11 1 Environmental Stewardship
11 2 Digital Water and Environmental Intelligence
11 3 WATER RESOURCES MANAGEMENT FOR DEVELOPMENT, SUSTAINABILITY AND PROSPERITY1 *J. Vidalón1, A. Cordero2 1Specialist in Water Resources Management and General Manager of VVVM Consulting, Perú, (*Presenting author: jvidalon@vvvm.com.pe) (Universidad ESAN – Universidad Continental) 2Economistan and Analyst in VVVM Consulting, Perú, ABSTRACT Water scarcity, climate variability, and institutional capacity gaps are reshaping the role of water in mining from a compliance-driven environmental concern to a strategic determinant of operational continuity, financial viability, and long-term competitiveness. This paper examines how adaptive, basin-perspective mining companies water resources interventions can simultaneously reduce hydrological risk, enhance sustainability outcomes, and strengthen economic performance. Using a mixed-methods approach that combines a systematic review of over 5,000 screened academic publications with in-depth interviews, with senior water managers from large-scale mining operations in Peru, the study develops and tests, in addition, a four-component framework: (i) data-driven and forward-looking water management, integrating monitoring, modelling, and climate stress testing; (ii) water-use efficiency and alternative sources such as reuse and desalination; (iii) basin-level supply augmentation through conventional and nature-based infrastructure; and (iv) governance and structured multistakeholder coordination. The findings show a clear transition from site-level mitigation to integrated basin management, where water is treated as shared infrastructure and as a core input in risk management and investment decisions. Operational evidence confirms that high recirculation rates, alternative sourcing, and climate-informed planning reduce production volatility and exposure to shutdown costs, while basin-scale co-financing of infrastructure and monitoring systems can enhance social license and regulatory stability. The Arequipa case illustrates how large-scale wastewater reuse and shared hydraulic infrastructure can simultaneously improve river quality, expand water availability, and secure industrial supply, demonstrating that environmental restoration and business continuity are not competing objectives. The results support the hypothesis that private sector participation in adaptive basin management is not only environmentally necessary but economically rational, particularly in contexts where public water governance remains constrained. Sustainable water management therefore emerges as a condition for long-term mining feasibility, capable of co-producing 1 The authors would like to especially thank Julia Torreblanca (Vice President of Corporate Affairs at Sociedad Minera Cerro Verde S.A.A.), Oscar Osores (Water Expert and Senior Mine Closure Manager - North America / Barrick Mining Corporation), Edgar Quiroz (Manager of Tailing and Water – MMG Limited Perú) for their valuable contribution to the development of this document through the in-depth interviews conducted, in which, in addition to addressing the topics consulted, they provided their highly informed perspective on water management in mining.
11 4 resilience, shared prosperity, and competitive advantage under increasing hydroclimatic uncertainty. KEYWORDS Adaptive basin management; Mining water sustainability; Climate risk; Water governance; Water-use efficiency; Wastewater reuse; Nature-based solutions; Operational risk; Financial viability. 1. CONTEXT AND PROBLEM STATEMENT Water is the natural resource under the greatest stress. Population growth, pollution, and climate change are tightening constraints on both the quantity and quality of available water. Urban growth, farming expansion, and water-heavy industries are boosting demand as supply drops due to shifting hydrology, groundwater overuse, and ecosystem decline. Recent climate variability has been marked by an accelerated emergence of extreme events linked to the El Niño–Southern Oscillation (ENSO), particularly the increasing persistence of multiyear La Niña episodes since the late twentieth century (see Fig. 1). This shift is associated with changes in the mean state of the tropical Pacific -notably the relative warming of the western Pacific compared to the central Pacific- which modifies key ocean–atmosphere feedbacks and favors prolonged La Niña conditions with heightened socioeconomic impacts (Wang et al., 2023). As a result, ENSO increasingly amplifies the occurrence and intensity of extreme hydrological events, exacerbating floods and droughts across regions (Islam, 2025). Figure 1. Sea surface temperature anomalies showing El Niño and single-year and multiyear La Niña occurrences Source: Wang et al., 2023. These impacts now unfold on a warmer background climate, as 2023–2025 were the three warmest years on record (see Fig. 2), further intensifying the severity of ENSO-related extremes (World Meteorological Organization [WMO], 2026; Copernicus Climate Change Service [C3S], 2026).
