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Peru - The Curse of Inca Gold

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Peru was home to the fabled Incan Empire in the 15th and 16th centuries.

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Video Length: 31:30

High in the Andean mountains of Peru is a gold mine, Yanacocha, run by Newmont Mining Corporation of Denver, Colorado, the largest gold mining company in the world. Once part of the Incan Empire, this land was conquered by the Spanish, who came in search of gold and silver. Descendants of the Incas remain suspicious to this day of outsiders seeking fortune here. FRONTLINE/World and New York Times reporter Lowell Bergman arrives to investigate a growing conflict between the local people and the Yanacocha Mine, which has already produced $7 billion worth of gold.
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All That Glitters
For thousands of years, gold has played civilization's ultimate Siren, luring explorers, sparking wars and building empires. So what is our enduring fascination with gold?

The Toxic Shimmer of Gold
Is your gold ring really worth its weight in gold? When experts include the risks to the environment and the people living near mine operations, many say no. A look at the hidden toxic costs of gold mining.

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Porcon, Cajamarca
I am a Peace Corps Volunteer living in the area of Porcon, about 16 kilometers down the road from the mine.

I have lived here for two years and I have experienced first hand and can therefore understand the complaints of the campesinos of the area: There is no water, the crops and animals are smaller, the frogs are no longer in the streams...That is only what they are noticing without any scientific equipment. So I can assume that there are environmental consequences that we have yet to notice or that will only occur far into the future. I have also seen the scar on the landscape that is the Yanacocha gold mine.

But, as usual, there are two sides to every story. I have watched my host brother earn a salary nearly twice that (if not more) of what he could earn living in our small community and doing farming and manual labor work. I have watched the comforts that this buys and the fact that he can now send his children to a better school in the city. I have watched as everyone I know attempts to get a job at the mine because it is the best-paying occupation around, especially for someone with little education in a country with high unemployment.

I see that the economy of Cajamarca is driven by the salaries these people are earning from the mine. The indirect benefits of this create yet more jobs and more money. I work with NGOs and have yet to see this level of development, efficiency and wide-spread income improvement from any other source.

So what to do? Quit complaining and start looking for ways to make the best of this situation. The mine is staying whether you like it or not, right or wrong, because I can guarantee you that 8,000 Peruvians are not going to be willing to give up their jobs. Therefore, people here need to look for ways to make the best out of this situation by holding their government accountable for efficieint and transparent transactions and by thinking about the future effects of pollution as well as the economic consequences that will occur the day when the gold runs out. Looking for those solutions NOW would be a much more efficient use of time and may provide a way to make the best of this situation.

Saratoga, Indiana
Wow! I am always amazed to see that man's greed overcomes humanity. As a Spanish teacher, I greatly appreciate progams such as this one. I only wish that more people could be exposed to the poor treatment of los campesinos. My heart truly goes out to the native peoples of all lands, where other countries take for themselves the best of what that country has to offer without giving back.

Money makes monsters out of anyone regardless of nationality. This has nothing to do with nationality, but everything to do with greed on the part of all parties involved. as this goes on in Peru and other places and no one is willing to involve themselves other than to point fingers and place blame, it will continue.(As it always has. It is the way of man.) May the Lord have mercy on us.

Michael Carter
Allen, TX

Gold mining is a profitable yet resource-taxing industry. Although the gold standard keeps a solid foundation beneath the world's economy, the mining companies are constantly depleting the natural resources of the Earth. The gold mining industry therefore has its pros and cons, but also in the equation is the fact that no mining company is truly only working for the large cause. Most companies will work for personal benefit while hiding under the camouflage cover of their "help the people" slogans and political works. I think that a truly worthy gold mining industry is one that puts the people before itself and has no corrupted officials working in the higher stations. This thought, however, is nearly impossible to fulfill, as a truly uncorrupted person in a powerful position is almost impossible to find.

Joshua Cameron
Allen, TX

It sounds like there was foul play on both the American and French side. It's unfortunate that respectable businesses and countries have to resort to this sort of childish game. Montesinos is not the smartest guy either. Why would he keep all those tapes from his office? That doesn't make any sense. That is a bad trail to leave for someone so high up in the government. It also makes America look bad when the CIA is paying this guy, to do who knows what. However, a very interesting story about something like a gold mine.

