New Green Party Forms in Chile - Promises Mother of All Battles Over HidroAysen

Promises “Mother of All Battles” Against Patagonia HydroAysén Dam Project

(Jan. 21, 2008) After a year of jumping legal hurdles, the Partido Ecologista (or Green Party) was recognized on Jan. 11 in the El Diario Oficial, the official government registry. Led by Universidad de Concepción political scientist Félix González, the party will be formally introduced to the public this week.

Well-known environmentalists Sara Larrain, director of Chile Sustentable, Ecology Policy Institute director Manuel Baquedano and Renace National director Isabel Lincolao also joined González in forming the party. These older activists will take on a supporting role in the party, but want a new generation to step into leadership roles.

During a meeting last week with Chile’s Secretary General José Viera-Gallo, the directors of the new party introduced a 10-point list that will define the party’s relationship with the government. The list, known as the “Chagual Agreement,” outlines promises made by Michelle Bachelet to the green movement when she was running for President in 2005. Bachelet signed the agreement during her campaign.

“We have restated our intention to respect this agreement,” Viera-Gallo told the Chilean daily La Nación.

The new party will not align itself with either the center-left governing Concertación coalition or the rightist opposition Alianza. In past elections, environmentalists have aligned themselves with the Concertación, but recent decisions by Bachelet’s government led them to disassociate themselves from the established blocs of Chilean politics.

During the Wednesday meeting at La Moneda, González outlined “two critical points” connected with the Chagual Agreement that trouble environmentalists. The first was the Zanelli Commission, a body created to study the possibility of developing nuclear energy in Chile. The environmentalists claim President Bachelet promised not to consider nuclear energy when she signed the agreement. Secondly, González said that the government has not made a decision on the labeling of genetically-modified foods.

González told the Santiago Times that Minister Viera-Gallo “assured us that the nuclear matter will not (…) go much further than what the Zanelli Commission has already done. On the subject of genetically altered foods, he told us that the government had no intention of approving them.”

Viera-Gallo also tried to pacify the Green Party’s worries by comparing the US$200,000 the government gave to the Zanelli Commission to the more than US$6 million in direct subsidies it has given to renewable energy through Corfo (the Corporation for Development of Production).

González explained to the Santiago Times that the Green Party is necessary because a “cultural change” is taking place in Chile. He argued that people are becoming more concerned about how environmental issues affect them, which allows his party to propose new topics. In order to get its message out, the party plans to use “alternative media” that is not owned by interests that can influence the way news is written.

The goal of the party is to be a “distinct alternative,” González said. “We don’t come from the political class, we are not going to be in Juntos Podemos (the far left coalition called Together We Can), we are not going to be on the right, and we are not going to be in the Concertación, because they don’t represent us. This is the principal message.”

González also said the party will form part of the growing international fight against the HydroAysén project. He described environmentalists’ efforts to thwart the dam initiative as “the mother all battles” because they are up against three industrial giants: Colbun, ENDESA and Transelec.

If approved by the government, HidroAysén’s multi-dam project could generate as much as 2,750 MW of electricity, roughly equivalent to about 20 percent of Chile’s current generating capacity. The project, slated for the region’s two largest rivers – the Baker and the Pascua – has an estimated price tag of US$2.5 billion.

That figure does not include an additional US$1.5 billion likely needed to build a 1,200 mile transmission line between southern Region XI, an area also known as Aysén, and central Chile, where the electricity would be consumed. HidroAysén is still working out details with Transelec, a Canadian-owned electricity transport company, over the costs and route of the extensive line.

The project has generated no small amount of opposition, particularly from environmentalists – both in Chile and abroad – who say the dams, reservoirs and transmission line would cause irreparable damage to pristine southern Chile. (ST, Jan. 14)

The party plans to run candidates in October’s municipal elections, hoping for five percent of the vote. According to their website, before being legally recognized in Chile, the party was incorporated into the International Green Parties, through the Federation of Green Parties of America. The party has been an active member of the Federation for four years.

Here is the full article.

"Chile is the best mining jurisdiction in the world... Canada is not a jurisdiction where I would like to develop a mine." says Centenario Copper CEO

Risk not a factor in this offer

Maybe having a former investment banker running a company is the best way to ensure investors are protected in the event that things don't work out properly.

Or maybe the same level of protection can be achieved by having a chief executive decide the risk should be borne by the company -- and not by the investors.

Whatever the source, investors in a US$80-million private placement done for Centenario Copper Corp., were protected in the event the issuer didn't receive the necessary permits. Centenario was formed in 2004 and operates in Chile.

"I didn't want us getting caught in the position where we were seen to be bagging investors," said Richard Colterjohn, chief executive of Centenario and a former investment banker with UBS Securities.

In July, Centenario raised US$80-million by selling 16 million special warrants at US$5 per warrant. The capital was raised after the company completed a bankable feasibility study. "I am very interested in speed of execution. So rather than waiting around to do a prospectus and then do a traditional IPO structure, we did a special warrant financing to accredited investors and gave an undertaking that we would become publicly listed within 120 days," added Colterjohn in a phone conversation from Chile last week.

(Canadian law allows this, sadly to the detriment of the host countries: 10 Things Canada Does Best - What Canada doesn't do best is hold domestic mining companies accountable for the damage they do abroad. , Canadian Government Urged to Rein in Mining Sector , Mining Misery: Guatemala is one of many countries that has attracted the investment of Canadian Mining Companies – but at what cost to its people? )

But releasing the proceeds from that financing was made conditional on getting a final Environmental Impact Statement approved, said Colterjohn, noting that despite giving the investors an out in the event that the permit wasn't received, he remained confident it would be.
"As far as I am concerned, Chile is the best mining jurisdiction in the world and we were highly confident we would get it. In fact, we did get it before we closed the financing."

(Mining is so good in Chile that the National Intelligence Agency (ANI) monitors all environmental NGOs that oppose mining: ANI or DINA? Environmental organizations protest espionage and infiltration by Chilean Intelligence Agency , Legislators angered by Chile Intelligence Agency monitoring of environmental organizations - investigation demanded , Chile Intelligence Agency Monitors Environmental NGOs )

Colterjohn, whose company's shares have been trading since mid-October following the receipt of a prospectus to clear the private placement, said that approach was adopted because he "was completely prepared to eat that risk in order to minimize that dilution. And I got better pricing for doing it," he said. The reason: with permitting risk not a factor, investors could focus on the merits of the company's copper project, knowing that in the event the permit wasn't received, they would get their money back--plus a tad more.

"It was a decision that [the permitting] risk belonged with us rather than with the investor and, thereby, we gave them greater comfort," he said.

Colterjohn was asked about the lack of a similar out in a $200-million financing done in March for Gabriel Resources, a company with a gold project in Romania -- but no permit. "It's an incredible geological potential, but you have a bunch of locals who don't want you. Mining has to go where it's wanted, and I am where I am wanted," he said.