11 5 Figure 2. Global annual surface air temperature anomaly relative to the pre-industrial period. The dashed line indicates the 1.5°C threshold; shaded area highlights 2023–2025. Source: Copernicus Climate Change Service (ERA5) data; authors’ elaboration. These dynamics are increasing water stress in regions with structural or seasonal scarcity and even in areas without a historical deficit of water resources. Moreover, these pressures are compounded by gaps in the very systems intended to manage them. In fact, in most countries currently experiencing, or projected to experience, water stress, weaknesses exist in water resources management. These weaknesses manifest in: i) water information, both for climate scenario modeling and for monitoring the quantity and quality of surface and groundwater resources, as well as its use for basin-level decision-making; ii) efficiency in water use, characterized by high losses and limited reuse; and iii) the timely development of conventional and nature-based water supply augmentation projects. Monitoring networks remain fragmented and uneven, with limited hydrometric and piezometric coverage often designed under assumptions of climatic stationarity, reducing their capacity to detect shifts in water availability (European Union, 2024). Continuous water-quality monitoring, QA/QC, and data interoperability are also inconsistent. Although advanced tools - including groundwater geophysics, AI-assisted inversion, environmental isotopes, Earth observation, continuous sensing, and coupled modelling-are increasingly available (Dimech et al., 2022; Mudunuru et al., 2022; Lubczynski et al., 2024), they are not yet routinely integrated into basin-scale management, leaving surface–groundwater interactions and subsurface storage dynamics insufficiently understood. Climate-scenario modelling and hydroclimatic projections are often weakly translated into actionable water management strategies (Suárez-Almiñana et al., 2020). Basin scorecards and medium-lead early-warning systems are generally absent, limiting risk-based operation and adaptive allocation. Water-use inefficiencies persist across sectors. Agriculture accounts for roughly 70% of global freshwater withdrawals (UNESCO, 2024), yet significant volumes are lost through inefficient irrigation and conveyance. Urban systems face similar challenges: in Latin America, non-revenue water averages 38%, far above efficient benchmarks of 15–25% (World Bank, 2022). At the same time, formal wastewater reuse remains limited. Although countries such as Chile and Mexico treat more than 60% of urban wastewater, systematic productive reuse
11 6 remains incipient across the region (OECD, 2025), and alternative source activation is still underdeveloped. Conventional supply-augmentation projects face long development and financing timelines, while Nature-Based Solutions remain limited in scale due to weak valuation frameworks that fail to quantify incremental supply and economic returns. Although addressing these structural constraints is primarily the responsibility of national water authorities, governance fragmentation, financing gaps, and weak inter-institutional coordination delay progress under accelerating climate pressures (Gallegos, 2026). In this context, the private sector -particularly mining- has incentives to play a complementary role. Despite high recirculation, its substantial absolute demand and reliance on supply reliability make water security central to long-term viability. Global experience shows that private co-financing of basin-level initiatives can enhance sustainability while remaining economically rational. However, these approaches have yet to consolidate into a coherent paradigm that integrates climate risk, governance reform, and economic valuation. 2. OBJECTIVES AND SCOPE The objective of this paper is to demonstrate that the effective and appropriate participation of mining companies in actions associated with water resources management with a basin perspective is both economically viable and strategically necessary to ensure long-term sustainability. Far from being solely a regulatory or reputational obligation, corporate engagement in basin-scale water management -through investments in efficiency, reuse, monitoring, infrastructure, and NbS- can lower lifecycle costs, reduce operational and social-license risks, and enhance resilience under climate uncertainty. In contexts where public capacity remains constrained, mining companies are uniquely positioned to co-finance, share data, and implement results-based interventions that deliver public water outcomes while strengthening business competitiveness. The paper argues that sustainability and profitability are not competing objectives but can be co-produced when water is managed as a strategic asset within an integrated, basin-oriented framework. This paper aims to contribute to the objectives of the 27th World Mining Congress by presenting evidence on the critical global water situation and its potential impact on mining, and by demonstrating that investments in water management —and the mechanisms through which mining companies can achieve investments that are both privately and socially profitable— are not only necessary but feasible.
11 7 3. METHODOLOGY OR APPROACH 3.1 Methodology This study adopts a mixed-methods approach, combining qualitative analysis of secondary sources with primary evidence gathered through expert interviews. The design enables a comprehensive assessment of water sustainability in mining by integrating conceptual insights from the literature with practical and operational sector perspectives, both to define a general approach to sustainable water management in mining under current conditions and to identify the fundamental elements that should compose it. Secondary sources were identified through structured searches in major academic databases, prioritizing recent peer-reviewed and gray literature. The platforms consulted included Google Scholar, Scopus, and EBSCO, with particular emphasis on leading waterresources journals such as Water Resources Management. Keywords were combined using Boolean operators (“AND”, “OR”), including “water sustainability”, “mine water management”, “water reuse in mining”, and “water scarcity”. The primary information was collected through semi-structured interviews with senior water experts from some of the largest mining operations, mainly in Peru2. The interviews focused on operational water management practices, risk management under climate variability, monitoring and modeling approaches, efficiency and reuse strategies, and the economic implications of water-related decisions. This qualitative evidence was used to complement and validate findings from the literature, identify gaps between theory and practice, and ground the analysis in real-world operational conditions. The authors reviewed the most recent and relevant literature, focusing on papers that provide robust analytical evidence on how water-related investments contribute to (i) supply risk reduction, (ii) operational sustainability, (iii) economic viability and financial risk mitigation, and (iv) governance improvement. Both primary information (interviews) and secondary sources were systematically classified according to these four analytical dimensions. The resulting body of evidence informed the paper’s conceptual framework and contextual analysis (see Appendix 1). 3.2 Analytical framework The analysis is organized around a general approach and four components of a proposed framework for water resources management in mining, both integrating evidence from the systematic literature review and expert interviews. The general approach assesses whether water sustainability interventions implemented by mining companies within an adaptive basin-scale framework reduce risk exposure, strengthen sustainability outcomes, and enhance economic 2 Julia Torreblanca (Vice President of Corporate Affairs at Sociedad Minera Cerro Verde S.A.A.), Oscar Osores (Water Expert and Senior Mine Closure Manager - North America / Barrick Mining Corporation), Edgar Quiroz (Manager of Tailing and Water – MMG Limited Perú).
