Mining is one of savage capitalism’s prime features
The Jesuits of Central America and Panama dedicated this year’s annual seminar of their Provincial Commission of the Social Apostolate to mining, in which we shared national experiences and heard national, regional and global presentations. One of our most important conclusions was that
the mining strategy in Central America points up the importance of the struggle for democracy.
Juan Hernández Pico, SJ
We learned from our seminar on mining, held on September 17-19 in San Salvador, that the fight between populations willing to resist to keep our region protected from the devastation produced by mining and the multinational companies that win over public officials through bribes, blackmail and buying off hearts and minds will be very hard and cruel without real democracy and independent state branches working to shake off corruption.
La Puya, GuatemalaOne of the seminar’s most impressive moments was the testimony of Yolanda Oquelí, leader of the resistance against the El Tambor gold mine at La Puya, in the municipality of San José el Golfo in Guatemala’s Metropolitan Department. On June 13 last year, Yolanda was shot by hit men while driving her car. Her house was also fired at. She still has a bullet imbedded in her body. “This pain,”she told us, “gives me greater courage and spurs me on to keep fighting.”
Fidel Ajau Suret, another of the people resisting, was murdered by hit men. Yolanda showed us a video of the tense hours in which members of the Guatemalan riot police battalion tried to block their entrance to the mine. Dozens of women from the municipalities neighboring San José el Golfo and San Pedro Ayampuc lay down in the highway, holding up pictures of the Virgin, crucifixes and rosaries, while Yolanda attempted to talk to the head of the riot police. A woman who claimed to be an Interior Ministry lawyer and had an order to open the mine was finally revealed to be a mining company employee. The valiant peaceful resistance of these neighbors stopped the mine from being opened. “We in the community have tried not to give in to provocation, to resist in a different way,” Yolanda told us. “All we’ve done is set up human barricades.”
The US mining company Kappes Cassidy & Associates bought the exploitation rights in La Puya from the Canadian company Radius Gold Inc., which explained to its shareholders that it sold out because its investment was “problematic.” Neither the State nor the companies conducted the required consultation of the affected population, which fears the mine’s possible effects on the local water, which is already very scarce. President Otto Pérez Molina decreed a two-year moratorium on new mining concessions, but the license to exploit El Tambor dates back to before it came into effect. The resistance of these communities has been strongly supported by the Confederation of Guatemalan Priests and Nuns (CONFREGUA), which periodically calls for solidarity with those resisting. As is always true in such cases, the mining company’s money has succeeded in dividing the communities.
Metals, prices, countriesAlthough all the testimonies we heard during the seminar were from Central Americans, today’s mining boom is global in scope. In 2013, the Alternatives Sud notebooks of the Catholic University of Louvain’s Tricontinental Center, founded by Belgian marxist sociologist and Catholic priest François Houtart, provided significant data on that boom.
World crude steel production increased by almost 7% between 2000 and 2007, while the global exploitation costs for commercial ends have increased more than five times. The estimated world budget for exploration of non-ferrous metals increased 45% between 2009 and 2010 and 50% between 2010 and 2011 and this upward trend of mineral prices will continue despite the global financial crisis. According to the United Nations Environment Programme, if world demand continues to increase at the current rate, annual natural resource extraction will have tripled between 2000 and 2050. The spectacular increase in global demand for natural resources—50% in 30 years—is explained by the rising demand by India, Brazil and particularly China. Between 2000 and 2007, China alone has more than doubled the world demand for aluminum, copper and zinc, tripled the demand for lead and iron and quadrupled the demand for nickel. It also currently accounts for 32% of the global demand for crude steel.