(Read more about Gabriel Resources and Romania here: Canadian gold mining corporation, Gabriel Resources Ltd. halts Romanian project as support sours - NGO's influence cited , Battle over gold mine plan that would create giant cyanide lake. , Mine Your Own Business - The Darkside of the Environmental Movement? - watch the groundbreaking video trailer below )

He was asked what he would have done had he been running Gabriel and decided to raise $200-million. "The reality is that there is permitting risk. From the company's perspective, it was more important to get the funds in and to continue to drive the project forward and to continue to develop support. Mining people by nature are optimistic and believe that sooner or later they will get there. But it's a judgment call," he said.

Colterjohn was asked about permit risk in Canada. He replied, "Canada is not a jurisdiction where I would like to develop a mine."

(Naturally, countries with weak governments and environmental laws attract miners: Chile's Government fines itself for polluting the environment . Compare that to what recently happened to a number of US paper companies : US Environmental Protection Agency forces paper companies to begin $400 million clean-up project to deal with PCBs in the Fox River . )

Here is the full article.

ANI or DINA? Environmental organizations protest espionage and infiltration by Chilean Intelligence Agency

ENVIROS DETECT HYPOCRISY IN CONAMA’S SUPPORT OF ANI INVESTIGATION

(Dec. 13, 2007) Leaders of the Chilean environmental movement spoke out Wednesday against the National Environmental Commission’s (CONAMA) support of the government’s monitoring of environmental NGO campaigns. This comes after the Chilean daily La Tercera disclosed last Friday that Chile’s National Intelligence Agency (ANI) has increased oversight of environmental campaigns against three of the country’s most controversial environmental undertakings – the Aysén dam, the Pascua Lama gold mine, and Celulosa Arauco’s (CELCO) proposed waste duct into the sea.

(MICHELE BACHELET & PETER MUNK: Until we hear otherwise, we can infer that Michele Bachelet holds the same opinion of Environmental NGOs as Peter Munk, Chairman of the Barrick Gold Corporation. They both attended the Davos Conference in Switzerland where Chairman Munk had this to say: Barrick Gold Chairman, Peter Munk complains rogue Environmental NGOs are Destroying the Mining Industry Apparently Bachelet was listening and took action?)

Various environmental activists have claimed that ANI’s methods include unnecessary measures like espionage and infiltration (ST, Dec. 10, 11). They are particularly upset by CONAMA’s support of the ANI investigation.

Director of Greenpeace Chile, Rodrigo Hererra, commented on CONAMA’s position Wednesday. “ANI’s report has very grave implications for freedom of expression in the environmentalist movement,” he told the Santiago Times. “I absolutely reject CONAMA’s support of their investigation. It is clear that CONAMA has no idea what methods the ANI is using.”

Lucio Cuenca, director of the Latin American Observatory on Environmental Conflicts (Olca), said that his organization – which campaigns against the Pascua Lama gold mine among other things – has been monitored by ANI since 2005 and has had negative experience with ANI’s questionable investigation tactics.

“It is legitimate within a democracy for the government to gather information on organizations,” he said. “It is not legitimate to deny people their liberty, intimidate them, and intervene in their civic participation as ANI has done.”

Cuenca said he was dissatisfied, though not entirely surprised, that CONAMA supports ANI’s investigation. He called on CONAMA to better fulfill its role as a facilitator of public opinion in projects affecting the environment.

CONAMA Director Ana Lya Uriarte has defended the ANI investigation. Her spokesperson, Jaime Ugalde, said, “It is necessary that in the democratic system that there exist investigation into the operations of organizations. But that does not necessarily imply infiltration or unnecessary persecution of said organizations.”

When asked about ANI’s supposed intimidation tactics, Ugalde said, “CONAMA does not have information that infiltration is one of the methods that ANI is employing. But if it is, then that is an issue that has to do with security, and should be left to the Ministry of the Interior. CONAMA does not have an opinion (on these allegations).”

CONAMA’s support of the investigation comes as the organization aims encourage more civic participation in its Environmental Impact Evaluation System (SEIA).

Urirate has launched a series of workshops set to last four months with the intention of surveying Chileans’ perception of the SEIA. Preliminary findings show that the general public believes there is not enough consideration of public opinion in CONAMA’s evaluation processes.

Uriarte says the survey of public opinion of the SEIA is part of a larger effort to restructure CONAMA to incorporate more avenues for the public to influence new projects.

But environmentalists are still dubious of CONAMA’s commitment to public participation. As Cuenca said, “CONAMA’s role should be to support free expression and ensure that people have all the information necessary to take part in the environmental impact evaluation process. But they do not do that. Instead, CONAMA misinforms the public by withholding necessary information on a given project.”

(This type of duplicity and corruption is characteristic of Chile and goes back a least a decade or more: Endesa Strategy & Tactics I – Revisiting the Ralco & Pangue Hydroelectric Projects on the Rio Bio Bio )

Here is the full article.

Legislators angered by Chile Intelligence Agency monitoring of environmental organizations - investigation demanded

CHILE LEGISLATORS ANGERED BY INTELLIGENCE MONITORING OF GREEN NGOs

“Actions Like This Cannot Be Allowed To Happen Here”

(Dec. 14, 2007) Party for Democracy (PPD) Dep. Guido Girardi said Thursday that the Chamber of Deputies’ Natural Resources Commission will meet next Tuesday to discuss reports that Chile’s National Intelligence Agency (ANI) has increased its monitoring of environmental NGOs. This news comes as Chilean environmentalists and politicians continue to express their concern over the Agency’s increasingly draconian tactics.

According to a report published last week by La Tercera, the ANI is gathering information on how environmental NGOs function, who their principal members are, who provides them with funding, and how they respond to environmental issues nationwide. At least three ANI employees, including a former official from Chile’s National Environmental Commission (CONAMA), are known to be working full time on these issues. (ST, Dec 10.)

The La Tercera report specified that campaigns against the controversial Aysen dam project, the transnational Pascua Lama mining project, and Celulosa Arauco’s (CELCO) waste duct are receiving the greatest attention by the state’s intelligence officers.

“On one hand, this news surprises me. On the other hand, it really does not. There are economic powers that clearly do not want pro-environmental organizations to thrive,” Girardi told the Santiago Times. “For those economic organizations, the environmental movement does represent a threat to national security.”

(NGO's were at the top of Barrick Gold Corporation's agenda at the 2007 Davos Conference in Switzerland, a conference frequented by Michele Bachelet: Barrick Gold Chairman, Peter Munk complains rogue Environmental NGOs are Destroying the Mining Industry )

“In next Tuesday’s meeting of the Chamber of Deputies’ Natural Resources Commission, I am going to introduce a motion to respond to this news. It is very probable that we demand that the Interior Ministry respond to these report. We need answers from them,” he said.

“In the Commission, we usually share the same thinking, although we come from different political parties. We are all concerned about the environment. In a situation like this, when there is something as extreme as espionage, I do not think that anyone in the Commission is going to vote against taking action…we recognize that actions like this (espionage) cannot be allowed to happen in Chile.”

Independent Democratic Union (UDI) Dep. Alejandro García-Huidobro, another member of the Natural Resources Commission, echoed Girardi’s comments.

“Countries definitely need to have their intelligence services. But, this does not mean that they can interfere in the work of NGOs which clearly have the right to defend the environment,” he said. “This is a very shameful situation. We have made such progress in our democracy and freedom of expression, and I think that it is a shame that this is happening. Intelligence should be more so focused on combating problems like delinquency.”