11 8 viability. In addition, the main components of these interventions, suggested by the literature, are confirmed and analyzed, based on the same body of evidence. These four components are: (i) Data-driven and forward-looking water resources management grounded in the assessment and monitoring of surface and groundwater resources through updated technological tools, combined with climate-scenario modelling to inform decision-making. (ii) Water-use efficiency and alternative water sources for mining processes, focusing on efficiency improvements and recirculation within operations, as well as the use of domestic wastewater reuse and desalination as alternative supply sources. (iii) Basin-level water supply augmentation and flow regulation through conventional or nature-based infrastructure. (iv) Governance and social participation, examining basin-level institutional arrangements, clarity of roles and responsibilities, data transparency, and structured participation mechanisms to reduce conflict and sustain long-term mining operations. 4. KEY RESULTS, OUTCOMES, OR INSIGHTS Adaptive basin scale water management, risk reduction, sustainability and economic viability The systematic review indicates that the relationship between mining and water management has evolved from a predominantly compliance-oriented approach toward a more strategic risk-management framework. Historically, water was largely treated as an environmental liability associated with treatment, discharge, and regulatory reporting. However, increasing water scarcity, climate variability, regulatory pressure, and social conflict have repositioned water as a determinant of operational and economic viability and long-term closure performance. Recent literature highlights the need for integrated, basin-oriented and system-based approaches that incorporate monitoring, reuse, alternative supply sources (de Lima & Amaral, 2025), and long-term planning across the mine life cycle (Kennedy, 2025). In this context, modern mining operations increasingly integrate water management into core business planning, risk assessment, and closure strategy rather than treating it solely as an environmental mitigation (Hamilton, 2019; Sonter et al., 2020). The most prominent transition is from site-scale mitigation to basin-scale management. Hydrological processes, cumulative impacts and multi-sector competition cannot be managed within the concession boundary. Effective approaches involve shared monitoring, data
11 9 transparency, coordinated allocation and long-term planning across users. This reframes water from a permitting requirement into a shared infrastructure system that determines both environmental sustainability and project bankability. Water availability already constrains mineral production, particularly copper, where a significant share of output exceeds regional availability limits. Relocating production to less stressed areas is often economically unfeasible, making water scarcity a structural constraint rather than a marginal environmental issue. Adaptive basin- and regional-scale management is therefore essential to sustain future mineral supply under rising demand (Islam, et al., 2025). Interviews corroborate this shift, with company representatives describing water as a determinant of operational continuity rather than mere regulatory compliance. Investment decisions are primarily driven by shutdown risk, leading to greater emphasis on anticipatory planning, supply redundancy, and basin-level coordination (Osores, personal communication, 2025). Nature-Based Solutions complement engineered infrastructure by regulating -rather than increasing- water availability. Wetland restoration, infiltration systems, and watershed conservation stabilize dry-season flows and buffer extreme events. This function becomes critical under climate change, where variability -not average supply- drives operational risk. The interviews reinforce these conclusions by showing how companies operationalize integrated water management. Mining water systems are managed as strategic systems combining governance, engineering, monitoring and stakeholder engagement. Particularly in headwater regions, operations directly affect downstream users, making watershed-level planning essential to maintain social license and operational continuity (Quiroz, personal communication, 2025). Operational experience confirms the economic rationale identified in the literature. High levels of water recirculation drastically reduce freshwater demand and operating costs. More importantly, preventing shutdowns -often costing millions per day- makes preventive water management financially rational. The economic driver is therefore continuity and risk avoidance rather than compliance. Long-term liabilities reinforce this logic. In tailings management and mine closure, underestimated water risks can multiply post-closure costs. Incorporating climate variability and hydrological uncertainty into design raises upfront investment but prevents far larger remediation expenses. Sustainable water management thus operates as life-cycle financial risk management. (Quiroz, Osores, personal communication, 2025) In addition, in water-intensive mining operations, limited or uncertain water availability increases marginal production costs through higher extraction, transport, treatment, or alternative sourcing expenditures (International Energy Agency, 2021). More critically, variability in water supply introduces production volatility, affecting output stability and revenue predictability, with companies reporting material financial impacts from water-related
11 10 disruptions (CDP, 2023). Even short-term production interruptions materially affect operating margins, cash-flow stability and net present value projections (World Bank, 2016). Consequently, reliable water access becomes a determinant of project bankability, influencing financing conditions, insurance premiums and access to capital under international environmental and social standards. Water management investments therefore function as mechanisms to reduce cashflow volatility, and protect long-term asset valuation (International Council on Mining and Metals, 2017). In many arid mining regions, extraction exceeds natural recharge, driving aquifer depletion and long-term risk, pressures intensified by climate variability and extremes. Because surface and groundwater are interconnected, operational decisions generate basin-wide and intertemporal effects (Hiam-Gálvez, 2024). Global evidence further shows that total water storage reflects both climate and human intervention, underscoring the need for diversified green and grey strategies to enhance resilience (Scanlon et al., 2022). These conditions underscore the need for integrated, basin-scale management under