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Ethical Sources

The Face of Fairtrade Gold in Peru

Bars of Fairtrade Gold from the Sotrami mine in Peru.

At a Glance

Reflective Jewelry sources much of their certified Fairtrade Gold from the Sotrami mine in Peru. This mine supports a village of 3,600 people. Their slogan is "mining with a human face”— a philosophy evident in their treatment of workers.

In 2013, Reflective Jewelry was sponsored by Fairtrade International to attend a round table conference. Our President, Marc Choyt, flew to London— where he represented the commercial interests of North American pioneers in ethical jewelry. At the meeting he met Eugenio Huayhua Vera, who had been flown in as a representative of the Sotrami mine in Peru. Eugenio told us this story of how he started, which is translated below. Much has changed since this narrative was recorded. Today, the Fairtrade Gold coming out of Sotrami is in high demand— and their community continues to reap the benefits of Fairtrade premiums.

The Story of the Sotrami Mine in Peru

I'd like to talk about the challenges that my community faces. I represent a company formed by artisanal miners from Santo Filomena, called Sociedad de Trabajadores Mineros S.A (SOTRAMI).

We work in an area that is completely arid and dry. Contrary to the situation of my Colombian colleague, we don't have rain at all. There is no agriculture, no livestock farming, no fauna and no flora. On the o ne hand this could be an advantage in mining terms; as our environment is completely dry with rocks and sand. But, we face difficult life conditions. We don't have basic services like water, electricity, sanitation or rubbish collection facilities. We're very much deficient in all of these, and our community and children suffer from a lot of different illnesses.

Previously, part of the mining activities took place in the middle of the village and the minerals were also processed in the houses. There was widespread pollution with mercury, and we had to basically relocate the entire population because of this. We moved everyone into an appropriate area and built a new village. Most of our houses are now made of pre-fabricated materials and some types of simple concrete. We are currently working on projects to have water and electricity supplied. In a few months this will all be set up.

There are more than 3,600 inhabitants in our village. They all came together out of the need for employment. Twenty-five years ago, Peru had high unemployment rates and because of this a lot of people tried their luck like in the Wild West, going after the mining dream. Initially they settled around the mining pits in small huts made of stone and mats, forming a small town. In these times there was not a single woman in the village, and the miners would work for 30 days straight in the mines. At the end of this period they would have big beards and long hair, and because of the lack of water they couldn't even clean themselves, or have basic levels of hygiene. Only basic food could be cooked, and miners cleaned their plates with toilet paper because there was no water.

When we started this small business it underwent some problems of credibility at the beginning, but as things stand today the company is very well put together. It has got continuity with regards to the management and it now meets all of the requirements of the mining legislation. It has got all the licenses required by the competent bodies, so we can now focus on improving working conditions and reach other aspirations.

We have been able to make the most of the support we have received from international cooperation. We received support from the ILO, the Swiss government and the World Bank, and with this were able to improve our productivity. For example, we were able to replace the capachas, which were our previous tools to haul ore within the mine, with mechanized extraction equipment called winche. Previously, with the old tools, miners could only extract a small amount of minerals.

For the processing of minerals, quimbaletes were used, which are stone mortars where the miner grinds the minerals with his own body weight. This process takes place in open air and exposes the miners to mercury. There were no health and safety measures taken at all, nothing to prevent contamination or using basic hygiene measures. In this process mercury was used, and all these activities included the participation of women and children.

We have been able to change these production methods and to introduce new technologies. Instead of capachas, a type of rucksack, we now use mechanical lifts ( Winches de Izaje), which allows us to extract minerals out of great depth. For drilling activities, which previously were conducted manually, we now use air compressors. We have also replaced the quimbaletes with a mechanized crushing and grinding system.

We have also progressed with regards to improving safety. Everyone, including the women, now wear protective equipment. We also replaced mercury with cyanide which, environmentally speaking and in terms of toxicity and contamination, is more workable and can be handled better. There are other types of safety measures to be taken, but these techniques allow us to control the situation better with cyanide as opposed to mercury.

The mechanized system has helped us increase the production of gold. We have been able to obtain gold in bars of 3 to 5 kilos, with a purity of up to 99.9%. We are already exporting it through Fairtrade channels, receiving an additional Premium, and to Switzerland via the Swiss Better Gold Initiative. Of course these achievements have come from a process of learning. We had to learn how to trade internationally. Traders have taken advantage and cheated us, but now we are better able to handle the export process.

Fairtrade Gold Peru

Reflective Jewelry sources much of their Fairtrade Gold from the Sotrami mine in Peru. This mine supports a village of 3,600 people whose slogan is mining with a human face.

We have our very own slogan: We opt for mining with a human face. This mining with a human face is something we practice in our day-to-day operations, in our security handling, in how we treat people in our working environment, in our working conditions, in the agreements we have reached. So this continues to be our trademark, our slogan, and we continue to put this into practice on a daily basis.

All of these achievements were possible because of Fairtrade certification. So far we have been the main beneficiaries of the premium, and obtained almost $2,000 dollars as premium in the first and second year of certification. Unfortunately, in this and the previous year there was not enough demand for Fairtrade Gold. So this year we are only selling approximately 5kg Fairtrade Gold. With the new standard, the premium has gone down to $2,000 per kilo. For us the premium is very important because that additional $2,000 per kilo allows us to attend to existing social needs.

The company SOTRAMI has an enormous responsibility in the community. We support projects for water, electricity, and the improvement of education and health infrastructure. We also supported the building of new classrooms and gave study and sports grants for the students. We've been able to support the creation of a health center with a child specialist health care team and other health care personnel. And we also equipped ourselves with tools to assist with accidents, such as bandages for fractures and a series of medical tools that may seem trivial, but are very important when it comes to accidents. We've been able to support all of this through the Fairtrade premium.

"A lot of people stigmatize mining as a dirty and polluting activity. But, there are examples, such as ours, which show that we do take care of the environment and work in a healthy way." Eugenio Huayhua Vera.

The premium is not managed directly by the company, but by a premium committee, which is made up by representatives of the shareholders, the miners, local authorities, women and others. The premium is distributed in a mutually-agreed away. However there is a lot of uncertainty at the moment and we are unsure how much gold we will be able to sell as Fairtrade. It's only when we have actually secured a sale that we take the decision on which projects we can carry out with the premium. The community knows that we are certified, and sometimes demands funds from the premium, as they sometimes do not understand that the funds will not come through if there is no demand for Fairtrade Gold.

That is why we are asking to promote Fairtrade Gold to the market so that customers can use our gold. It is not just a present you give to us or something you do to help us, it is a merit that we gain because we are contributing to developing responsible mining, which treats people and the environment carefully. Downstream from our mine there is a valley which is used for agriculture and produces a lot of olives. People along the river keep an expectant eye on our business, which is why we have to control our emissions and our waste and have to be very careful.

: Those successes show you that we are carrying out responsible mining. In Peru, and the rest of the world, a lot of people stigmatize mining as a dirty and polluting activity. But, there are examples such as ours, which show that we do take care of the environment and work in a healthy way.

This post reprinted with the kind permission of Estelle Levin.

Marc Choyt, President of Reflective Jewelry, showing Eugenio Huayhua Vera the story of Sotrami's gold featured on ReflectiveJewelry.com