The European Union’s economy is highly dependent on mineral imports, from 48% for copper to 100% for cobalt, platinum and titanium. The import of raw materials makes up nearly a third of all EU imports. At the other extreme, Africa not only fails to produce the basic grains it needs in its vast territory, it also fails to consume the minerals it produces. This is due to the weakness of its States, the lack of market control and its weak industrialization. Africa produces 16 times more gold than it consumes, 12 times more tin, 8 times more iron and 7 times more copper. Those proportions are similar to Latin America’s, which only consumes 13% of the metals it produces. And the story is the same in certain southern Asian countries, such as Indonesia, which exports approximately three-quarters of the abundant gold, copper and coal it produces. The case of the Philippines is scandalous, with gold production representing 76% of its gross domestic product (GDP), equivalent to the investment required to completely eradicate poverty. Cajamarca in Peru, site of Latin America’s largest gold mine, has one of the country’s highest percentages of poor and wretched.
All of this contrasts with the incomes of the big transnational companies. The income of Glencore International, a giant in the ore business, is greater than the GDP of Peru or the Ukraine. Between 2007 and 2009, the income of the 40 main mining companies exceeded the GDP of 50 of the world’s countries.
This is savage capitalismMining is one of the industries in which capitalism’s savage nature can be most clearly seen. Another is agriculture. As Jean Ziegler, former Special Rapporteur on the Right to Food, said a few years ago, each child who dies of hunger in today’s world is a murdered child. The relationship between big US agriculture and world hunger and the latter’s deadly consequences is a sin of omission. But the relationship between mining and the death of some of the people resisting its local projects is a sin of commission—in this case committing crimes, because if people can’t be convinced or bribed they have to be terrorized.
The seminar showed us this savagery in several places in the region. In addition to the cases of Yolanda Oquelí and Fidel Ajau in La Puya, several militants from the resistance in Marlin de San Miguel Ixtahuacán, San Marcos, in Guatemala have also been murdered. Celinda Berta Pérez told us how the mine belonging to the Canadian company Goldcorp, which bought Glamis Gold, also Canadian, and operates through a company called Montana, “hasn’t brought prosperity, just saloons and damage to the heart of Mother Earth.” Nomel Pérez Sosa from Santo Domingo in the department of Chontales in Nicaragua told us of the Canadian company B2Gold’s persecution of the individual small-scale gold miners known as güiriseros in that country.
Odalia Orozco, a Ngäbe woman from the rural district of the Ngäbe and Buglé indigenous peoples in Panama, told us of the murders of two colleagues in early 2012 when Panama’s security forces decided to break up the resistance against the mining companies trying to set up the exploitation of copper in Cerro Colorado: “Several sectors joined together and managed to paralyze the country for five days, but it left a toll of two dead, women raped and people blinded and with amputations.” Miguel Rivera talked about the murder of his brother Marcelo, a militant in the resistance against the exploitation of the El Dorado mine in San Isidro, in Cabañas, El Salvador. Death threats have also been received by César Espinoza, the parish priest of La Esperanza, in Atlántida, Honduras, a member of the Claretian order who is an activist opponent of mining with a view to preserving water. “Mining needs a lot of blood, and its blood is water,” he told us.
The new death squadsExperiences similar to those witnessed during the Central American revolutionary processes are currently being repeated around mining. The attempts being made to break people’s resistance are not dissimilar to “death squads,” because that’s how the hit men hired to kill individuals and silence groups involved in the anti-mining resistance act. But as happened in the past, these brutal and illegal measures haven’t dissuaded people from continuing to defend the hills, forests, water and what’s left of the vital environment.
Capitalism shows its savage crypto-criminal nature when citizens’ groups defend the common good—a better distribution of wealth, better wages, greater employment security, health care within the reach of the majorities—or when they defend the air and water, aquifers, forests and biodiversity. To avoid showing itself committing the crimes and violating the laws it boasts of upholding, it pays criminals to do its dirty work.
The capitalists who traffic drugs, arms, organs for transplant and girls and young women for prostitution are only doing in a bare-faced public way what the big “legal” capitalists are doing with the “austerity” policies that are wiping from the world map the Keynesian measures that built the welfare State.