uncertainty. Building on this evidence, the paper advances a four-component framework linking monitoring and modelling, efficiency and alternative sourcing, supply augmentation, and governance coordination as mutually reinforcing pillars of mining water resilience. Data-driven and forward-looking water resources management Across mining contexts, effective water management is increasingly framed as an integrated measurement–model–decision loop spanning surface and groundwater across operations and closure. Leading practice moves beyond periodic compliance sampling toward continuous monitoring, coupled water balance and hydrogeological modelling, and climate stress testing under hydrological non-stationarity (Kennedy, 2025; Punkkinen, 2016). This shift reflects recognition that mine water systems are highly sensitive to variability and that uncertainty must be actively managed rather than averaged out. Recent practice emphasizes fit-for-purpose instrumentation to monitor flows and storage across surface systems, dewatering networks, tailings facilities, seepage pathways, and aquifers. Automated telemetry and continuous monitoring improve data continuity and water accounting (Burton, 2023; Drobniewski et al., 2017). Life-of-mine water balance models increasingly integrate time-series data to test climate variability and operational contingencies, while monitoring designed “with the end in mind” strengthens closure and liability management (Kennedy, 2025). Advanced tools such as InSAR further enhance detection of hydrogeomechanical responses beyond conventional networks(Falorni et al., 2018). Climate-scenario modelling shifts design from stationary assumptions toward stress testing under extremes, supporting trade-off analysis among supply reliability, discharge compliance, and storage risk (Zhou et al., 2013). This is particularly critical for closure, where extreme precipitation may exceed original design thresholds and increase long-term treatment
11 11 risk if groundwater dynamics are insufficiently anticipated (Baisley, 2016). Interview evidence indicates that fragmentation -rather than data scarcity- is the main constraint, as existing monitoring systems are insufficiently integrated into decision-making. Where telemetry and modelling are embedded operationally, companies anticipate extremes and reduce disruptions. In Andean regions such as Peru, however, limited baseline monitoring - especially for groundwater and headwaters- increases hydrological and financial risk (Quiroz, personal communication, 2025). Water-use efficiency and alternative water sources for mining processes The literature highlights that modern large-scale mining operations already operate with high internal water recirculation rates, often exceeding 70–85% in mineral processing circuits, particularly in copper and iron ore operations (Northey et al., 2019). Information provided in interviews shows that recirculation could be higher (up to 85%-99%), as in large-scale mining (Quiroz, personal communication, 2025). Water recovery from tailings thickening, filtration systems, and closed-loop process designs has substantially reduced the freshwater intensity per tonne of ore processed. These efficiency gains constitute a major technological advance in mining water management over the past two decades. However, despite high recycling rates, mining still requires substantial make-up water to offset evaporation, tailings and concentrate moisture, seepage, and system losses. In arid regions such as northern Chile and southern Peru, large-scale copper mines processing over 100,000 tonnes per day depend on significant external inputs even under high recirculation (Cacciuttolo & Valenzuela, 2022). This structural reliance on make-up water limits the ability of efficiency measures alone to secure long-term water resilience. Recent research shows that internal efficiency gains, while necessary, are insufficient in water -stressed basins. Integrated “One Water” approaches therefore complement recirculation with diversified supply portfolios including desalination, urban wastewater reuse, managed aquifer recharge, and seasonal storage (de Lima et al., 2025). The choice among these options is context-specific, shaped by infrastructure, energy costs, regulatory frameworks, and local demand. The literature increasingly frames these interventions in economic and risk-management terms. Water scarcity, variability, and social opposition create operational uncertainty, making alternative water sources strategic risk-mitigation investments rather than mere environmental expenditures. Interviews confirm that decisions are driven primarily by supply reliability rather than compliance (Torreblanca, personal communication, 2025). In water-intensive mining systems, reliability -not marginal cost minimization- ultimately determines economic viability (Hamilton, 2019; Northey et al., 2019). Thus, high levels of internal recycling represent a necessary foundation of responsible water management in mining, but long-term sustainability requires sustained efficiency improvements combined with basin-scale supply diversification and coordinated water
11 12 governance mechanisms. Basin-level water supply augmentation and flow regulation In many mining regions, desalination is not viable due to distance from the coast or high conveyance costs, and domestic wastewater reuse may be limited by the absence of large nearby urban centers. The literature therefore highlights the importance of basin-level supply augmentation and flow regulation through multi-purpose infrastructure that increases reliability across users (ICMM–IFC, 2017). Reservoirs, managed aquifer recharge, seasonal storage, and regulated transfers can enhance dry-season availability and reduce interannual variability, generating shared benefits for agriculture, communities, and ecosystems. Even when a mining operation secures its supply through alternative sources, contributing to basin-wide reliability can strengthen legitimacy, reduce conflict risk, and support long-term project viability (ICMM–IFC, 2017; Tapsuwan et al., 2022). Nature-Based Solutions (NbS) complement grey infrastructure by improving hydrological performance through infiltration, seasonal storage, and baseflow enhancement rather than creating new water volumes. High-Andean wetlands (bofedales), terraces, and infiltration systems are often identified as socially accepted, relatively low-CAPEX measures with regulatory benefits (Ross et al., 2023). However, NbS remain limited in scale, partly due to insufficient valuation frameworks that capture their incremental supply and risk-reduction benefits. Strengthening economic appraisal methodologies is therefore essential to enable scaling and integration into basin-level planning. In addition, climate