Ecological Jewelry with Mining Social Responsibility
Ecological Jewelry with Mining Social Responsibility
Business Model Description
Create and market eco-friendly jewelry, revaluing Peruvian gemstones, promoting legal and sustainable ASGM mining, using certified and responsible materials, and establishing fair and equitable business relationships with suppliers and employees.
Expected Impact
Involving artisanal and small-scale miners (MAPE) in the value chain of formal businesses for responsible production with social impact.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Macroregion Selva
- Macroregion Norte
- Macroregion Sur
Sector Classification
Extractives and Minerals Processing
Development need
River pollution is caused by the discharge of mining tailings (5). In 2020, 7956 environmental mining liabilities were identified (6). In 2020, the Mining industry reported 175,443,053 m3 of wastewater discharges (6). Mining accounts for 8.24% of workplace accidents (7).
Policy priority
By 2030, the Peruvian state will have achieved regulatory status, improvement of environmental performance, working conditions, and competitiveness of small-scale and artisanal mining, as well as the eradication of illegal mining (38).
Gender inequalities and marginalization issues
Direct employment in mining over the last 10 years has increased by 30%, but female participation has only grown by 1%, going from 5.6% in 2010 to 6.6% in 2019 (9). The participation of women in the mining labor market in Peru is at 6.7% (10).
Investment opportunities introduction
The production of the mining and hydrocarbons sector grew by 7.4 percent in 2021 (3)
Mining investment exceeded US$ 5,200 million in 2021, growing by 21.1% year-on-year, surpassing the projected target (4). There is a 6% gender pay gap between men and women (14)
Key bottlenecks introduction
Of the 132 socio-environmental conflicts, 65.2% are related to mining activity (8) The mining business sector is closely linked to strong opposition to key reforms that the country needed to implement and faced staunch resistance in this sector (12).
Metals and Mining
Development need
Illegal gold mining reached a crisis level in the southern Peruvian Amazon between 2017 and 2018, destroying more than 1,200 hectares of forest in La Pampa (1).
Approximately 150,000 hectares of forests are lost each year (2). As of January 2021, only 1% of the miners in Madre de Dios who were registered in the formalization process had successfully formalized (13).
Policy priority
National Multisector Policy for Small-Scale Mining and Artisanal Mining by 2030: This policy aims to reduce social and environmental precarity, increase access to formal value chains for small-scale and artisanal miners, improve their access to mining rights and land tenure, and enhance inter-institutional coordination among entities involved in small-scale and artisanal mining.
Gender inequalities and marginalization issues
Women's participation in Peruvian mining represents 6.87% in medium and large-scale mining, 7.17% in small-scale mining, and 9.62% in artisanal mining (24).
Investment opportunities introduction
According to MINEM (Ministry of Energy and Mines), the gold production from artisanal and small-scale mining (MAPE) is approximately 20%, which represents around 15 to 20 tons per year (32). There are more than 300,000 miners who work directly in this activity, providing a source of direct and indirect employment for over 1 million families (35).
Key bottlenecks introduction
There are significant corruption issues in artisanal and small-scale mining (13). Barriers to access formal value chains, limited accreditation to mining rights, and weak state institutional framework (27).
Metals and Mining
Pipeline Opportunity
Ecological Jewelry with Mining Social Responsibility
Create and market eco-friendly jewelry, revaluing Peruvian gemstones, promoting legal and sustainable ASGM mining, using certified and responsible materials, and establishing fair and equitable business relationships with suppliers and employees.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
The production of gold by artisanal and small-scale gold miners (MAPE) in Peru is approximately 30 to 38 tons per year. The value of gold per gram is approximately S/ 222.94 (16). Additionally, about 50% of the world's gold is used by the jewelry sector (36).
The export of Peruvian jewelry and goldsmithing reached US$10,694,000 in January 2022, representing a 17.6% increase compared to 2021 when it was US$9,907,000 (15).
Indicative Return
20% - 25%
20% - 25%
The study conducted for the investment in an artisanal mine in Arequipa revealed that an approximate investment of US$ 177,322.69 is required, part of which is through a loan with an annual effective interest rate (TEA) of 30% (34).
Investment Timeframe
Medium Term (5–10 years)
Based on the interviews conducted and considering mining operations, it is estimated that the return on investment period for mining projects is typically greater than 5 years (34).
From the feasibility study for an artisanal mine in Arequipa, the estimated investment period is 5 years (35).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Market - Volatile
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
In Peru, there are over 300,000 artisanal and small-scale miners, of which only 14,932 are formalized (21).
Artisanal and illegal mining is the primary cause of environmental pollution in Peru (22).
During 2022, there were 35 fatal accidents in the mining sector, not including informal or artisanal mining (23).
