Tuesday, July 21, 2009

Roadblocks to gold mining remain in place

An essay at Foreign Policy In Focus titled El Salvador's Gold Fight presents a viewpoint sympathetic to the efforts to block gold-mining in El Salvador. The article focuses on gold-mining company Pacific Rim and that company's arbitration against the government of El Salvador. Popular resistance to mining continues:

The combined effect of local resistance and religious backing had a decisive impact on government decision-making. With public opinion polls showing a clear majority in opposition to gold mining, and despite its initial enthusiasm for Pacific Rim's mining proposals, officials from the ruling conservative ARENA party refused to issue the company permits to begin extracting gold from underground deposits. In essence, the government ceased to acknowledge Pacific Rim's existence. Repeated complaints and applications for permits were filed by the company with government ministries, and promptly ignored.

Since then, La Mesa has continued to push the envelope. Not trusting that government silence on the permits issue equaled support for their cause, the organization presented a bill for congressional consideration in 2006 that would ban all precious metal mining in El Salvador. While the bill was almost immediately withdrawn from deliberation, it wasn't forgotten. Shortly after Funes took power, the Frente Fabarundo Martí para la Liberación Nacional (a left-wing opposition party, better known as the FMLN) resurrected the proposed legislation and presented it to El Salvador's National Assembly for a vote. According to the Latin American Herald Tribune, the proposed law would grant Pacific Rim and other foreign companies six months to discontinue operations before being ordered to leave the country.
At the moment, El Salvador's government seems intent on resisting the promise of job creation and royalty revenues from gold mining and on giving credence to the spectre of environmental degradation portrayed by the protesters. There doesn't seem to be any force in the government aligning itself with the miners. With no one advocating for mining in El Salvador's government, it is hard to imagine mining permits being issued at any time during Mauricio Funes' term as president.


Gatofilo said...

Thar may be gold in them thar hills, but it's not so easy to get at. There are small operations that might be profitable because of the current prices of gold.

I was invited to go to one mine in the Eastern part of Salvador, and my friend walked into the shaft along some push cart tracks. He tells me he didn't see a thing, much less gold nuggets!

I remember they would bring out cart loads of rocks and grind these in metal cylinders with large metal balls. Then they run water through the fine stuff and catch any gold dust in flukes.

They would then heat all of it in smelters and pour out the gold into ingots.

From what I was able to see, I don't think there was enough gold for the dentists down there to us

As for the ecology and environmental impact related issues, besides the necessary irrosion controls, were the arsenic and heavy metals released during the process.

So your leftist comrades can forget about that gold, because it's not just laying around for the pickings, but rather it's labor intensive. We all know that's a Bad for them,

El-Visitador said...

In essence, the government ceased to acknowledge Pacific Rim's existence.

Dude, that is the exact opposite of rule of law.

It is too bad my taxes and those of peasants in Arcatao will certainly be used to pay the giant arbitration award to which Pacific Rim is entitled and which is surely coming to them.

Are people so fanatical about their faith-based points of view with regard to mining that they are actually OK with their government having ignored its own law?

Anonymous said...

How come the coffee producers are allowed to pollute the rivers?

Gatofilo said...

To Mr. Anonymous who is wondering why coffee growers can contaminate rivers.

Friend, your entire country is contaminated, and more resembles an overturned garbage can. I guess the word that best describes El Salvador is "Acelhuate."

I still have fresh in my mind the case against Baterias de El Salvador who were contaminating the soil and groundwater with lead and mercury. But it goes on and on.

There is not one single waste water treatment plant in that entire country. So guess who finally ingests all that waste in your environment.

You folks definitely have lot of work to do in order to surpass your living in your own waste.

humble.pie said...

Hello EV,

Did you know that every single 1st world mining jurisdiction, including all jurisdictions in the US and Canada, separates mineral exploration permits from mine operating permits. So does the ES Mining Act. In all these jurisdictions the former does not lead automatically to the latter.

There are many precedents of mining projects being denied permits at the penultimate stage. Take Northgate over Kemess North. Did Northgate whine when denied at the last minute? No. Did Northgate sob to the media? No. Did Northgate sue? No. Did Northgate send shills to post anonymous messages in internet forums like this one? No. Did Northgate waste its valuable executives' time by fretting obsessively into dead-end routes? No.

Instead, Northgate mobilized its positives energies virtually overnight and immediately bought another mine in Australia. The company had previously identified and developed this prospect as an alternative to Kemess North, ie they had a backup strategy in place.

Pacific Rim could have had a backup strategy in place.

