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PERU: Leaching Out the Water with the Gold

by Milagros SalazarInter Press Service (IPS)
September 20th, 2006

The conflict that brought operations at Yanacocha, Latin America's largest gold mine, to a halt just a month after President Alan García took office in Peru was merely the latest illustration of the tensions between mining companies and local communities in the northern province of Cajamarca.

It takes two hours to reach the small town of Combayo from Cajamarca, the provincial capital, along a narrow bumpy, dusty track.

"That water is barely good enough for horses and cows!" shouts María Santos at an emergency meeting held by her community, Bellavista Alta de Combayo. She is referring to the water from the rivers and streams that local peasant farmers must drink now that their wells have run dry, as a result of the mining activity at Yanacocha.

Yanacocha is owned by Newmont Mining, based in the U.S. state of Colorado, and the Peruvian firm Buenaventura. The community is angry with the managers of the mine, who argue that Peruvian authorities have not raised objections against the company regarding quantity or quality of water in the area.

However, the official studies only focused on international standards for water supplies for livestock, not human beings.

"Our struggle used to be for land; now it is for water," says Félix Llanos, the top local authority in Bellavista Alta and one of the participants in the Aug. 2 protests against the expansion of the company's Carachugo pit, which ended in clashes with the police and the Yanacocha security guards.

Local campesino (peasant farmer) Isidro Llanos was shot and killed during the protest. It has not yet been clarified who fired the shots. IPS was present at the exhumation of the body in late August, carried out to determine the kind of gun that was used.

Between Aug. 28 and 31, local residents blocked the roads leading to Yanacocha, preventing the company's trucks from getting in or out, to demand the clarification of Llanos' death, measures to protect local water supplies, and social investment programmes.

The company said the six-day blockade, which briefly shut down the mine, caused 1.8 million dollars a day in losses, while the state lost 615,000 dollars a day in taxes.

Only then did the administration of García, who took office on Jul. 28, send a high-level commission to broker talks between the community and the company.

The result was an 11-point agreement signed by the representatives of Combayo, the government, and the mining company, which includes a promise to build water purification plants, as well as a commitment to carry out studies of the local water supply.

Llanos was shot and killed at the Chaquicocha river, one of Combayo's main sources of water and the site chosen by the company for the expansion of the Carachugo mine.

Yanacocha mines for gold in an area of around 100 square km in Cajamarca, under a concession granted by the state in 1993. The mining activity takes place in three large river basins: the Jequetepeque, Cajamarquino and Llaucano rivers, which are surrounded by 120 communities in a region of the Andes mountains that is home to several thousand people.

"The conflict has not ended, and will never end if the problem continues to be dealt with in a superficial manner," Catholic priest Marco Arana told IPS.

Arana is the founder of GRUFIDES -- a Cajamarca-based environmental, sustainable development and social justice organisation that is an Oxfam partner -- and has mediated in the conflict between the campesinos of Combayo, the mine and the government.

Arana said there are at least six other simmering conflicts in Cajamarca -- a region governed by the ruling Aprista Party -- all of which involve mining companies.

Some date back years. The causes of the tension include the depletion and pollution of local water supplies, the right to use communally owned lands, and the death of a campesino in 2004.

In every case, Yanacocha -- whose net earnings climbed 225 percent from 2002 to 2006, due to the rise in gold prices -- or its main shareholders, Newmont and Buenaventura, sit at one side of the table, and local residents on the other.

In the region of Cajamarca, nearly 75 percent of the population is poor. Combayo, a town of 5,000, is no exception. There is no electricity here, and just one health clinic, open from 8:00 AM to 1:00 PM, to serve the entire community. Adobe houses line the unpaved streets.

Combayo was founded in 1988 on what was once one of the biggest haciendas or landed estates in northern Peru, which declined in the 1970s after land reform efforts sought to redistribute rural property from large landowners to small farmers.

A metallurgical plant operated on the estate, processing the metals that the landowner, Eloy Santolalla, brought in from a nearby mine.

Today, the people of Combayo are mainly small-scale ranchers and farmers who depend on the water from the surrounding mountains for their livelihood.

In 1993, Yanacocha began operations in the Carachugo gold pit, on the hills near the town.

The local campesinos began to protest last year, when the company won approval of the environmental impact study for the second stage of the project.

"The water is murky in the morning and after noon it starts to clear up," says Reina Llanos, who adds that the flow of water in the streams has diminished, leading to a 50 percent drop in milk production among her cattle.

According to a 2004-2005 annual monitoring report prepared for the compliance advisor/ombudsman (CAO) of the International Finance Corporation (IFC) -- the World Bank's private financial arm -- water in the Chonta basin, which gives rise to the rivers that supply Combayo with water, was found to have concentrations of aluminum, arsenic and lead that exceeded international guidelines for livestock.

And in one of its monthly reports, the CAO-Cajamarca Roundtable for Dialogue and Consensus, set up in 2001 on the initiative of civil society, with the participation of the IFC ombudsman, stated that arsenic concentrations exceeding international guidelines were also found in the Azufre Atunconga canal last July.

Yanacocha environment manager Luis Campos told IPS that the finding of arsenic was an isolated incident. "There is no record of a permanent presence of that metal because we have taken the necessary precautions," he said.

Colorado-based Stratus Consulting, an independent consulting firm, also carried out a hydrologic study in 2003, at the request of the IFC's CAO. The study warns that in streams in Chaquicocha, water flows could be reduced by 50 percent, as a result of the expansion of the Carachugo pit.

Campos admitted that mining activity interrupts the water cycle, because groundwater is extracted, but he said the company takes the necessary measures to return treated water to the rivers.

A study soon to be published by GRUFIDES underlines the crucial role that water plays in the mining industry.

In its open-pit gold mines, Yanacocha uses the cyanide heap leaching process, in which crushed low-grade ore is piled on huge leach pads, and saturated with a weak water-based cyanide solution to dissolve and separate the gold.

As the volume of gold increases, so does the consumption of water. The environmental impact study for the first stage of the Carachugo project, presented in 1992, forecast that 11.6 litres per second, or 1,000 cubic metres of water a day, would be needed for Yanacocha's metallurgical operations alone, to process 5,000 tons of gold a day.

Between 1993 and 2004, 624.8 million tons of gold were processed, using approximately 125 million cubic metres of water, according to the company.

That volume of water would supply a city of 6.5 million people with 50 litres per person for one day, states the GRUFIDES report.

This year, the company is seeking to expand its operations to over 20,000 hectares.

But GRUFIDES says the government must study the conflicts surrounding water rights, and take a more active stance, guided by the principles of the collective good and public interest.

Minister of Energy and Mines Juan Valdivia told IPS that the government would take steps to ensure that these rights are respected, although he pointed to the lack of funds for setting up an autonomous oversight body. (END/2006)





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