Gender & Marginalisation
In REINFO, 30% of the 100 registered individuals are women. (25) Among women miners and "pallaqueras," 20% maintain single-parent families, while 77% of women report doing household chores, often doing them alone without any assistance or support, regardless of whether they have a partner or not. (24)
In Amazonas, one of the main problems is mercury contamination, primarily due to illegal mining. Over the past 20 years, more than 3,000 tons of mercury have been discharged into the Amazon rivers. (26)
Expected Development Outcome
Promote the formalization of artisanal and small-scale miners in Peru and integrate them into formal value chains.
Promote responsible mineral (gold) production with environmental standards and incentives.
Financial inclusion of ASGM (Artisanal and Small-Scale Gold Mining) as an incentive to transition out of the informal sector.
Gender & Marginalisation
Contribute to closing the gender wage gap in the ASGM sector, increase female participation, and highlight the involvement of women in the value chain, among other objectives (24).
Reduce the use of mercury in artisanal and small-scale mining (28).
Primary SDGs addressed
8.3.1 Proportion of informal employment in total employment, by sector and sex
According to the DGFM (Directorate General of Formalization Mining), Arequipa, Puno, Madre de Dios, Ayacucho, Apurímac, and La Libertad make up 70% of miners in the formalization process (29). According to the Ministry of Energy and Mines, the mining and extractive sector employed more than 200,000 people in Peru in 2020, which accounted for 3.68% of the Active Labor Force (32).
By 2030, the goal is to increase the number of formal miners with certification in gold production in the formal market by 34% (27).
9.4.1 CO2 emission per unit of value added
In the past 10 years, illegal mining has destroyed more than 50,000 hectares of forests, and extensive areas of rivers, lakes, and wetlands have been contaminated with mercury (26).
By 2030, around 70% of both formal and informal miners conduct their activities with environmental standards in place to reduce environmental impact. (27)
12.2.1 Material footprint, material footprint per capita, and material footprint per GDP
12.2.2 Domestic material consumption
Unregulated ASGM (Artisanal and Small-Scale Gold Mining) operations require three kilograms of mercury for every kilogram of gold processed in areas near rivers (26).
The goal is to reduce the environmental impact of artisanal mining on the quality of water and the Amazon rainforests.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Indirectly impacted stakeholders
Planet
Corporates
Outcome Risks
Lack of profitability in the activity, depletion of mineral resources, and environmental degradation due to inappropriate mining practices.
Exposure of workers to injuries, illnesses, and workplace accidents due to the lack of appropriate safety measures.
Gender inequality and/or marginalization risk: Lack of access for women to job opportunities, limiting their ability to improve their quality of life and economic independence.
Impact Risks
Soil and water contamination due to the use of materials for mineral extraction.
Deforestation caused by the removal of vegetation for mining extraction, resulting in the loss of natural habitats and biodiversity
Gender inequality and/or marginalization risk: The exposure of women to additional risks and hazards in the workplace due to the lack of proper safety measures, as well as discrimination and gender-based violence.
Impact Classification
What
A positive and significant outcome as it allows for the formalization of artisanal and small-scale mining (MAPE) for responsible mineral production.
Risk
It can generate inequality and more social conflicts if the business model does not work hand in hand with artisanal and small-scale miners (MAPE).
Impact Thesis
Involving artisanal and small-scale miners (MAPE) in the value chain of formal businesses for responsible production with social impact.
Enabling Environment
Policy Environment
National Multisectoral Policy for Small-Scale Mining and Artisanal Mining by 2030 aims to implement integrated, long-term solutions to achieve responsible and sustainable small-scale mining activities that benefit both society and the environment (27).
Financial Environment
Financial incentives: The growth projections for the Peruvian mining sector are high, as well as the outlook for the jewelry sector.
Fiscal incentives: The tax revenue from formalized mining in September 2022 alone was S/ 14,259 million (32).
Other incentives: The creation of decent employment opportunities for communities near artisanal miners is a crucial goal.
Regulatory Environment
Law No. 31007, which restructures the registration in the Comprehensive Mining Formalization Registry (REINFO) of natural or legal persons engaged in the activities of exploitation or beneficiation in the small-scale mining and artisanal mining segment
Supreme Decree No. 032-2020-EM, which establishes regulatory provisions for access and permanence in the Comprehensive Mining Formalization Registry.
Legislative Decree No. 1293, declaring the restructuring of the formalization process for small-scale mining and artisanal mining activities to be of national interest
Legislative Decree No. 1105, which establishes provisions for the formalization process of small-scale mining and artisanal mining activities
Supreme Decree No. 014-92-EM, which regulates small-scale mining and artisanal mining activity in Peru.
Marketplace Participants
Private Sector
Jewelry companies, such as SISSAI, create high-value products in their market.
Government
The Ministry of Energy and Mines and the Ministry of the Environment work together through policies for formalization and environmental regulations.
Multilaterals
Swiss Cooperation, through the Responsible Swiss Gold Initiative, has collaborated with the Ministry of Energy and Mines (MINEM) to support their strategies and activities aimed at facilitating formalization and establishing predictable and effective mechanisms for the sustainability of the process.