Mining is the great mirror that reflects the true dictates of any capitalism worth its salt: don’t permit progressive taxes, don’t allow minimum wages to come anywhere near real family needs; scuttle any organizing for collective labor contracts, don’t insure all workers, keep work posts precarious, go where wages are the lowest...
Dr. Jekyll and Mr. HydeWhen that face gets distorted by uncertainty about the probability of ever greater earnings on its investments, crime comes into the picture, in which we see a Dr. Jekyll and Mr. Hyde syndrome: the same person with a public generous side and a private criminal side. That hundred-year-old legend can also be applied to capitalism, which freed from competition with socialism as its global alternative is no longer happy just being a highly productive Dr. Jekyll forced by the State to distribute some of its wealth. Instead it is becoming increasingly voracious, obliging the State to withdraw from the game in the global casino, imposing financial austerity on it to leave more winnings for itself. In the process, its face is acquiring the features of the evil Mr.Hyde.
The proposal formulated in 1989 by Jesuit theologian and philosopher Ignacio Ellacuría, rector of El Salvador’s Central American University, just before he was gunned down, is finally acquiring the importance it merits: reverse history, rebuilding a civilization of work instead of the current civilization of capital.
The case of Costa RicaIt became evident during the seminar that not all national situations are the same regarding mining. The analysis stressed the advantages of Costa Rica when the rules of an advanced democracy are really put into play.
Costa Rica has been the first country in the world to halt open-pit mining following a proactive fight that combined resistance and advocacy to achieve a legal framework to prevent it. Teacher and anti-mining activist Heidy Murillo and Las Crucitas resident Alfredo Arias, a farmer whose family resisted the mining company’s plans for a mine in that area told us their experience.
They explained how gold exploitation had been authorized years ago in three mines in the province of Punta Arenas—Macacona, Veta Vargas and Bellavista. Before being granted to mining transnationals, the gold veins were reached through tunnels. A drop in gold prices, however, made such extraction costs too high to generate profits so United Herne Ltd., a Canadian company, started open-pit mining of the Macacona mine in 1978. This was abandoned nine years later when the Costa Rican heavy machinery company working in the mine went bankrupt. The exploitation of the Veta Vargas mine was even briefer. A subsidiary of Lyon Lake Mines, another Canadian company, started mining there in April 1998 without the required permits from the Punta Arenas council and decided to abandon it three months later.
Despite its brevity, the work in these mines left serious ecological damage behind. None of the companies involved repaired the blasted slopes or sealed what one Salvadoran economist hired by a mining company to study the costs and benefits of mining exploitation called “reservoirs” of contaminated waters—known colloquially as “tailings ponds”—left behind. These waters contain cyanide and arsenic, very effective poisons that can end up filtering into the aquifers if these reservoirs are not sealed off.
Continuing with the story, the National Environmental Technical Secretariat authorized the Río Minerales S.A. company to exploit the Bellavista mine in 2001. At the time, Carlos Manuel Rodríguez, who served as environment minister between 2002 and 2006, was working in conjunction with the National University, the University of Costa Rica and civic groups to get the government to declare an indefinite moratorium on mining exploitation, which succeeded in cutting short the Bellavista exploitation. The ministry cited three reasons for its decision. The first was economic, as the mining legislation produces minimal benefits for the country: just 2% of the production value, as well as the taxes applicable to any industrial-commercial company. The second was technological, as the Geology and Mines Directorate has extremely limited verification, monitoring and evaluation capacities. And the third was the mining industries’ own insufficient and poor experience in developing projects in tropical environments and ecosystems.
That moratorium on mining exploitation was suspended during Oscar Arias’ second presidency (2006-2010). In October 2008 a decree was issued declaring “the Crucitas mining project developed by the Industrias Infinito, S.A. company of public interest and national suitability” and granting the company the power “to proceed to cut down trees [including protected species] and develop infrastructure works in protected areas.”