variability reinforces the need for integrated basin-scale planning and life-cycle water system design, as extreme events can exceed historical assumptions and create long-term liabilities if hydrological dynamics are not adequately managed during operations and closure (Kennedy, 2025). Interviews indicate that basin-level reliability is a strategic priority in water-constrained mining regions where desalination or urban reuse are not feasible. Even with high recirculation rates, structural make-up water requirements persist, making shared storage, managed recharge, and selected Nature-Based Solutions — particularly high-Andean wetland restoration and infiltration systems — critical for operational continuity and social acceptance (Quiroz, personal communication, 2025). Governance and social participation. Effective water governance in mining regions is shaped not only by hydrological conditions but also by the quality of institutional coordination and stakeholder engagement. The literature shows that water insecurity often emerges from fragmented governance structures, limited cross-sector planning, and misaligned priorities among public authorities, productive sectors, and local communities (Salmoral et al., 2020). Even in basins with relatively strong
11 13 institutional capacity, increasing climate variability and rising demand require adaptive, coordinated, and forward-looking governance mechanisms. Research consistently shows that sustainable water management depends on clear allocation frameworks, transparent data-sharing, and structured multi-actor platforms for joint decision-making (Megdal et al., 2017). Where governance fragmentation persists, water-related risks -including social conflict, regulatory uncertainty, and operational disruptions- tend to increase. Conversely, coordinated basin-level approaches that integrate public authorities, mining companies, agricultural users, and civil society can enhance resilience and reduce longterm vulnerability (Torreblanca, personal communication, 2025). Empirical evidence suggests that mining-led initiatives in shared monitoring, infrastructure co-financing, data transparency, and multi-stakeholder platforms can strengthen basin governance (IFC, 2014). These mechanisms improve environmental outcomes while reducing social and operational risks, reinforcing economic viability in water-stressed regions. Interviews confirm that disruptions often stem from institutional uncertainty rather than physical scarcity (Osores, personal communication, 2025), prompting companies to prioritize data-sharing, co-investment, and coordinated governance to mitigate conflict risk. Arequipa Case The Arequipa case provides a real-world basin-scale implementation of these principles. Through cooperation with public authorities, hydraulic infrastructure was built to increase basin storage and regulate flows, improving availability for all users. The objective was not only operational supply but systemic water security, benefiting agriculture, population and industry simultaneously. The central intervention was large-scale municipal wastewater reuse. A treatment plant processes roughly 95% of the city’s sewage, recovering river quality and public health conditions while providing a reliable industrial water source (Torreblanca, personal communication, 2025). Instead of competing with urban users, the operation relies on water that previously represented a pollution burden. This demonstrates that reuse can simultaneously solve environmental and supply constraints. The project included potable water infrastructure serving approximately 500,000 people and additional hydraulic works that expanded storage and improved basin regulation, reducing drought impacts. The same infrastructure secured operational supply, aligning public benefit with business continuity. Economically, the model functions as a circular water system: urban wastewater becomes industrial input, storage stabilizes seasonal variability, and shared infrastructure reduces conflict. Rather than increasing costs, it lowers risk exposure and supports long-term production assurance.
11 14 Taken together, the literature, interviews, and the Arequipa case converge on a consistent finding: sustainable water management generates three simultaneous outcomes — environmental restoration, operational reliability, and social acceptance. Mechanisms such as reuse, diversified supply, monitoring systems, and basin-scale governance reduce uncertainty and strengthen project viability. Overall, the results support the hypothesis that private sector participation is both necessary and economically rational. Where institutional capacity is limited, companies can co-finance adaptive infrastructure and data systems that generate public goods while protecting operations. Sustainable water management thus emerges not as a constraint, but as a condition for longterm competitiveness. 5. CONCLUSIONS AND IMPLICATIONS FOR INDUSTRY This study demonstrates that water management in mining has shifted from a compliance-driven function to a strategic determinant of operational continuity, financial performance, and long-term asset viability. The evidence confirms that adaptive basin-scale water management reduces hydrological risk, strengthens sustainability outcomes, and improves long-term economic performance. The shift from site-level mitigation reflects structural realities: climate variability, cumulative impacts, and multi-sector competition exceed concession boundaries. Resilience therefore depends on integrated strategies combining monitoring, climate-informed modelling, recirculation, diversified supply, shared infrastructure, and coordinated governance. For industry and policymakers, water security must be embedded in core investment and risk decisions. Efficiency, reuse, and alternative sourcing reduce production volatility, while cofinancing basin-scale systems strengthens social license and project bankability. Under increasing hydroclimatic uncertainty, sustainable water management emerges not as a discretionary sustainability measure, but as a prerequisite for long-term mineral supply, asset bankability, and competitive positioning in water-constrained economies. ACKNOWLEDGEMENTS The authors would like to especially thank Julia Torreblanca (Vice President of Corporate Affairs at Sociedad Minera Cerro Verde S.A.A.), Oscar Osores, and Edgar Quiroz for their valuable contribution to the development of this document through the in-depth interviews conducted, in which, in addition to addressing the topics consulted, they provided their highly informed perspective on water management in mining. REFERENCES Baisley, A., Pearce, S., & O’Kane, M. (2016). Climate change and mine closure–a practical framework for addressing risk. Proceedings IMWA, 35-42.
