Examining the Pros and Cons of Mining in Peru

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HIGHLAND VILLAGE, Texas — Peru has a population of about 33 million people, making it the fourth most populated country in South America. About 20% of these people live in poverty. These statistics appear bleak, but considering that in 2007 this percentage was more than twice as high, there is hope for more economic stability among Peruvians. A large part of Peru’s economic growth is due to its lucrative mining industry, which encourages investment in Peru by both Peruvian and foreign companies.

5 Things to Know About Mining in Peru

  1. In the 1990s and 2000s, the value of mining exports in Peru expanded by 15 times.
  2. Peru was one of the five largest producers of metals in the world. This includes silver, zinc, tin, lead, copper, gold and mercury.
  3. Mining makes up a large percentage of Peru’s exports. More than 50% of Peru’s exports are from the mining industry.
  4. Not all Peruvians are thrilled about the success of the mining industry. In 2009, mining activities contributed to 38% of social conflicts in Peru.
  5. Mining in Peru has been linked to a multitude of water and land contamination incidents that affect local residents.

How Mining Helps Peru

When looking at the numbers, mining in Peru appears to benefit the areas with mining activity. These areas experience higher consumption per capita and lower poverty rates than other Peruvian districts. Additionally, mining districts tend to have higher educational indicators, likely due to educated immigrants drawn in by mining-related opportunities. Overall, the mining industry contributes significantly to the Peruvian economy by generating tax and export revenue, creating jobs directly and indirectly and by attracting educated immigrants to Peruvian communities.

How Mining Hurts Peruvians

Though Peru has benefited from mining, there are some negative social and economic impacts of mining in Peru. Many districts that should be prospering due to mining investments are still suffering. In 2014, San Marcos made $50 million in mining revenue, yet the area had no paved roads, hospital infrastructure or water treatment facilities. The most poverty-stricken region in the country, the Cajamarca province, also contains Latin America’s largest gold-mine. Additionally, inequality in mining districts is significantly higher than in nonproducing areas based on the Gini coefficient of inequality. This inequality, along with the inconsiderate treatment of local communities by mining companies, has led to social unrest.

Peru experiences frequent mining protests. In 2019, Peruvian president, Martín Vizcarra sent the army in to maintain order at a mining protest. Additionally, later that year, protests erupted when Peru’s Ministry of Energy and Mines approved the Tía María mining project. Small farmers are especially wary of these mining projects as they pollute the land and water on which they rely. Protestors argued that the authorization of the project blatantly ignored a previous report indicating that such activity poses a grave and direct threat to the fragile ecosystem in the area.

Oxfam’s Recommendations for the Government

Though Peru earns large amounts of revenue through mining, there remains the question of who reaps the benefits. Oxfam America has developed a plan to help resolve the issues created by mining in Peru.

  1. Increase the Peruvian government’s capacity to regulate the mining industry
  2. Give the Ministry of the Environment the ability to regulate mining
  3. Ensure citizens have the right to express their opinion through protest
  4. Recognize the right of communities to withhold their consent for mining projects
  5. Establish mining zones

Oxfam’s Recommendations for the Mining Companies

  1. Respect the right of communities to give consent for mining projects
  2. Disclose to communities information on costs and benefits of the mining project
  3. Give community members access to advisors to help them understand how the mining project will affect the community
  4. Ensure that all employees are committed to building positive relationships with local communities
  5. Condemn threats against civil society organizations seeking to protect the rights of community members and the environment

Through cooperation with the communities most affected and government intervention, the hope is for mining to continue in a way that considers local communities. If these recommendations are followed, mining has the potential to bring economic benefits to all Peruvians, especially those living in poverty.

Jillian Reese
Photo: Flickr

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