Environmental activists reported this week that ANI’s methods include espionage and infiltration (ST, Dec. 10, 11). Activists are particularly upset by CONAMA’s support of the ANI investigations.

(Not unexpected, as the Chilean government's lack of concern for the environment and ardent support of the foreign owned extraction industry is notorious: Chile's Government fines itself for polluting the environment )

Greenpeace Chile director Rodrigo Hererra commented on CONAMA’s position Wednesday. “The report about ANI has very serious implications for freedom of expression in the environmentalist movement,” he told the Santiago Times. “I absolutely reject CONAMA’s support of their investigation. It is clear that CONAMA has no idea what methods the ANI is using.”

Lucio Cuenca, director of the Latin American Observatory on Environmental Conflicts (Olca), said his organization – which campaigns against the Pascua Lama gold mine among other things – has been monitored by ANI since 2005 and has had negative experience with ANI’s questionable investigation tactics.

“It is legitimate within a democracy for the government to gather information on organizations,” he said. “It is not legitimate to deny people their liberty, intimidate them, and intervene in their civic participation as ANI has done.”

Cuenca said he was dissatisfied, though not entirely surprised, that CONAMA supports ANI’s investigation. He called on CONAMA to better fulfill its role as a facilitator of public opinion in projects affecting the environment. (ST, Dec. 13)

In spite of repeated phone calls and e-mails from the Santiago Times, the ANI declined to comment on these allegations and delayed a requested interview with ANI director Gustavo Villalobos until sometime next year.

Here is the full article.

Chile Intelligence Agency Monitors Environmental NGOs

OLD FRIENDS: Endesa SA, Barrick Gold Corporation, Celulosa Arauco receive support from Chile's Intelligence Agency.

Environmental Activists Alarmed, But Not Surprised About The News

(Dec. 10, 2007) The Chilean daily La Tercera on Friday revealed that Chile’s National Intelligence Agency (ANI) has increased its monitoring of environmental NGO campaigns since the start of this year. The report specified that campaigns against the controversial Aysen dam project, the transnational Pascua Lama mining project, and Celulosa Arauco’s (CELCO) waste duct are receiving the most attention.

According to La Tercera, the ANI has been gathering information on how environmental NGOs function, who their principal members are, who provides them with funding, and how they respond to environmental issues nationwide. At least three ANI employees, including a former official from Chile’s National Environmental Commission (CONAMA), are known to be working full time on these issues.

Prominent environmentalists expressed no surprise, saying the news confirmed their belief that they had been placed under increased surveillance.

The Director of the Latin American Observatory on Environmental Conflicts Lucio Cuenca said he received several phone calls from ANI employees in 2005, looking for information about campaigns against Pasca Lama. Cuenca said he did not provide any information, but warned that officials continue to be very interested in the anti-Pasca Lama movement.

“They are keeping a close eye on our activities. But, we refuse to cooperate with them,” he said. “It is extremely worrying that, even though we are in a democracy, environmental movements are considered as a threat to the State.”

(NGO's were at the top of Barrick Gold Corporation's agenda at the 2007 Davos Conference in Switzerland: Barrick Gold Chairman, Peter Munk complains rogue Environmental NGOs are Destroying the Mining Industry )

Juan Pablo Orrego, coordinator of the NGO Ecosistemas and one of the leaders of the campaign against the Aysen dam project, had a similar response.

“There are people who are not comfortable with our work,” he said. “I suppose that this has to do with the fact that we could be creating problems for the government or obstacles for big businesses.”

“Several of our computers have been stolen, but these crimes appear to be totally selective,” said Orrego. “Additionally, we have received phone calls saying that we should be careful about what we do. We are being investigated, but I have no idea why.”

Meanwhile, current CONAMA Director Ana Lya Uriarte defended ANI’s work.

“All of our country’s institutions—including environmental organizations—form part of the analysis for national security. I think that it is natural — and also quite obvious — that there exist intelligence reports about organizations in this area,” she said.

(Not unexpected, as the Chilean government's lack of concern for the environment and support of the foreign owned extraction industry is notorious: Chile's Government fines itself for polluting the environment )

The on-going citizen education campaigns against the Aysen dam project, Pascua Lama mining project, and CELCO’s waste duct are arguably the three best known environmental initiatives in Chile.

The dam proposal, known as HidroAysén, calls for five massive hydroelectric dams to be built in far southern Chile’s Region XI, an area also known as Aysén. The dams are slated for the region’s two most powerful rivers: the Baker and the Pascua. Together the five generating facilities would produce an estimated 2,750 MW of electricity – roughly equivalent to 20 percent of the country’s current overall generating capacity.

The dam project has attracted significant opposition from local residents and environmental groups who say the dams will be socially and ecologically devastating for the pristine region. A planned transmission line from Region XI to central Chile has been a particular lighting rod for criticism, with opponents insisting it will be a major blight on the country’s landscape (ST, Dec. 6).

The Pascua Lama gold mine is set to be built in the Andes Mountains in an area straddling the border between northern Chile's Region III and Argentina. This bi-national location has led to several disputes between the two countries, including prolonged discussions on how to divide tax revenues earned from the project (ST, Sept. 12).

Environmental activists have lambasted the construction since it was first proposed, claiming the mine will destroy nearby glaciers and pollute downstream water supplies with waste runoff (VT, June 10). Barrick’s deplorable track record for environmental abuse is well-known: U.S. Vice-President Al Gore insisted upon removing Barrick Gold as a sponsor of his May visit to Chile (ST, May 11).

(Here is another classic Barrick Gold Corporation missive: Barrick Gold Corporation Chairman asserts that gold mines create jobs and feed people. (so would dismantling the Pyramids of Egypt) and here is the truth: Mining Misery: Guatemala is one of many countries that has attracted the investment of Canadian Mining Companies – but at what cost to its people? )

Finally, CELCO has been at the center of environmental controversy since 1996 when it first proposed to build a waste disposal duct from its Valdivia plant through the tiny Region XIV fishing community of Mehuín. Resistance in the town was initially strong enough to make CELCO back out of the sea duct project, opting instead to dump its waste water into the nearby Cruces River. But in 2004 the newly inaugurated Valdivia plant leaked untreated waste water into the river, killing off the black-necked swan population and setting off a firestorm of local and international protests. (ST, Dec. 3)

CELCO announced in October it had reached an agreement with Mehuín’s fishermen’s unions - paying members US$8.9 million in exchange for their acquiescence in the company’s waste duct plan. Initial reports indicated that 99 of Mehuín’s nearly 250 unionized fishermen had signed the agreement.

But, community leader Eliab Viguera recently told the Santiago Times that the opposition to the Mehuín duct is stronger and more widespread than ever before.

“It is no longer an issue of just Mehuín,” he said. “The movement has gained strength in communities throughout the Valdivia area (ST, Dec. 6).

Here is the full article.

Argentina Mine Tax Threatens Stability, Investment -Industry

BUENOS AIRES -(Dow Jones)- By placing a new export tax on mineral exports despite a 30-year guarantee of tax stability, Argentina has shattered confidence in tax stability, which will discourage future mine investment, industry players said Wednesday.

