Bella Rica Gold Mine Cooperative COMIMACH
The Bella Rica Cooperative is based in the canton of Ponce Enriquez, province of Azuay, southern Ecuador, which overlooks the Guayas river delta, the world’s main banana producing region and home to shrimp farms and cocoa plantations which offer additional important economic activities.
The area experienced a gold rush during the 1970s but after two decades of uncontrolled mining growth around Ponce Enriquez, the Government took steps to promote the creation of cooperatives as part of a World Bank program to support artisanal and small-scale mining (ASM) and the Government of Ecuador. The Bella Rica Cooperative was established in 1993 as a government strategy to formalise ASM and to stem the flow of immigrants looking for a livelihood in gold mining . The miners’ main objectives in forming the cooperative were to legalise their work and obtain mineral rights. Consequently, in 1992, the State granted them a mining concession covering some 1,422 hectares, corresponding to the Bella Rica and Guanache mining areas, together known as Tres de Mayo. The cooperative consists of 141 members, of which 118 are men and 33 are women, grouped into 56 mining societies. Each society operates independently on land that it rents from the Bella Rica Cooperative, contributing US$6,000 towards mining right, which the cooperative uses to cover administration costs, mining patents, environmental restoration activities, education and healthcare.
One of these societies is the Grupo Minero Machala - COMIMACH, an ARM pilot project. It was established in 1998 by three miners (one of them a cooperative member) and now has 22 contracted workers, three technicians and three administrators, of which 27 are men and one is a woman. With the exception of administrative and technical personnel, the miners work under temporary contracts, which range from one to three months. They generally prefer to have flexible agreements so that they can leave at any time.
The lack of an agreement between Ecuador and Perú regarding the rights of migrant workers along the frontier is a cause of particular concern for COMIMACH. Its manager has lobbied the Government to legalise such workers and provide them with access to a social security scheme, demonstrating COMIMACH’s strong commitment to creating positive examples of responsible mining both within the Bella Rica Cooperative and more broadly throughout Ecuador’s ASM sector, through its impressive capacity for generating employment and livelihoods. At the insistence of COMIMACH, its project in Ecuador is the most recent operation to enter ARM’s network of Latin American pilots, displaying exemplary progress over the past three years in areas such as cleaner processing, ecological restoration, health and safety, labour development and environmental management. This has had an important impact on the remaining societies of the Bella Rica Cooperative, three of which have already expressed their interest in becoming certified, sharing the same values in respect of responsible mining.
The Bella Rica Cooperative is affiliated to the Direction of National Cooperatives of Ecuador (Dirección Nacional de Cooperativas del Ecuador), complying with all cooperative governance laws and all relevant mining, labour and environmental legislation. It pays income tax and for mining rights, although each mining society is responsible for paying its own tax.
In technical terms, the Bella Rica Cooperative mines a poly-metallic vein deposit, currently operating through one mine tunnel. Veins are approximately 20cm wide and COMIMACH processes an average of 300 metric tons monthly, producing approximately 10,752g of gold with 95.5% purity annually, which equates to 896g for the cooperative monthly. The Bella Rica Cooperative includes a mine and a processing plant, which also offers processing services to third parties. However, each client’s batch is processed separately and not mixed with mineral from other parties.
Each associate of the cooperative is free to sell his or her gold individually. The metal is sold as doré or fine gold to local buyers, depending on the volume of the production. Buyers pay a value per gram according to the London Bullion Market Association price, discounting 1 to 5% for impurities and trading costs. The incentive to sell to local buyers is that they offer working capital to the miners and/or act as collateral guarantors for the acquisition of new equipment. However, a couple of the larger operators within the Bella Rica Cooperative are already exporting their gold directly.
The main achievements of the COMIMACH operation over the past year include:
- setting up a quality control and traceability system with the necessary paper trail on concentrates and gold;
- promoting the standards and principles of Fairtrade Gold among its associates and workers;
- training workers on the safe management of toxic elements throughout the processing plant;
- increasing gold recovery while reducing waste and establishing clear procedures for solid waste and effluents, using bioremediation to treat cyanidation tailings which are safely stored and detoxified in an impermeable impoundment;
- organising the whole mine and processing plant to be clean, full of flowers and other plants, with separate toilets for men and women; and
- formalising all commercial operations and all migrant temporary workers, offering more stable contracts to those interested in staying.
COMIMACH has also actively promoted responsible mining and Fairtrade-Fairmined certification within the Bella Rica Cooperative, which hosted and partly funded the pre-certification workshop for the whole pilot project network, FLO and FLO-CERT during June 2009.