11 15 Burton, R. (2023). Flow Monitoring at Mine Water Discharges and Treatment. Cacciuttolo, C., & Valenzuela, F. (2022). Efficient Use of Water in Tailings Management: New Technologies and Environmental Strategies for the Future of Mining. Water,14,1741. Copernicus Climate Change Service. (2026, January 14). Copernicus: 2025 was the third hottest year on record. https://climate.copernicus.eu/copernicus-2025-was-third-hottest-year-record De Lima, J. P. M., & Amaral, M. C. S. (2025). Sustainable water management in the mining industry: Paving the way for the future. Journal of Water Process Engineering, 71, 107239. Drobniewski, M., & Witthaus, H. (2017). Monitoring of mine water. Mine water and circular economy, IMWA report, 88-93. Dimech, A., Cheng, L. Z., Chouteau, M., Chambers, J., Uhlemann, S., Wilkinson, P., & Meldrum, P. (2022). A review on applications of time-lapse electrical resistivity tomography over the last 30 years: Perspectives for mining waste monitoring. Surveys in Geophysics, 43(6), 1699–1759. Falorni, G., et al. (2018). InSAR monitoring of subsidence induced by underground mining operations. Gallegos, A., Grigg, N. S., & Llano, W. (2026). Enablers and Obstacles in Integrated Water Resources Management (IWRM) Implementation and Their Contributions to Sustainable Territorial Development. Land, 15(2), 270. Hamilton, K. (2019). From water management to water stewardship—A policy perspective for the mining sector. Water, 11(3), 438. https://doi.org/10.3390/w11030438 Hiam-Gálvez, D. (Ed.). (2024). Designing sustainable prosperity: natural resource management for resilient regions. John Wiley & Sons. Islam, M. (2025). El Niño–Southern Oscillation impacts on global climate variability. Journal of Global Ecology and Environment, 21(3), 1–26. Islam, K., Maeno, K., Yokoi, R., Giurco, D., Kagawa, S., Murakami, S., & Motoshita, M. (2025). Geological resource production constrained by regional water availability. Science, 387(6739), 1214-1218. ICMM & IFC (International Finance Corporation). (2017). Water in the mining sector: Shared water, shared responsibility. World Bank Group. IFC (2014). Water, Mining and Communities. International Finance Corporation. (PDF disponible) Kennedy, T. (2025). A mine water system framework: Designing with the end in mind for
11 16 monitoring that works across and beyond mine life. In S. Knutsson, A. B. Fourie, & M. Tibbett (Eds.), Mine Closure 2025. Australian Centre for Geomechanics. https://doi.org/10.36487/ACG_repo/2515_68 Lubczynski, M. W., Leblanc, M., & Batelaan, O. (2024). Remote sensing and hydrogeophysics give a new impetus to integrated hydrological models: A review. Journal of Hydrology, 633, 130901. Mudunuru, M. K., Cromwell, E. L. D., Wang, H., & Chen, X. (2022). Deep learning to estimate permeability using geophysical data. Advances in Water Resources, 167, 104272. Northey, S. A., et al. (2019). Sustainable water management and corporate reporting in mining. Water Resources and Industry. OECD. (2025). The Circular Water Economy in Latin America. Punkkinen, H. (2016). Guidelines for Mine Water Management. Respati, G., & Putro, U. S. (2023). Navigating water sustainability in mineral mining with a systems thinking-based approach. Indonesian Journal of Multidisciplinary Science, 2(9), 3070– 3077. Ross, C., et al. (2023). Seasonal water storage and release dynamics of bofedal wetlands. Hydrological Processes. Salmoral, G., Zegarra, E., Vázquez-Rowe, I., González, F., Del Castillo, L., Saravia, G. R., & Knox, J. (2020). Water-related challenges in nexus governance for sustainable development: Insights from the city of Arequipa, Peru. Science of the Total. Scanlon, B., Fakhreddine, S., Rateb, A., de Graaf, I., Famiglietti, J., Gleeson, T., & Zheng, C. (2023). Global water resources and the role of groundwater in a resilient water future. Nature Reviews Earth & Environment. Sonter, L. J., Dade, M. C., Watson, J. E. M., & Valenta, R. K. (2020). Renewable energy production will exacerbate mining threats to biodiversity. Nature Communications, 11, 4174. Suárez-Almiñana, S., Solera, A., Madrigal, J., Andreu, J., & Paredes-Arquiola, J. (2020). Risk assessment in water resources planning under climate change at the Júcar River basin. UNESCO. (2024). UN World Water Development Report: Water for Prosperity and Peace. Wang, B., Sun, W., Jin, C., et al. (2023). Understanding the recent increase in multiyear La Niñas. Nature Climate Change, 13, 1075–1081. https://doi.org/10.1038/s41558-023-01801-6 World Bank. (2016). High and Dry: Climate Change, Water, and the Economy.
