perumin 31: engineering permitting requirements for mining projects in peru and their challenges

Permitting in Mining Projects and their Challenges in Peru

Miguel E. Gutierrez, P.E.

Knight Piésold and Co.

Denver, CO

Objectives

• Importance of permitting in the financial viability of a mining project

• Permitting process for mining projects in Peru

• Overview of selected international cases


1. Regulatory Framework and Investors

2. Permitting Process for Mining in Peru

3. Permitting Process: International Cases

4. Conclusions and Recommendations

Regulatory Framework and Investors

• The permitting process should be holistic managing stakeholders interests with transparency and reliability

• Investors favor permitting regimes with regulations that are: – Clear (in content and timeline) – Rigorously and consistently applied – Reasonable

• The permitting process is assessed by finance entities to evaluate the viability of a project and answer: WHERE TO INVEST?

Permitting Process for Mining in Peru

1. Environmental and Social Impact Assessment (ESIA)

2. Beneficiation Concession (“Concesion de Beneficio”)

3. Mining Permit (“Autorizacion para el inicio de actividades mineras de explotacion en concesiones mineras”)

4. Water Permits


• Environmental and Social Impact Assessment (ESIA): – Legal requirements

– Base Line-Environmental

– Base Line-Social

– Alternative Analysis

– Project Description

– Impacts Assessment-Environmental

– Impacts Assessment-Social

– Impact Prevention, Mitigation and Monitoring

– Community Relations Plan

– Mine Closure


• Beneficiation Concession (“Concesion de Beneficio”)

– Confers the right to extract or concentrate minerals and to recover metals through processing

– Granted by MEM

– Detailed engineering required for the Metallurgical Process


• Mining Permit (“Autorizacion para el inicio de actividades mineras de explotacion en concesiones mineras”) – Confers the right to begin

mining operations – Detail engineering

required for infrastructure associated with the mine operation


• Water Permits

– Surface Water License (use of water for mining activities)

– Ground Water License

– Use of water for construction

– Discharge Permits

– Creek crossing

– Other

Permitting Process: International Cases

• Behre Dolbear Group - 2012 Ranking of Countries for Mining Investment Where “Not to Invest” used criteria: – Country economic system – Country political system – Degree of social issues affecting

mining – Delays in receiving permits – Degree of corruption prevalent

in the country – Stability of the country's

currency – Competitiveness of country's

tax policy

• Top countries where to invest (out of 25 countries): – Australia – Canada – Chile – Brazil – Mexico – USA – Colombia

• Peru ranked 9th


• Australia (Queensland) – EIS granted by “Coordinator General” rather than

the Department of Environment and Heritage Protection

– EIS approval focus is in protection to the environment

– Secondary permits are required after EIS is approved: water extraction, discharges, creek crossing, indigenous heritage agreements, and others


• Chile: – Taxation model impact in the mining industry

– National government has ownership of all minerals and mineral concessions which are granted by civil court with no intervention from other authorities

– A comprehensive ESIA is required

– Water Permits is administered by a National Water Agency

– Additional permits are required according to the phase of the project: exploration, construction, operation and closure


• United States (State of Nevada) – Mining industry in Nevada is

large and well established – Mining is regulated by State

and Federal agencies – The permitting process is

extensive and complex including environmental and social considerations

– Despite lengthy timeframe it provides transparency and fairness

– Resulted in a reliable system for all stakeholders

Conclusions

• Proper engineering design including state of the art practices minimize environmental impacts inherent to mining operations – Waste management (including tailings

management)

– Water management (including acid drainage)

• Understanding the design will allow a faster permitting process. Local communities need to be informed to avoid social issues

Conclusions

• Regulations in Peru are relatively new and needs time to mature

• A clear permitting system with timely results will attract investment in mining

• Successful international cases were discussed for improvement opportunities

• The permitting system should be in accordance to local conditions which include the environmental, social and political scenarios

Recommendations for the Peruvian Permitting Process

• The permitting process should be: – Clear (in content and timeline) – Rigorously and consistently applied – Reasonable

• Consider greater stakeholder engagement in regulations framework with emphasis in local participation

• Establish a process for stakeholders to communicate concerns • Consider implementation of world recognized HSE standards • Annual performance reports on social and environmental matters

should be prepared • Continue review of current regulations to identify opportunities for

improvements

perumin 31: engineering permitting requirements for mining projects in peru and their challenges

Presentations & Public Speaking

mining projects

mining investment

metallurgical process

international cases4

regulatory framework

social impact assessment

actividades mineras

ranking of countries