As soon as Funes announced his candicacy, even a fool could see that the ES left had a significant chance to increase power in the 2009 elections, bringing with its success a groundswell of concern, not only for the environment but also for the meagre financial offerings that Pacific Rim had put on the table. And yes, those offerings were meagre by current global standards. Keep in mind that Kinross, on whose board the chairman of Pacific Rim currently sits, recently offered a 5% royalty to Ecuador. Keep in mind that, in one of the foxiest financial struggles the world has ever seen over a valuable mining property, Mongolia's parliament still won't agree to a 34% co-ownership deal with Rio Tinto because its radical faction wants 51%.

No tribunal is likely to award a giant settlement to Pacific Rim. Keep in mind, also, that one of those judges will be picked by El Salvador, and the third one will be picked by the first two acting together. And it's also useful to keep in mind that, because of the importance of this precedent-setting case, the hearings will likely stretch out over three, four, five years. The mining company does not have the financial resources to back such legal fees.

What would a buyer pay to take on this listing ship and its rats' nest of ES politics, in the faint hope that a permit may be granted sometime prior to 2013. At the Toronto PDAC this spring, all buyers of junior mining explorers including the highly acquisitive Chinese were said to be looking only at mining properties on the cusp of production. All buyers were said to be willing to pay top dollar while insisting on a sure deal. This is not Pacific Rim's profile.

Solavá said...

"In essence, the government ceased to acknowledge Pacific Rim's existence. Repeated complaints and applications for permits were filed by the company with government ministries, and promptly ignored."

Pacific Rim is not seeking arbitration (suing, really) the Government of El Salvador because it denied them a permit to exploit their gold mine, it suing them because they didn't deny them that permit.

The Salvadoran government's "administrative silence" is actually a crude violation of the law. It was a mistake to celebrate the Salvadoran government's neglect in this matter during the Saca administration and it would be a mistake to expect the same from the Funes administration.

The lawsuit filed by Pacific Rim is in fact based on the notion that El Salvador violated its own laws by not responding to Pacific Rim. The total disregard of the law by the Government of El Salvador actually gives Pacific Rim a real advantage in their efforts to recover the $77 millions they claim they invested in the exploration phase.

Now, what on fucking earth prevented the Salvadoran government from following the rule of law and sending the company a straightforward letter stating "we don't want your fucking business so get off our backs"?

Well with 18 other metallic mining exploration permits going strong, what do you think would be the effect of just 9 of those following on Pacific Rim's steps and suing the government as well?

Thanks to "La Mesa"'s efforts against mining, which focused all of its energies against only one company, the one that actually found gold, El Salvador might actually become the first country forced to give mining exploitation permits in Latin America.

Solavá said...

"How come the coffee producers are allowed to pollute the rivers?"

In El Salvador everyone is allowed to pollute the rivers. Over 90% of the rivers in the country are heavily polluted by human fecal matter. Every time a person flushes a toilet, their shit goes straight into a river. It's that simple. And this has caused the rivers to be so polluted that in at least 60% of them the native fish population has been completely wiped out. But, in general, the water in 90% of the rivers of El Salvador is completely undrinkable.

Lasmarch said...

Traces of fecal matter were even found in Agua Cristal bottles.

Gatofilo said...

Gold shhmold... Solava, God, a breath of fresh air at last!

I am really amazed that there still are people in Salvador who don't simply point fingers to blame others and make excuses to evade taking responsibility for their own screw-ups and doings.

The people there live in their own wastes and filth, and apparently they don't mind, or they're so used to it that no one even comments on the depravity of living inside of an unflushed toilet.

Instead of talking so much demogogic political rhetoric, I would suggest that people get together as "Friends of El Rio Acelguate" or Lempa, or of the beautiful lakes and streams. Do something tangible and positive for a change.

Instead of trying to emulate losers like Daniel Ortega and that gang, how about cleaning up your country and making it a better place to live your only life in.

As it stands now, the talk about the marvels of Chavez, the Castro boy's 50 year dynasty, Daniel Ortega and his wife trying to follow Somoza's footsteps to riches, but when push comes to shove we all know where all this big talkers migrate to; Yup, they all head for "El Norte."

Ever wonder why it's mostly Mexicans, Guatemalans, Hondurans, Salvadoran, Cubans and Nicaraguans who risk it all trying to get here just for a taste of our freedom and our much envied way of life?

But you don't ever see many people coming here from Belize or from Costa Rica do you... Guess why.

El-Visitador said...

«There is not one single waste water treatment plant in that entire country»

This is, quite of course, a lie.

