Next Generation Mining Latin America Summit: The rise, and rise, of illegal mining

With prices for both precious and base metals currently in the fourth year of a strong sector bull market, it should come as no surprise that very little has changed in this respect. And, like the conquistadors before them, foreign companies are today flooding into Latin America seeking the fabled deposits of ores and minerals. Be it copper from Chile, gold from Peru, iron from Brazil or silver from Mexico, a presence in Latin America is virtually a licence to print money.

The figures speak for themselves: currently South America has more mining exploration than any other area in the world: 38 percent of global investment in metallurgical prospecting goes to the region, as well as 27 percent of all gold exploration. The area is particularly appealing to foreign investors because its mineral reserves are relatively untouched compared to the rest of the world, and it has a ready supply of cheap labour.

In Peru, for example, the wealth of the gold mines is one reason why Peru’s economy is set to grow by close to nine percent this year. But according to mining analyst Laura Collins, the soaring price of gold, of which Peru is the world’s sixth biggest producer, has also brought a less welcome consequence. “Sky-high gold prices have enticed migrants from the poorer highlands into the region. These wildcat miners are tearing down the country’s rainforest and polluting rivers with tones of toxic mercury, which they use to separate gold from ore.”

In Peru alone, illegal mining produces up to 18 tons of gold a year and causes immense destruction to one of the most bio-diverse places on earth. “On a good day, the river dredgers can find almost US$30,000 worth of gold, but the miners pay nothing to the State,” Collins was reported as saying.

Yet the real impact of the illegal mining in Peru – as well as in Colombia, Bolivia, Ecuador and Venezuela – goes beyond millions of dollars in unpaid taxes. “For every gram of gold, up to three times more mercury is used to extract it. This is absorbed into the air and the rivers, poisoning the food chain.” For example, officials say fish in these areas contain three times more mercury than is safely permitted by the World Health Organization. In Peru alone it’s alleged that miners have bulldozed more than 150,000 hectares of forest.

But the government is fighting back and has recently sent in security forces to destroy river dredges used by illegal miners. Late last year, Bolivia’s president, Evo Morales, sent troop to the lowlands of Santa Cruz to crack down on gold mining, while Colombia, Ecuador and Venezuela have also asked their armies to act against the miners.

And almost 1,000 troops and police officers in Peru recently destroyed river dredges and burnt boats used by illegal miners to suck up silt from the riverbed in the country’s southeastern Amazon region of Madre de Dios.

How to address this illegal activity is likely to be one of key issues at the Next Generation Mining Latin America Summit 2011, which takes place from 10-12 May in Santiago, Chile. This closed-door summit, hosted by GDS International, features some of the leading voices of the mining sector, including Marco Orellana, CIO of Codelco; Yvan Garcia, CIO of Chinalco; Rob Moore, VO Operations of Excellon Resources Inc; Paul Farrow, VP Safety & Health of Goldcorp and Renaud Adams, VP Operations, Americas of IAMGOLD Corporation.

Along with information security, other key topics for discussion include process optimization, lowering risks and costs through strategic logistics and HSE standards and regulations.

Next Generation Mining Latin America Summit 2011 is an exclusive C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networks and co-ordinated meetings.

For more information, visit www.latinminingsummit.com