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Mining in Latin America: deepening contradictions



The Editor of Mines and Communities takes an extensive sweep through the Region, charting the numerous mining projects and the problems and conflicts they create. He makes numerous references to more detailed stories published on www.minesandcommunities.org

Latin American countries are leading producers of minerals. To mention some examples, Brazil is the world’s major producer of niobium and tantalum and the third ranked producer of aluminum, bauxite and iron ore. Chile is the world’s leading exporter of copper and is estimated to have the world’s largest reserves of lithium. Peru and Mexico are the world’s leading producers of silver, accounting for over one-third of global output last year.

The exploration budget for Latin America jumped to US$2.9 billion in 2010, accounting for 27 percent of the estimated global exploration budget (Metals Economics Group based on data from 2,213 companies). The Chilean Copper Study Center projected that investments in the Latin American mineral industry will total US$327 billion between 2011 and 2020.

Riding the boom

Two key conditions for the development of large scale mining are now present in Latin America: whether they tend to the right or to the left, almost every national government welcomes foreign investment in the mining sector; and most metal prices have reached and maintained record high prices in the past few years, stimulated by Chinese demand and financial markets speculation.

However, some of the biggest mining projects proposed in Latin America have been stalled, delayed or face unprecedented social rejection. As mineral commodity chains expand in terms of energy consumption, environmental impact and geographic occupation, their coexistence with the local populations seems to be more difficult than ever.

Deepening contradictions

Dwindling ore grades in Chile’s massive copper mines are pushing the industry energy needs. To solve the issue, the government aims to add 8,000 megawatts to the power grid by 2020. But social resistance and legal action have already sinked a number of energy developments.

On August, Chile’s top court rejected the planned US$5 billion Central Castilla port and thermoelectric coal-fired power plant due to environmental concerns in the nearby community of Totoral. The proposed 2,100 megawatts plant is a joint venture of MPX Energia (owned by Eike Batista, Brazil richest individual) and Germany’s E.ON, being built in the Atacama region, to supply power to the copper -rich area. On June, an environmental authority suspended the US$1.4 billion Punta Alcalde project of two 370 megawatts coal-powered thermoelectric plants also in Atacama. In the southern Biobío Region, neighbors of the Bocamina II thermoelectric plant buried themselves in coal-ash piles to protest against the plant environmental impacts. The HidroAysen project, owned by Colbun and Endesa, as well as the hydropower Energia Austral project, developed by Xstrata Copper and Origin Energy, seems to be losing its battles against public opinion. More details.

In May, the Chilean Supreme Court ratified a lower court ruling that rendered Goldcorp’s environmental assessment for the El Morro gold project null, due to the company’s failure to consult with the Diaguita Huascoaltinos Indigenous Community, whose lands would be affected if the mine is built. The Huascoaltinos have already taken a case against Barrick Gold to the Interamerican Human Right Commission over the Pascua Lama gold project, located 70 km south of El Morro. More details.

Social movements from several countries accused Vale, the second-largest mining company in the world, of causing serious environmental and social damage. Their damning report was released on 19th April at the annual general meeting of the company in Brazil. The world’s largest producer of iron ore and second largest of nickel was awarded this year Public Eye award. More details.

Vale has a 9% stake in Norte Energia, the company in charge of the controversial Belo Monte dam on the Amazon’s Xingu River. In August, a high-level court suspended the construction citing that indigenous people had not been properly consulted prior to the government approval of the project. The ruling ordered Brazilian Congress to organize consultations with affected indigenous peoples, especially the Juruna, Arara and Xikrin tribes. More details.

On February, up to 2,000 citizens marched on the Peruvian capital calling for the Conga gold project, the largest-ever mining investment in the country, to be cancelled. Billed as a Grand National March for the Right to Water and Life, the protestors asserted the value of health and wellbeing of communities over large resource-extraction ventures.

The Conga project is an expansion of the Yanacocha mine, one of the largest gold producers in Latin America, owned by US based Newmont Mining, Peruvian firm Buenaventura and the World Bank. After almost two decades of large scale mining operations, people in the Cajamarca region know all too well its social and environmental impacts. Violent confrontations related to Yanacocha expansion plans occurred before in Cerro Quilish and La Zanja in 2004, Combayo in 2006 and La Quinua in 2007. More details.

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The Humala administration declared a state of emergency in four provinces of Cajamarca, were Minera Yanacocha operates since 1993, in an attempt to weaken people’s rights to protest and convene in public. On the 3th of July police officers shot three protesters dead (one of them a minor) during clashes in the town of Celendín. The next day another protester was killed in the town of Bambamarca and later another person died in a hospital. More details.

