(IN BRIEF) Solidaridad, planetGOLD Peru, and the Ministry of Energy and Mines of Peru organized a panel at the PERUMIN event to emphasize the importance of financial inclusion in the artisanal and small-scale mining (ASM) sector. The event aimed to shed light on the challenges faced by ASM miners, such as limited access to formal banking and financial services, and shared successful examples that could help improve financial inclusion in the industry. By addressing these barriers, PERUMIN is contributing to changing perceptions of ASM and aligning with Peru’s National Policy for Small-Scale Mining and Artisanal Mining, which focuses on inclusion and sustainability within the formal economy.
(PRESS RELEASE) UTRECHT, January 5, 2024 — /EuropaWire/ — Solidaridad, PlanetGOLD Peru and the Peruvian Ministry of Energy and Mines co-hosted a panel at Perumin36 to explore how monetary inclusion can contribute to ASGM progress. sectors and percentage of positive examples that can be replicated through others.
PERUMIN is a widely identified annual occasion in Peru that showcases advances in the mining sector nationally and globally. The occasion brings together ministers of state, mining companies, foreign organizations, representatives of embassies and miners.
For 34 years, PERUMIN has basically focused on large-scale mining, however, as of 2022, 16 artisanal and small-scale mining (ASM) delegations from 8 regions of Peru have been invited. This shift reflects a growing popularity of the ASGM perspective, and research into the sector’s successes serves as a stark reminder of how formalization can contribute to alleviating illegal mining.
By officially engaging with ASM miners and addressing their concerns, PERUMIN is helping to replace the ASGM belief among influential stakeholders, such as monetary establishments and government agencies, who can play a huge role in its formalization. This aligns well with Peru’s new National Policy. for Small-Scale Mining and Artisanal Mining, which aims to create facilities that promote the inclusion and sustainability of ASGM in the formal economy.
MAKING ASM FINANCIAL INCLUSION A KEY AGENDA ITEM
Access to formal banking and monetary services is essential for the formalization of ASGM, as it is mandatory for operations and productive capacity building. Without support, many dangers will persist, such as illegal mining activities, increased network vulnerability, lower tax revenues, and negative effects. on environment, health, governance and safety at work.
Mauricio Winkelried, Solidaridad mining manager in Latin America, moderated the panel ‘Promoting Financial Inclusion in Small-Scale and Artisanal Mining: Progress and Challenges,’ which was co-organized with the United Nations Development Programme (UNDP) through the planetGOLD Peru project, and the Ministry of Energy and Mines through the General Directorate of Mining Formalization.
BARRIERS TO FINANCIAL INCLUSION
In the panel, Jorge Álvarez, Environmental Sustainability Program Officer at UNDP, addressed existing barriers to financial inclusion, referring to a study published in 2022 by planetGOLD. The study reveals that only 10% of artisanal miners utilize loans from financial institutions, while 87% of transactions are conducted in cash. It also shows that nearly 60% of miners do not issue receipts for their activities. Moreover, access to additional financial services, such as insurance and pension systems, is virtually nonexistent in artisanal mining.
The situation is even more critical for ‘pallaqueras’, women miners that pick gold manually on the slope of mines. They face inadequate recognition and lack specific national regulations that make their work easier. This forces them to operate in a gray area between informality and illegality.
Álvarez pointed out that a main impediment is that monetary institutions have limited knowledge of the differences between artisanal mining, mining in the formalization process and illegal mining. Furthermore, few people are aware of the scope of the state-led formalization process. This lack of awareness discourages the interaction of the formal banking formula with ASM.
SHOWING EXAMPLES OF FINANCIAL INCLUSION
The panel introduced creative solutions to extend access to formal banking. Edgar Mamani, President of the Mining Cooperative Central of San Antonio de Poto de Ananea (CECOMSAP) shared an inspiring example that relies on Savings and Credit Cooperatives.
Five years ago, the CECOMSAP established a Savings and Credit Cooperative (COOPAC) to pool savings from over 340 miner members, which created a fund of approximately 3 million soles (around USD 780,000). Since then, COOPAC has become a vital resource for members, granting them access to current accounts and financial services that were beyond their reach. The savings cooperative has grown to 1,500 members and operates under the rigorous supervision of the Superintendence of Banking and Insurance, underscoring a high level of formality and commitment. Moreover, this mechanism enables affiliated cooperatives to meet the transparency and traceability requirements that the export markets served by CECOMSAP demand.
Sergio Samaniego, General Manager of the company ‘Minera Orex’, shared how they partnered with a financial institution to design and launch a specific credit product for artisanal miners undergoing the formalization process within their concessions. This product, called the ‘Artisanal Mining Entrepreneurial Loan‘, provides loans to purchase fixed assets that enhance productivity, and allows repayment in kind, through the minerals the miners sell to the company, sparing them from traveling to bank branches.
The Minister of Energy and Mines, Oscar Vera Gargurevich, delivered the final speech of the panel on public credit projects such as “Crece Minero” and “Muger Pallacera”, recently presented through Caja Ica. He also highlighted the collaboration with the National Bank to streamline the procedure that will allow all miners in the process of formalization to open savings and existing accounts. Finally, the Minister presented the ongoing reflections on a national guarantee fund (to cover possible losses or related risks) that can inspire and the integration of ASM miners into the formal monetary system.
The presence of artisanal and small-scale miners in public events, like PERUMIN, is crucial for fomenting dialogue and exchanging ideas so that public and private decision-makers can develop the best possible policies. This example can also inspire civil society to continue driving, systematizing, and developing more spaces like this.
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RECLAIM Sustainability! is a five-year program implemented in strategic partnership with the Dutch Ministry of Foreign Affairs. This global program is active in 17 countries in the cocoa, coffee, tea, palm oil, cotton, and textiles and gold sectors; with a specific theme on local food systems in Africa.
In this program, we fight for a radical rebalancing of forces and genuine transformation that benefits small farmers, workers, and miners at the beginning of price chains. After all, there can be no true sustainability when the other people who produce the goods we consume continue to live in poverty; when arable resources are not sustainably controlled; In many countries, civic space is limited or even continues to shrink, and the operating situations of millions of manufacturers are abhorrent.
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SOURCE: Solidarity Network
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