Las Crucitas: A success storyLas Crucitas is a canton in the north of the country, three kilometers from the Río San Juan, Nicaragua’s border with Costa Rica. It rains a lot in that area, making it almost impossible to seal off contaminated waters and stop them from overflowing toward the river. The company calculates the value of the gold extractable from these deposits at US$1 billion, of which only 2%, or US$20 million, would go to Costa Rica. Contrary to what’s happening in the rest of Central America, the extracting company was prohibited from using cyanide or other poisons to separate the gold from the other minerals, a process known as leaching, thus making the mining operation more expensive.
“The first thing we did was present a legal appeal for protection to stop the felling of trees in over 50 hectares,” Heidy Murillo explained. “Seeing so many felled trees was what triggered the fight, making the Costa Rican population oppose the mining.” Landowner Alfredo Arias resisted with heart and soul the pressure Industrias Infinito exerted on him to sell them his lands to excavate a hole 70 meters deep and several dozen hectares in diameter, destroying all the vegetation, including one of the protected species, the yellow almond tree.
This first appeal for protection was followed by others. Heidy Murillo showed us a video of a protest march from San José to Las Crucitas against the mining company. The long legal and civic struggle got the Supreme Court to repeal the presidential decree and on February 10, 2011, finally convinced the Legislative Assembly to pass a law prohibiting any open-pit metal mining in Costa Rica. That law defines that the use of cyanide or mercury to separate gold from other minerals damages the environment and will therefore be prohibited after a period of eight years, during which time only small-scale individual and cooperative miners may use them. The law stipulates that cooperatives will be able to continue exploring, exploiting and processing minerals, but that nobody can affiliate to more than one cooperative.
Heidy Murillo mentioned the following lessons learned during this successful fight: there was more than one visible leader in the struggle; all kinds of activities were done (walks, parties, fasts and even bi-national actions with Nicaragua); and artists, journalists, university students and priests all contributed. She described the media support as fundamental. In the end, 90% of the Costa Rican population rejected open-pit mining. “Sometimes lobbying parliamentary representatives is bad-mouthed,” Murillo told us, “but we did it and it helped. Everything adds up in this effort.”
Honduras: An undermined democracyAt the other extreme of the Central American spectrum is Honduras, where the coup d’état of June 28, 2012, created a democratic vacuum that facilitated the establishment of the mining industry. Pedro Landa, who for many years was the director of Caritas in Honduras and is a researcher on mining, explained the situation there to us. According to Landa, Honduras currently has 292 approved mining projects, which cover 46.08% of the country’s surface. Another 562 requests are in the process of being approved, which will bring the total land dedicated to mining to 84.08%.
A legal framework has been put together during the current presidency of Porfirio Lobo Sosa (2010-2014) that practically hands the country and the State over to savage capitalism’s representatives. Landa listed the following decrees and laws: the Creation of Special Development Regions (Model Cities), a law fostering private-public investment (Coalianza), an investments protection and promotion law, a wind energy production law, an anti-terrorist law, an electronic surveillance law, a law for the generation of hydroelectric energy (dams), a mining law, a law for granting sea concessions, a decree allowing the Army to exploit the forests and a decree law for petroleum exploration and exploitation.
Despite this legal reinforcement, a good number of people in Honduras have organized in social movements and are fighting in defense of the environment and against mining companies. They have not infrequently achieved moratoriums on exploitation or even withdrawal of the company in question, although mining companies always leave behind enormous damage.
A notable anti-mining struggle is the one in the Siria Valley in the municipality of San Ignacio, department of Francisco Morazán. Henry Sauceda, an anti-mining activist and pastor, told us about the struggle there against the San Martín mining project, run by Minerales Entre Mares de Honduras, a subsidiary of Glamis Gold.
