Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
A Canadian university professor is presenting a new approach to artisanal mining that could prove beneficial both to miners and investors.
Marcello Veiga, a professor at the University of British Columbia’s Norman B. Keevil Institute of Mining Engineering, seeks to reframe the relationship between large mining companies and small, artisanal miners who mine or pan for gold using traditional methods that are labour-intensive and involve low, outdated technology.
While that relationship can be cooperative, it is more often fractious, and can even turn deadly.
Artisanal miners and large mining companies typically compete for the same mineralization, which can lead to conflict. In April of this year six Peruvian miners died while protesting new government regulations aimed at controlling pollution caused by artisanal mining.
The miners feared that the measures, to limit dredging and mercury usage in rivers and ban mining in certain areas, would put them out of business and give mineral rights to large companies. The plight of artisanal miners, who operate in some of the poorest, least-developed countries in the world, became a passion for Veiga when he visited the Serra Pelada gold mine in Brazil in the early 1980s and saw the conditions that the miners operate under.
“My impression was they were illegal guys, invaders, working without any care, but after working with them I came to understand that they’re poor. They don’t have a way to mine, any knowledge. They do it for survival,” says Veiga, who has a background in metallurgical engineering and environmental geochemistry.
He went on to join UBC’s mining faculty in 1997, where his work has focused on environmental and social issues related to mining.
Considered to be an expert in artisanal mining, Veiga took leave from UBC in 2002 to work for the Global Mercury Project in Vienna, Austria.The project was created by the United Nations Industrial Development Organization (UNIDO) to promote best practices among artisanal miners and to prevent pollution and deleterious health effects caused by the use of mercury in the mining process.
It was through this work that Veiga saw first-hand the effects of mercury on miners and mining communities. The experience also spawned the idea that he could teach the miners how to make their mining practices not only safer and easier on the environment, but profitable for the miners.
The human and environmental costs of artisanal mining are indeed so bering.
The UNIDO estimates that 1,000 tons of mercury are released into the environment every year from artisanal miners, who use mercury to separate the finegold particles. Lead poisoning has also been tied to artisanal mining. In northern Nigeria 163 people, including 111 children, have died this year from exposed soil containing lead deposits.
The miners often work without respirators and inhale the mercury vapours, which cause kidney and respiratory problems and, in the worst cases, brain damage.
Mercuryfrom tailingsis dumped into rivers, thus contaminating fish and local human populations who consume the fish and gradually absorb the mercury into their systems.
Veiga says that one of the worst examples of mercury contamination occurs in Colombia, where artisanal miners process the goldin small towns, from fear of guerrillas who control remote areas of the country.
“I’ve never seen so much mercury in my life,” says Veiga, who observed mercury concentrations in school children that were 10 to 20 times greater than allowable levels.He said artisanal mining has replaced drug trafficking as a source of income for poor villagers in the troubled South American country due to record-high gold prices.
But Veiga says that when outsiders approach the miners, health and environmental concerns play second fiddle to the economic imperativeof feeding their families.
Instead, in order to enact change, Veiga began showing the miners different ways of extracting gold, using methods that do notinvolve mercury, such as gold cyanidation.
“It’s the first step to show them that I can do better than they’re doing,” says Veiga, noting that he can sometimes extract two to three to times more gold than the artisanal miners. “Then they believe me.”
Veiga says that the miners need new technology for processing the gold, and someone to provide the capital investment. His idea is to build partnerships between the artisanal miners and companies willing to invest in small processing plants. In return for a secure mineral deposit, the companies bring processing expertise and provide a source of wealth for mining communities.
He is already seeing the model working in Peru, Colombia and Ecuador, where artisanal miners are producing 300 grams of gold per day through a small processing plant financed by Vancouver- based Salazar Resources Ltd.
“In Ecuador it’s a wonderful situation because the artisanal miners are getting educated quickly, and they understand what they have to do and how to move ahead.”
While Veiga acknowledges that the risk may be too high for some investors, he is hopeful that others will see the potential in making a relatively small investment in actual, proven mineral reserves versus “the big elephant” sought by prospectors. “Of 5,000 ore deposits found in the world, one becomes a mine. So there’s 4,999 available,” says Veiga, noting that some of those deposits could be mined and processed by artisanal miners. “It’s possible to transform this group of people that are completely marginalized into entrepreneurs,” he says.
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