For the first time, the government in Peru has acknowledged that large-scale artisanal copper mining exists and that it could increase as the prices of the metal climb on the world market. This revelation was made by Jorge Montero, the minister in charge of mines and energy in the country.
Speaking to foreign media in the country’s capital Lima, Montero said the government was particularly watching informal mining in a region where MMG, a Chinese firm, owns mineral rights through its Las Bambas operations. The area has the most widespread informal copper mining operations that the government has so far identified.
Apu Chunta, as the informal mine is referred to, is run by the Pamputa, an indigenous community in the area. Bloomberg run a story on this informal mining operation back in April. Estimates put the annual production of copper from this mine at 30,000 tons and the current value of such output is approximately $300m. The Pamputa own the land, but the mineral rights for that property belong to Las Bambas.
Las Bambas intends to establish open pit mining operations there in the next decade. Prior to that, the company will be required to purchase the land from the indigenous community.
Peru’s mining activities have been dogged by conflicts between concession holders and the communities which own the land. The government has had a tough time finding a middle ground between these two conflicting parties. With Peru holding the record as the number one South American gold producer and the number three leading copper producer globally, the extensive deposits it holds have been a huge magnet for artisanal miners.
These informal miners largely operate on tracts of land where they don’t own any mineral rights. They have infiltrated areas where firms like First Quantum, Teck Resources and Southern Copper have licensed mining operations. While the overall haul of informal miners is significant in dollar terms, their activities yield a tiny fraction of what the licensed mining firms extract from the country.
As the years go by and more people take up artisanal mining, the conflicts between large corporations and the small-scale mining groups are bound to increase. How the government resolves this issue will be closely watched given that it is duty-bound to protect the rights of mining companies whose operations bring needed taxes and foreign exchange to the country. At the same time, the growing population of artisanal miners could pose a security and political risk for the government if care isn’t exercised while curbing informal mining activities.
No such headaches are likely to arise within the jurisdictions where exploration firms like Torr Metals Inc. (TSX.V: TMET) have operations in various Canadian provinces since their areas of interest are established mining zones with respected regulations governing the activities there.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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