Deadly Peru Mine Is Partner in Switzerland’s Efforts to Clean Up Gold Supply

A gold mine in Peru where 27 workers died in a fire over the weekend is a partner of Swiss institutions in their effort to ensure responsible sourcing from informal miners in the Andean country.

Top Swiss-based refiner Metalor is currently the mine’s only gold buyer, which shipped $363 million worth of gold to Switzerland since 2016, according to Peruvian customs records.

Metalor along with nonprofit Swiss Better Gold Association forged a partnership in 2020 with Minera Yanaquihua SAC, which owns the mine, to ensure a sustainable supply of gold from informal miners with better social and environmental practices, before the deadly incident. Informal prospectors, sometimes called artisanal miners, often work without official employment or machinery.

Yanaquihua has a hybrid production model, combining its own formal gold production while also buying metal from artisanal miners, according to its website. The disaster happened at its own mine, which is categorized as a small formal operation under Peruvian regulations.

Swiss firms have the world’s top gold refining capacity and have for years struggled to certify that they can source the precious metal from responsible producers that can trace exactly how and where it was mined. In those efforts, Yanaquihua was a trusted partner that would train artisanal miners to better their standards and move toward formalization.

Metalor said it had paid “site visits on a regular basis” at Yanaquihua and required all environmental and safety permits.

“This is a terrible accident, it’s a tragedy,” said Diana Culillas, Secretary General of the Swiss Better Gold Association. “For the time being we are in a wait-and-see position to really receive the results of the root causers (of the incident).”

Culillas said Yanaquihua remains a partner of Swiss Better Gold. Yanaquihua didn’t respond to a request for comment.

In recent years, refiners accredited by the world’s major gold markets have largely avoided accepting so-called artisanal gold due to the risks involved, pushing their output into the hands of smugglers and organized criminals.

In a press release announcing the partnership, Metalor and Swiss Better Gold said Yanaquihua would “help (artisanal miners) to improve their working methods, implement better social and environmental extraction practices and, importantly, make progress towards formalization.”

Antonio Samaniego, Yanaquihua’s chairman, said in the press release announcing the partnership that the company would share with artisanal miners “principles of compliance, safety and environmental best practices and regulations.”

The incident is the deadliest in Peru in years, highlighting the safety risks for workers in one of the world’s most important mining countries. Peru is South America’s top gold producer and the world’s No. 2 copper-producing nation, as well as a base of operations for many of the globe’s largest mining companies.

Top photo: The La Esperanza mine, where at least 27 people died in the Yanaquihua district of Arequipa, southern Peru, on May 7. Source: AFP/Getty Images