Mining makes people sickThe fight in the Siria Valley has been to suspend the gold mine’s exploitation after observing serious ailments among the population. According to one study, an increase in skin diseases—12% of the population in 2001, 52% in 2002 and 98% in 2003—can be attributed to the high concentrations of arsenic in the water of a well for human consumption in El Pedernal. There has also been a rise in eye diseases, with 13% of the population suffering from them in 2001, 25% in 2002 and 45% in 2003. High lead concentrations have also been verified. As in the case of arsenic, these concentrations are far higher than the levels considered inoffensive by the World Health Organization (WHO). In the village of Nueva Palo Ralo—which replaced the original Palo Ralo, flattened to exploit the mine—child mortality between 2001 and 2006 was 300 for every 1,000 live births, which is 12 times Honduras’ overall figure of 25.82 for every 1,000 live births.
The excessive concentrations of heavy metals are transmitted through the food chain: a plant is contaminated, a cow eats it and the resulting beef eaten by a human contains concentrations of it as well. The San Martín Mine is no longer operating. Henry Sauceda told us about both the divisions generated in the Siria Valley due to mining exploitation and the solidarity that the Jesuits’ Reflection, Research and Communication Team and Radio Progreso gave the fight against the mining. He counted the friends he has lost and the threats received by members of the environmental committee.
Where’s the gold? Central America is besieged by transnational mining companies and gold is the main attraction. The traditional gold deposits in Russia, Canada, South Africa and Australia seem to be running out, as happened with the deposits that triggered the California gold rush in the 19th century. Those veins could originally be seen in rivers, gullies and hillsides.
Gold is now being found in regions prone to seismic movements, such as Indonesia, the Philippines, Peru and Central America. Earthquakes and volcanic eruptions stir up the bowels of the earth, sending red-hot magma containing small percentages of gold up to areas relatively close to the surface. Extraction of this gold, however, requires very large movements of land and enormous amounts of work to expose the deposits to the open air yet result in a low yield.
Mining mythsAndrew McKinley of Catholic Relief Services in El Salvador, who participated in the seminar, identified the myths behind open-pit mining. The first of these is that the new technology protects the environment. Photographs over the mountain range that crosses Central America and contains valuable minerals don’t leave the slightest doubt as to the deception imposed by those preaching the protecting effects of the new technology. Enormous machinery is being used to dismantle enormous hills, turning them into deserts. The mining companies not only never reforest the hills they have leveled but also dehydrate the regions where they blast for gold because their operations use massive amounts of water. The extracted rocks are bathed in water and cyanide to release the gold. At current gold prices, it’s profitable to obtain only 7.5 ounces per ton of rock. In the United States alone, mining companies contaminate 27 billion gallons of water a year and the treatment to purify that same amount costs US$67 billion a year. In Central America the water used in mining is not purified; it remains contaminated forever.
Another myth is that mining generates employment and a local economic boom. This is the cruelest promise they make because it plays with the needs of the people, who want work. The reality is communities living in absolute poverty alongside a gold mine. And although jobs operating the heavy machinery are the best paid, local inhabitants are never seen doing that. Instead, they are hired for the most dangerous and lowest paid jobs. In addition, the exploitation of the mines is very short-lived. The San Martín mining project in the Siria Valley lasted nine years and exploitation of the Marlín mine lasted ten. Exploitation at El Salvador’s El Dorado mine, which has yet to start, is only expected to last six years. While six years of mining won’t bring development, it’s enough to destroy the fish, agriculture, ranching and traditional ways of life. Mining removes the wealth and leaves, or even causes, poverty. The shareholders in the mining transnationals are the ones who get the profits. The lunar landscapes the mines leave behind them are proverbial.