On Tuesday, the mining chamber CAEM said that customs agents demanded the new taxes on Rio Tinto PLC's (RTP) Borax Argentina S.A., Procesadora de Boratos Argentinos S.A., Minera del Altiplano FMC and Xstrata PLC's (XTA.LN) Minera Alumbrera Ltd.

The companies previously had received letters from the Mining Ministry certifying that they would enjoy tax stability for 30 years, but this assurance was cast in doubt by the new tax.

Some companies immediately announced that they would challenge the new tax in court.
Borax Argentina is in the process of asking for an injunction after customs agents demanded a 10% export tax payment for its latest borate shipment.

"We will argue to the court that a note cannot modify a law," mine director Alberto Trunzo told local industry magazine Mining Press.

However, other companies were waiting for more clarity before reacting.
"We have a stability agreement at Veladero...(but) are monitoring and assessing developments," Barrick Gold Corp. (ABX) spokesman Vincent Borg said. Barrick operates the Veladero gold mine in Argentina and is developing the $2.4 billion Pascua-Lama gold mine project straddling the Chile-Argentina border.

Said the CEO of a company involved in exploration in Argentina and Chile: "This makes Argentina much less attractive for foreign investors. The effect won't be immediate, as companies have budgeted programs...The effects will show up initially with decreased exploration investment.

"This is a real problem for Argentina. There isn't a lot of mining investment in Argentina relative to its mineral potential," the CEO said.

The CEO asked not to be identified because of the sensitivity of the situation.
Lower margins due to the export tax will also push companies to mine higher grade ores, leaving behind more of the lower grade ores.

"Effectively this shortens the mine life, so in the end the government will get less revenue, less employment, etc.," the CEO said.

------------------

Argentina mining hopefuls also have faced environmental resistance to development plans and a number of provinces have shut their borders to the industry.

In June, the province of Mendoza banned mining activity using chemicals such as cyanide, mercury and sulfuric acid, effectively shutting down gold and uranium mining.

A group of local mining companies and the Argentine government's national atomic energy commission, or CNEA, brought a lawsuit in Mendoza provincial court challenging the ban.

In addition, Calypso Uranium Corp.(CLP) announced Wednesday that it had filed a case before the Argentine Supreme Court challenging the constitutionality of the chemical ban in Mendoza.

A number of other provinces recently also have enacted laws limiting mining activity. Tucuman, Rio Negro and La Rioja provinces have all passed local laws banning open-pit mining using cyanide.

Meridian Gold Inc.'s (MDG) attempts to mine gold in Chubut province also have been on hold since a local court decision blocked the project in 2003. The Supreme Court upheld the decision earlier this year.

Despite the uncertainty, mining activity is experiencing unprecedented growth in Argentina due to high metals prices, large mineral potential and low extraction costs. Investment in mining projects reached $1.27 billion last year, up 56% from 2005, according to the Mining Ministry.

Investment across the country over the next eight years is expected to reach $12.5 billion as Argentina develops at least 10 new major mine projects, according to the ministry.

Here is the full article.

Argentine Supreme court upholds Chubut Province ban of cyanide leach mining - local protest crucial to the verdict

BUENOS AIRES, Apr 20 (IPS) - Environmental activists in Argentina applauded an Argentine Supreme Court ruling against a projected open cast gold mine using cyanide, pointing out that it set an important legal precedent.

The Supreme Court did not rule on whether or not the gold mine project planned by the Minera El Desquite SA mining company in the southern province of Chubut would cause environmental damages, nor does the verdict prohibit the company from operating.

But the lawyer for the residents who mobilised against the mine, Gustavo Macayo, told IPS that with this ruling, "all legal recourse has been exhausted," and "the stoppage of the mineworks was upheld."

Besides, the decision will also have other repercussions, because it "recognises the power of provinces to regulate the protection of the environment locally, and to regulate or restrict activities, even when they are permitted under national laws," said the lawyer, who lives in Chubut.

The Supreme Court rejected a suit brought by Minera El Desquite, a subsidiary of the Canadian mining company Meridian Gold, after it had lost cases at every local and appeals court in Chubut province, where its Cordón Esquel mining works have been at a standstill since 2003.

The court threw out the company's argument that its project, blocked by provincial laws, was permitted under national laws. In their Apr. 17 ruling, the magistrates held that there was "no conflict," because the state sets "minimum protection standards" which the provinces have the right to extend as they see fit.

A law passed in Chubut in 2003 "absolutely prohibits" open cast metal mining, as well as the use of cyanide for gold and silver mining in the province, and the company had not fulfilled the environmental requirements established by local law.

Argentina is experiencing a mining boom, driven by high international metals prices and legislation that encourages investment in the sector. The number of mining projects, which are concentrated in the west of the country, along the border with Chile, has grown by 400 percent in just over two years.

The El Desquite mining project concession was awarded by the provincial government of Chubut in 2002. Gold was to be extracted from an open pit mine and leached from the ore with cyanide.

But the ski resort town of Esquel, population 40,000, is only six kilometres away from the projected site, and residents organised against the mine because of potential air and water pollution.

They formed a citizens' assembly, whose biggest achievement was getting the municipal government to hold a non-binding plebiscite in 2003, in which 81 percent of residents said "No" to the mine.

One month before the plebiscite, a provincial court accepted an appeal for legal protection and suspended work on the mining project until an environmental impact study was carried out and was submitted to a public hearing for approval. The company, however, did not take those steps, and instead appealed to other courts.

Although El Desquite's project in Esquel remains blocked, the company's concession from the provincial government is still valid. Residents protested against this on Mar. 23, when they celebrated the fourth anniversary of the plebiscite.

The Supreme Court ruling was a victory for organisations that are against mining projects involving the use of cyanide.

"Residents' demonstrations, the plebiscite and the rulings of provincial courts had already demonstrated the legitimacy of these demands, but the Supreme Court decision sets an important precedent," Javier Rodríguez of the Chubut Antinuclear Movement told IPS.

Rodríguez, an anti-mining activist who works with movements in several provinces, said that in any event, court decisions were not enough. "Social mobilisation is essential. As a judge in San Juan once told us, 'the people have to come out on the streets'," he said.

The Supreme Court decision was "a blow to open cast mining. It sets a very important precedent, as it imposes complete cessation of work until the province's legal requirements are met," said the head of the Centre for Human Rights and the Environment (CEDHA), Daniel Taillant.

In an interview with IPS, Taillant said there was a rising trend in social protests over environmental problems in Argentina in the last five years. He said that the justice system "reflects" that trend in its verdicts, and cited the case of the Riachuelo in Buenos Aires, Argentina's most polluted river.

In that case, the Supreme Court ordered the national, provincial and municipal governments as well as the factories polluting the river to present a drainage and sanitation plan to clean up the river and curb pollution, as well as a policy to deal with the environmental impact on the health of people living in neighbourhoods along its banks.

CEDHA pointed out that further small victories had been won in other provinces, through local legal decisions and laws. In the northwestern La Rioja province, Canadian mining giant Barrick Gold was forced to halt its plans for a mine in the Famatina range after the province passed a law against using cyanide.

A similar ban was approved in the neighbouring province of Tucumán. In both cases, CEDHA noted, the decisions by the provincial legislatures were prompted by pressure from citizens' assemblies opposed to projects because of potential pollution of the air, soil and water.

