Press Responses: June 30, 2006

By Joan Delaney
Epoch Times Victoria Staff

Picture this: a fertile valley at the foot of the Chilean Andes, bathed in pristine water from three massive glaciers which nourish the grape, avocado and olive groves below. Now imagine if this scene included a huge open-pit mine built to extract 17.6 million ounces of gold and silver deposits that are buried beneath the glaciers—a first in the annals of mining.

This is the reality unfolding in the Huasco Valley in Chile, where Toronto-based Barrick Gold got environmental approval in February to continue with ambitious plans for its Pascua Lama project high in the Andes Mountains. Construction is slated to begin in September. However, the Chilean Environmental Authority has rejected the mine's most controversial aspect: Barrick's plan to relocate the three glaciers in order to access the gold underneath.

Barrick's first proposal was to transfer the three glaciers and merge them into a larger glacier several kilometres to the south. Then, in a report submitted to the Regional Environmental Commission last November, the company said it would only need to intercept five hectares of the glaciers rather than the initial 10, and that the remaining five hectares would naturally melt over time, providing access to the gold. It was around this time that Barrick began referring to the glaciers as "ice reserves"—a play on words, environmentalists say, meant to minimize the importance of the glaciers.

But some local farmers, environmental organizations and church and community groups are strongly opposed to disturbing the glaciers in any way, believing it will threaten the eco-system, agriculture and water quality of the valley.

Because the project spans the border between Chile and Argentina, making this the first bi-national mining project in the world, there have been protests in both countries against the mine, including a blockade on the Argentinean side. The mine site in Argentinean territory is called Valdero. After a letter and a petition with over 18,000 signatures opposing the mine were submitted to the Chilean government in November 2005, police charged protesters when they tried to place chunks of ice representing the threatened glaciers in front of the government palace. There were more demonstrations in Santiago and Vallenar.

Jamie Kneen, Communications Coordinator at Miningwatch Canada, says there are concerns not only about acid mine drainage and contaminant leaching into the groundwater, but also about water quantity, because the project will consume huge amounts of water in an already arid region. He says despite opposition and protests by local groups, neither the Chilean nor the Argentinean governments have been open to "democratic dialogue or discussion" regarding Pascua Lama.

"On the Argentinean side, the mines minister and the provincial governor have accused environmentalists of being eco-terrorists and being against development," says Kneen. "They're not interested in addressing the issues, they're interested in promoting mining, and unfortunately they've got a lot of support in that."

Kneen says the Diaguitas, an indigenous people who had a portion of their land misappropriated for Pascua Lama, have resorted to the courts because the mining concessions were given to Barrick without consulting them. He says the group also has legal issues with Noranda Mines, another Canadian company operating in Chile.

Antonia Fortt, Environmental Engineer with the Santiago-based Oceana, says it's unclear how the company is going to be able to access the gold without disturbing the glaciers, which she says initially Barrick intended to destroy outright. She says that although Oceana and other NGOs have been trying to protect the glaciers, they have already sustained damage due to Barrick's extensive exploration process.

"We know that they started some operations before getting approval. There have been explosions. They've made a helicopter base, they've started building roads, and we know that a portion of the glaciers has disappeared."

Besides the risk of groundwater pollution, Fortt says another concern is the potential for accidents because cyanide, a toxic chemical used to separate the gold from the rock, will be transported to the mine by truck through the valley and along mountainous roads. She says there have been accidents involving cyanide spillage at another Barrick-owned mine in Chile.

Barrick became the world's largest gold mining company after its recent takeover of Placer Dome Inc.

Nobody at Barrick Gold was available for comment at the time of this report. But a Pascua Lama Fact Sheet posted on the company's website claims that it is "committed to high standards" and the mine will bring "significant and sustainable social and economic benefits" to the communities on both sides of the border. It says Barrick has to meet more than 400 conditions to be able to build and operate Pascua Lama, including "very stringent commitments and controls for the protection of glaciers/ice fields and water resources."

"It's not enough to have a resolution from the Environmental Authority that says they can't disturb the glaciers," says Fortt. "We really think they should be monitored, but that's not going to happen."

Calls for Accountability

A series of national roundtables on corporate social responsibility being held across Canada this year may be instrumental in bringing about change in how Canadian mining companies conduct their operations overseas. Fraser Reilly-King, coordinator for the Halifax Initiative Coalition which is involved in the debates, says the roundtables are a response to 12 "pretty progressive" recommendations made by the Standing Committee on Foreign Affairs and International Trade in June 2005.

Civil society organizations involved in the roundtables are asking the government to require Canadian mining, gas and oil companies to uphold certain standards while operating abroad. They want the companies to meet clearly-defined human rights and environmental standards as a precondition for receiving financial and political assistance. They also want legislation introduced that would hold Canadian companies and their directors accountable in Canada if they fail to meet these standards overseas.

Reilly-King says Canadian extractive companies have been implicated in environmental damage and human rights abuses in over 30 countries. He says in many cases, the reality is that both the host governments and the mining companies only care about the investors.

"It's not about the community, it's not about the people who are being affected" says Reilly-King. "While you would hope that the companies would police themselves, ultimately they'll claim that they're accountable to their shareholders and no one else. It's all about the bottom line."

Radhika Sarin, International Campaign Coordinator with Earthworks, says the small mining companies have also been known to shirk their responsibilities, a case in point being the Summitville Mine in Colorado. In 1992, Galactic Mines, a Canadian company, declared bankruptcy and closed Summitville. Cyanide leakage from the 567-hectare mine throughout its entire operation had destroyed 25 kilometres of the Alamosa River. But Galactic pulled out, leaving the U.S. taxpayer with the reclamation bill.

Washington DC-based Earthworks, together with Oxfam America, have initiated a global consumer campaign called No Dirty Gold, aimed at urging jewellery retailers to provide an alternative to gold that's irresponsibly mined, and reforming the "egregious practices" of some mining companies, says Sarin. The groups have outlined a core set of principles that mining companies should abide by, such as observing certain environmental, social and human rights standards.

Sarin says that with 80 percent of the gold market going into jewellery, No Dirty Gold is hoping to gain some leverage with the mining companies through jewellery retailers. In the two years since the campaign started, eight jewellery giants, including Tiffany and Cartier, have committed to selling gold that's more responsibly mined. No Dirty Gold says an average of 20 tons of mine waste is generated to produce just one gold ring, while thousands of families around the world have been displaced to make way for gold mining operations which cause "massive environmental destruction."

While Sarin recognizes that mining companies may be reluctant to introduce changes if it means their profits will be reduced, she says the reforms are "very feasible," especially given the high price of gold this year. Australia-based BHP Billiton, one of the world's largest mining companies, now has a written policy saying they won't dispose of mine waste in oceans or other water bodies.

"The nature of mining is that there will always be an impact, but the discussion that really needs to happen is how to do it in a way that the environmental impact can be minimized," says Sarin. "It's a question of doing it in a way that when the operation closes down and leaves, the water resources and farmlands in that area are not contaminated."