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All that Glitters is Not Gold

In one of my last articles I wrote about the incredible gold artifacts crafted by numerous civilizations found in Peru over the centuries. Very soon you will see just how important Peru's natural wealth in gold was in contributing to the greed of the Spanish Conquistadors and how it helped motivate them to destroy the prosperous Inca Empire. But despite centuries of exploitation and habitation, Peru to this day remains a country with vast resources in highly valued materials, the most precious being gold.

While I was staying up in Cajamarca, located in Peru's northern Andean mountains, I heard the word Yanacocha, a word that popped out in conversations from time to time. It's not a Spanish word, but it has a playful sound and for some reason it seemed rather important to everyone in Cajamarca. Well, as it turns out, they were talking about the Minera Yanacocha (Yanacocha Mine), which is not only important to the folks of Cajamarca. Minera Yanacocha just happens to be the largest gold mine in South America!

However, as Kavitha pointed out last week, the small local communities surrounding Yanacocha do not have running water, sewage, telephones or electricity! Should we be concerned that only 5% of the profits from these mines go to the local people, the rest mostly going to a US company? (See "Corruption by Corporate Conquistadors") Should we be concerned about the environmental impact this mine has on the local people. Because I have been spending time in the town nearest the mine, I decided to find out more about the impact of this comany.

Heigh Ho, Heigh Ho, It's Off to the Mine We Go (Minera Yanacocha Mining Company - Cajamarca)
With over 65 metric tons of gold produced in 1996, Minera Yanacocha beats Brazil in product by a hair and Chile by a greater margin (It's the ninth most productive gold mine in the world, and rates second for silver production, at 16%). Yanacocha is located about 20 miles north of Cajamarca at an altitude 13,120 feet above sea level. The mine was first started back in 1992, when geologists were sent into the mountainous region to study earth and determine which valuable minerals were present. After finding significant amounts of both gold and silver, the Minera Yanacocha began operating officially in August of 1993. Since then, it has produced significant amounts of zinc, copper, lead, tin, iron, mercury, and tungsten. The mine is also an important source of revenue, employment, and much controversy for the nearby town of Cajamarca and the rest of Peru.

Minera Yanacocha, owned by the US mining company Newmont, uses some of the most effective, yet questionable techniques of mining, even though the company claims these practices exceed the standards of typical Peruvian operations. Unfortunately, I was unable to visit the mine personally because of strict security and tourism quotas. However, I was able to speak personally to Marcos Valdez Cadenillas, the Director of Public Relations for Newmont. From both a lengthy discussion and video presentation, it was clear that the company is very sensitive to local and international concern about the major impact they have on the local environment.

The Minera Yanacocha covers a vast region. After geological testing, explosives are used to blow up areas of land, making the ground loose and ready for transport. Each of the three areas has a large, plastic pad. This pad is stretched out with a tubing system beneath it and dirt is piled into a large mound on top. The plastic pad contains an impermeable coating resistant to water and chemicals. A chemical element called cyanide is applied in quantity to the mound of dirt. The chemical has the ability to melt down any metallic substances it encounters as it passes down through the mound. As it reaches the bottom, it carries all of the metal, now in a liquid form, through the tubing system into a very large poso, or pool. From there, the liquid is pumped into the plant where the gold, silver, and other minerals are separated from the cyanide. Then, the land is washed down with water and drained out through the tubes and into the poso.

The 9th most productive gold mine in the world.  Is it worth it?
With mining of this scale, potential dangers exist for all elements of the surrounding environment including land, water, and air. In turn, the state of these elements affect plant, animal, and human life -- even at great distances. Consequently, the Minera Yanacocha puts a lot of effort into publicizing its campaign to protect the natural elements from potential devastation.

Land: The company claims that the earth from which the minerals are extracted is thoroughly washed down with water, ridding it of the harmful chemicals. It is then dumped back where it came from.

