August 05, 2015 - Page 1 EJOLT Fact sheet The Yanacocha Mine Case 043 1. Introduction: The Yanacocha Ore & building materials extraction mine The Yanacocha gold mine is located in Northern Peru, at an altitude between 3500 and 4000m, near the city of Keywords Cajamarca (35 km). It is considered to > Gold mine be one of the largest and most profitable > Congo project in the world, and the largest and most profitable in Latin America. 1 It is > Yanacocha operated by Minera Yanacocha, S.R.L. © Michael Swerdlyk –The Yanacocha gold mine > Newmont Mining (MYSRL), a company controlled by three Corporation main shareholders: Compañía de Minas According to information published by Buenaventura —a Peruvian company— The New York Times , the takeover was (43.65%), International Finance only made possible by pressure brought Corporation (IFC) —a member of World to bear by Peruvian officials, such as the Bank Group, promoting investment former intelligence chief Vladimiro projects in developing countries— (5%); Montesinos. 6 and Newmont Mining Corporation, which is the principal partner (51.35%). 2 The Newmont has a new project in this latter is one of the world’s largest region: the Conga project. It is a large producers of gold, located in Denver copper-gold porphyry located 24 (Colorado, USA) and operating through kilometers northeast of Newmont’s different companies in different countries Yanacocha gold mine. According to the around the world. 3 company, Conga is part of Newmont’s strategic plan to reach 7 million ounces It has been said of MYSRL that it of gold and 400 Mlbs of copper by the “accounts for almost half of Peru’s year 2017 while developing a diverse annual gold production”. Almost all of South American asset base. But Yanacocha’s numbers are gigantic. For Newmont halted their work at Conga example, its production increased from Project in November 2011 because of 81,000 ounces in 1993 to 3 million strong protests. ounces in 2003. It is also of an 1 See S. Langdon, “Peru’s Yanacocha Gold Mine: The IFC’s Midas touch?”, 2000 enormous size: the land under ‹http://www.ciel.org/Publications/IFCCSPe concession is approximately 1,572 ru.pdf›, at 1. square kilometers, “including four major T2. Various aspects of the case 2 See C. Kamphuis, “Derecho y la watersheds and the Andean continental convergencia del poder público y el poder 2.1. The property/cultural aspect empresarial: la desposesión campesina y divide”; the current mining district spans la coerción privatizada en el Perú”, about 160km 2 with five open pit mines. 4 of the case Revista Latinoamericana de Derecho Social , 15, 2012, at 2; Report of the The mine began to operate at the Independen t Evaluation of the Mesa de The Yanacocha project has involved a Dialogo y Consenso CAO-Cajamarca , beginning of the 1990s. It was controlled considerable amount of land transfer Compliance Advisor Ombudsman, 2005, by Buenaventura and a French state- at 3. from the original proprietors to the owned company, Bureau de Recherches company. This has been done through 3 See <http://www.newmont.com/>. Géologiques et Minières (BRGM), which convoluted and even deceptive ways 4 Report cit. , supra note 2, at 3. owned a 24.7% equity interest. and people have been deprived of the 5 See Mining Operations Report on This partnership had ended by 1994, land they possessed seemingly without Yanacocha , 2005 < 7 http://www.geomineinfo.com/Complimenta because the French government knowing exactly what was happening. ry%20Downloads/Yanacocha.pdf >, at 6. decided to privatize its mining assets. The local farmers (campesinos ) soon 6 See Ángel Páez, “‘The New York Times’ Newmont took control over the mine became aware of the low price they had revive el caso Yanacocha”, La República , after a controversial process, including been paid for their land and the legal November 22, 2011 < 5 http://www.larepublica.pe/26-10- litigation before Peruvian courts. effects of the obligations contracted with 2005/new-york-times-revive-el-caso- YMSRL. Some of them have alleged that yanacocha >. the negotiation was led through 7 See R. E. Chacón, “El caso Yanacocha: deception, menaces and false promises, crónica de la lucha contra una as can be seen in a letter addressed by contaminación minera inevitable”, Ecología Política , 26, 2003, at 51; Langdon, supra note 1, at 2. August 05, 2015 - Page 2 some farmers to the Human Rights complex litigations aiming to put an end Coordinator (CNDDHH), a local NGO, in to the communal ownership of the June 1997. 