"Public opinion is playing an increasingly important role in setting public policies on the environment," Taillant said. (END/2007)

Small Mapuche community rests all of its hopes on a group of strangers in far-away Washington, DC - Inter-American Commission on Human Rights (IACHR)

[Nov. 22, 2007] Puerto Montt: Fighting for years to preserve the last, tiny plot of land it has left following years of state and more recently industrial encroachment, a small Mapuche-Huilliche indigenous community near Puerto Montt, Region X is now resting all of its hopes on a group of strangers in far-away Washington, DC.

This past February – out of legal options here in Chile – the Pepiukelen community sent its case to the Inter-American Commission on Human Rights (IACHR). An autonomous branch of the Organization of American States, the IACHR examines accusations of human rights violations, referring more egregious cases to its sister body, the Inter-American Court on Human Rights.

Nine months later the IACHR has yet to rule on the case. And, with the latest in a series of recently arrived salmon industry factories now beginning to operate quite literally on their doorsteps, hope springs far from eternal for the eight large families that make up the Pepiukelen community.

"At this point there’s still a chance the Inter-American Commission could rule in our favor, but honestly, we’re disappointed with what’s happening up there. I’ve spoken with lawyers from different parts of Latin America who have presented cases before the Commission, and it’s never taken this long before," said Francisco Vera Millaquén, the werken (spokesperson) for the indigenous community.

The Pepiukelen community has resided in the area near Pargua, a launching point for ferries traveling between mainland Chile and the island of Chiloé, for as long as anyone can remember. Maps dating back to the time of Chile’s independence suggest the community once possessed some 11,000 acres of land. Two centuries later, mostly as a result of expropriations by the state, the community has seen that vast property reduced to just 8.5 acres, land on which Vera and his family members continue to support themselves through farming.

But it’s not just the size of the property that has changed. Thinking back to the years of his youth, Vera recalls the sloping, seaside plot with its then crystal-clear river and easy access to the beach as a magical playground.

"It’s difficult," said Vera, struggling unsuccessfully to contain his emotions. "Years ago, right here, there was a school. And we’d play all over this area. We’d always swim in the river. Every summer we used it as a natural swimming pool. It was the same thing here on the beach…And now that’s all gone."

The most notable changes have taken place over the course of the past 15 years, a period of time that corresponds precisely with a regional boom in farmed salmon. With exports increasing more than 10-fold since the early 1990s, the now US$2.2 billion-per-year farmed salmon industry has transformed southern Chile’s economy and now employs an estimated 45,000 people, principally in Regions X and XI.

Considered by many a godsend for the mostly rural southern region, for Vera and his family the salmon boom has been more like a living nightmare. The start with, the "farms" – offshore raft structures where salmon are raised in pens by the tens of thousands – have polluted area waters and thus driven local artisan fishermen and shell fish harvesters out of business.

"It’s not a coincidence," said Vera, noting that over the past two decades local shell fish have disappeared, red tides have become increasingly common, and native fish have simply died off. "It’s all a chain that began approximately 20 years ago when people still thought these companies were setting up operations that wouldn’t be harmful to the environment. Today it’s finally being shown that’s not the case."

The industry has also spawned a host of satellite businesses, such as processing plants, fish meal and oil factories, and salmon feed plants: precisely the kinds of factories that because of Pargua’s proximity to Chiloé (one of the most concentrated salmon farming areas in the country) have one by one set up shop in the immediate vicinity of the Pepiukelen community. Vera’s farm is now surrounded by four large plants.

"What we have now is a landscape that is completely, absolutely horrible," said Vera. "Besides painting their facilities ugly colors that don’t at all fit the surroundings, the companies are also causing tremendous harm to the environment."

In the late 1990s, when the first of the factories moved in, members of the unprepared Pepiukelen community had little idea what was taking place. But in 2001, when a salmon company called Long Beach managed to acquire land directly abutting Vera’s property – just meters from his front door – the community took direct action.

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"Here the authorities have always just shut their eyes. And when I say authorities, I mean all of the authorities: starting with the president and her cabinet, the regional government, the judges who’ve sold out, and finally the members of Congress who have simply looked past the problem. They haven’t wanted to help," said Vera.

The community leader did note one exception: Sen. Alejandro Navarro of the Socialist Party, who has tried to exert some influence on behalf of the Pepiukelen. According to Navarro, the problem in Chile is that both the courts and government environmental authorities have a built in bias toward "mega-projects," i.e. business ventures involving substantial amounts of capital investment.

"In this particular case, and despite a host of irregularities, the project was allowed to go ahead because of the law’s passion for development and production and because of the intolerance of Region X’s regional authorities," said Sen. Navarro.

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Sen. Navarro for one is convinced the IACHR will eventually rule in favor of the Pepiukelen Community. "We’re going to take this all the way to the Inter-American Court on Human Rights," he said. "And I think Chile’s going to lose. Just like what happened in Ralco, with the Pehuenche community, Chile’s going to be convicted and the state’s going to have to shell out a lot of money to pay for the damage caused by this private venture."

Vera, however, appears less and less convinced. With the Los Fiordos factory now basically completed and the IACHR dragging its feet, hope is certainly running thin. "Although we still have some faith, bit by bit we’re losing it, because we haven’t yet seen any clear, concrete result. Up to this point the Commission has just done things to prolong the process," he said.

The salmon companies, meanwhile, "want this land at any price," Vera added. "It doesn’t matter to them what they have to do to get it. That’s the final objective. If they have to eliminate people, they’ll do it. If they have to remove people, they’ll remove them. They don’t have a problem doing any of that."

Dealing With Latin Populists - Chavez, Ortega and Morales hold court at the Ibero-American Summit in Santiago, Chile - Parallels from the past evident

What was the Wizard of Oz really about? One hundred years ago Populism swept the United States in response to tight credit and the domination of the national economy by large corporate trusts. The US populists were led by such notables as, trust-buster, Theodore (Dor-o-thy) Roosevelt and free silver advocate, William Jennings Bryan (The Lion). The house falling on the Witch of the East, which opens the story, signified Roosevelt's victory over the Wall Street robber barons. The brainless farmers (Scarecrows) of that era threatened to unite with the oppressed, heartless factory workers (Tin Men) and petition the government to put an end to the gold standard (Yellow Brick Road). A chronic shortage of gold, measured in ounces (~Oz~), throttled the economy and the economic prosperity of the common man. (Read more: Wizard of Oz)

Dealing With Latin Populists

Populist rhetoric and policies will continue as long as natural resources prices remain high. But what happens after they fall?

BY JOACHIM BAMRUD

Last week's Ibero-American Summit in Chile was supposed to be a good opportunity for private-sector leaders in Spain, Portugal and Latin America to influence policy-makers to boost investor-friendly policies.

Instead, the summit turned out to be only the latest platform for populist, anti-business rhetoric, with presidents like Hugo Chavez of Venezuela and Daniel Ortega of Nicaragua attacking Spanish companies.

Ortega compared Spanish electricity company Union Fenosa to the mafia and accused it of using "gangster methods" and corruption. He also criticized a previous government of Nicaragua which sold state electricity companies to Union Fenosa. "We wouldn't have let them in," he said, while the Spanish king and prime minister were looking on. "They bought, amidst corruption, the generating companies which were in good shape."