The video's information was very shocking. I found it amazing that with the knowledge of what we know about Mercury today that after a spill no one bothered to even attempted to clean it up. I also found the information on the Peruvian government and what corruption was involved quite amazing. This was a very informative subject and I feel I have gained more knowledge from this.

Jared Lyon
Allen, TX

"Wealthy Americans abusing a poor third world country", was the first thing that came to mind when I saw this FRONTLINE/World story. This news video illustrated to the watcher how badly the government of Peru and the businesses of Peru are corrupt, especially the gold mines. The main person in the article, Larry Kurlander, was a wealthy man that looked to me like a very guilty person. It appeared to me that he had a mind set that he was above the law and the people of Peru, so he would just waltz on in to Peru and pay off the government so that he can do as he pleases and make money using the natural resource that are in Peru. Instead of opening the mine, using legal and uncorrupted ways and actually give back to the community surrounding the mine that gave him so much wealth and abundance, he is conniving about ways to be dishonest and greedy. This time a wealthy person having that mind set was caught and in my educated opinion should get the maximum jail time allotted by Peruvian law!

Florissant, Missouri
I do not agree with this statement that you are making with the whole mining process. This whole thing will mess up the environment. This could kill thousands of people. I do like breathing fresh air not polluting air. This is just contaminating our planet Earth.

Harris Rosenbloom
San Francisco, CA

It takes a large company to effectively extract natural resources. Whether that company is French, American, Peruvian, or Chinese, I do know it is not owned by me or anyone I know, or most of the 6 billion people on earth. Cartels are an elite group and nationalism is a device when it helps them get their way, and governments are usually drawn from the same elite group that has organized the cartels. My point is the gold was going to come out of the ground, who cares who does it, and the most you can hope for is that the miners are paid well, the companies doing the extraction are properly taxed by a socially active government.

Occidental, CA
It is incredible that the people in my country are dying of hunger and illnesses while corporations of the most powerful country in the world are taking our natural recourses so irresponsibly and no integrity at all.

R. Johnson
Minot, ND

Most of this makes me sad as you are not doing the arithmatic. The U.S. has been held to much higher standards in its international dealings than any other nation, save China. U.S. companies are expected to adhere to U.S. laws within U.S. borders and comply to the laws of the countries within whose borders it does business. I find it extremely hard to believe that any country is short of savvy lawyers who would allow us to walk all over them.

Having been in Peru several times and traveled in some of these mining areas, I can tell you that seeing what some of these companies do makes me ashamed to be from the US. I have a mining background, and live in a mining region of the US and there is no way these companies could get away with any of what they do in Peru, here. I would summarize the situation as rape and plunder of the people and the landscape.

Javier Iturri
Houston, Texas

I am from the north of Peru and I know the Beauty of Cajamarca. It is very bad to hear about the contamination and killing. Peru is a poor country but very honest. Please respect our country and the world.

Kamloops, British Columbia

This is just one example of American, and 1st world irresponsibility towards poorer nations. The fact that the Peruvian government has not taken control of these situations is not surprising. An elected government must seek to be re-elected, and in dealing with an uneducated population as described, it is easy to see the best long term course would have less appeal than the current employment. Despite being idealistic, it must be the responsibility of a profitable company to ensure the best future for its employees and environment.

Stephen Maynard
Albuquerque, NM

I am a minerals exploration geologist with experience working in Latin America.
Unfortunately I did not see the program, though I have read the NY Times article on Yanacocha and the articles on the Frontline site.

The knee-jerk reaction against multi-national companies in general and against mining companies in particular is illogical and feeds into the strategies of grandstanding populist politicians and wannabe revolutionaries. Which is not to say that these companies are without sin, but to point out that the news is mixed, as with everything. The Peace Corp volunteer working near Cajamarca points this out nicely (see e-mail above).

If one is to rail at multinationals keeping people poor and subjugated, why not put the Catholic Church in the crosshairs? ... If the Church were actively implementing education, training, family-planning, and health programs, in other words really looking after the poor, I'd have more respect for the position of clerics that oppose the activities of mining companies.

Politicians, local and national, all over the world tend to lay blame for their countries' ills at the feet of outsiders. It's far easier to inculpate a (foreign) mining company than it is to turn the criticism inward. In countries with rampant corruption, poorly educated populations, and widespread poverty, it's even easier.

