Gold Wildcatters Wooed as Peru Leader Swaps Dynamite for Dialog

  • Kuczynski begins talks with mining groups in Amazon jungle
  • Illegal miners have defied government efforts to halt trade

Peru’s former President Ollanta Humala used explosives to combat wildcat gold miners in the Amazon jungle in a bid to stem deforestation and mercury pollution. His successor is taking a more diplomatic approach.

Less than two weeks after taking office, President Pedro Pablo Kuczynski held talks Tuesday with industry representatives in Madre de Dios, an area of southeastern Peru that accounted for almost 10 percent of the country’s gold output last year. Kuczynski is also adopting a conciliatory approach to try to restart work at major mining projects that were stalled amid community opposition during the previous administration.

At Madre de Dios, meetings will be held regularly to agree on a way forward, Kuczynski told reporters. 

“We’ve come to listen,” he said. “We don’t propose violence or anything forceful. There has to be discipline but what we want is to seek a consensus around which to work.”

For an analysis of the challenges facing Peru’s new leader in mining, click here.

Informal gold production in Madre de Dios expanded over the last decade as bullion prices surged, fueling the destruction of pristine rain forest and the pollution of rivers with mercury while forced labor and prostitution flourished in mining camps. In 2014, the Humala’s government imposed restrictions on the sale of fuel and stepped up police operations to blow up mining equipment such as river dredges and loaders.

Legislative ‘Threat’

Cynthya Montes, a spokeswoman for Humala, didn’t immediately respond to an e-mail seeking comment on the talks.

Mining groups in the area want the government to repeal the measures, which were designed to force them to submit to new regulations for small producers. 

Luis Otsuka, the Madre de Dios state governor and a former head of the local mining federation, told reporters that the legislation is a threat to the local economy and welcomed Kuczynski’s call for dialogue.

Energy & Mining Minister Gonzalo Tamayo said it’s too early to say whether there’ll be changes to the existing legislation.

Kuczynski, a former investment banker and mining executive, has proposed creating a bank to lend to artisanal miners that respect labor, tax and environmental rules.

Peru is Latin America’s largest gold producer. The metal’s price has jumped 26 percent this year after three straight annual declines.

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