We spoke with David Silva, the company's general manager, about the development of the circular economy in mining and the formalization strategies aimed at artisanal miners.

“Illegal mining is not an issue here. What we do is work with miners who are formal or in the process of formalization with all their documentation in order.” David Silva is the general manager of Paltarumi, a Peruvian processing plant dedicated to the collection and processing of gold ore. Its facilities are located in Paramonga, 200 km north of Lima, in a desert area with no rivers or lakes nearby.

While this feature poses a challenge for safety, it also allows the company to minimise its environmental impact by reducing the risk of contamination and favouring sustainable practices. Since 2017, its main shareholder, businessman Jimmy Pflucker, has been committed to this approach and, in parallel, uses suppliers from artisanal mining, as well as small and medium-sized mining.

Although, as Silva points out, these partners must commit to joining the Comprehensive Registry of Mining Formalization (REINFO), a platform promoted by the Peruvian government. Under this slogan, Paltarumi's controls include the verification of legal documents and updated records.

“We validate that they are companies that pay taxes, have collaborators, workers on payrolls, and that provide labor benefits. Something we recently implemented is asking miners to send a photo with the coordinates of the work where the mineral is extracted to cross-check the data with the information they declare in the REINFO. Once these requirements are met, the miners sign a mineral supply contract with legalized signatures,” Silva explained to AméricaEconomía .

The mention of controls is not a coincidence. In April 2021, the Peruvian Prosecutor's Office opened an investigation into the company for money laundering. It was finally archived in December of the same year and later in 2024, a witness in the case revealed in a sincere confession that Javier Miu Lei, owner of the gold processing company Lomas Doradas, used influence peddling to open the legal proceedings against Paltarumi. This discovery soon undermined the credibility of the accusations and currently, the Prosecutor's Office considers the company to be the aggrieved party.

“We have a series of procedures in the area of compliance . Using our anti -money laundering software , we filter the RUCs of suppliers and the DNIs (identity documents) of representatives to see if they have a negative background,” Silva adds.

SUSTAINABLE PROFITABILITY

Once the impasse was overcome, Paltarumi closed 2024 as Peru's tenth largest gold exporter, according to the Andean country's Foreign Trade Society (COMEX). To be specific, the annual gold processing capacity is 127,000 tons and the total investment in the Paramonga plant, from its construction to the present, is around US$ 40 million.

Much of the investment is allocated to technology to improve operational efficiency. The implementation of advanced equipment for dosing cyanide and soda, as well as oxygen injection systems in the tanks, is noteworthy. Since extracting gold from raw ore is not a simple task, these machines seek a cost-benefit balance that allows the investment to be recovered and profitability to be increased.

Finally, when the mining tailings are obtained, the company reuses these wastes by taking them to a flotation plant to obtain a gold concentrate, as well as material to make bricks and tiles that are used in the construction of new areas of the plant. “Our goal is to have zero environmental liabilities. We have done some tests that certify the hardness of the bricks and how their contaminants have been destroyed by flotation,” says Silva.

This is a circular economy model that has been replicated in the organic sector through the construction of a mini farm and a nursery at the Paramonga plant. Currently, the facilities house alpacas, guinea pigs, sheep, among other domestic animals, under the premise that mining can coexist with the environment.

Paltarumi uses guinea pig excrement as fertilizer and the work of Californian worms to obtain humus, the main element of fertile soil. This organic compound is used to maintain the green areas of the plant and to plant hydroponic plants that are then used to feed the animals, thus renewing the circular economy.

“Once we have a considerable population of guinea pigs and worms, we want to deliver this circular economy model to a community so that they can be self-sustaining. We want the population to stop buying fertilizers for their crops and instead, be able to generate their own humus,” says Silva.

Talking about ties with the locals, Paltarumi maintains a close relationship with the farming community of Pararín. In addition to social events such as leadership workshops, the company has supported with heavy machinery to level the ground of Nuevo Pararín, a settlement that the community plans to build on Litera beach, off the coast of Paramonga.

THE CONTROVERSIES OF THE MINING SECTOR

Asked if Paltarumi’s arrival in this town north of Lima caused skepticism among the locals, Silva denies it. “As we are not a mine, but an industrial plant, there is a difference with the mine per se. And the peasant community of Pararín is located three hours from here, so we have never felt a negative attitude towards mining. We are willing to help the community as much as possible,” he says.

Another sensitive point in mining is the relationship between employees and their superiors. In this regard, Silva believes that a common mistake is to establish long work schedules. In fact, some exceed 20 days in Andean towns where distractions are minimal and staff are susceptible to developing stress.

For this reason, he believes that one of Paltarumi's greatest assets is its location and the nature of its facilities. In addition to the proximity to the sea and the presence of green areas, there are recreational areas such as a football pitch, gym and board games. Recently, some of the walls in different areas have been decorated with urban art inspired by mining activity.

Finally, it should be noted that in Peru, the six-month extension of REINFO by the government of Dina Boluarte caused controversy, because various specialists accused the law of favoring illegal miners to continue operating. In response to these criticisms, Silva recognizes that the Peruvian State should intervene in a more efficient manner to have resources available to address all mining cases.

"While it is true that there is a sector that takes advantage of REINFO to market gold that is extracted in other ways, we work with groups that really want to formalize," he responds.

In this way, with its commitment to sustainability and the circular economy, Paltarumi seeks to position a responsible mining model in the flagship sector of the Peruvian economy. However, success will not only depend on its initiatives, but also on effective collaboration with the State and local communities to ensure long-term sustainable development.