On 6 July the Inter-American Commission on Human Rights expressed its concern over the killings and urged the State to guarantee the life, physical integrity and security of the people protesting against mining developments. Soon after that, and as a direct consequence of his inability to appease the conflict, Prime Minister Oscar Valdez was replaced by former minister of Justice and Human Rights Juan Jiménez Mayor. Last week, Jimenez confirmed to the press that the Conga project ‘entered a suspension phase’.  More details.

The Alumbrera copper-gold mine, the biggest open pit operation in Argentina, is owned by Xstrata (50 percent and operator), Goldcorp and Yamana Gold. After heavy clashes near its expansion project Agua Rica in 2009, a judicial order prohibited any activity in the area. But in January 2012 the order was lifted. As a response, through so-called “selective blockades” (aimed only at mining trucks) activist groups have attempt to close all access of critical supplies for Alumbrera.

On January 27th, 18 protestors were detained by the police at a blockade in the town of Santa Maria. On February 1st a ‘caravan for water’ took hundreds of vehicles to support the blockade in the town of Belén. Two blockades were forcibly removed by the police on February 9th. In Amaicha del Valle, Tucumán province, some 30 activists were also removed by the police on route 337. In Tinogasta, dozens of heavily-armed police attacked a blockade established on route 60, leaving at least 24 people injured. More details.

Despite concerted industry opposition, social mobilization helped secure passage of a law to protect Argentina’s glaciers in April 2010. Most of the mining projects in Argentina are found above 4,000 meters, in the high Andes mountains, where the bill protect glaciers by banning mining and infrastructure projects in all ice zones. But less than twenty four hours later a judge in San Juan province suspended a number of clauses in the law to facilitate the construction of the Pascua Lama gold mine. More details.

In July this year the Supreme Court rejected the 2010 ruling and the glaciers law will now be applied across the country and specifically to San Juan. The following week Barrick Gold, the largest gold producer in the world, announced it would ‘delay’ the start-up of the gold mine, straddling the border between Chile and Argentina, for about a year. More details.

On March, more than 1,000 indigenous protesters reached Quito after a 700 km march from the Amazon to oppose plans for large scale mining projects on their lands. Earlier that month, Ecuadorian president Rafael Correa signed the country’s first ever large scale mining contract for Chinese-owned Ecuacorriente to invest US$1.4 billion in El Mirador, a massive open pit copper project in the southern Zamora Chinchipe region. Ecuador aims to sign four more contracts this year with Kinross, International Minerals, Iamgold, and a second deal with Ecuacorriente. More details.

Steps in the right direction

Key to resolve some of the contradictions between local communities and mining companies is that national states comply with the International Labor Organisation’s convention on the rights of Indigenous Peoples and its principle of Free, Prior Informed Consent (ILO 169). On August 2011, Peru’s Congress unanimously approved a bill requiring consultarions with native communities before building mines or drilling for oil. More details.

Also in Peru, local communities have complained for years that the existing model for approving mines was flawed: the Mining Ministry alone is tasked with both promoting investment and reviewing the environmental impact studies. Just last week, Peruvian President Ollanta Humala has sent a bill to Congress that would transfer to the Environment Ministry the power to approve or reject new mines. More details.

The consultas movement is slowly spreading in the region after early successful experiences of Tambogrande in Peru (97 percent voters rejected a gold project being developed by Canadian miner Manhattan Minerals in 2001) and Esquel in Argentina (83 percent voters rejected a gold-silver mine proposed by another Canadian company, Meridian Gold, in 2003). Referendums play an important role in local non-violent struggles, help unite communities facing tense conflicts and strengthen their voice against multinational mining corporations.

Two recent consultas are those rejecting Iamgold’s Quimsacocha gold project in Azuay province, in the Andes of southern Ecuador (October 2011); and Chinese conglomerate MCC’s Campana Mahuida copper project in Neuquén province, Patagonia, Argentina (June 2012). More details.

In line with the Glaciers Protection Law in Argentina, on October 2010 Colombia’s Environment, Housing and Territorial Development Minister announced a mining ban in the country’s paramo ecosystems. Shortly after, Canadian miner Greystar Resources withdrawal its Angostura gold project in the paramos of Santurban, in Santander department. According to Colombia’s State Ombudsman, twenty two paramos are at risk from the impacts of mining. Glaciers and paramos provide vital environmental benefits: generation, regulation and distribution of water. More details.

Moments after assuming the presidency of Costa Rica in May 2010, Laura Chinchilla signed an executive decree that places a moratorium on open pit metal mining in the country. More details.

El Salvador seems to be following the same path: on August this year, the Ministry of the Environment and the Ministry of the Economy presented a bill to the Legislative Assembly that would suspend all metal mining activity in the country.