Friday, October 03, 2008

New summary of gold mining issues

The website of Ethical Corporation magazine has a good article summarizing the gold mining debate in El Salvador. Here's the introduction to the article:

Extractive firms struggling to gain licenses in central America should do more to show what benefits mining has for local communities

El Salvador can little afford to turn away investors. Tax burdens have been lifted and subsidies introduced precisely to attract foreign companies.

Strange, then, that the government should be stalling the progress of one of its biggest investors to date. Pacific Rim Mining, a Canadian company that has so far plowed $77m into El Salvador, requested a concession to exploit the El Dorado gold mine in December 2004. Almost four years later, the environment and natural resources ministry is still to give the green light. Fed up with waiting, the multinational miner has put its exploratory activities in the country on hold.

Behind the potential loss of millions of investment dollars lies a heated debate over the very existence of mining in the small central American state.

Read the rest here.


sideliner said...

I just want to address a few of the points in the Ethical Corporation article.
The 1,000 protestors that "took to the streets" were bussed in by the Lutheran and Catholic churches and supporters of Oxfam from all over the country. These were not local folks opposed to mining. These were people who were "bought" in by the local NGO's that stand to lose a lot of money if they don't toe Oxfam's anti-mining line.

As to the assertion that PacRim has exhausted local water supplies, has pressured government officials, has failed to meet environmental standards and generated local conflict; Baloney! I dare Oxfam, ADES and company to show where water supplies are different today than a year ago. If PacRim has been pressuring government officials, then why have they been waiting four years for a permit that should have been granted in 60 working days after complying with the law? If anybody has been pressuring the government it is Oxfam and company. It would also be interesting to see how PacRim has failed to meet environmental standards. It is interesting that the Ministry of Environment has never failed to emit a decision stating that PacRim has complied with all requirements of their exploration permits. PacRim has never used or advocated violence against any person or group, which cannot be said of Oxfam and the other ani-mining advcacy groups in El Salvador.

It is also interesting how Oxfam can say that mining has not helped growth rates in Latin American countries. Prof. Thomas Power must be both blind and stupid. I guess the growth of the Chilean economy at 6-10% per year, he must consider negative growth. Other Latin countries may not be as strong as Chile but mining must be hurting them as well. I have to agree with Oxfam that only 80% of the projected PacRim earnings staying in the country is a travesty. How can PacRim in good conscience pay back their investors and the capitalist swine that have financed their efforts in El Salvador to date?

I love the fact that Oxfam says they don't advocate a blanket ban on mining. What a buch of hipocrites! Why then do they advocate any means possible including violence and causing social unrest in the forums where they train the local NGO's in how to fight mining. What a bunch of terrorists. Supposedly one of their gringo representatives is such a peace loving guy that he fought with guerillas during the civil war. While anyone can repent of stupidities they commited in their youth when they grow up they should outgrow this form of mindless expression.

The ironic thing is that it is common knowledge that Oxfam and company were invited to join PacRim in making sure that PacRim's project was initiated and maintained at the highest standards of environmental compliance. PacRim was coldly turned down. That is the hypocrisy of Oxfam.

If Oxfam had invested the money they have allowed the local NGO's to use to line their pockets, along with the money the mining groups are prepared to invest there would have been some serious impovements made in the local communities. It is just to bad that these "supposed" development groups think that people are happy poor and miserable and without the means to better their lives.

Interested Dude said...

I have been livingin El Salvador for the past 4 years and I got involved in the debate that
generated around the extractive industry. The topic is certainly
controversial, and I think that the real point in contention is the risk linked to open new mines in El Salvador, not the supposed potential benefits.

A year ago, after a sort of town hall meeting in which Pacific Rim's
representatives laid out their plans, it seem obvious to me that they are not willing to take full responsibility for the potential environmental impact of operating new mines. On paper, Pacif Rim will adopt the newest technologies to avoid that the toxic elements that they would use will end
up contaminating the water reserves. But they don't give you any guarantee that they will actually do it. The security deposit that the government is
asking them to give is ridiculously low (around $200,000) for investments in the tens of million of dollars, and the Salvadorian Environment Ministry has made clear publicly that they do not have the expertise to monitor mines. And we are talking about a country where water is already scarse and mostly
contaminated. Furthermore, the Salvadorian judicial system is extremely weak, so any claim that the local communities might present to local authorities would not guarantee that justice be done. Especially when you
consider that mining companies have already secured the "friendship" of El
Salvador's third leading political party (Partido para la Conciliacion
Nacional, or PCN). PCN is championing the conceccion of the mining licences, and it has direct control over a branch of the judicial system (Corte de

Finally, there are no international bodies that could eventually held Pacific Rim accountable. Even the Interamerican Justice System would
consider the Salvadorian State only as defendant, not the companies. You can review the case brought against Baterias Record to have an idea of how difficult is in El Salvador to keep business accountable.

