Cotapata Gold Mining Cooperative
With an elevation range close to 4,500m, the Cotapata National Park protects a representative section of the Yungas cloud forest of the department of La Paz, Bolivia. The Cotapata Mining Cooperative has been working in the area since before it was declared a national park, providing a livelihood for more than 100 families and generating a monthly production of 3kg of 95% purity gold.
Even though mining activities have a long history in the area, it was only in 1991 that a group of individuals decided to formalise their activities and establish the Cotapata Mining Cooperative. Currently, the cooperative has 88 associates, of which ten are women. Forty-three associates are active workers, while 45 members are now too old to work inside the mine. The Cotapata Mining Cooperative operates in accordance with strict principles and guidelines, for example, all workers, regardless of gender, receive a salary and are insured to the value of US$10,000 in the event of accident or death. The monthly salary paid to contracted workers is close to US$200, a good wage given that the national minimum is around US$80. Payment to members depends on the profits of the mine, which can vary. The cooperative is affiliated to both the Federation of Mining Cooperatives of La Paz (FEDECOMIN) and the National Federation of Mining Cooperatives (FENCOMIN).
The Cotapata Mining Cooperative is established in a permanent camp beside the mine with no immediate neighbouring community. Most of the families of workers and members live in La Paz so there are no children at the mine site. The community downstream at Chairo is the closest settlement and the cooperative maintains an active and respectful relationship, supporting the local school through donations. With certification, the Cotapata Mining Cooperative will be able to further enhance its relationship with the Chairo community and positively contribute to local development.
The cooperative has both land rights and a mining concession. It also holds the necessary operational and environmental licences to conduct activities within a national park, paying the Bolivian state an annual fee for mineral rights in accordance with the applicable law. However, because the Cotapata Mining Cooperative sells its products to intermediaries, taxes are deducted at the point of sale and at present the cooperative cannot guarantee that these monies are properly declared and paid to the State. Under the proposed certification system, it would be able to sell directly to importers in Europe without the need for intermediaries, assuming direct responsibility for paying the relevant taxes to the State. Such an outcome represents one example of the potential positive impact of certification on the formalisation of mining activities.
The mining itself is underground hard rock. Associates work in shifts of two weeks, living at the mining camp during shifts, and returning to La Paz during rest periods. The Cotapata Mining Cooperative processes approximately 432 metric tons of mineral per month, producing between 2.5 and 3kg of gold with a 93.84% purity. The cooperative then transports the metal directly to La Paz, where it is sold to a trading house for refinement and export. In terms of production, the cooperative’s main challenges are to increase the mineral output by reducing the loss of fine gold and to improve the housing conditions at the mining camp. There is also a need for better health services, improved work conditions with enhanced technology and training facilities at the camp.
The Cotapata Mining Group’s main environmental hurdle in achieving fair trade certification is the construction of a safe dam for amalgamation tailings. The cooperative is currently working on this project with the support of a university, so construction of the dam will commence in the coming months. It already operates a closed circuit mercury processing method, amalgamating concentrates (not whole ore) and using a retort to recover the gold. At present, the first round of tailings, which are rich in pyrites, are sold to a Peruvian trader who transports them to Perú for further processing. In which case, there is still enough gold left in the tailings to make it economically feasible to transport them far from the mine for processing.
Perhaps the main challenges for Bolivian miners in entering the certification scheme relate to the formalisation of sales transactions. Taxes in Bolivia are very high, making the country uncompetitive compared with other mining countries in the region. Most mining cooperatives sell to intermediaries without issuing an invoice, as is the case for the Cotapata Mining Cooperative. The economic feasibility of formalisation is also fundamental to the process. The cooperative cannot export directly and therefore must enhance its performance before undertaking such export activities. A certification premium could break this cycle by providing funds to invest in the mine and improve its overall operation.
In spite of these challenges, the Cotapata Mining Cooperative is well recognised for its high level of organisation and as one of the few gold producing cooperatives that works with a closed mercury recovery system and offers labour security to its miners. Due to its location within a national park, the cooperative has been implementing responsible mining practices for several years and is now seeking certification to reflect such efforts.
Cotapata Cooperative was the first mining organisation in the world to receive the Fairtrade and Fairmined certification in December 2010.