were worried by the level of informality of the emerald industry and the lack of reliable information on it. Nonetheless, he stressed that there will never again be a “Emerald Czar” in Colombia.

Peruvian protesters refuse to give up the fight over Las Bambas

On Tuesday, the Peruvian government announced that it had agreed to changes to the Las Bambas copper mining project after meetings with local mayors, who had expressed concerns over the project’s impact on the environment. However, the mayors constituents are refusing to follow their elected leaders, insisting that they will keep up the fight until the Peruvian government withdraws the state of emergency declared last month after the protests erupted in violence.

TelesurTV quoted one protester, Efrain Condori, as saying, “The struggle continues. … There is no agreement with us. We have not been informed. On the contrary, the (government’s) ministers have met only with the mayors who have come to Lima and have set another meeting that we the people from Cotabambas and Grau did not know about.”

In related news, La Republica published an opinion piece by Antonio Zapata about the social conflict over Las Bambas. Zapata defends the protestors and explains their grievances against the Las Bambas project. Originally, the Las Bambas project had planned to transport ore via an underground pipeline, to be refined in a different region. Now, the project’s new Chinese owners will transport the ore via truck to refineries located in the same complex as Las Bambas. Zapata argues that the local community is right to protest, and that the project should be forced to apply for new environmental and social licenses.

In oil-related news, Argentinian oil company Pluspetrol and three partners have released a tender to sell 900,000 barrels of gasoline at the Pisco Port.

Colombia's Ecopetrol continues divestment strategy of non-core assets

On Tuesday, Bloomberg reported that Colombian state-owned oil company Ecopetrol SA took the first steps towards selling its plastics division. Unnamed well-placed sources explained that this move is in keeping with Ecopetrol’s strategy, announced in May, of divesting itself from “non-core assets” to focus on its oil and natural gas production.

Ecopetrol has been left reeling from the collapse in global oil prices and the paltry investment in oil exploration in Colombia, leadings its share price to plummet by 54% over the last year. New company president Juan Carlos Echeverry is working hard to implement his new strategy and try to turn the company around.

In other news, the National Mining Agency (ANM) named Javier García Granados as its new President earlier this week. Granados was promoted internally from his previous position as vice president for Mining Security, Monitoring, and Control. Granadas replaces Natalia Gutierrez, who supposedly resigned because of frequent clashes with high-ranking ministers.

Amidst the turmoil at the ANM, neo-paramilitary group “Los Urabeños” assassinated a mining leader in Segovia, Antioquia, effectively shutting down Gran Colombia Gold’s mines in the region. In a WhatsApp message, the Urabeños threatened to kill anyone who went back to work. Reports estimated that between 500 and 800 of the threatened miners in the region did not report to work at the El Silencio, El Castillo, and Providencia mines.

Negotiations start between Peruvian officials and Las Bambas protestors

On Friday, representatives of the Peruvian government and the local protestors opposing the $8.3 billion Las Bambas copper mining, met to discuss a negotiated solution to the conflict. The violent protests resulted in the deaths of four protestors, and the Peruvian government immediately dispatched a high-level negotiating team, led by Energy and Mines Minister Rosa María Ortiz, to develop a solution.

According to the BNAmericas report, a roundtable between the high-level minister and local mayors to discuss development projects will start October 6. Peruvian Cabinet chief Pedro Cateriano blasted the Peruvian Congress’ vote to censure the ministers of the environment, interior, and energy and mines, for creating additional instability in the midst of a crisis.

In other Peruvian mining-related news, ex vice minister of Mines, Rómulo Mucho, told the press that he believes the Peruvian mining industry will keep growing by double digits for the rest of the year thanks to the Toromocho and Constancia mining projects. He added that mining production would increase even more the following year as the large mining projects of Las Bambas and Cerro Verde go online.

Lastly, El Comercio reported on a fine that the OEFA issued against a Chinese miner, Yanguang Li, for failing to comply with Peruvian regulations on the mining industry for environmental protection. The report noted that this marks an important step in the battle against the “kings” of the illegal gold mining industry in Peru.  

Ecopetrol works to boost Colombian oil production and reserves

On Wednesday, Colombian state-owned oil company Ecopetrol announced that it had signed a new agreement with Canadian oil company Parex Resources that could boost oil output at Aguas Blancas oilfield to 10,000 bpd by 2020. The agreement could require an investment of as much as $700 million, 60% of which would be paid for by Parex and the remainder by Ecopetrol. During the first three years of the agreement, Parex would invest $61 million in boosting the oil field’s production and reserves.

In mining-related news, a Colombian tribunal temporarily removed the restrictions on the use of the Fenoco coal railway in northern Colombia. The tribunal removed the curfew in order to allow for a study of the railway’s noise levels. The curfew prohibiting the trains from running between 10:30 p.m. and 4:30 a.m. was imposed after locals complained about noise and dust from the coal trains.

In other mining-related news, Colombian weekly Semana reported on why Natalia Gutierrez left the National Mining Agency (ANM). According to Semana, Gutierrez clashed frequently in recent months with senior governmental officials, and especially with Mining and Energy Minister Tomás González. The report noted that Gutierrez’s departure comes at a very difficult time for the mining industry, as it is grappling with falling production, frozen projects, and informal and illegal mining.