June 16, 2006

Andean Gold Fever Sparks Cross-Border Battles

High in South America’s Andes Mountains, a battle continues between rural communities and a large Canadian mining company over the future of an environmentally and culturally-sensitive region. Sparked by a $1.5 billion-dollar project by the Barrick Gold Corporation of Canada, the dispute is an early test of how the new government of Chilean Socialist President Michelle Bachelet will balance environmental and economic concerns. Centered in the Huasco Valley that borders Chile and Argentina, the dispute pits indigenous and rural communities against Barrick Gold over the company’s Pascua Lama Project.

Projecting the use of tens of thousands of tons of explosives to clear mine entrances, the Canadian transnational proposes to extract 20 million ounces of gold, 600 million ounces of silver and 200,000 tons of copper concentrate over nearly two decades. If precious metal prices continue to stay at their current high levels, the company stands to rake in billions of dollars in profits from Pascua Lima.

Many residents of the Huasco Valley contend they will get stuck with the raw end of the deal. They charge the massive mining project will damage or destroy three Andean glaciers, dry up and contaminate groundwater supplies, disturb wildlife habitat, wipe out meadows, and ruin archeological sites.

Pascua Lima will be “the death of the Huasco Valley,” contends Luis Faura, one of the valley’s leading opponents to Barrick Gold’s plans. Faura is especially concerned about the possible impacts on human health and groundwater from Barrick Gold’s plans to use a cyanide leaching process to extract gold and silver; arsenic and mercury pollution are additional worries.

A related conflict involves members of the indigenous Diaguita community of Huas-coaltinos who charge that they were stripped of more than 100,000 acres of their ancestral land to pave the way for the project. Nancy Yanez, a lawyer for the community, characterizes the threats posed by the mining project to the Diaguita’s traditional farming and grazing activities as constituting ethnocide.

About three-fourths of the project is planned on Chilean territory and one-fourth on Argentine territory. The proposed project site is about 400 miles south of Santiago, Chile, and 180 miles northeast of San Juan, Argentina. The mining is planned to occur at altitudes ranging from about 13,000 to 16,500 feet.

Chile’s National Environmental Commission (Conama) gave a green light to Pascua Lima last February 15, but attached a number of conditions to the project. Conama ordered Barrick to not remove or disturb the glaciers, monitor the groundwater and soil and prevent dust from accumulating on glaciers that supply water to the Huasco Valley.

Vince Borg, a Barrick Gold spokesman, says his company will not challenge the conditions. Barrick Gold’s opponents, however, have filed dozens of administrative appeals to Conama’s decision. Supporting Huasco Valley residents in the legal challenge are the Santiago-based Latin American Observatory for Environmental Conflicts (Olca) and the international environmental advocacy group Oceana.

According to Cesar Padilla, Olca’s mining project director, Barrick Gold’s opponents minimally demand the preparation of a new environmental impact statement for Pascua Lima. An Argentine government decision on Pascua Lima is expected by next month. Argentine authorities already have fined Barrick Gold for dumping oil and burying waste in the San Guillermo Biosphere during the com-pany’s preliminary project operations. If the environmentalists’ appeals fail in Chile, construction of the Chilean portion of the project could begin later this year.

Pascua Lima is the first big project to result from the 1997 mining treaty between Chile and Argentina that lifted binational legal restrictions and eased foreign investment in the mining sectors of the two nations. A company with operations five continents, Barrick Gold reportedly has counted among its stockholders former US President George H.W. Bush. Brian Mulroney, the former Canadian prime minister who promoted the North American Free Trade Agreement and the Canada-Chile free trade that facilitated new investments like Barrick Gold’s, sits on the company’s board of directors.

Another prominent company director is Venezuelan media magnate Gustavo Cisneros. Barrick Gold is not the only transnational company interested in the Andes’ treasures. Reportedly, the Noranda and Homestake mining companies are also eyeing the region for operations.

Reprinted from Frontera NorteSur, U.S.-Mexico border news Center for Latin American and Border Studies New Mexico State University Las Cruces, New Mexico

Return to the Frontpage