Letter to Chilean President Lagos Re: Noranda’s investment in Chile and the case of Alumysa - July 14, 2003

July 14, 2003

President Ricardo Lagos
Government of Chile
C/o Chilean Embassy
50 O’Connor Street
Ottawa, ON  K1P 6L2

Fax: (613) 235-1176

Dear President Lagos:

Re: Noranda’s investment in Chile and the case of Alumysa

On the occasion of your visit to Canada and your meeting with Prime Minister Chrétien, we are writing to you concerning Noranda Inc.’s proposal to build an aluminum smelter in the Aisen region of Southern Patagonia, Chile.

We recognize the importance that foreign investment can play in the development of strong and vibrant economies such as those found in Chile. The Chilean government has taken exemplary measures to insure itself against short term speculative investment, and in 1997, opened its borders to further trade and investment through the Canada-Chile Free Trade Agreement (CCFTA). With the environmental side agreement to this treaty, Chile also committed to modernize and effectively enforce national environmental laws and regulations.

It is our collective belief that Noranda’s proposal to build an aluminum smelter in southern Patagonia is not the kind of foreign investment that will lead to positive development. Indeed it is a destructive investment that will have negative impacts on the environment, people and the economy. As you well know, the project requires constructing six dams and three hydroelectric facilities, flooding 10,000 hectares, and the habitats of 23 species threatened with extinction. It will also pump 1.5 million tonnes of solid and gaseous waste per year into Patagonia’s fragile and pristine ecosystem. All the necessary alumina and other inputs will be imported, with the end results exported, leaving only a small fraction (3%) of the profits for the local economy. The investment will also severely compromise the existing billion dollar salmon and trout industry, organic cattle ranching, and eco-tourism – and will disrupt the development strategy laid out by the region itself. Furthermore, much of the profit from the venture is reliant on world aluminum markets which are currently unstable.

Noranda is still compiling its second addenda to the Alumysa environmental impact assessment, due this November. Thereafter COREMA will take a decision with regards to this project. We know that Chile is committed to a thorough and critical assessment of environmental and social impacts of this project, and to respecting all applicable laws and agreements.

To this extent, we urge you to use all of your influence to ensure that this project does not proceed in its current form and destroy one of the last unspoiled treasures of the planet, and a vibrant regional and local economy.

Yours sincerely,

Fraser Reilly-King
NGO Working Group on EDC

CC: The Right Honourable Jean Chrétien, Prime Minister of Canada

Roch Lanthier
Collectif de Lutte aux Organochlorés

Joan Kuyek
MiningWatch Canada

David B. Brooks
Friends of the Earth Canada

Henri Jacob
Le REVE (Le Regroupement Ecologiste Val d'Or et Environs)

Martin Wagner

Joel Reynolds
Natural Resources Defense Council

Anna Cederstav
Interamerican Association for Environmental Defense (AIDA)

Peter Bosshard
International Rivers Network

Martin Wagner

Randi Spivak
American Lands Alliance

South America
Fernando Dougnac
Fiscalía del Medio Ambiente (FIMA)

South Pacific
John Seed
Rainforest Information Centre

Claire Malcolmson
Victoria BC