As regards technical issues, hazardous materials are often treated in the press with a kind of muted hysteria. As an example, cyanide is hazardous, to be sure, but then so are gasoline and electricity, two things most of us live with and safely manage every day. It's a question of familiarity, procedure, and proper handling. Discussions of the science and technology of mining and other industrial procedures are given only slightly better treatment than the sound-bites accorded to the policy positions of politicians.

As for the "true cost" of gold mining, there's no doubt that mining on such a scale makes a mess and has a significant impact on local communities. Translating that into the cost of mining an ounce of gold is a question of requiring producers to do the appropriate remediation and community relations/development work, and making it stick. All the talk about gold's historic, emotional, spiritual value, etc, is interesting, but irrelevant.

As a 20 years old Peruvian teenager, I despise the intentions of United States and other developed countries in thirld world nations. Transnational companies do not care about environmental impact, health and safety hazards of employees or local communities. History can provide us with evidence that foreign companies want every possible benefit from extracting activities, deforestation, or others, based on their lousy argument that they create jobs for the local people and bring development for their cities and towns. Unfortunately, it is extremely difficult for these communities to raise their fist and speak out against the abuses of transnational companies, since they could face deadly consequences. These companies are very aware that government authorities are venal, so they assure their impunity by tendering juicy bribes, which translates into violence and repression of these communities ... Violence is called the economy, which destroys our culture and our freedom. Do not steal our resources. When is this going to stop??

James Wise
Reno, NV

To place the 2000 mercury spill in northern Peru in another light, during this accident I was working in the central Peruvian town of Huancavelica...the largest mercury district in the western Hemisphere. The mines at Huancavelica have been closed for 30 years, and the majority of mercury was mined 150 years ago during the Colonial Spanish period. The mercury spill near Cajamarca was unfortunate, but at the same time in this forgotten city of Huancavelica mercury runs freely in some of the open trenches downtown. The people have been living with mercury here for nearly 400 years, and the mine has probably been responsible for more mercury deaths than anywhere in the Western Hemisphere.

By comparison, the incident in northern Peru is extremely minor, and very well attended to in the aftermath. At Huancavelica nothing is being done by the Peruvian goverment...the town is extremely poor. To some extent, the focus on the impact of an active modern gold mining operation is simply and shallowly chasing the money, and does not reflect a true intention by society to better the living conditions in Peru.

Beverly Stoeltje
Bloomington, Indiana

While more chapters of this story could no doubt be told, especially concerning the conditions of the laborers in the mine and how much of the money that does stay in Peru actually benefits the people of Cajamarca, the article focused on the globalization of capital, transnational corruption, and the consequences of the exploitation of the local people and the environment -- a comprehensive, challenging and major contribution to our knowledge of contemporary political and economic forces.

Lima, Peru
I have not watched the program but I have read the two articles in the New York Times, 'The Curse of Inca Gold' in The Washington Post and the articles on PBS Frontline and I found the information and the facts presented the result of professional work. As a Peruvian citizen, I am very grateful for the information and the analysis presented and I hope the main topics the articles put in front of us, like the role of foreign investment and specifically mining investment, sustainable development and economic growth, can be part of the political debate in the coming Peruvian presidential elections in April 2006

Delta, BC
I am a director and officer of a small public mining company that is currently exploring in Peru. One of the main goals of any mining company operating in the High Andes should be to improve the living conditions of the people there. We employ more than 100 of the local people (a small nearby town), 45 other Peruvians and one American and one Canadian.

In my view, the sole goal of the public company is to create awareness among investors so that we can develop our Peruvian project.

As part of our agreement, we make sure that our facilities and equipment are available to the town and they have welcomed us with open arms.

The land we work on now used to be run by a big company similiar to Newmont but they were wise enough to see that small companies have a huge advantage because they can move quickly and are more flexible. It's a win-win-win situation for the town, the junior and the senior company. But at some point, you have to extract the metal. Maybe someone could invent a new way, but today, the use of cyanide in a well planned operation is environmentally manageable if the company wants to make the committment to do it.

