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PERU
Water and mining: tensions in development
Ibis Liulla Torres
10/26/2006
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Water contamination in mining areas paints a bleak picture for environmental issues.

Peru’s mining industry has generated billions of dollars for the country. In 2005 alone, 56 percent of Peru’s exports came from the mining sector, totaling US$10 billion. But the environmental impact of mining has also sparked social conflicts in Peru.

According to the Ombudsman’s Office, seven of the 10 pending social conflicts in Peru reported in August of this year were linked to disputes involving mining companies and the environment.

Profits generated by the current high prices of the international metals market dwarf the environmental investment the sector contributes to. Reports of contaminated water and air and the impact of mining on forestlands have become the norm in many communities near mines.

"The mining sector is considered the sector that most contaminates surface and underground water supplies, especially with heavy metal (copper, zinc, lead, cadmium, silver, arsenic and magnesium) contaminants," says the National Environmental Fund, or FONAM, a private institution that promotes public and private investment in environmental development projects for Peru. "It is estimated that mining and metallurgical activities together discharge more than 13 trillion cubic meters of effluents into the country’s bodies of water annually."

The impact on water
Even though at 1 percent, the mining industry uses less water than other sectors, its impact is greater because of the presence of metal and mineral waste in headwaters, rivers and lakes that affect not only the water quality and quantity but the entire ecosystem.

In 2004, a conflict erupted between the Minera Yanacocha company — which operates the largest gold mine in Latin America — and residents of Cajamarca, in Peru’s northern highlands, when the company attempted to explore Cerro Quilish, a hill rich in gold reserves, but also home to important water reserves for the town.

Following several days of violent protests, Yanacocha backed down from exploring Quilish, but reports of water contamination in the area continue.

"Yanacocha’s use of cyanide lixiviation to extract gold from the Cajamarquino, Llaucano and Jequetepeque river basins has caused serious environmental impacts to the fragile Andean ecosystem, where the water that supplies the human consumption in the town and the livestock and fishing industries orginates in the lower parts of the basins," said Father Marco Arana, coordinator of the Conservation and Development Area of the nongovernmental organization Grufides.

According to the Yanacocha environment manager Luis Campos, "the company is conscious that mining causes a greater quantity of sediments that are pulled along by the rivers," and as a result has constructed dams to hold back 40 percent of the sediments.

Campos said that the dams cost $30 million, adding that the company consumes 52 liters (13.5 gallons) of water per second to control the dust in the roads. "The water that we use at the camp is used and later discharged in the basin, and we have ways to control this," he said.

Environmental defense organizations, however, say that the company has not been transparent about the quantity of water used and contaminated by the mine.

Extensive problem

But water sources near Yanacocha are not the only ones impacted by the Peruvian mining industry. According to the report "State of Water Management in Mining: The Peruvian Case" by environmental consultant Doris Balvín, there is water contamination in the southern departments of Moquegua and Ica, the central highland department of Junin, and the southeastern jungle department of Madre de Dios.

"Southern Peru Copper Corporation’s impact on the Moquegua and Locumba river basins has been drastic since it began its activities 56 years ago," the report stated. "The open pit Toquepala [in southern Tacna] and Cuajone [in Moquegua] mines require large amounts of water and generate an enormous quantity of waste that is circulated throughout the basin."

Studies conducted in the area in 1991 on the company revealed high concentrations of arsenic, cadmium, lead, copper, chromium and cyanide over the country’s legal limit for recreational and commercial fishing areas and in aquatic wildlife preserves.

Another study showed that the start-up of the Quellaveco mine, near the headwaters of the Asana River in Moquegua, would reduce water resources in the adjacent basins because of the extraction of underground water in the Chilota area.

The Yauli River, part of the Mantaro basin in Junin, home to the Doe Run metallurgical plant, has shown high levels of heavy metals exceeding permissible standards in.

As a result, the mining industry has become extremely mistrusted, especially in Peru’s highlands, where much of the country’s mining activities take place.

The Ministry of Energy and Mines identified more than 600 environmental liabilities in 2003, requiring a $200 million-cleanup. This year, the number of cases has reached 850. According to FONAM, however, the number is close to 2,000 cases in 66 basins, meaning a $474-million-cleanup, for which the companies themselves must pay, or the government, if the owners cannot be identified. "Reparations of the mining environmental liabilities must be paid," said Julia Justo Soto, FONAM’s executive director, adding that mining companies only manage water on a limited level. "To not pay would create negative impacts, and in turn, give mining a bad image."

Despite the economic boom these mining companies are enjoying, the environmental and social impacts caused by this industry continue unabated as neither the companies nor the state have done much to stop it.

Even though Peru is the largest producer of gold and the second-largest producer of silver and copper in Latin America, environmental and social sustainability are far from being a reality.

The government’s role is vital to spark development initiatives in mining regions. Illustrating the disparity between the lucrative industry’s profits and development, Yanacocha registered earnings of $204 million in the second quarter of 2006, while 77.4 percent of the population of the Cajamarca department lives in poverty.

Father Arana says he hopes that at some point in the future "not only will we be talking in Peru or Cajamarca about the success of mining companies, but also of the opportunity to improve quality of life in all populations."

Development for all?

Environmental liabilities


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