8 Yanacocha area and facilitate the mining activity. One example is that of the community of San Andrés de Negritos, very affected First of all, in 1991, the property rights by the mine. According to the Peruvian over part of the communal area were agrarian law, this community was granted to individual commoners and the entitled to a ceOrdntain amount of land rest was declared a ‘reserved area’— (14,375ha), after a complex process that owned directly by the state and open to was initiated by the Agrarian Reform Act a further distribution in the future—by a (1969) and finished with the official decision of the Peruvian government. registering of the property in 1991. 9 This The goal was to suppress communal property has been systematically eroded ownership in San Andrés de Negritos by since the starting of the mining project in opening the door to individual Yanacocha. agreements between Yanacocha and the new proprietors of the land. The In 1990, Alberto Fujimori was elected members of the community consented to president of Peru. Almost immediately the decision, but it has been alleged that he started a comprehensive program of this consent was obtained through economic reforms which particularly deception and distortion of the affected agrarian legislation. One of his 12 consequences of the decision. The first actions was to amend this legislation largest part of the ‘reserved area’ was by the Act of Promotion of Investments attributed in 1995 to individual in the Agrarian Sector (1991), which commoners, almost suppressing the focused on the individual property of legal status of the community on the land. Afterwards the Constitution was land. Even the very legal existence of also amended and, in this case, the the community was suppressed. communal property of land was given less legal protection. With this Moreover, in 1992 and 1994, Yanacocha constitutional amendment a new Land requested the compulsory purchase of Act (1995) was made possible, allowing part of the land of San Andrés de transfers of land from peasant Negritos to build various facilities communities to private investors. 10 associated with mining activity, and the constitution of an inevitable obligation Peruvian law distinguishes between the associated with other parts of the land to property of mineral resources in the allow the company’s on-the-spot subsoil and the property of the land operations. A group of commoners, where these resources are located. The allegedly representing the whole former is attributed to the Peruvian community, negotiated with the company government, as is the case in several to set the compensation—the final sum countries in the region. 11 Permission to was almost ridiculous—and it was mine these resources can be granted to decided to use the former communal private investors. The Yanacocha mine 13 land. is partly located on land that is the property of the Negritos community. In 1995, the original titleholder of the Therefore, although the Peruvian land—the community—was suppressed, government granted the Yanacocha the land was re-distributed among company permission to extract the gold individual ex-commoners, and large 8 See I. Ormachea Choque, “Utilización from the Yanacocha mine, the Company parts of the land were assigned to de Medios Alternativos para la was not allowed to use the surface Yanacocha so that it could carry out its Resolución de Conflictos Socioambientales: dos casos para because it was the property of the activities. All this was done at minimal reflexionar”, 1999 communal area of San Andrés de cost for the company, thus making the <http://scar.gmu.edu/Medios%20Alternati Negritos. This problem was solved by mine extremely profitable. Hardly any vos.pdf>, at 9. 9 compensation was given to the local See Kamphuis, supra note 2, at 6-8. population. Then, the company took 10 Op. cit., at 10. advantage of the situation by purchasing 11 See Peruvian Constitution, Article 66. 12 See Kamphuis, supra note 2, at 14. 13 Op cit., at 16-18. August 05, 2015 - Page 3 pieces of land from the new individual case since the beginning of the project, owners at a very low price. This meant when Minera Yanacocha concealed from that almost a third of the former IFC the fact that the people living there communal land had been transferred to were indigenous. Given IFC’s very high the company. A significant part of the standards, this would have involved a community’s territory had been taken considerable amount of tact in setting up away and its very survival as a the mining operation because, according community was threatened. to Peruvian law, if a people regard themselves as indigenous, they are. 16 As the members of the community were becoming progressively aware of the Given that the World Bank had consequences of the convoluted legal dramatically changed its attitude to © Michael Swerdlyk –The Yanacocha process which had led to this situation of indigenous peoples with the passing of gold mine dispossession, they began to organize the Operation Policy (OP) and Bank acts of protest against the company. The Procedure (BP) 4.10, this was by no community tried to act as such, and means a minor issue.