I got together with a couple of guys who are in mining a few days ago. Mining is a big part of the economy here in Peru: copper, gold, zinc, you name it. I don’t know much about mining, my father worked in the coal mines in Belgium when he was young but those mines are long gone now. As you might expect, since we’re talking Peru, a good bit of the mining here is informal and badly organized. Peru tends to be that way in many respects, the economy in general is very informal and with poor or little organization. Outside of a few foreign companies (LAN, Telefonica, Saga Falabella, …) the only large and well organized organizations are the police, military and churches, that’s just part of the culture here I guess.
Cuzco is the nearest somewhat big city to the region of Madre de Dios, where a lot of the informal mining takes place. “Informal” is the politically correct term for illegal mines, small mines that have no license and no environmental controls.
My accountant has quite a few informal mining customers and he regularly tries to get me involved with them. Cuzco is one of the most traditional areas of Peru and there is still this weird idea out here that foreigners (so called first world people) are all-knowing and can do anything Peruvians can’t. In the case of my accountant, his “informal” mining customers are always looking for ways to sell their illegal gold. So they ask me if I can make a trip a month to Switzerland with a case full of gold and sell their gold to the Swiss banks. Seriously, just because I’m tall and white they think I can do that, and that it would be OK if I did that. I don’t know what they get in towns like Puerto Maldonado for their illegal gold but I’m sure it’s much below the market price. It’s sad really, because I don’t think those people fully realize the damage they’re doing to the environment but on the other hand, how can you expect somebody who would otherwise be living on $200 a month to turn down a chance to make $30,000 a month?
Anyway, the guys I had a beer with are stand-up people, they’re the guys that do apply for environmental permits and all that good jazz. But I forgot to tell them a secret I got from these local “informal” miners: if you want to find the gold, all you have to do is look at the color of the rock. The blue rock is where the gold is.
I don’t know diddly about geology and drill holes and mineral resource classification but just look for the blue rock if you want to find the gold. So say the locals.
I spent time at a mine start-up north of Cajamarca that I designed the electrical systems for. The big boys don’t care any more about the environment than the little guys. At least the little guys can’t afford to do the right thing.