How Goldcorp managed to decrease complaints about its flagship mine in Mexico

Grievances against Goldcorp’s (TSX:G) (NYSE:GG) Peñasquito gold mine in Mexico have decreased by almost 66 per cent in 2018, said Nelson Núñez, Corporate Social Responsibility Manager for Minera Peñasquito, the Canadian miner’s subsidiary in the Latin American country.

Interviewed by MINING.com, Núñez revealed the strategy behind such accomplishment in an area that has seen its share of protests organized by residents of nearby villages who have demanded jobs, compensation for environmental damages, and clean water for their communities.

Besides complying with some of such demands by, for example, establishing a participatory water monitoring program run in conjunction with the community and building a rural health centre in the town of Cedros, Goldcorp decided to take a more inclusive approach to keep locals happy.

The miner partnered with TechnoServe a US-based, trailblazer non-profit that has experience working in communities near extractive-industry projects and whose motto is to connect people to information, capital, and markets.

Together, the miner and the NPO launched an economic development program for small businesses that has been running for two years now and whose results are starting to show.

In addition to the reduction in complaints and work disruptions, the initiative has helped the company establish a permanent communication channel with those who live in the 25 villages around its almost 46,000-hectare mine in the central Zacatecas state. “This offers the possibility of engaging without conflict and of working together for everyone’s benefit,” Núñez said.

From bakeries to clean-water distributors

Sandra and Epifanía run a bakery that is currently making $5,000 a month in sales but, according to Juan Carlos Thomas, Global Entrepreneurship Director for TechnoServe, just a couple of years ago their average was $200 in monthly sales.

When the miner and the NPO called for applications to their program, the women signed up and were selected together with other 140 individual participants. For nine months, they were trained in the arts of studying the local market, identifying new opportunities, developing an action plan to capture such opportunities, and cultivating the skills needed to carry out the plans.

“Now they have improved the product display in their shop and created a distribution network
to reach different villages and sell their products in shops and cafeterias. Goldcorp also provided seed money, which Sandra and Epifanía used to purchase better baking equipment and expand their operations,” Thomas said.

The executive explained that the seed money is provided by the end of the training and it ranges between $5,000 and $15,000. Goldcorp’s total investment in this program adds up to $1 million.

Most of the businesses become suppliers for Peñasquito, as there are parts of the training program focused on easing their way into the mine’s supply chain or that of its big suppliers. “To take one example, Sandra and Epifanía’s bakery sells bread and other products to contractors working for the mine,” Thomas said.

However, the executive emphasized that keeping in mind that the mine’s supply chain is capable of hiring only so many people, one of the goals of the project is to help the residents of the nearby communities look beyond the mine, to other potential sources of income.

They are also trying to promote enterprises that, through innovative approaches, address the area’s most urgent need, that of clean drinking water. “Entrepreneurs have started businesses to purify and package drinking water locally, so it doesn’t have to be brought from some far-away bottling plant,” Thomas revealed.

On average, out of 56 businesses represented in the first cohort, 39 were new and 17 were already established companies. Although there is little data from the former, the executives interviewed said that total revenues for the latter -such as Sandra and Epifanía’s shop- rose by more than 50 per cent.

“In rural communities like those that the project reach, this marks a really significant change. And when we measure again later this year, we expect many businesses will have more than doubled their sales,” the managers said.