/IPS ENVIRONMENT BULLETIN/ PERU: Gold Mine Looms As Big Problem For Local Farmers

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

CAJAMARCA, PERU, Mar 15 1997 (IPS) - Splashing across a stream high up in the Andes of northern Peru, the horse lowers its head for water, but its rider tugs at the reins, jerking the horse’s head away.

The two ford the stream on a four-hour walk that began at dawn when the dew was still frozen on the grass. The man takes off his cream cowboy hat and wipes the sweat from his brow.

“The horse must ot drink the water,” he says. “It is poisoned by the waste that comes from over there.” He points to a distant grey plateau that rises out of the grassy hills.

The tableland, some 4,000 metres above sea-level, is the work of man and machine. It is largely the waste of Minera Yanacocha, the largest gold mine in South America which produced 811,400 ounces of gold last year. The mine uses toxic cyanide to extract gold from the porous ore piled high on thin plastic sheets. This process makes it one of the cheapest gold producers in the world.

Yanacocha, which has been mining for gold on 25,000 hectares of local land since late 1993, is jointly owned by Newmont, a company based in the U.S. city of Denver, Colorado, Buenaventura, a Peruvian company, and the International Finance Corporation (IFC), the private sector arm of the World Bank.

Backed by loans from the IFC and the Union Bank of Switzerland, the company has political risk insurance from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and the U.S. government’s Overseas Private Investment Corporation (OPIC).

Minera Yanacocha has built roads into this region to allow them to explore for gold in villages like Obayo, Negritos Altos, and Yanacancha Grnde. This mine contributed 36 percent of Newmont’s global production in 1996 and helped boost company profits to 94 million dollars last year.

But not much of that has trickled down to the local communities.

Frederico Carrasco, a villager from Negritos Altos, is among the region’s luckier farmers, dozens of whom have sold land to Yanacocha without realising what the consequences would be. Carrasco received 1,350 soles (540 dollars) a hectare for a 42- hectare plot of land last August. The problem is, his new wealth is not much good to him, since land in his village costs over 2,000 dollars a hectare on the open market.

Most of the farmers make a living among the little streams that form some of the headwaters of the Amazon. They grow potatoes and corn for food, but cash is scarce. The average family makes five soles (two dollars) a day from selling milk.

Nicholas Cruzado sold 332 hectares of land Nov. 1992 in the neighbouring village of Combayo to Yanacocha. He received a mere 109 soles (42 dollars) a hectare. The money allowed him to buy 12 hectares of land in another part of the village. Today, Cruzado, who has 13 family members living with him, has sold off some 250 animals, including cows and pigs, in order to survive. His son Mario works in nearby farms for three soles (1.40 dollars) a day.

So far, seven of the more than 50 farmers who have sold their land have asked for legal help to sue the company.

“There is very little I can do,” says Jorge Malca, a lawyer who works for the Catholic church to help represent local people. “Yanacocha has bought legal title to the land. The farmers should have come to me before they sold their property.”

Disagreements over property are only some of the complaints levelled by the farmers against the company. Water contamination is a concern voiced in the dozens of communities scattered across the three districts of Cajamarca, La Encanada, and Yanacancha.

Gil Paisic, mayor of Yanacancha Grande, says that just three years ago, thousands of trout could be caught in the local rivers. Today, the rivers are lifeless.

“When the rains come, the water runs off the tailings into the rivers making them turbid. If the horses and cows drink the water from the rivers, they get stomach problems and sometimes die,” he says.

Hiriberto Ventura, a leader of Rondas Campesinos (Farmer Patrols) in Negritos Altos, says that company operations have had even more disastrous consequences.

Last August, he says, Rosa Castrejon and four others died after collecting water with plastic containers discarded by the company. The containers were apparently used to store cyanide, the deadly chemical used to extract gold.

To add insult to injury, local mayors say that the company, whose revenues totalled 217 million dollars in 1995, employs almost none of the local residents.

Paisic says that not one of the 1,800 people in Yanacancha Grande has been able to get a job with the company. Francisco Llanos, mayor of Combayo, says that a mere 10 people in his village of 4,936 people have jobs with Yanacocha. These jobs pay 14 soles (5.60 dollars) a day.

Four local mayors have written repeatedly to the company over three months, asking for a meeting to discuss problems. They have so far been unsucessful.

Nicholas Cotts, manager of environmental affairs for Yanacocha, disputes the complaints of the local communities. He sa the company recognises “fair value prices” for all its land transactions.

“Approximately 95 percent of the land purchases conducted by Minera Yanacocha have been conducted under full knowledge and in direct negotiation with the land owner. In other cases, expropriation was used at the request of and in complete cooperation with the landowner,” he wrte in a letter faxed to IPS.

Cotts also says that the company monitors approximately 120 water sources on a regular basis. He says Yanacocha also maintains a herd of 60 sheep and alpacas at the site and have never been affected by heavy metal contamination.

Cotts adds that a 1994 investigation into deaths of local cattle showed that the animals had died of “liver fluke and related indigenous diseases.”

Cotts insists that he maintains an “open-door policy” for “any and all” requests from local people and interested groups to visit the site. The company says that it spent three million dollars in 1995 to help the local community by building roads and providing free, hot lunches to local school children.

But Ephrain Castillo, a Catholic priest whoprovides villagers with agricultural services, food, and legal help, doubts the company will contribute to a sustainable future for the local people.

“People here are very poor,” he says. “The mine promises to change things,” but there are big problems, he says.

Ironically, some 460 years ago, Atahualpa, the last Inca king, was executed in this city by Pizarro, the Spanish conquistador who was also searching for gold.