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The Gold Standard

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Issue: 38 Section: Business Geography: Latin America Chile, Argentina Topics: Mining, social movements, water, corporate

July 6, 2006

The Gold Standard

Chileans fight to protect their environment from Canada's Barrick Gold

by Rob Maguire

Pascua-Lama_web.jpg
In what direction is Barrick's Pascua Lama mine headed? photo: Mining Watch
In the face of local grassroots opposition, the Chilean government has given Canadian mining giant Barrick Gold the go-ahead for its controversial Pascua Lama mine. Chile's National Environmental Commission heard only two of the nearly 50 complaints filed against Barrick before giving the project its approval.

Founded in 1983 by Saudi arms dealer Adnan Khashoggi, Barrick is the foremost gold mining corporation in the world, with sales exceeding $2.6 billion in 2005 and the largest reserves in the industry, at nearly 90 million ounces.

High in the Andes Mountains, the Pascua Lama mine straddles the border of Chile and Argentina and represents a $1.5 billion investment for Barrick. The company plans to extract 615,000 ounces of gold, 30 million ounces of silver and 5,000 tons of copper annually over the 21-year lifetime of the open-pit mine.

Despite all the wealth that will soon be extracted, few Chileans are likely to benefit. Thanks to a combination of favourable tax legislation, legal loopholes and corporate malfeasance, no Canadian mining corporation paid any Chilean income taxes in the 1990s.

The mine is located in the Huasco Valley, a semiarid ecosystem that is entirely dependent upon the mountains for water. Residents argue that the mine will poison the land upon which they depend, endangering their health and jeopardizing their agriculture-based livelihoods.

In order to process the ore at Pascua Lama, Barrick will use 7,200 kilograms of cyanide and 10 million litres of water per day. Cyanide contamination of water resources can be devastating -- cyanide concentrations as little as 1 microgram (one-millionth of a gram) per litre can be fatal to fish. Barrick's site manager, Julio Claudeville, insists that cyanide is innocuous.

One report on mining in northern Chile found high levels of arsenic in the region's ecosystems. Health problems directly linked with arsenic exposure include cancer, deformation, miscarriage and underweight children. Other toxic contaminants found in nearby water supplies include sulphuric acid, diesel oil, urine and faecal matter.

After discovering dead fish floating in the San Juan River in 2004, locals found Barrick trucks dumping waste from their nearby Veladero mine into the adjacent wetlands. Barrick admitted to the practice, but argued that the waste was treated and posed no harm to the environment. No explanation was given for the dead fish.

Deeply concerned about the environmental dangers posed by the new mine, locals formed the Coordination for the Defence of the Valley of Huasco. Several demonstrations took place in 2005, culminating in thousands gathering in the Chilean capital of Santiago for a vibrant protest. In November, a petition signed by 18,000 valley residents and people opposed to Pascua Lama was delivered to President Lagos.

Seeking an international intervention, the Chilean Consumers' Organization filed a complaint with the Organization of American States alleging that the mine represents a great risk to the subsistence rights of the local indigenous population and that Chile would be breaking its international commitments by allowing the Barrick project to go ahead. More recently, the environmental group Oceana held a demonstration outside of the Canadian embassy in Santiago, arguing that the mine would enrich the Canadian corporation but would "do nothing for Chile except destroy its environment."

The president of Barrick Gold South America acknowledged the local resistance, pointing out that sustained opposition to the company was by no means unique to the Pascua Lama project. "The biggest challenges we are facing by far, in both South America and Africa, are social in nature."

Although the mine is still slated to go ahead, these grassroots efforts have proven successful. Initial plans for the mine included the "relocation" of three glaciers that form the basis of the valley's water system. In its first environmental impact assessment, Barrick withheld this information from the Chilean government, who remained ignorant of the plans until residents brought the situation to their attention.

In approving the Pascua Lama mine, the Environmental Commission stipulated several conditions, including one that prevents Barrick from "intervening" in the glaciers. According to Argentinian biologist Raúl Montenegro, "it is absurd to pretend you can just move glaciers, as if it were a sustainable practice." Opponents of Pascua Lama are claiming this as a significant victory and only hope that there are more to come.

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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.

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