So, before anything else, Pacific Rims and the other extractive companies should ease these concerns.

Anonymous said...

I have intimate knowledge of this negociation, and have attended both the meetings with Pacific Rim representatives as well as protests from both sides. By "both sides" I mean people protesting against the possibility of a mine, and people protesting FOR a mine.
The reason the mine is getting held up has absolutely ZERO to do with the safety of the mine, water supplies, OXFAM, NGO's, or mining expertise. Powerful members of the government have family interests against having an outside company operate the mine in El Salvador. That is all, end of story.
It will some time before the truth will come out, but it definitely will.

El-Visitador said...

«Powerful members of the government have family interests against having an outside company operate the mine in El Salvador»

This is possible, but not probable. No mines have operated in ES for decades; who could possibly benefit from having the mining industry as a whole aborted prior to its rebirth?

Besides, El Dorado is a greenfield project; i.e., a new mine. By definition, no one owned it before and there is no-one who might resent its being opened.

I think the govm't has sat on this for 4 years because of a permeation into the general Salvadorean psyche of the soft eco-terrorist message we get everyday via the U.S. media (all development is BAD!) plus all that sideliner said above (the truly nasty tactics of Oxfam and its client NGOs in El Salvador).

Anonymous said...

I'm the anonymous that posted before.
You are correct in that my statement is not probable: it is a fact.
[ie, that "Powerful members of the government have family interests against having an outside company operate the mine in El Salvador"].
This is not speculation. It doesn't have to do with anyone having owned the mine before, or Salvadorans wanting to operate the mine.
And, I sound bitchy and I don't mean to be, but the El Salvadoran government cares about as much for the opinion of OXFAM as they care about the same campesinos getting flooded and having their homes destroyed year after year, as is happening as I write this in La Union. Ie, not much.

Intersted dude said...

Anonymous, your statement might actually explain the whole issue, but you need to clarify it. Are these families interested in setting up their own mining operation? Hardly so, since there is no Salvadorian company with the necessary level of expertise. Then what is it?

sideliner said...

auyI am wondering where interested dude got his number of $200,000 for the security deposit for PacRim's project. The number I saw when I looked over their EIS was $5,000,000.

I am also interested in his assertion that PacRim is not willing to assure protection of the water supplies. What water supplies? The Lempa is already to polluted to use. Then when I picked up the papers a week or so back they were trumpeting the new map that ANDA had conned some Swiss NGO into financing, that shows the probability of finding aquifers here in El Salvador. The most interesting part of the whole map was that the northern part of country and especially where PacRim is exploring doesn't have aquifers. At least the way I read the map there is very low probability of encountering an aquifer anywhere near their project in the volcanic base rock of the area. As well interested says that he doesn't think PacRim is willing to take care of the water; the only company in El Salvador that will be on the same level as PacRim will be La Constancia. I haven't heard much about the rest of the home grown companies that are dumping in the Rios Sucio and Aceljuate. Interested Dude needs to look a little farther afield before condemning PacRim who have committed to observing International standards for "any" discharge of water and also for taking care of the environment.

Also I think you could use the same Chile argument as before. It will take a project like PacRim's that will be overseen by the parent governments (Canada and the US) to generate the capital to allow the development of the institutions that will then take over the watchdog functions. That was why PacRim invited the hipocrites to be part of the process. This is precisely what happened in Chile. In the beginning the industry financed the improvement of the government institutions, like the environmental ministry. I can't believe that any of the principals in PacRim are going to jeopardize their reputations forged over years of experience in the industry and also risk criminal liability just to rape the land. To some people their reputation is their stock in trade. They would lose all credibility in the industry and the opportunity to ever develop something like this again. That is what these guys consider fun.

