The Appeals Court of Copiapó province in Chile‘s northern Atacama region issued an order on April 10 completely suspending work at the massive Pascua Lama facility, an open-pit gold, silver and copper mine under construction in the Andes on both sides of the border between Argentina and Chile. The order was in response to a complaint filed by five communities of indigenous Diaguitas in the Huasco Valley; the residents charged that the work was damaging the Toro 1, Toro 2 and Esperanza glaciers and contaminating water resources in the area, according to Lorenzo Soto, the communities’ lawyer. The Chilean government’s National Geology and Mining Service (Sernageomin) and the Environmental Evaluation Service have also found environmental damage from the project. Construction is about 40% complete at the mine site, which is under the control of the Toronto-based Barrick Gold Corporation.
The government of rightwing president Sebastián Piñera backed the suspension, although officials clearly expected the mine to be completed eventually. “It doesn’t surprise us at all,” Interior Minister Andrés Chadwick told reporters, “and it seems good to us that the work could be suspended, by a judicial organ, while Pascua Lama [works to] comply with all the requirements that the Environmental Bureau has made.”
The April 10 decision was the latest major problem for Pascua Lama, a $8 billion project that was expected to be the third largest mine in the world and the first binational mining enterprise but is now billions over budget and months behind schedule. Barrick Gold’s Chilean subsidiary, Compañía Minera Nevada SPA, has had to suspend part of the work since late October because of health issues for the workers; regional authorities have hit the company with more than $340,000 in fines over the past two months; and the national mines commissioner has upheld claims by a Chilean miner and another Canadian company that they own the Chilean side of the site. Barrick’s stock fell 6% to a new four-year low on April 10 after the Chilean court’s decision was announced; shares regained 1.1% the next day.
“Construction activities in Argentina aren’t affected by this measure,” Barrick vice president for corporate affairs Rodrigo Jiménez Castellanos announced after the decision. Analysts said more than 70% of the mine’s reserves are in Chilean territory, but Argentine mining minister Jorge Mayoral insisted that if “at least 30% of the reserves are on the Argentine side, then we’re talking about a very important quantity of reserves that would guarantee the value of any work unit in the immediate future.”
But as in Chile, the mine faces strong opposition in Argentina from environmentalists and people who live near the mine. The Argentine movement has an important supporter in the well-known filmmaker Fernando “Pino” Solanas, whose 2009 documentary “Tierra Sublevada: Oro Impuro” (“Rebellious Earth: Impure Gold”) treats the dangers of open-pit mining. Barrick also has legal problems to deal with in Argentina. It has tried to block a law protecting glaciers, but Argentina’s Supreme Court ruled against the company last July, leaving open the possibility that construction work could be suspended in Argentina as well. (La Tercera, Chile, April 10, some from wire services; InfoBAE, Argentina, April 10; Associated Press, April 12)
Barrick continues to have trouble with its $4 billion Puerto Viejo project, an old gold mine in Cotuí in the central Dominican province of Sánchez Ramírez. Barrick reopened the mine in August 2012 in a joint venture with the Vancouver-based multinational Goldcorp Inc.; Barrick owns 60% of the project and Goldcorp owns the other 40%. Under pressure from demonstrators and opposition politicians, Dominican president Danilo Medina is trying to renegotiate a 25-year contract that the government signed giving very favorable terms to the two companies. In March Dominican customs authorities briefly held up a shipment of gold from the mine valued at $11.6 million; they said the shipment was irregular, and critics suggested that Barrick was trying to smuggle gold out of the country before new contract terms could be negotiated.
Dozens of activists and Cotuí residents protested at the headquarters of the Barrick’s subsidiary, Pueblo Viejo Dominicana Corporation (PVDC), on April 13, demanding modifications of the contract and charging that operations at the mine had hurt farming in the region. Activists are planning a “people’s tribunal” to judge Barrick and its local collaborators on April 21 in Santo Domingo’s Independence Park. (El Nuevo Día, Santo Domingo, April 11; AP, April 12; Xinhua, April 13)
Barrick isn’t the only gold mining company in trouble. Multinationals rushed into new gold mining operations in Latin America over the past decade as the price of gold rose dramatically, but the soaring prices may have been a temporary phenomenon: investors turned to the supposed safety of gold during the 2001 recession, and investment in the metal intensified with the 2008 global economic crisis. Now the gold rush seems to be coming to an end. Prices have fallen 17% since their high at the end of 2011, and stocks in gold mining companies have been plunging, leaving investors with losses as high as 42%. (New York Times, April 11)
From Weekly News Update on the Americas, April 14.
