Tucked between two desert ridges in southern Peru, Relave looks like any of the hundreds of ramshackle mining towns that blight the landscape in the world’s sixth-largest gold exporter.
Its name in Spanish means “tailings,” a nod to the heaps of mining waste that the town, a sprawling collection of wooden shacks and simple concrete huts, sits upon.
However, Relave is also home to Aurelsa, one of the first small-scale mines in the world to produce gold certified and marketed as “ethical,” as part of a scheme aimed at reducing the harmful impact of illegal mining in mineral-rich developing countries.
“When we arrived we didn’t have anything... Now we’re exporting internationally,” said Juan Coronado, the chief executive at Aurelsa who came to Relave in the late 1980s to sift through what was left of an abandoned gold mine after leaving his family farm in the Andean highlands.
He used to collect the abandoned mine’s tailings, mix them with mercury, and sell the amalgam to middlemen in a nearby town.
Then he joined forces with a small group of illegal miners to set up Aurelsa as a legal company in 2000, paying taxes and abiding by industry regulations.
It struggled at first to compete with illegal operations that had virtually no overhead, but in 2011 it opened talks with the Alliance for Responsible Mining (ARM), an advocacy group that seeks to improve small-scale miners’ working conditions through direct sales to overseas customers.
Aurelsa, with 45 employees, made its first direct international sale in June last year, 1kg of gold certified as “ethical” by ARM. It has since exported another 10kg of ethical gold.
While Aurelsa still sells some gold to middlemen, it hopes that all of its production — currently at 2kg to 3kg per month — will soon be marketed and sold as ethical gold.
There are three other mines like Aurelsa in South America and last year they exported a combined 360kg of ethical gold to boutique jewelers in the US and in Europe.
Miners at Aurelsa work in well-lit tunnels and take home regular paychecks, a vast improvement over other mines in Relave, a town of about 4,000 people.
Across from Aurelsa’s active mineshaft, hundreds of illegal miners dig without protective gear at La Capitana, an imposing hunk of rock that locals say has been mined for more than two centuries.
“In any one of those, you’d have to crawl to get inside, and you wouldn’t be able to see anything,” Aurelsa engineer Daniel Arcos said.
As the price of gold soared to record highs over the past decade, hundreds of thousands of poor people from Peru to Indonesia have scoured rivers and mountains for the ore at makeshift mines that operate outside of the law.
Working without environmental and legal permits, they typically use large amounts of mercury to separate the precious metal from rock, often handling the neurotoxin with their bare hands and inhaling its fumes when it is burned off.
Miners sell their nuggets to middlemen and processing plants that refine the metal before shipping it abroad to refineries, where ore collected from all over the world becomes bullion.
Refineries source most of their gold from large mining firms that operate globally, though industry experts say there is no way to tell for sure where the ore originally came from by the time the bullion is sold to dealers and consumers.