Should we find enough copper to become a mining operation, the community will benefit along with the company. I think it's when companies stop listening to the community and start listening to brokers and analysts that they get in to trouble. However, because of the risks involved in mining, investors in the sector are a jittery bunch as they are always looking for the black cloud.

I would like to get fund managers involved in my company that understand what long -term commitment is but they don't exist anymore. Normal people don't invest in mining because of past scams such as Bre-X (Indonesia, remember?) and that means investors are snatch and grab types -- in for six months and out with a 50 percent profit -- they are investing in a stock not a company. Given this background, you can see how dificult it is to balance managing the long-term environmental concerns without long-term investors.

Although I am in the mining and exploration business now, that isn't everything I've been or ever was. I've been on the other side of roadblocks, stopping bulldozers and tree-harvesting equipment. If anything, all I would say is all the people muttering and shaking their heads should look at their mutual fund portfolio (which no one does). More likely than not, they are owners of these companies and start complaining when their RRSPs or 401K start to shrink.

The only diffference between me and a lot of people who respond to your show is that I am willing to back up my words with action.

I know that protesting is very easy. Taking real action and affectiing real change in one small town in Peru is a 10-year commitment for someone in my shoes. I hope one day to report a successful mine opening and inviting PBS down to look at how we've done things. However, we are a long way from that -- but we wil forge ahead -- stay tuned.

Back to work! Cheers.

San Mateo, CA
The documentary was so captivating! I have immense respect for the campesinos who are fighting so courageously to protect their sacred lands. This is hardly a unique experience for Newmont though. The company is facing resistance around the world. The documentary pointed out that Newmont did not follow American standards in Peru. What about in Indonesia? Newmont is dumping mine waste into the ocean there. There's no American standard that would allow dumping of mine waste into the ocean. Is Newmont unaware of the Clean Water Act?

Fort Worth, TX
I salute you for this fine in-depth analysis of a matter of life and death for the "voiceless" peasants of northern Peru. I hope that you will continue to do more to redress the imbalance of reporting and understanding in this (our) country, where too often the voiceless silence of the majority of the world is not heard.

Wendy DeMegret
Arlington, VA

This is another case of corporate greed and the devastating effects of gold mining with cyanide. This is happening in Honduras and other places in Latin America where the local campesinos have the rights to protect their environmental interests and the extraction of their patrimony. Thank you for the excellent broadcast.

Will Conta
Tonawanda, New York

So, will there be a movement toward a "social license" between the indigenous people of Peru and Newmont corporate goals? Or are the two notions too far apart to attain a middle ground? In the end, will Newmont adjust their Corporate Strategic Planning to accommodate and meet the perceptions of the local populous or allow the continuation of the appearance of a lack of social responsibility?

Bob Thomson
Paris, France

In your history of Peru, you note, "In 1532C.E., Spanish explorer Francisco Pizarro arrived in the middle of an Incan Empire that had been weakened by civil war." You should note that this civil war was brought on largely by the decimation of the population (by 50 percent some say) by measles, which was introduced from Europe and preceded Pizarro from Panama.

Your report is a high-quality reflection of how business operates in countries rich in resources. The conscience of people still is very cheap. When we talk about professional labor, it is a disadvantage for a country like Peru. I would like to know why Americans can work there freely and Peruvian professionals can not work freely in the U.S.

Yanacocha is the richest gold mine in the world, but that classification does not mean anything to the poverty created in Peru by corporations, which do not have any flag or conscience or "social responsibility." There needs to be reform.

Back to the EXCELLENT REPORT, the lobbyist is an illegal element in politics and also immoral. I wonder in a country with the rule of law (the U.S) why they persist in this branch of government? Could we call the United States the biggest corrupted government of the world? Corruption is part of the U.S. as long as there are lobbyists in Washington D.C. Thanks a million.

Fran Manns
Toronto, Ontario

I considered the program almost fair although the reporter is forgettable because of his ignorance of tech issues and the usual media bias against business.

At the end of the program, though, the emotional appeal against mining came up full bore in discussing the $1 billion worth of gold left behind due to Newmont not being permitted to extend the operation to a historical watershed.

I would really be interested to know the history of that major news, but the piece was very cloudy, emotional and incomplete. Usually there's a populist leader with his own political agenda behind mobilizing and scaring people to the extent that they behave that way against their better long-term interest.

