A new gold mine in eastern El Salvador will lead to serious environmental degradation according to the the Association for Social and Economic Development (ADES), a Salvadoran nongovernmental organization. As reported in Diario CoLatino, ADES has concluded that the waste from the mining operation will pollute local water supplies and adversely impact local agriculture and fisheries.
The mine is operated by a Canadian company, Pacific Rim. The El Dorado mine is the first commercial-scale gold mine in El Salvador.
According to ADES, the numbers speak for themselves: of a projected annual profit of $30 million for North American shareholders, 1% royalties to the San Isidro county government amount to $300,000 and 148 jobs for locals for eight years. Meanwhile, ten thousand people, mostly farmers, are left with questionable water resources and the risk of future chemical leakage and health afflictions.
The Sierra Club has written about the El Dorado mine:
In Cabañas, Pacific Rim's plans to fund schooling and other community projects fits squarely into the development principles promoted by the World Bank: foreign investment and private sector incentives for education and other services. During the past decade, El Salvador has been the model student of the development strategies of the World Bank and the IMF, deregulating industries and courting foreign investors through emphasizing the minimal royalties that local communities such as San Isidro receive. For proponents of the mine, El Dorado would bring money to one of the most impoverished areas of El Salvador and could even stem the flow of young people migrating to the US.
Yet when Mr. Earnest explains on the local radio that Pacific Rim's primary purpose, "like any other company, is to earn profits for our shareholders," many residents aren't ready to hand over such influence on San Isidro's local services and development plans. "The government is corrupt here, and we don't receive anything, but we don't want the gringos involved," says Alejandro, a San Isidro resident who attended the workshop. Others are concerned that the company-sponsored training programs displace teaching resources from the local schools and only target potential mine employees.
My take -- if El Salvador has gold or other mineral resources, such resources should be exploited for the benefit of the country. The best way to achieve this may be by granting concessions to foreign companies like Pacific Rim. The devil is in the details, though. How does a small country with an abysmal record of environmental protection, oversee a complex mining operation? How is corruption avoided in the granting of mining concessions? And if El Salvador wants to change the rules that Pacific Rim operates under, it will face the threat of litigation in the new arbitration forum created by CAFTA.