All private enterprise greenfield manufacturing plants built since the mid '90s have to have built a waste waster treatment plant.

The private sector has done its part, or most likely, unable the face the gargantuan costs of trying to comply with these requirements, has outsourced manufacturing to China and other growing countries.

It is the public sector that has yet to implement the codes imposed on business.

Gatofilo said...

Friend, El Visitador, I don't have a horse in that race and have no reason to exagerate or lie about the enviromental desaster in that polluted country.

You, Mr. El Visitador obviously need to "VISIT" the country and tell us where there is a single "municipal" waste water treatment plant in all of Salvador. Fact is that every city discharges it's waste water into a lake, stream or river, which run its course into the Pacific Ocean.

Since of the people of Salvador are at the top of their food chain, it's those same people who get to ingest the fat of the land and sea. The rest I'll leave to the imagination because it's too gross to coment on.

I don't know if he has seen satellite photos of that country where the severe pollution in the lakes, rivers, streams, and oceans is evident.

You'd be hard pressed to find a single body of water in Salvador that is without fecal or heavy metals contaminants.

And that, El Visitador, is no lie.

But then, who would not support facts that stare you in the face, and where the poignant stench itself is enough to clear ones sinuses.

El-Visitador said...

«tell us where there is a single "municipal" waste water treatment»

What's wrong with you?

That's exactly what I just said. That the government has failed to implement that which demands from private business.

That's why no municipality operates wasterwater plants.

Gatofilo said...

Friend El Visitaor,

You seem to be a nice enough fellow, but apparently you are the type of person who must have to have the last say on any given topic.

Don't you understand, EV, that we're talking about the same thing: Chronic pollution and contamination in El Salvador.

It's unacceptable and really uncanny that there are NO MUNICIPAL WASTE WATER TREATMENT PLANTS anywhere in the entire country, and the fecal matter, heavy metals, and filth laden water for the entire populaiton is simply diverted to any stream, river, or lake that ultimately enter the Pacific Ocean.

Mr. El Visitator, there is no argument here. I'm just letting those who don't seem to know or care, that they are at the top of their food chain, and are in effect living in and ingesting their own excrement and desease laden filth.

Instead of "talking the talk," I wish more people like you would "walk the walk," and adopt a polluted river, lake, or stream in El Salvador, and develop a project to clean up the mess.

How wonderful it would be, to at least have one river for starters, that is not dying and polluted, but is thriving with native species that the populace understands, protects and enjoys.

Mr. El Visitador, I hope that your last word will be along the lines of, "Yes I will."

There is no shame living in filth and squallor, the shame is in not cleaning it up.

Solavá said...

"The Government has failed to implement that which demands from private business. That's why no municipality operates waste water plants."

El Visitador is right in one sense but mistaken in another. There is the national Government's responsibility, and then there are municipal governments.

In El Salvador, water is distributed and managed by a single institution. They are also in charge of managing the waste, and what the government does is dump it into the rivers. The fact is that the salvadorean Government has not done anything to clean the rivers or to treat waste water. That's why there has been a long struggle to force the Government to pass a law that will force them to do that and pay for waste water treatment plants for local municipalities.

However, there are three local governments that have created their own treatment plants: Suchitoto, San José de las Flores and Nejapa. Suchitoto did it to stop the foul smell that was crippling its tourist business, now thriving. San José de las Flores did it as a remedial measure after an epidemic caused by the high levels of water toxicity took the lives of 10 children (this is a town of only 2,000 people). Nejapa did it because it has the largests underground water reserves in San Salvador and protecting them became an investmente to attract businesses that need water to function, such as the Coca-Cola plant, etc.

These three are the only local governments to have waste water treatment plants, and they did it without the national Government's help.

Gatofilo said...

Thanking friend Solava for the interesting summary to our conversation.

It's undeniable that protecting the environment is critical in every sense of the word, and hopefully Salvador will step forward and follow the examples of municipalities mentioned by Solava.

Salvador clearly isn't unique in being a densely populated country and without abundant natural resources. But so are many other nations, Japan is a great example. While on the other spectrum is Nicaragua that uses a marvelous natural wonder on the edge of their capital to dump their wastes.

Solavá said...

Oh, I see, a new type of troll: a babbler.

Gatofilo said...

I definitely don't blame you or anyone down there; you are all simply victims of your polluted environment, and I understand that it's all in the water, the air, and in what you ingest.

I'd just suggest that you check for amebas now and then, parasites are supposed to be something really terrible.

Wishing you the best.