COMMUNITY RELATIONS IN AMERICAS

Context

  • The national government of Pedro Pablo Kuczynski, without a majority in Parliament, has struggled to assert its pro-business economic policies
  • Mining remains the mainstay of Peru's economy with a current project portfolio of almost US$50bn and another US$10bn in new projects being proposed for 2018
  • While not as numerous as in 2016, community protests against mining occur regularly, including in the Cajamarca province, which is home to our Cerro Corona mine as well as Newmont and Buenaventura's stalled Yanacocha project. One of the projects expected to start soon in Cajamarca, Southern Copper's Michiquillay copper mine, has already established a US$130m social fund run with local communities
  • Cerro Corona is located in the district of Hualgayoc, where agriculture and cattle raising are the main economic activities. The mine's direct area of influence include the city of Hualgayoc and six rural villages. Around 6,000 live in the area of influence (2011)
  • Poverty in the Cajamarca region, including Hualgayoc, is prevalent with 40% of children under the age of three suffering chronic malnutrition. Education levels are also low by national standards: 11% of men and 39% of women are illiterate. While 90% of the district's population now has access to electricity, only 40% have access to piped drinking water and only 7% live in sewered households
  • Cerro Corona's latest perception study (2016) indicates that the main needs of our local communities are access to drinking water, employment and support for their economic activities

Build relationships and trust

  • During 2017, our community relations activities were focused on strengthening trust with our key stakeholders. Our community relations strategy was revised to adjust to Cerro Corona's new LoM (until 2030)
  • We actively support and attend the monthly dialogue and consultation round table in Hualgayoc, which is chaired by the district mayor and includes community representatives. The majority of our community projects are approved at these sessions
  • A number of engagements take place with communities on a regular basis, including guided visits to Cerro Corona (almost 72% of pupils in the district have participated). We also sponsor a number of events, including religious festivals, health campaigns and a radio contest for school students
  • We are relaunching some of our community projects in line with principles set out in government's Works for Taxes system, which lets us recover some of our investments in social projects against our income taxes

Create and share value
Project 1: Water supply to communities

During 2017, one of our main community goals was to bring permanent, high-quality, drinkable water to our communities, in line with our goal to ensure that all our impacted communities have access to clean water for both domestic and agricultural purposes. During 2017 and 2018 three main projects were completed or are in development:

  • The construction of the Pilancones pumped water system was finalised in 2016 and during 2017 was maintained and operated by the community, ensuring continuous water supply
  • Construction of the water systems for the Kiwillas and Lipiag hamlets' commenced in 2017 and will be completed in early 2018. The construction involves 19km of distribution piping, 134 house connections, three water reservoirs and three water catchments
  • The Cuadratura water project is set to commence this year. Development will be in three stages and includes structural improvement works on the Cuadratura dam (water source), a new water treatment plant, an 80m3 reservoir, water facilities and pipelines. The project is set for completion in mid-2018

Costs to date: US$870,000

Benefit to the community

Over 200 families in the Pilancones hamlet now have permanent access to drinking water. The Cuadratura dam water system and the Kiwillas-Lipiag projects will provide water to more than 4,500 inhabitants at a low cost.

Benefit to Gold Fields

This project strengthens our social licence and reputation in a region where many mining companies have experienced water-related conflicts with their local communities.
Project 2: Development of local suppliers
A four-year project to improve the competitiveness of our host community suppliers was finalised in 2017. This project was developed in partnership with Swisscontact. The main achievements of this project are:

  • 77 local suppliers were analysed and improvement action plans implemented
  • 34 of these suppliers increased their competitiveness
  • 14 local suppliers obtained a quality certification
  • Eight suppliers won services contracts from companies other than Gold Fields

Workshops were also offered to improve service delivery and improved machine efficiencies.

Costs to date: US$700,000 (since 2014)

Benefit to the community

Individual host community suppliers will derive long-term benefit from targeted plans to help them to improve their competitiveness and to diversify their customers' portfolio, while their communities will have more employment opportunities.

Benefit to Gold Fields

With this project Gold Fields will be able to obtain a better service from its local suppliers, while also helping to increase local employment.
Other material value creation projects
  • Our cattle-breeding programme continues with over 500ha of improved pastures developed during 2017, leading to an average 10% increase in milk production among farmers we support in the district.

    • Costs to date: US$1.28m

  • The 'Adapting Together' programme in 2017, aimed at supporting appropriate policies to mitigate the impact of climate change in the Hualgayoc district, led to the reactivation of the municipal environmental committee. Gold Fields also funded the irrigation system for 60ha of potential agricultural land.

Costs to date: US$160,000
Manage risk and impact
Project 1: Houses with high risk of collapse in Hualgayoc

Risk: Possible social protests set off by the collapse of houses with structural damage in Hualgayoc City.

Action:

  • After a first assessment, and with the participation of the municipality and community, nine houses have been rebuilt since the project started in 2014
  • A second assessment took place in 2016-2017 identifying 28 houses with serious structural damage. Net reconstruction of 22 houses to commence in 2018. Six houses to be abandoned and demolished

Spend to date: US$1.04m (since 2014)
Project 2: Restrictions for raising of our TSF above the Las Tomas spring level

Risk: Protests by the Manuel Vasquez Association (MVA), a local community organisation.

Action:

  • Raising of the water spring in line with the legal and regulatory permits in 2016
  • Construction of 12km of the MVA water system pipeline, benefiting 1,500 households within 18 hamlets was completed in 2017. A further expansion of the MVA water system is currently being evaluated
  • Construction of a platform around the Las Tomas water spring - to separate it by 80m from the TSF - to commence in 2018

Spend to date: US$4m (since 2015)
Project 3: Exploration agreements with communities

Risk: Without consent from local communities, no exploration activity can take place. Exploration is important for further life extension of Cerro Corona.

Action:

  • Extensive stakeholder engagement activities in communities (medical campaigns and educational support)
  • A pilot exploration campaign took place in La Tahona Baja hamlet during 2017, with the participation of the community and employing members of the community
  • Further engagement with the Cuadratura hamlet to implement the signed exploration agreement
  • Continued negotiations to finalise an exploration agreement in two communities (Tranca de Pujupe and El Tingo)
  • Identification of key stakeholders in four communities concluded: Chulipampa, Tumbacucho, Vista Alegre Alto and Vista Alegre Bajo.

Measure actions and impacts

SED spend in Peru 2014 – 2017

Peru SED contributions by type 2017 (%)
 
Grievances

Twelve grievances were recorded during 2017 with five carried over from 2016. Combined, six related to the alleged impact of blastings from the mine, four were environmental, two related to social development and five were employment-related. Eleven of the grievances were resolved, while six are still being investigated in dialogue with the complainants, including four related to houses in the Pilancones hamlet, allegedly damaged by the mine's blasting.