Ortega blames Union Fenosa for Nicaragua's electricity problems and has repeatedly threatened to expel the company. Union Fenosa, however, blames the problems on users who are not paying their bills. Ortega's speech in Chile earned him a rebuke from the American Chamber of Commerce in Nicaragua.

CONTRACT RENEGOTIATIONS

The latest rhetoric comes after a series of populist policies implemented this year in Latin America. In January, Chavez nationalized Venezuela’s largest telecom and electricity companies CANTV and EDC. He later renegotiated the terms of existing oil contracts – leading ExxonMobil and ConocoPhilips to leave rather than accept the less profitable terms. Meanwhile, Ecuador’s populist president Rafael Correa this month announced he will renegotiate the contracts of foreign mining firms and revoke those who aren’t being used. He also threatens to expel U.S.-based City Oriente and Mexico-based America Movil for alleged tax problems. That comes on top of his recent decision to hike oil royalties from 50 to 99 percent.

“Risks remain high while Correa is in office and beyond given Ecuador’s long history of political instability and inconsistent policymaking,” U.S.-based consultancy Global Insight warned in an analysis today.

City Oriente has taken its case to the World Bank’s International Center for Settlement of Investment Disputes (ICSID). But it may face some problems. Correa says he won’t recognize any verdicts from the ICSID. Ecuador already faces a suit from U.S.-based Occidental petroleum, which was Ecuador’s largest foreign investor until it had its operations expropriated from the government last year.

And Bolivia – led by populist president Evo Morales – has decided to leave the ICSID altogether. It also faces a possible ICSID case brought by Swiss-based Glencore, which had its tin smelter seized without compensation in February.

LESS PRIVATE INVESTMENT

The result? More litigation and less investment, experts say. “Obviously there will be protracted litigation at certain levels,” says Michael Diaz, managing partner at U.S.-based law firm Diaz, Reus, Rolff & Targ. “It will affect their trade policies with the U.S. and other developing countries.”

Both Ecuador and Bolivia are seeking an extension of the Andean Trade Preferences and Drug Eradication Act (ATPDEA), which provides duty-free access for around 5,600 products. The two are also – along with Colombia and Peru – set to negotiate a free trade agreement with the European Union.

Meanwhile, investment will decline. “Who want to invest in those countries if they won’t respect the rule of law?,” asks Diaz.

(But that argument cuts both ways, who will embrace these multinational corporations if they fail to respect the law and the environment? See: False Environmental Impact Statements induce Regional Environment Commission to Implement Fines. , Mining Giants Account For Fifty Percent Of All Corporate Profits in Chile , Ransacking Chile - Fabulous Profits for Multinationals , Chile's 21st Century Gold Rush , Chilean authorities outraged over new leak at Los Pelambres mine , Chile's Government fines itself for polluting the environment )

Here is the full article.

Chile's Government fines itself for polluting the environment

“These fines are a joke,” said Girardi, adding that companies like state-owned CODELCO should be one of the leading industries cutting back on water pollution.

CHILE: 70 BUSINESSES FINED FOR WATER VIOLATIONS

(Nov. 13, 2007) Magaly Espinosa, the Superintendent of Sanitary Services (SISS), fined 70 public and private companies Monday for polluting Chile’s waters. The fines represent the outcome of an extensive investigation, began in September of last year, during which Chilean businesses were warned to reduce the level of their water pollution.

Out of 174 companies SISS found guilty of polluting waters, annual fines were given out to 52 companies, and monthly fines to 18 companies. The annual fines ranged from 409,440 pesos (US$809) to 16,377,600 pesos (US$32,360).

The only company to receive the maximum sanction was El Teniente, a division of Chile’s National Copper Corporation (CODELCO), the state-owned copper company responsible for roughly half of Chile’s Gross Domestic Product (GDP). Most companies receiving the higher fines were mining or cellulose companies, including Sociedad Punta del Cobre, S.A., and Celulosa Arauco (CELCO) (Planta Aserradero El Colorado).

Among the companies given monthly fines was the Spanish-owned fishing company Pesca Chile, S.A., which was fined 9.8 million pesos (US$19,360). Artisan beer company Cerveceria Kuntsmann S.A. received the smallest monthly fine at about 2.47 million pesos (US$4,800).

Sen. Guido Girardi (PPD) termed the level of noncompliance with water pollution norms as “catastrophic” because the companies that do not cut down their water pollution levels directly affect the industries that are trying to meet the terms of the new legislation.

(Weak environmental laws in Chile pave the way for foreign owned extraction companies. Example: False Environmental Impact Statements induce Regional Environment Commission to Implement Fines.

This is the opposite in Argentina where local residents have a say about their environment: Revisiting the Esquel Gold Mine Protest - Argentine community wins mining moratorium , Argentine government will have to get tougher with anti-mining provinces if it wants industry to fulfill potential )

Here is the full article.

US Environmental Protection Agency forces paper companies to begin $400 million clean-up project to deal with PCBs in the Fox River

EPA orders start to Fox River cleanup in Wisconsin

Federal and state officials have run out of patience with paper companies' inability to reach a financial settlement for cleanup of PCBs from the Fox River.

Now they are using their enforcement powers to get them to work on the project.

The U.S. Environmental Protection Agency and Department of Justice, with agreement from the Wisconsin Department of Natural Resources, is expected to issue orders today to require six paper companies, including Georgia-Pacific, to site a landfill, prepare the area and order equipment next year.

The companies, along with the Menasha Corp. and P.H. Glatfelter Co., will be ordered to start dredging the river north of the De Pere dam in 2009.

The $400 million project includes the dredging or capping of 3.7 million cubic yards of PCB-contaminated sediment from the dam to Green Bay.

The contamination occurred when the paper mills discharged waste from recycled carbonless paper. It is the largest PCB (polychlorinated biphenyls) river dredging project ever undertaken by the EPA.

"The project is no longer a cooperative operation," said Bruce Baker, deputy administrator of the DNR's Division of Water. "I've been working for 30 years on Fox River projects and this is the first time we've had to take this kind of enforcement action. But the driving force is keeping this on schedule. We couldn't wait any longer."

Mary Jo Malach, spokeswoman for Georgia-Pacific, said the company has not received a cleanup order from the EPA and could not comment on it.

Company representatives met with a mediator throughout the summer in an effort to determine financial responsibility but couldn't reach agreement.

Here is the full story.

Ransacking Chile - Fabulous Profits for Multinationals

The rise in copper prices has produced euphoria in the government and ruling elites, despite relative complications for certain exporters. The price rise seems not to be a momentary phenomenon. Although abundance is not noticeable in the daily life of Chileans, three out of four expect that the price rise will raise their living standards. Everything is looking good. But a kind of conspiracy of silence hides something basic. The ones who do best out of the copper price are the multinationals who manage two thirds of Big Mining, not Chile. The multinationals are the main winners : they pay low taxes and walk off with colossal profits.