Non-Profit
"Alianza por la Minería Responsable" accompanies mining organizations in Madre de Dios. "Hub Innovación Minera" is an associative program that arises from the mining companies themselves, in their quest for a mechanism that facilitates innovation and collaboration in the sector.
Non-Profit
Conservación Xlabs is involved in the ARTISANAL MINING GRAND CHALLENGE, a project or initiative related to artisanal mining conservation.
Non-Profit
The National Society of Mining, with the aim of promoting the development of the mining activity.
Target Locations
Macroregion Selva
Macroregion Norte
Macroregion Sur
References
- (1) Conservación Amazónica (2022), ILLEGAL MINING IN THE PERUVIAN AMAZON - 2022 UPDATE.
- (2) USAID (2022), PREVENIR: Combating Environmental Crimes in the Peruvian Amazon.
- (3) BCR (2022), Memoria Anual 2021
- (4) MINEM (2021), Mining Statistical Bulletin, 12th Edition 2021.
- (5) INEI (2023),Environmental Statistics - No. 2 (February).
- (6) INEI (2022), Perú: Yearbook of Environmental Statistics.
- (7) MINTRA (2022), Workplace Accident Notifications, Hazardous Incidents, and Occupational Diseases - December 2022.
- (8) COMEX (2022), Social conflicts related to mining activity have a serious impact on the national economy.
- (9) MINEM (2020), Empleo Minero 2020
- (10) Institute of Mining Engineers (2020), GENDER EQUITY IN THE MINING INDUSTRY, A COMMITMENT OF IIMP.
- (11) Ojo Público (2021),Investment without development: poverty is increasing in the mining regions of the country.
- (12) Observatory of Mining Conflicts in Peru (2022), Second Semester 2022. "13) USAID (2022), CORRUPTION IN ARTISANAL AND SMALL-SCALE MINING IN THE PERUVIAN AMAZON. "
- (14) PNUD (2022), Women and the Future of Mining.
- (15) Andina (2022), Exportación de joyería y orfebrería peruana creció 17.6% en enero de 2022
- (16) Rumbo MINERO (2022), Small-scale and artisanal mining contributes to over 20% of the world's gold production.
- (17) BCR (2018),The Dynamics of Investment Projects in Peru.
- (18) PNUD (2021), Toward Financial Inclusion for Artisanal and Small-Scale Mining (MAPE).
- (19) ADEX (2022), Reporte de tendencias - Joyería
- (20) INGEMMET (2022), ATLAS DE LA PEQUEÑA MINERÍA Y MINERÍA ARTESANAL EN EL PERÚ
- (21)MINEM (2023), REGISTRO INTEGRAL DE FORMALIZACIÓN MINERA - REINFO
- (22) COMPLUTENSE (2020), Problemas ambientales en la minería aurífera ilegal en Madre de Dios (Perú)
- (23) MINEM (2022), ESTADÍSTICA DE ACCIDENTES MORTALES EN EL SECTOR MINERO
- (24) PNUD (2022), Hombres y mujeres de oro
- (25) USAID (2022),GÉNERO Y MINERÍA ALUVIAL: MUJERES MINERAS EN MADRE DE DIOS
- (26) Actualidad Ambiental (2020), Contaminación por mercurio: un problema que va de la mano con la minería ilegal e informal
- (27) MINEM (2022), Política Nacional Multisectorial para la Pequeña Minería y Minería Artesanal al 2030
- (28) Planet Gold (2022), Entrega de tecnologías limpias para reducir el uso de mercurio en la MAPE de Perú
- (29) Rumbo Minero (2022), MINEM: Hay 10,692 mineros formalizados a la fecha
- (30) Consorcio de Universidades (2022), Policy Brief – Daños ambientales de la minería en el Perú: ¿qué hacer con ellos?
- (31) Instituto de Ingeniero de Minas (2021), Ingreso tributario por minería suma S/ 8,125.6 millones y ya supera 2019 y 2020
- (32) MINEM (2022), Boletín estadístico minero, Edición 9 - 2022
- (33) MINEM (2022), Nota de prensa Más del 50% del oro producido en el Perú provino de La Libertad y Cajamarca
- (34) UPC (2015), Tesis, Evaluación de la Factibilidad Económica-Financiera del ProyectoAurífero Minero"LasAlexas"ubicado en el distrito de RioGrande,provincia de Condesuyos, región Arequipa
- (35) PLANET GOLD (2020), La MAPE en tiempos del COVID-19
- (36) World Gold Council (2023), Gold Demand Trends Q1 2023
- (37) Conservación Amazónica (ACCA) / Proyecto Prevenir de USAID (2022). Estimación de la población minera informal e ilegal en el departamento de Madre de Dios, a partir del uso de imágenes satelitales submétricas.
- (38) MINEM (2019) Visión de la minería en el Perú al 2030