Canadian mine in eye of storm; Protests bring moratorium on licences for extraction of gold and silver

Celeste Mackenzie. Toronto Star, Mar 27, 2005. pg. A.14

A handful of huge front-loaders and their complement of dump trucks are moving earth high on a desolate Guatemalan mountain that has become a site of controversy in the last few months.

One of the machine operators is Patricio Orlando de Paz Ramirez, a Mayan from a nearby hamlet and one of about 800 Guatemalans employed during the construction phase of a gold and silver mine owned by Canada's Glamis Gold Ltd.

Sporting a hard hat and fluorescent safety vest, de Paz Ramirez says it's sad to see the mountain transformed this way, but in impoverished San Marcos state, he's happy to have the job and the training that went with it.

"When I hear that the mining company had come, I came to look for work, and thank God, I was given this opportunity," he says.

"When I came here, the mine gave me lots of help. I had never seen machines this big - such modern machines.

"Thank God I was given this job and so much support."

But indigenous leaders and environmentalists, led by local Catholic Church leaders, say the government failed to hold required consultations with the Mayans who live in these western highlands, and they've criticized the Canadian embassy for its very public support of the project.

Last month, as a result of pressure from across the country, Guatemalan Vice-President Eduardo Stein announced that, while honouring its commitments to Glamis, the government would not issue any new extraction licences.

"We might be facing a temporary postponement of the development of the mining industry in Guatemala that could last not months, but a few years," Stein told reporters.

A five-hour drive from the capital, Guatemala City, the Glamis project is on track to becoming the first gold mine in the country in modern times.

High commodity prices, coupled with the return of stability in the highlands since the end of Guatemala's 36-year civil war in 1996, have made the region attractive to mining companies. Glamis expects to process more than 200,000 ounces of gold and about 3.3 million ounces of silver annually over 10 years.

But around the world, international law is strengthening indigenous peoples' resistance against the mining, petroleum and forestry industries. And more and more people are learning about their rights.

Here in Guatemala, many say the Glamis mine will damage the environment.

In addition to the issue of proper consultations, critics say royalties to be paid to the government - 1 per cent of the value of extracted metals - are too low, even if they could be accurately calculated.

Recently, about 3,000 people, including local Bishop Alvaro Ramazzini, protested in the streets of San Marcos, the state capital, demanding that mine operations be halted.

Demonstrator Timoteo Vasquez said he's worried about the amount of water the mine will use for processing, and about possible contamination.

"The company has come to violate our human rights and ruin the environment," he claimed.

"More than anything else, we're here to protect our lives, because we can't live without water; we can't live without land. The company is interested in its capital, in money, and it doesn't care about life."

Guatemala signed the International Labour Organization agreement on the rights of indigenous peoples - known as Convention 169 - in 1996.

The convention says governments must consult native people when these kinds of projects are planned for their traditional territory, before they start.

But the government never introduced legislation on how it would carry out consultations. So, Glamis carried out a series of its own local meetings.

Having acquired 100 per cent interest in the property through its 2002 merger with Francisco Gold Corp., Glamis received its extraction licence on Nov. 27, 2003, and began constructing the mine early last year

Sister Maudilia Lopez Cardona's residence sits near a small chapel on the edge of San Miguel.

Nestled in a small valley, it's the closest town to the mine.

Only a few blocks wide, it boasts a town square, a Catholic church and a few stores and homes.

Lopez Cardona, a Catholic nun who has been in San Miguel for eight years, says residents weren't told the meetings were a consultation and she insists their opinions were not solicited.

"I went to several meetings," she says. "A car would drive around town with a loudspeaker saying that the company would be holding a meeting. I wanted to know what the project was all about, but I never took this to be a consultation.

"Later, we realized that our names were on a list. This was really a meeting where the company told us it was here to offer development to the community; that they were going to do this and that.

"But lately, they have been saying the people of San Miguel were consulted."

Back in the capital, Glamis Gold's vice-president for Central America, Steve Baumann, acknowledges that the company has had a hard time getting its message across. But he insists proper consultations took place.

"There was continuous dialogue between the company and the government concerning what was going on at the project," he says, "so I think all of us were pretty confident that the process was fulfilled.

"The government never sat down and wrote a regulation for what ILO 169 means - certainly, that seems to be what the discussion is right now - but by golly, we thought we did the right thing here.

"But there are a lot of people who don't think we did the right thing and maybe we need to figure out a methodology to use so in the future we don't get this kind of criticism."

Frank LaRue, director of the government's human rights commission, says the consultation was flawed but the project is likely to continue. Cancelling it would mean having to compensate the company for losses.

La Rue says he's pleased that a special commission of government and Catholic Church representatives was created in February to make recommendations on the future of mining in the country.

As it stands, he says, it is a conflict of interest for companies to be carrying out consultations. And he points to a further problem with calculating royalties to be paid to the government.

"The amount of gold that is going to be taken by the corporation has royalties of 1 per cent," he explains. "But that 1 per cent is going to be estimated by the corporation because the state doesn't have the capacity to analyze the amount of ore they are taking out."

Ginette Martin, political affairs officer at the Canadian embassy in Guatemala City, says there are five other Canadian mining companies operating in Guatemala, at various stages of the exploration process.

Martin says the Glamis mine and the two other most advanced projects are expected to invest $1 billion in exploration and extraction over an eight- to 10-year period.

The embassy has been trying to shore up public support for the industry - participating in talk shows, presenting op-ed pieces in local newspapers, supporting a large mining conference last November and helping arrange for a local community leader and journalist to visit British Columbia for five days in January to learn about mining there.

Martin says Canadian companies and their shareholders must be supported, but she acknowledges problems with Guatemala's current consultation procedures and says Canada plans to help strengthen that process.

She says local people must "be guided through the process rather than being thrown information in such a way they barely understand what is really happening."

Meanwhile, far from the capital, as the country debates the future of mining, the earth-moving continues at the Glamis site.

And if all goes according to the company's plan, it will be extracting ore by the end of the year.'The government never sat down and wrote a regulation ... but by golly, we thought we did the right thing here'.