Sunday, January 29, 2006

Foreign gold mining companies have high interest in El Salvador

Foreign gold mining companies have big plans to explore and exploit gold deposits in northern El Salvador. Australian gold mining company Condor Resources has this statement about its plans in El Salvador:

Condor Resources has a number of projects in Central America with the potential to host world class high grade epithermal gold deposits. Both the El Potosi and El Pescadito projects in El Salvador have plus million ounce potential. There is also the potential to rapidly delineate resources on the San Albino project in Nicaragua with the planned exploration programs, raising the real possibility of early gold production. All these projects lay within major epithermal gold belts hosting world class gold deposits....

Condor Resources is one of an increasing number of companies actively exploring in Central America. Central America contains a mosaic of tectonic plates and plate boundaries that represent prime hunting ground for precious metal deposits and in particular gold and– silver deposits. Since the 16th century, gold and silver has been mined from Central America with hundreds of million of ounces of silver and tens of millions of ounces of gold being produced since this time.

The mineral endowment of this small area is truly large scale when one takes into account that much of the region in under explored. The "“Trifinio"” or triple point of Honduras-Guatemala-El Salvador is a precious metal rich province.

Other foreign companies active in El Salvador include Canadian companies Intrepid Minerals, Au Martinique Silver and Pacific Rim

This interest in gold mining in El Salvador does not mean an economic bonanza for the country, as a presentation by Mining Watch Canada at Engineers Without Borders Conference, January 20, 2006, points out:
Does mining really alleviate poverty in the developing world? There'’s little evidence it does, and a lot of evidence that it actually creates poverty. The benefits of mining tend to be measured on a macro level -– foreign exchange earnings, gross domestic product -– rather than looking at any kind of measure of distribution of those benefits. The benefits of mining also tend to be measured in a vacuum -– providing X many jobs - without mentioning how many thousand farmers or small-scale miners are losing their livelihoods.

In fact, academics -– and even mining journals -– talk about the "“Resource Curse"”. It seems that extractive industries create poverty, not wealth; having rich deposits of minerals or oil does not make a poor country rich. Local elites may do well; investors and Bay Street brokers may do very well, but the workers and the people who lose their lands or water supplies don't get much in return. Studies in countries as different as Peru and Ghana have shown that where there is more mining, and more foreign investment in mining, there is also more poverty. This can be measured at any level - countries or counties that don'’t depend on mining have better economic growth.

7 comments:

Anonymous said...

"thousand farmers or small-scale miners are losing their livelihoods"

I call bullshit on you for quoting this piece of propaganda.

El Salvador is a free country. Mining companies have to PURCHASE the land they intend to exploit.

If a farmer sells land, it is because they perceive more value from selling than from holding; i.e., no-one "loses their livelihood"

Did you "lose" your last car when you sold it? Jeez, what a kid.

XAVI

Tim said...

XAVI --
I'm afraid your analysis is the one that lacks much depth. The issue is one of what economists call "negative externalities" -- there are costs created by environmental degradation which are not borne by the mining company which created them. Sure, the farmer who sells his land to the gold mine is well off and we can be happy for him. But what about the neighboring farmer who has his land polluted and receives no compensation for that damage? If we don't factor in those negative impacts of gold mining, we don't get a good measure of whether it is a net positive or negative for the country.

Anonymous said...

Tim, I appreciate your response, sorry I had not had a chance to check back.

I agree there can be externalities unless markets are correctly set up, and long conversations can be had about that. I'll have you remember, though, that no facility can be opened in E.S. unless an environmental impact study is approved by MARN and other bureaucracies; if the study finds that pollution is a likely result, MARN will not issue permits unless and until remedial investments are included in the project.

Nonetheless, my challenge was specifically to the scare piece about farmers losing their livelihood ---note how the P.R. spin doctors know they cannot attack mining in developed countries as far as economic benefits, so they raise a strawman: "Does mining really alleviate poverty in the developing world?", and from there raise all kinds of speculations: macro benefits vs. "unmeasured" micro benefits, starving farmers...

Xavi

Anonymous said...

Given the current amount of high profile ad campaigns sponsored by Pacific Rim and other mining companies who want to do business in El Salvador, I wouldn't be surprised if Xavi himself wasn´t a paid hire for the mining industry or some offshoot thereof (ad agency, etc.).

In fact, there´s a whole bunch that could be said about mining in "developed countries" (like West Virginia). Ever been to Kentucky? I doubt it. Check out Google Earth and see what happened there. It doesn´t take a rocket scientist to figure it out.

The companies get their licenses to do business based on their lobbyists and connections within government and then they do what they want to local communities. The evidence is everywhere mining has been. The problem is that those places are usually so isolated that we never see them.

Next, Xavi will be telling us that there was no reason why indigenous people throughout isolated areas of Ecuador finally managed to kick out Occidental Petroleum--after years of environmental abuses and Ecuadoran military incursions into indigenous lands.

Anonymous said...

Very interesting Story.
We will see this later in German Boards :-)
Thank You

>>XIO<<

Anonymous said...

March, 19. 2007
Condor Resources Exploration Update
http://www.advfn.com/p.php?pid=nmona&cb=1174067676&article=19835329&symbol=L%5ECNR

Dacey said...

Condor Resources is one of an increasing number of companies actively exploring in Central America. Central America contains a mosaic of tectonic plates and plate boundaries that represent prime hunting ground for precious metal deposits and in particular gold and– silver deposits.