The figures are startling. With copper at US$2.60 per pound, the profits leaving Chile for production in 2006 will be US$16 billion. More than twice the surplus of CODELCO One is dealing with real plunder, the culmination of an open handed policy towards the multinationals that began with the dictatorship and has been maintained to the present day and which, apparently, President Bachelet wants to continue. Punto Final talked to the economist Orlando Caputo of the Study Centre CETES, an academic and expert in copper and the world economy.

PF. What is the situation relating to multinational profits in Big Mining of copper during this period of high prices?

OC. The profits of the foreign companies that control 70% of Chilean copper are so high that they are equivalent to more than twice the surplus of CODELCO. El Mercurio (3) on April 30th reported that in the first quarter the profits of Escondida (4) were US$1.136 billion, which means more than US$5 billion for the whole year, including taxes. One has to take in the general panorama and we can use data from recent studies. There is no information from the multinationals since they are not obliged to publish accounts. We can only make deductions. There are figures for profits sent overseas resulting from direct foreign investment, which are after-tax profits. The significant figures are these : 1999, US$1.603 billion; 2002, US$2.557 billion; 2003, US$4629 billion; 2004, US$8.231 billion; and 2005, US$11.088 billion.

These figures include the total of foreign direct investment but help us get to the figures for the mining multinationals. If we discount profits of foreign non-mining companies, we arrive at the companies that are, namely, the copper mining companies. To their profits we need to add remittances made up of accelerated depreciation and other items that we can consider as earnings. We can conclude from these calculations that the surpluses of the mining multinationals were approximately US$10 billion in 2005. This year however, when prices and their trends are higher, the surpluses of the copper mining multinationals are around US$16 billion. A figure that would finance the new social program announced by Michelle Bachelet for 27 years.

To appreciate what these earnings mean we can establish other relations. One is that which exists with the material investments made, which together with labour and the natural resource itself, constitute the source of those profits. According to the Foreign Investments Committee, that investment in the mining sector for the period 1991 - 2004, that is to say the democratic period, was US$16 billion in round figures. That figure is practically the same as the earnings for 2006. In just one year the multinationals will earn the same amount that they invested over 14 years, and the investments in the democratic period represent more than 80% of the investment in copper Big Mining since 1974.

Here is the full article.

Chile Copper Windfall Makes Bachelet Unable to Placate Laborers

Nov. 6 (Bloomberg) -- Pablo Troncoso calls out to prospective customers in Santiago's O'Higgins Park. He's hoping to lure them to one of the hundreds of food stalls that spring up in the capital during Chile's independence festivities in September. Troncoso's regular job is selling health insurance. He's got debts to pay, and his company told him he would have to take a pay cut -- at a time of rising living costs. So he's working a 17-hour shift flogging empanadas and an alcoholic drink called chicha to earn extra cash.

For Troncoso, Chile's status as Latin America's richest country and poster child for emerging-market development doesn't wash. ``That's what they say overseas, but here it's not noticeable at all,'' he says. ``Those that see it are the owners of companies, not the employees.''

Troncoso's disenchantment, and that of thousands of his countrymen, is giving Chilean President Michelle Bachelet a political headache. She took office with great fanfare in early 2006 as the first woman president of Chile and the second ever elected in South America. A pediatrician by training, Bachelet, 56, had a 62 percent approval rating in an April 2006 survey by Santiago-based polling firm Adimark GfK.

Since then, the Socialist leader's popularity has plunged - -it was 35 percent in September -- and Chile has been rocked with unrest. One reason: Bachelet's government has refused to spend billions of dollars in revenue from Chile's biggest export, copper, and has instead put the money in savings funds to prepare for the time when the price of copper falls.

Hundreds Arrested

In June and July, copper output was cut as workers blockaded mines in northern and central Chile and pelted police with rocks after demanding a bonus based on record mining profit. In August, hundreds were arrested during a march by labor unions in Santiago.

In September, a police officer was shot dead as armed youths took to the streets to mark the anniversary of the Sept. 11, 1973, military coup that brought Gen. Augusto Pinochet to power.

Bachelet's administration also suffered a blow when the introduction of a new transit system for Santiago resulted in long delays for commuters. And rising food and electricity prices have stretched household budgets for workers such as Troncoso.

``People see that Chile as a country has a lot more money, and they want their piece of the pie,'' says Valentin Carril, who oversees $3 billion as chief executive officer of Principal Asset Management SA in Santiago and lectures in economics at Santiago's University of the Andes.

Here is the full story.

Chile's 21st Century Gold Rush

Environmentalists Upset With Increased Investment In Gold Mining

[Sept. 13, 2007] After spending much of the past year prospecting for gold in southern Chile, U.S.-based mineral exploration company Geocom Resources has now narrowed its search to three specific areas, all in Region X.

Geocom – which is working in collaboration with the Kinross Gold Corporation – announced the elevation of the Espolon, Cerro Mera and Cerro Vaca gold claims to “formal venture status.” Its partner in the joint venture, Canada’s Kinross, is the world’s eighth largest gold mining company. Kinross is also a major player in Chile, where it holds an estimated 18,500 tons in gold deposits.

In a telephone interview with the Patagonia Times, Geocom CEO John Hiner was careful to explain that the Region X projects are still very much at an exploration stage. Elevating the three claim blocks to formal venture status, he explained, “is basically saying these things may have some interest.”

“It’s all basically exploration,” he said. “We don’t know what’s there. We have to continue exploration, but by the agreement with Kinross, we have to do it as a formal joint venture.”

At this point, he added, it’s not even clear whether the claims – which together cover several thousand hectares of land – are rich enough in gold, copper and silver deposits to even warrant setting up mines.

“It’s at such an early stage, it’s going to be difficult to say with certainty that there’s mineralization of any economic interest there. That’s the reason for doing the work now. So I guess the next year or two will tell us whether or not there’s mineralization to justify continued work,” said Hiner.

Increased Investment In Gold Mining

While Tuesday’s announcement may never develop into a really important mining venture for Geocom, it is still a timely reminder of how foreign companies are increasingly investing in Chile’s gold mining potential.

By the end of next year, according to a recent study by the Chilean Copper Commission, gold mining companies will have invested some US$3 billion here since 2004. A good portion of that money comes from Barrick Gold, a Canadian company behind the controversial Pascua Lama project in Region III.

But with Kinross, Swiss mining company Xstrata and other corporations also banking on Chilean gold, investment in gold and silver mines could, by 2011, come close to matching that of copper, the daily El Mercurio (citing Mining Industry stats) reported this week.

The trend may be due partly to the fact that Chile’s copper industry is in many ways saturated – there isn’t a lot of room for growth. Another factor has to do with waning confidence in global stock markets, and in traditionally stable currencies like the U.S. dollar, explained economist Bernardo Reyes Ortíz.

“There’s a general concern that things aren’t going well…That leads many people to seek refuge in more solid currencies, not, in this case, the U.S. dollar. The most likely alternative is gold. That, then, is a driving force pushing up investment in gold mining,” said Ortíz, who works for the Santiago-based Ecological Policy Institute (EIP).

A third factor, at least in southern Chile, may have to do with planned infrastructure changes. In isolated Patagonia, plans by the Chilean government to extend the Carreterra Austral (Southern Highway) would no doubt make mines or any other industry planned for the area all the more cost effective.