11 17 World Bank. (2022). Water matters resilient, inclusive green growth through water security in Latin America. World Meteorological Organization. (2026, January 14). WMO confirms 2025 was one of warmest years on record. https://wmo.int/news/media-centre/wmo-confirms-2025-was-one-ofwarmest-years-record APPENDIX 1 Reference Journal 1 Supply risk reduction 2 Operational sustainability 3 Economic viability / financial risk mitigation 4 Governance improvement Islam et al. (2025) Science ✔ ✔ Scanlon et al. (2023) Nature Reviews Earth & Environment ✔ ✔ De Lima & Amaral (2025) Journal of Water Process Engineering ✔ ✔ ✔ Cacciuttolo & Valenzuela (2022) Water (MDPI) ✔ ✔ Northey et al. (2019) Water Resources and Industry ✔ ✔ ✔ Hamilton (2019) Water (MDPI) ✔ ✔ ✔ Salmoral et al. (2020) Science of the Total Environment ✔ ✔ Lubczynski et al. (2024) Journal of Hydrology ✔ ✔ Dimech et al. (2022) Surveys in Geophysics ✔ ✔ Mudunuru et al. (2022) Advances in Water Resources ✔ ✔
11 18 SuárezAlmiñana et al. (2020) Water Resources Management ✔ ✔ Ross et al. (2023) Hydrological Processes ✔ ✔ Torreblanca (2025) Interview ✔ ✔ ✔ ✔ Quiroz (2025) Interview ✔ ✔ ✔ Osores, (2025) Interview ✔ ✔ Table 1: Core Evidence Matrix – Sustainable Water Management in Mining. Source: Authors’ elaboration
11 19 CHALLENGES AND SOCIO-ENVIRONMENTAL IMPACTS OF INFORMAL AND ILLEGAL MINING W. Setiono1 1Geo Mining Berkah, Indonesia wisnuset7423@gmail.com ABSTRACT Informal and illegal mining is a serious problem in many developing countries, including Indonesia. These activities not only cause a loss of local revenue and widespread environmental damage, but also have significant social impacts. The absence of permits, supervision, and guarantees for reclamation and post-mining activities makes this practice a threat to environmental sustainability and social stability. This paper discusses the main challenges and environmental and social impacts of illegal mining, as well as the importance of law enforcement and community empowerment to overcome these issues. The government must create regulations and enforce them so that illegal miners do not carry out their illegal activities. The issue that needs to be considered is why illegal mining is still convenient and why they are reluctant to go through the licensing process. Of the 66,593.18 hectares of small-scale mining area, only 62.31 hectares are mined legally. In Indonesia, law enforcement efforts are being promoted involving all elements. Eliminating illegal mining is not as easy as turning one's hand. There is a role played by the government, which is slow to complete regulations and mining documents in small-scale mining areas, there is a role played by unscrupulous officials who protect illegal mining, and there is a role played by the mining community, which does not obtain mining permits.. KEYWORDS Illegal, Environment, Law 1. PENDAHULUAN Mining is a vital sector for economic development in many countries, especially those with abundant natural resources like Indonesia. However, behind its contribution to economic growth, informal and illegal mining practices have created a variety of complex issues. Informal mining refers to small-scale activities conducted without official permits, which often serve as a primary source of livelihood for local communities. Meanwhile, illegal mining is carried out
11 20 in defiance of existing regulations, typically ignoring sustainability principles and legal aspects. Field findings reveal that these miners are often funded by wealthy backers from major cities. This contradicts the fundamental concept of "community mining" (tambang rakyat), which should ideally be initiated by the local people themselves. I have personally observed community mines in Mamberamo Raya and Pohuwato, Gorontalo, being financed by wealthy individuals from Jakarta. They implement profit-sharing schemes, typically ranging from 50% to 80% for the financier. The licensing process is often initiated by these backers, who persuade locals with promises of large profit shares. These actors generally fall into three categories: the majority who refuse to process mining permits, a small group that attempts to process permits while continuing illegal operations, an even smaller group that processes permits and refrains from mining until legal.Unfortunately, obtaining permits is extremely difficult, partly due to the absence of required reclamation and post-mining documentation. The phenomenon of informal and illegal mining is widespread in developing nations, including Indonesia. These activities generally occur outside of government oversight, lack adequate technology, and ignore safety standards or environmental protections. Consequently, various negative impacts emerge, ranging from environmental degradation such as deforestation and water/soil pollution to social conflicts between communities, authorities, and legal mining companies. Addressing these issues requires more than just strict law enforcement; it demands a deep understanding of the socio-economic factors driving communities toward informal and illegal mining. Therefore, this study is essential to understand the challenges and socioenvironmental impacts involved, serving as a foundation for formulating fair and sustainable policies. 2. THEORETICAL FRAMEWORK AND LEGAL CONTEXT Illegal mining refers to extraction activities conducted without official government authorization and in defiance of existing regulations, including the failure to provide reclamation and post-mining guarantees. In contrast, informal mining may occur within legal areas but is carried out by individuals or small groups lacking a formal legal entity or standardized operational procedures. 2.1 Theoretical Framework: Social and Environmental Impacts Environmental and social impacts are critical aspects that must be considered as a consequence of mining activities. According to Rumkel et al. (2020), an environmental impact is the influence of changes on the environment resulting from a business and/or activity. Meanwhile, according to Stroz (1987:76), social environmental impacts encompass all conditions in the world that, in certain ways, influence an individual's behavior, including growth, development, or life processes, which can also be viewed as "providing the
11 21 environment" for future generations. When legal and regulatory structures are weak, communities residing near illegal mining sites tend to experience uncertainty, social conflict, and the deterioration of local social institutions. 2.2 Legal Framework in Indonesia In Indonesia, several regulations govern mineral and coal mining permits, including: • Mineral and Coal Mining Law (such as Law No. 3 of 2020): This law regulates mining permits and reclamation. However, in practice, there are gaps in implementation, particularly regarding illegal mining activities that are difficult to monitor. • Environmental Regulations (such as Law No. 32 of 2009): This law governs environmental protection, sanctions for violations, and the mandatory obligation for reclamation and restoration. Numerous studies have highlighted weaknesses in this area, specifically regarding enforcement, oversight, and the lack of effective sanctions. • Government Regulation No. 39 of 2025 (Amendment to PP 96/2021): This regulation stipulates that cooperatives and Small and Medium Enterprises (SMEs) are permitted to manage Mining Business Permit Areas (WIUP) for metallic minerals or coal. 3. ENVIRONMENTAL AND SOCIAL IMPACTS Illegal and informal mining operations disregard environmental and social aspects, as these activities do not conduct reclamation or provide post-mining guarantees once extraction is completed. This lack of accountability leads to severe consequences if not properly addressed. Figure 1 – Distribution of Illegal Mining in Indonesia 3.1 Environmental Impacts Informal and illegal mining activities lead to significant environmental degradation, including: 1. Water Pollution and Quality Degradation Illegal mining causes a drastic decline in water quality through the direct discharge of toxic waste into rivers, such as mercury (Hg), cyanide, and high levels of sediment. These activities result in turbid and acidic water contaminated with heavy
11 22 metals, rendering it unfit for consumption, destroying aquatic ecosystems, and threatening public health. Figure 2 – Basamuk Bay waters, Papua New Guinea, discolored by toxic waste from a Chinese-owned nickel mine in 2019 2. Landscape Degradation and Deforestation Illegal mining causes permanent ecological damage, including the loss of forest cover, soil erosion, and mercury contamination, particularly in areas such as the new national capital (IKN) and Sumatra. These activities destroy wildlife habitats, trigger floods and landslides due to decreased water absorption, and lead to state financial losses and social conflict. Figure 3 – Forest deforestation in West Sumatra 3. Lack of Reclamation and Post-Mining Management Unlicensed Mining (Pertambangan Tanpa Izin or PETI) in Indonesia is characterized by a minimal, and often non-existent, approach to reclamation and post-mining management. These practices operate without complying with technical standards, ignoring environmental obligations, and leaving behind excavation pits that devastate ecosystems. Key points regarding the lack of reclamation in illegal mining include: • Negligence of Environmental Responsibility: PETI (illegal mining) operators are not bound by legal obligations to conduct reclamation, leaving mined lands abandoned.