As far as holding people accountable, do you really think that anybody is going to take a chance on spending time in Zacatecoluca? Pacific Rim sure doesn't have the clout to weasel their way out of any trouble like the home grown boys of Baterias Record. If PacRim says they will follow the standards of Canada and the US, they will, just to cover their backsides.

Interested dude said...

Dear sideliner, I just want to get back to some of your observatiion:

A - It is not about what Pacific Rim states in its EIS. That study is awesome. Unfortunately, there is no guarantee that they would comply with it. That includes the security deposit. Insiders told me that it would be around $200,00o, not in the millions.

B - PacRim doesn't care where they get the water or whether it is contaminated, because all they need it for is to spray rocks and dirt with a mix of water and cyanide (an highly toxic substance). This way they separete gold from the rest of minerals. It works this way in any ore. But the point is, once they separete gold, the residual water has to go somewhere. And if it is left untreated or stoked in a safe place, it will end up in some river or aquifer, eventually poisoning the soil, plants, animals and human beings. You are correct in saying that Rio Lempa is already polluted (actually the most contaminated river in Latin America after Rio de la Plata in Argentina), but is this a good enough excuse to make it worse? Hundreds of thousands of Salvadorian use that water for their daily activities, including cooking and bathing. And by the way, a mine uses extremely large amount of water. Is it ok with you in a country as El Salvador, where half of the households do not have running water?

C - Are you kidding me? You really believe that reputation management is a strong enough incentive? Ever herd of Enron? The 7th largest US company back at the time, it crashed under a ton of lies and accounting frauds. And remember who was certifing Enron's books? Arthur Anderson, an accounting multinational which disapperead after the scandal broke out. If you prefer to stay in Latin America, Coca Coca was found buying sugar cane cut by children in El Salvador, while it managed to have union leaders killed in Colombia. Go to any US-based MBA program, and you will notice that corporate ethics, corporate governance and corporate social responsibility are hot topics, because they realize that unchecked greed can lead to gigantic scandals.

D - A big enough company can easily dodge any responsibility in El Salvador. For once, they set up a subsidiary, so any legal claim would be bound to El Salvador. Then they buy political influence, which PacRim already did with PCN (a party well known to use its political and judicial power as a trading card). If needed, they can always bribe people, as this recent case involving Discover Petroleum proves ( If you don't trust me, go read the State Department report on the Salvadorian judicial system. It describes it as weak and prone to corruption.

E - Finally, the US and Canadian Goverment are totally pro-business, so they do not monitor at all what their companies do abroad. Otherwise, the US would have set up some sort of control system within CAFTA, the free trade agreement signed with El Salvador. Unfortunately, they don't. Small wonder people don't trust them now.

Anonymous said...

Like everyone but a few people in this debate, "Intersted Dude" knows nothing of what he talks about! His discription of the mining process is completely inaccurate and leaves out all the "safe guards" that are in the EIS which assure no contamination is discharged. Also, the most recent calculation for the "bond or fianca" is about $7,000,000. OXFAM, ADES, FMLN, CARITAS and others have never told the truth about the operation and have used lies and genalizations which absolutely do not apply to this operation in order to frighten locals against this beneficial project. OXFAM and ADES have finacial issues at stake. FMLN is simply the FMLN! However, the Catholic Church response is the most shocking! Even though he is a chemist and has been given numerous technical presentations by company representative, La Calle has turned right around and publicly confirmed the lies and missrepresentations of the NGOS, thus "lying" in order to affect his desire for no mining in EL Salvador. Had there been a truthful debate, the Church opposition could be accepted but since is based on lies it has to be questioned. Makes me wonder what else the Catholic Church is distorting in order to manipulate the masses! And yes, it is true that local oppositon has resorted to terrorism, apparently with the blessing of ADES who is funded by OXFAM in these matters. Go ask any of the locals who have worked for the company and have been threatened with death of themselves and families. These people who threaten stand up in the meetings side by side with the OXFAM people. You can't tell me there is not a connection!

HODAD26 said...

gold mining is toxic, bottom line, they should leave and leave the gold in the ground, the benefits never will outweigh the costs, in polluted water that will eventually arrive to the ocean
gold miners leave NOW!
and any and all 'anonymous' posts are just that, no credence
as the other posts in support are also just that, diatribe from those with interests in these gold mines
El Salvador fishermen have more to lose
'sideliner', has no profile, so he is obviously paid to write lies, must be a lawyer......
that is what they get paid to do