So, too, would the so-called Aysén Project, a US$4 billion hydroelectric scheme planned for Region XI. If approved by the government, the Aysén Project – which plans to build five massive hydroelectric dams that would then be linked to Santiago via a 2,000-kilometer transmission line – could provide easily accessible electricity for a host of local mining ventures in the future.

“There’s a clear relationship,” said Víctor Formantel Gallardo of the environmental NGO Ecosistemas. “Once they’ve come here and built a 1,000-kilometer high tension line that stretches to Puerto Montt, and then reaches from there through the valleys and foothill areas for another 1,000 kilometers all the way to Santiago, at that point there really will be no reason for them not to come and extract the region’s very real mineral resources.

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“The types of process that are used in gold mining have an even greater environmental impact than copper mining, because of the types of chemicals that are used, and the types of residues that are left behind,” said Ortíz.

Another vital issue has to do with water supplies. Gold mines require a tremendous amount of water. And in Chile’s dry northern regions – home, for example, to Barrick Gold’s Pascua Lama project, that can be particularly problematic.

“These projects are often being prepared in semi-arid or arid areas, where there’s already a major water supply problem. The mines tend to be set up near the headwaters of river basis, which can end up having multiple economic affects downriver;” said Ortíz.

In the much wetter southern Chile, where Geocom and Kinross are conducting their explorations, gold mining could precipitate another environmental problem – landslides, according to the EIP economist. Open-pit gold mining necessarily involves removing ground vegetation, and in rainy areas like Region X or XI, that could increase the likelihood of erosion and dangerous landslides.

“No company can guarantee that there won’t be accidents…Especially when it comes to large-scale operations. And we’re not talking about small gold mines here, we’re talking about large-scale operations, the majority of them open-pit. These aren’t underground mines,” said Ortíz.

Here is the full article.

Argentine government will have to get tougher with anti-mining provinces if it wants industry to fulfill potential

BUENOS AIRES, Oct 23 (Reuters) - Argentina's fledgling mining industry has grown fast under President Nestor Kirchner, but the next government will have to get tougher with anti-mining provinces if it wants the sector to fulfill its potential.

Argentina is a newcomer to mining when compared to many of its South American neighbors, though high metals prices, lower costs and a legislative reform in the 1990s have given it impetus in recent years.

However, fierce environmental opposition and provincial government mining bans have put the brakes on investment in several provinces such as the Andean wine-growing region of Mendoza and the Patagonian tourist destination of Chubut.

"For the mines that are successfully operating at the moment the regime is fine legally wise. It's the application that's the problem," said Christopher Ecclestone, an analyst from the New York-based Hallgarten and Co consultancy.

Federal laws take priority over provincial rulings under Argentina's mining code, but that has not been respected in relation to the bans, said HSBC mining analyst Victor Flores.

The center-left government of Kirchner, whose senator wife is expected to win an Oct. 28 presidential election, has not intervened in the provincial conflicts even though he has declared himself a "defender of mining."

"The federal government has shown no interest in ticking off the provinces when issues have come up because it's obviously not important enough," Flores said.

BANS LOSING STEAM?

Here is the full article.

Legislators outraged with Chile’s main copper company pollution

Legislators from Chile's environmental caucus reacted angrily last week to reports that state-owned mining company CODELCO is violating legal pollution limits for their waste water – in some cases by more than 700%. Senator Guido Girardo (PPD) and Deputy Alejandro Garcia-Huidobro (UDI) demanded that company executives be personally held responsible for their company's excesses, and denounced current sanctions as insufficient.

Reports Girardo and Garcia-Huidobro received from government oversight group the Superintendency for Sanitary Services (SISS) indicate waste runoff ducts from four CODELCO mining operations are contaminating rivers at levels far beyond those legally allowed. Copper and aluminum levels in Region V's White River – where seven of CODELCO's fourteen ducts were found to be in violation – with copper levels 700 time above the legal limit and aluminum levels and 52 times above legal limits. Levels of seven other contaminates were also found to be at dangerously high – and illegal – levels.

“These pollutants in the water will be absorbed by vegetables, agriculture, seafood, and fish,” said Girardo. “This will have a serious impact on human health.”

CODELCO has been fined between US$10,000 and US$30,000 by the SISS for its illegal activities. Still, Garcia-Huidobro and Girardo both denounced these sanctions as meaningless to the mining giant which earned 2007 first-quarter profits in excess of US$1.7 billion – money that is used to supplement the government's operating budget.

“CODELCO, of course, chooses to pay these fines, which are so insignificant that they are a joke,” said Dep. Garcia-Huidobro. “And, eventually, all Chileans will end up paying the fines.”

Here is the full article.

Chile plans to invest 17 billion US dollars in mining industry

Chile’s Mining Minister Karen Poniachik disclosed Monday that Chile is anticipating 17 billion US dollars on new gold and copper mining investment in the next five years. Poniachik said the new cash infusion is needed to replace existing mines whose reserves are running out and to bolster output.

Poniachik made her remarks while participating in the London Metal Exchange Week. During her visit to London she also gave a keynote address to the more than 3,000 mining executives, consumers, and investors gathered at the event. Her address marked the first time in more than 130 years that a woman has spoken at the gathering.

The new investments will be spread out over a period of five years, Ponichek said. During that time, she expects Chile's copper output to rise to 6.4 million metric tons, up from the current figure of 5.6 million tons.

Copper is a key sector in the Chilean economy, with exports last year reaching 33.3 billion US dollars. According to a 2007 report from the Council on Hemispheric Affairs, the daily average copper price for the first half of 2007 was about US$3.06 per pound on the London Metal Exchange. That figure was 11.5% higher than in 2006. Copper mining accounts for roughly 7% of Chile’s total GDP, and in 2006 copper represented 57% of the country’s total exports and 32 percent of its total fiscal revenues.

Poniachik’s announcements come as copper prices are heading for their sixth consecutive annual gain.

Poniachik also confirmed that Chile’s government is not interested in selling the state-owned copper agency. Chilean President Michelle Bachelet revealed in January that a group of investors had approached the government with an offer to buy the company. “CODELCO is not for sale,” said Poniachik.

While Poniachik’s announcement will have important ramifications for Chile’s business and mining communities, it has also raised strong concerns among energy and environmental experts, who link the mining industry’s expansion to several potentially destructive energy projects currently in the works in Southern Chile.

“In Chile, 65% of the country’s electricity is currently being consumed by the mining industry,” ecologist Juan Pablo Orrego, director of the environmental NGO Ecosistemas, told the Santiago Times Monday.

“The Hydroaysén project directors have stated that, with the creation of new mining projects, the country’s demand for energy will rise 6.8% annually (…) in other words, the directors themselves have linked hydroelectric projects in Southern Chile with mining initiatives to the North of Chile (…) but, I must be clear that the Central Interconnected Grid only extends to Region III. Still, it does include mines such as CODELCO’s Andina and El Teniente and Los Pelambres. Additionally, there are new projects which are specifically sprouting up within the Central Interconnected Grid’s range”.

Aaron Sanger, a U.S. environmentalist formerly with NGO ForestEthics and now helping lead an international effort to stop dam construction in Chile’s Patagonia region, also linked the mining industry’s needs to the destruction of Chile’s southern Patagonia region.

Here is the full article.