As one would imagine, The Yanacocha Minera is made up of a predominantly male workforce. However, there are a whopping total of twelve proud women that also work for the mine. For the most part, they have not attended university, but have received many months of formal training from the mine company. During their training, they learn about mechanics, driving (dump trucks and bulldozers), and general mine operations. They study in classes for six months and then are required to complete 160 hours of on-the-job training. It is interesting to note that none of the women employed are managers or supervisors.
Water: The water that is used to cleanse the dirt is highly toxic with traces of cyanide. The water is then dumped back into local streams and rivers, though the company claims that it is able to clean this water to the point where it can be safely consumed by people, so there is no encvironmental danger. What happens to the toxic contaminants is unclear, though the company claims that the cyanide is reusable.

Air: The major threats to the air are the large amounts of dust resulting from the explosions and upheaval of earth and the exhaust from the mine's operation vehicles. Many, although not all, of the vehicles are equipped with a water system that splays out the back of the vehicles ostensibly in order to wet down dust and exhaust fumes.

How do people of Cajamarca feel about the potential threat to the environment? Well, for starters I can tell you that none of my friends from Cajamarca said they would be willing to drink the "recycled" water. Ironically, the people that live closest to the mine itself are the campesinos, or descendents of the indigenous population. They live high in the mountains and use those water sources in order to sustain their agricultural tradition. Locals, however, seem most concerned about the inevitable air pollution resulting from the mining since the company appears remiss in this area. From what I could gather while in Cajamarca, so far there have been no incidents of sickness or contamination. However, the mine is a very recent development and evidence of even low levels of contamination can take many years to appear. So the truth is, nobody knows exactly how well the Yanacocha company is protecting the environment and people are worried that the company's policies, technology, and public relations efforts are not enough to prevent threats to the environment.

As with most profitable large scale operations, there is a temptation to focus on the short term financial rewards and, in this case, it may be the economic impact of the Yanacocha Minera. Although the majority of the profits are made in the US and remain there, the mine does give a small percentage of its profits to the Municipality of Cajamarca, though it's not clear how much of even this amount makes its way back to the local people. More significantly, however, there are about 4,000 employees working for the company, most of them residents of Cajamarca.

Even so, the employment of so much of the local population has both safety and financial concerns:

Health and safety of Employees

The main risks to the health and safety of workers are due to:

  • Exposure to the chemical cyanide
  • Exposure to dust
  • Inhalation of smoke (from the soldering of metal)
  • Extreme temperatures (high of 8 degrees, lows below freezing)
  • Ultraviolet radiation (from soldering metal or from sun exposure)
  • Altitude sickness (see Shawn's recent article about the symptoms of AMS)

All workers for the company are required to participate in medical testing twice a year. However, the 30 or so workers needed for each of the plants' shifts require tests as often as once a month. Most high risk workers are also phased out after just two years of contracted employment.

Financial strains due to the high rate of employment:

The Yanacocha Minera employs people for work in areas of administration, security, loss management, plant processing, field work, and scientific research. Many of the employees are scientists, but even those working in other areas are generally paid handsome salaries, compared to what a small farm worker makes.The wealth of the company, specialized skills (mostly scientific), and high risks of certain jobs are the reasons for these high salaries. The presence of these jobs has produced somewhat of a financial subculture within Cajamarca, a group that is more prosperous than the average worker. Many people I spoke with told me that they have felt a significant increase in normal inflation levels throughout the past decade. This affects the price of food, goods, services and even real estate in Cajamarca. Many business owners and merchants feel that "If the workers of the mine are doing so well, then why shouldn't we?" This puts additional strain on the everyday finances of everybody, particularly the poorer people of Cajamarca. Cajamarca is commonly referred to (even here) as a very poor country, despite its great wealth in natural resources.


Abeja - All in the Family
Kavitha - One Potato, Two Potato, and a Hundred More!
Monica - The Belly-button of the Inca Nation
Making a Difference - Eating Pesticide Potato Chips
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