11 23 • Terrestrial and Aquatic Ecosystem Damage: These activities transform landscapes into barren areas, causing soil erosion and water pollution. In illegal gold mines, the use of mercury contaminates rivers and soil, adversely affecting human health and the environment. • Hazardous Mining Pits: Massive excavations create voids that often fill with water, becoming breeding grounds for diseases and triggering landslides or floods. • Absence of Financial Guarantees: Unlike legal mining companies, which are required to place a reclamation guarantee fund (jaminan reklamasi), illegal mines have no such mechanism. • Economic and Social Consequences: Beyond environmental damage, PETI often involves social conflicts, occupational safety hazards, and losses in state revenue. 4. Loss of Biodiversity and Habitat In illegal mining, the loss of biodiversity and habitat is a critical environmental impact because the activities directly destroy the land without any recovery efforts. Unlike legal mines that are mandated to restore the land post-operation, illegal miners typically leave behind giant pits and critical lands that can no longer support flora and fauna life. 3.2 Social Impact Illegal mining (Pertambangan Tanpa Izin/PETI) in Indonesia has devastating and complex social consequences that often outweigh the environmental and economic losses. These activities encroach upon living spaces, ignite conflicts, and compromise public health. The social impacts of informal and illegal mining include: 1. Public Health Disruptions Dust generated from mining activities causes respiratory issues, influenza, chronic coughs, and eye infections among residents living in the vicinity of the mining sites. 2. Economic Loss and Income Instability For local miners or workers in the illegal sector, the income earned is often disproportionate to the risks faced. Their earnings are highly dependent on black market prices and fluctuations in yield, without any certainty of a minimum wage or formal employment contracts. 3. Social Conflict and Legal Uncertainty Illegal mines frequently trigger divisions within the community due to: • Resource Competition: Competition between illegal miners and local residents with different livelihoods (such as farmers or fishers) whose land or waters have been contaminated or damaged.
11 24 • Economic Disparity and Resentment: Instant profits from illegal mining are often enjoyed only by a few, while the resulting damages (floods, landslides) are borne by the entire community. • Thuggery and Intimidation: Groups controlling illegal mines often use threats or violence to protect their operations, creating an unsafe environment. • Internal Conflicts: Disputes between rival miners or between illegal miners and legitimate companies holding official Mining Business Permits (IUP) for the same land. 4. Inequality and Injustice • Revenue Disparity: Illegal mining yields often do not contribute to Non-Tax State Revenue (PNBP), meaning natural wealth is depleted without providing equitable benefits to the region or the state. • Privatized Gains, Socialized Costs: Large profits typically flow to specific rogue actors, while local citizens are left to bear the ecological and social burdens. • Worker Vulnerability: Workers in illegal mines often operate under unsafe conditions, receive low wages, and lack social protections. Furthermore, there is a high risk of child labor involvement in these operations. 4. CHALLENGES IN MITIGATION AND HANDLING Addressing illegal and informal mining that defies existing licensing regulations inevitably faces significant hurdles. The primary challenges are as follows. 1. Weak Supervision and Law Enforcement This situation is often triggered by the remote and inaccessible locations of illegal mining sites, compounded by sanctions that are frequently ineffective or lack consistent enforcement. Despite recent adjustments to the Mining Law, illegal mining practices persist due to a significant lack of a deterrent effect. Furthermore, a critical issue remains the alleged support from rogue law enforcement officials. Oversight and enforcement against illegal mining in Indonesia are considered weak, leading to the proliferation of Unlicensed Mining (PETI), which causes environmental degradation and substantial state losses. Although Article 158 of the Minerba Law stipulates severe penalties including up to five years of imprisonment and fines of IDR 100 billion enforcement remains inconsistent, casuistic, and hindered by the involvement of rogue actors alongside the socio-economic dilemmas faced by local communities. In response, the government has established the Directorate General of Law Enforcement (Ditjen Gakkum) under the Ministry of Energy and Mineral Resources (ESDM).
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