Formalisation of artisanal mining in Peru – reducing major mining companies’ reputational risk exposure

By Daisy Johnson

In an attempt to mitigate the risks associated with the increasing prevalence of informal mining- including inadequate environmental management, poor health and safety provisions and escalating security challenges – the Peruvian government has stepped up efforts to formalise the sector. The formalisation process and engagement with artisanal and small-scale mining (ASM) miners will reduce current company exposure to reputational risk by proximity:

      
• The reporting of the detrimental environmental impact of mining operations, workplace fatalities and incidents of child labour in ASM operations is often attributed to neighbouring large-scale operations, cumulatively increasing reputational damage

      

• Large-scale mining operators are exposed to heightened reputational risks when ASM miners are forcibly removed from their concessions by government security – particularly in cases where ASM mining activity predates commercial mining development and communities have been established surrounding the site. (more…)