Incidently, Frontline broke the Canadian disclosure law. If one cannot mine the deposit, strictly speaking, it's worthless. It can't be worth $1 billion. Not to mention the details you were talking loosely about in terms of market value before discounting the cost of extraction -- wages, fuel, infrastructure, chemicals, depreciation, ammortization and taxes. Most of that $1 billion would have stayed in Peru.

And, after all, Fujimori is no longer around. Fujimori, you may have reminded viewers, was responsible for jailing the very violent populist 'Shining Path' Maoist guerrillas who retarded the growth of Peru for 30 years. But I digress...

What isn't mined from the ground in the United States, Peru and Africa makes a very short list, and mining companies are on the leading edge of redeveloping countries and initiating prosperity in countries that have had misguided leadership in the past. And the human race would not have evolved without metal. If you want to return to your cave, give up all your 21st century comfort.

Otherwise, deal with it. Cyanide is a chemical, and it's a poison, but mind poison -- like bias, ignorant reporting of highly technical issues -- is more deadly in the long term.

I can hear your editorial staff making excuses even as I mail this off. It's discouraging to see bad reporting from such a lofty platform...and I assume you think you have the moral high ground. Think again.

Carol Davidek-Waller
Kirkland, WA

I thought FRONTLINE/New York Times failed to report fully and honestly on this issue. It came across as a PR exercise designed to polish the image of Newmont Mining -- once fallen but remade as a paragon of virture and social responsibility. It did not ring true. Most of the time was spent on the perspective of Newmont mining. The transgressions of the company were glossed over. There was no followup to their alleged newfound social/environmental conscience; only statements by Newmont management.

As to the "accidental" mercury spill, if you have done any reading on corporate polluters you will know that spreading toxins over large distances via the highway system is standard operating procedure. It was done in this country with impunity and it is difficult to believe they wouldn't be using the same methods elsewhere.

It is not believable that hard-pressed farmers and villagers would take to the streets in a country with a repressive government if the behavior of Newmont were not egregious.

Graft, corruption, pollution and environmental havoc are the tip of the iceberg when it comes to the behavior of transnational corporations, particularly extractive industries.

It is an oft-told tale that not only do these companies destroy the living of those downstream from their operations, they exploit their workers unmercifully. No information was given regarding the plight of Peruvian workers. One only has to think back on the misery of South African gold miners to wonder about employment practices in Peru.

The biggest complaint is that countries that host these companies are left with a whole host of problems, both environmental and social, but get little benefit from having their natural resources exploited. The lion's share of the profits belong to Newmont.

It is the sort of exploitation that sparks revolutions.

Another chapter to this story is that nations that try to nationalize their industries out of the hands of corporate America often have the CIA or an invading army to deal with.

This production may meet the standards of the badly degraded New York Times, but it doesn't meet the standards one has come to expect from Frontline.

Frank Iha
Los Angeles, CA

As a Peruvian national currently studying in the U.S, I am not at all surprised by the facts brought forth in the show. It is a well-known reality by most of us ( well informed) Peruvian citizens that the environmental atrocities and unashamed total disregard for the inhabitants of these poor rural communities, by multinational corporations, is unfortunately, an ongoing problem. It is the name of the "Capitalistic" game to put profits before anything else, including the welfare of human beings.

I admire the "campesinos" in Cajamarca who stood up to the multinationals, and stopped this mining company from further destroying their sacred land. These are the everyday heroes who give us hope for a future where, despite the menacing tentacles of the giant American and European multinationals reaching every virgin corner of the globe for riches and profit, one day the human justice and equality that should be, shall prevail.

Tucson, AZ
I completely disagree with this article. You did not research the other side of the news. You did not mention that Father Arana worked for an NGO. I am really disappointed with the New York Times because it was not serious. How is it possible that one newspaper of this level did not research all sides? You just listened to one position. There is some truth to what happened but not from the point of view you use. It is a political issue in Peru. I hope you will show the good things the Yanacocha mine is doing for my city Cajamarca.

John Dunlap
Dallas, TX

This was an excellent program -- well-balanced and informative.

Tacoma, WA
This extraction of resources in South America is not just in the realm of gold but exists with other minerals as well. Countries like Canada, the U.S. and France have been extracting all resources for quite some time now.


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