For hundreds of thousands of Peruvians, gold does not mean wealth but a daily struggle for survival. But the people working in informal small-scale gold mining operations in remote Andean villages expect more from life.

The estimated 30,000 families of small-scale gold miners knew the truth of the above saying all too well in Peru in 1999. Altogether they produced around 15 tons of gold annually worth about USD 150 million, but they were living with their families in extreme poverty: straw huts covered with plastic sheeting didn’t provide protection from the cold at night; there was no water for washing; the 20 litres of water given to each family had to last for at least two days. Electricity, schools, doctors…the children knew about these only from their parents.

Life in the mines in 1999 was hard and the gold was not easy to find. The “mineros” had acquired their knowledge through practice. The techniques differed only slightly from those in colonial times. Accidents were frequent in the mines. But even outside the shafts, danger was everywhere for the miners and their families: To free the gold from the rock they used mercury. The mines didn’t belong to the miners and the owners demanded their share. Whoever didn’t pay was arrested by the police and landed in jail for illegal possession of dynamite. The unregulated status of the operations came at a high price, but there was no law in1999 which let the mineros acquire a recognized status.

The GAMA project
Then in 2000, the SDC, in cooperation with the Peruvian Ministry of Mining, began implementing the GAMA project (Gestión Ambiental en la Minería Artesanal). In the interests of environment protection, the urgent reduction of mercury pollution can be achieved only if small-scale mining activities are released from the vicious circle of the informal economy. GAMA began its activities in two typical small-scale mining regions– the desert-like mountains of the south coast and Puno, high in the Andes.

Framework conditions created
In 2001, at the initiative of GAMA, representatives of the Ministry of Mining drew up a proposal for a law on small-scale mining. At the same time a regional miners’ association was founded. Responsibility for legislative initiatives already in the pipeline was assumed by the minero organization AMASUC (Asociación de Mineros Artesanales de Sur Medio y Centro) and put on a broader support basis. Consequently, parliament adopted the law at the insistence of AMASUC at the end of 2001. This new law enables the miners for the first time to acquire their own concessions, or in the case of existing concessions to conclude legal mining contracts.

Peru’s new small-scale mining
The impact of the new framework conditions for small-scale mining surpassed all expectations. The possibility of formalizing the activity in short led initially to a wave of new local small-scale mining organizations in nearly all mining villages. Support for these organizations through training in technical, organizational and legal matters then led to a second wave of operations in the form of shareholder companies or cooperatives.

“Who invests in something that does not belong to him? It is completely different with our own mine. As MACDESA (Minera Aurífera Cuatro de Enero S.A.) we have so far received four mining concessions and applied for four more. Our operation has around 500 shareholders and more than 1,000 miners work in our mine every day. We share the proceeds from our production fairly among all the workers and a part remains for investments in the mine and the village,” said Valerio Condori. His village, Cuatro Horas, now has a school, electricity, a doctor and a pharmacy. A water pipeline from a source 8 km away is under construction and there’s even television. In Cuatro Horas strict regulations are in force. The people have decided not to sell alcohol anymore. “We have built everything ourselves. We didn’t receive a centavo from the state. We even pay the wages of the teacher ourselves. There are many former convicts here. Otherwise they wouldn’t find work anywhere. Here everyone is welcome who is ready to put in a hard day’s honest work and to build a new life“.

Cuatro Horas is only one village of many. Some are represented today in various regional organizations, which together form the national miners umbrella association CONAMA. In the meantime CONAMA, at its own initiative and without outside support, has succeeded in achieving further legal improvements in the small-scale mining sector including specific and practical regulations requiring environmental approval of mining operations. But even without such environment sustainability checks, many villages have already installed community mercury retorts developed by GAMA with the aim of reducing one of the main dangers to health and the environment.

A look into the future
Since 1999, the small-scale mine operators have profited from the sharp increase in the price of gold. So it should not be surprising that the number of families earning a living from small-scale mining is estimated at around 50,000, which corresponds to around 250,000 people. The latest statistics show that in Peru around 60% of the economy is informal and this should increase to 70% by the end of the decade. In contrast, the trend towards formalization is continuing because the success of operations like MACDESA is a model for many and whoever is not yet a shareholder in one of the small-scale mining firms, gets together with a couple of buddies and sets one up himself and takes control of his own future.

The GAMA project still has an important function in a managerial advisory capacity and in the training of small-scale miners, focussing on safer, more environment friendly and more economical techniques, as well as in organizational, social and legal matters. However there are justifiable hopes that, thanks to modern electronic communications, small-scale miners will have direct access to this information by the time the project ends in 2008.