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BUENOS AIRES–Julián Rooney, Vice-President of Bajo la Alumbrera, Argentina's largest gold and copper mine, was charged this past summer with crimes against the environment. The charges – the result of 10 years of action by community organizations – stemmed from four proven toxic spills, and a dozen formal complaints filed for pollution.
This is the first time in Latin America that this form of legal action has been taken against a mining company executive for crimes against the environment. Journalist David Mordersbach wrote that the charges alone sent 'shockwaves' through the Argentinean mining community.
The charges against Rooney represent a small victory, but opponents of unchecked mining development in Argentina still face many hurdles in reforming the country's mining sector. Argentina's by-the-book effectuation of the World Bank economic policies pushed throughout the world in the '80s and '90s the vast amount of unexplored land with high mining potential, and the high commodity prices make it a prime destination for multinational mining companies.
During the 1990s, under the leadership of neo-liberal President Carlos Menem, with the active participation of Angel Maza – then National Secretary of Mining – and with governors of the relatively poor but mineral-rich provinces of San Juan, Catamarca and Tucumán, the government revamped national mining policies.
The resulting legislation, instituted in 1993, prohibited the state from exploiting the country's mineral resources (effectively forcing privatization in the mining sector), guaranteed investors tax stability for 30 years, granted 100 per cent deduction of exploration costs from income taxes, and capped the maximum royalty payment to the government at three per cent.
In 2001, a decade of World Bank and International Monetary Fund policies at the hand of Menem led Argentina to economic collapse. Some of the results include the devaluing of the peso to a third of its previous worth and unemployment rates skyrocketing to over 20 per cent, up from 16.4 per cent before the crisis. Interestingly, the province affected most by unemployment – at 25.5 per cent – was Catamarca, currently a mining leader in the country.
The collapse was beneficial to mining investors, as the newly devalued peso meant doing business in Argentina became much cheaper than it had been, while their earnings, tallied up in dollars, were not affected.
The mining policies of the centre-left government of Néstor Kirchner, who was in office from 2003 to 2007, strongly supported mining investment and activity in the country.
Building on the 1993 Mining Law, Kirchner launched a “Mining Plan” in 2004 to strengthen mining investment and activity in Argentina. Among other issues, the Mining Plan set the stage to ensure a secure environment for mining investments and sought to create opportunities for market development at national and international levels.
The current National Secretary of Mining deems the Mining Law and Mining Plan responsible for the impressive upsurge in mining investment over the last decade.
Mining investments in the country stood at over $2 billion by 2007, a massive increase over the $220 million invested in 2003.
With six projects currently in production, 10 under construction and well over 200 in exploration, the last decade has seen Argentina take a leap from being a small player in the mining world to becoming a stronghold for the transnational mining industry. Ninety per cent of mining concessions in Argentina are held by transnationals.
The changes in mining policies in the 1990s were followed by the creation of several junior mining companies in Canada that focus either exclusively or mostly on mining ventures in Argentina.
These include Mirasol Resources, Argentex Mining Corporation, and Yamiri Gold and Energy Inc. Concerning gold mining in particular, more than 80 per cent of mining companies currently exploring in Argentina are based out of Canada.
At least seven projects from Canadian corporations are at an advanced exploration stage or under construction. Two such sites are expected to be among the world's largest mines.
Barrick Gold's controversial Pascua Lama project proposes mining an area that straddles the mountainous border between Argentina and Chile, a region covered by glaciers in a World Biosphere Reserve granted legal protection by UNESCO.
Yamana Gold Inc's Agua Rica, a gold mine projected to be three times larger than Alumbrera – currently Argentina's biggest mining site – is situated only 34 kilometres from the existing giant.
Alumbrera, going into its 13th year, is among the 10 largest copper projects in the world and is also a significant gold producer. Alumbrera is 50 per cent owned by Swiss company Xstrata; the other half of the ownership is shared between Goldcorp and Yamana Gold.
The Alumbrera project alone means Catamarca accounts for 80 per cent of Argentina's metal exports.
In addition, Barrick and Yamiri Gold and Energy Inc are in the exploration stage of the controversial Famatina project in La Rioja province.
Barrick, the world's largest gold-mining company, owns the entirety of the Veladero project (located within the same World Biosphere Reserve as the Pascua Lama development) in the nearby province of San Juan.
Angel Maza, National Secretary of Mining during Menem's first term in office in the early 1990s, eventually returned to his home province of La Rioja, where he was elected governor. During his three terms in office, he pushed hard for the development of the mining sector.
Under his political tutelage, Yamiri, a provincially owned company, underwent a series of fraudulent changes to become a private entity, which allowed it to maintain its legal entitlement to continue work in the province.
Vancouver-based TelcoPlus acquired control of Yamiri S.A. in 2005, buying just under 80 per cent of the company's shares. TelcoPlus then changed its name to Yamiri Gold and Energy, and began trading under that name on the Toronto Stock Exchange.
Earlier that year, Yamiri SA signed a controversial agreement with Barrick Gold. The deal grants the latter exclusive rights to exploration of the highly coveted gold and silver Famatina project. This agreement was helped along by Maza's visit to Barrick's Canadian headquarters in 2006.
The close links to Barrick Gold and accusations of Maza holding 41 per cent of the shares of Yamiri S.A. before the involvement of TelcoPlus were instrumental in igniting the public outrage that helped lead to his impeachment in early 2007. Argentina's current Secretary of Mining, Jorge Mayoral, from the mining-rich province of San Juan, also owns a considerable volume of shares in three mining companies active in Argentina.
Public servants’ financial engagements with private mining companies violate Argentina’s Law of Public Ethics, but the country's anti-corruption agency deems this acceptable so long as Mayoral refrains from intervening in the affairs of the companies.
During the 2001 economic collapse, when all bank accounts were frozen, street riots finally resulted in the resignation of then-president Fernando de la Rúa. When a highly controversial pulp mill in Uruguay that drains into one of Argentina's main rivers was proposed, Argentine protests brought the issue before international courts and gained the world's attention. Argentines have a tradition of standing up and speaking out when their interests are affected. Mining, and particularly Canadian mining, have not been an exception.
In response to frequent protests, governors of La Rioja and San Juan drew up policies that penalize public protests against mining with imprisonment and which prevent social organizations from giving talks about mining in schools.
In some cases, local action and the need for increased state benefits have led to higher taxation of and legislated protection against destructive mining practices.
In December of 2007, the government of Kirchner modified some export tax breaks for mining companies, changes that companies are attempting to evade by claiming they contribute otherwise to society through education and social programs in the areas where they operate, and through royalties.
In 2003, a well-organized group of concerned residents in the town of Esquel in Patagonia held a public consultation, during which 81 per cent of the population expressed opposition to the proposed Cordón Esquel open-pit gold mine, currently owned by Yamana Gold.
These actions led to the provincial governments declaring a mining moratorium in parts of the province until 2009.
With the increase of mining activities over the past five years, other forms of community organizing have led to changes in the provincial legislatures of Jujuy, La Rioja and San Juan.
Most recently, in September and early October, the provincial legislatures in Córdoba and then San Luis also passed bans on open-pit mining.
The conditions might still be ripe for extensive mining in Argentina, but so long as communities are organized – and they increasingly are – social and environmental challenges will continue to expose realities that corporations and governments would gladly do without.
M. Olimpia Boido, BA, MA, a specialist on political intercultural relations, has been following mining developments as they pertain to Canadian corporations in Latin America.
The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.