Neither development Another myth is that mining generates important income for the State and encourages sustainable development. In most of our Central American countries, however, the State receives just 1% of the profits; only in Costa Rica was it going to receive 2%. By contrast, the State in countries of the North regularly receives 30% of the profits. Little can be done with the percentages the countries of the South get, and in some cases the mining companies have even successfully pressured to be exempted from taxes. In El Salvador, the people have said “no” to the El Dorado mine in San Isidro, Cabañas, and managed to get the last two Salvadoran governments to prohibit its exploitation. However, the Pacific Rim Mining Corp. insists its rights have been violated and has sued the State of El Salvador for US$77 million for breach of contract and presumed loss of earnings.
nor human rights
Yet another myth is that the mining companies respect human rights. This isn’t true. They violate the right of the populations where the mines are located to be consulted previously even in countries that have signed International Labor Organization Convention 169. In Sicapaca—one of the two Guatemalan municipalities covered by Goldcorp’s Marlin mine— the company interpreted the large turnout of people at the consultation as approval of the exploitation, ignoring the fact that the vast majority voted against it. The two affected municipalities include homes belonging to Mame indigenous people whose walls have cracked under the constant vibrations caused by dynamite blasts.
The companies also violate the right to health. A high rate of skin diseases and other serious ailments related to the use of sodium cyanide for leaching are found in San Miguel Ixtahuacán (the Marlin mine) and the Siria Valley (the San Martín mine). This same process also separates arsenic and heavy metals such as mercury, lead and cadmium, all of which are harmful to health and are spread through the food chain. The cyanide leaching method is prohibited in countries of the North.
“Mother Earth is weeping” Mining violates people’s right to a dignified and sustainable life, to health and housing, and to know the truth and decide whether or not they want the mining industry where they live.
Mining is also a problem of contrasting cosmovisions. As Mam indigenous woman Celinda Berta Pérez González from San Miguel Ixtahuacán put it: “Gold extraction is like extracting the sacred heart from the earth. Mother Earth is bleeding. The Earth is very important to us because it’s what gives us life. Mother Earth is weeping. God is being killed, because Nature is God’s face. Would we like to have our mother naked in front of everyone like that?”
Water is the blood of miningAlthough it may seem strange that the conquistadors only saw Central America as a source of land wealth, having exploited the gold in Peru and the silver in Mexico and Bolivia, it was because the mineral wealth in the isthmus is hidden in subterranean geological layers inaccessible to the keen-sighted explorers of 500 years ago. With that gold now revealed, water is seen as having an industrial value for mining, but it is a value inversely proportional to the need to preserve the water for essential human uses.
Mining extraction uses water intensively. Ángel Ibarra, director of the Salvadoran Ecological Unit (UNES), explained to us how rich in water Central America is because it rains three times more in our region than the world average. But the availability of water is unequally distributed due to the different microclimates, altitudes, rainy seasons and population settlement patterns. According to WHO projections, there is a threat that the amount of water we currently have will suffer drastic reductions. El Salvador will only have 1,952 cubic meters of water available per inhabitant in 2025, compared to 4,259 in 2000. Annual availability In Guatemala will drop from 9,899 to 5,354 cubic meters per inhabitant, in Honduras from 16,039 to 8,862, in Costa Rica from 31,441 to 16,940, in Nicaragua from 45,506 to 19,275 and in Panama from 54,159 to 37,286. While annual per-capita water availability in Belize was calculated at 82,102 cubic meters in 2000, there are no figures for the reduction envisaged.
In Central America water is mainly “eaten,” with a full 77% used in agriculture, compared to 15% employed domestically and 8% in industry. With the exception of Costa Rica, where over 20% of the agricultural land is irrigated, the surface watered during cultivation ranges between 8.6% in Nicaragua and 3.6% in Honduras.
A third of Central America’s population (12 million inhabitants) has no running water connection in their home or land. Added to the deficit in coverage is the high level of bacteriological and chemical contamination affecting the water to which people normally have access.
What causes the bad state of the water in our region? Ángel Ibarra pointed out several causes, including changes in soil use and environmental destruction, which have led to a deregulation of the water cycle; excessive pressure on the water resources, widespread contamination, the absence of any legal and institutional framework of appropriate public policies, a lack of equity policies, deficient investment and the extractivist models, particularly mining. In short, it’s a combination of management problems, economic model and political will.
More mines, less waterOpen-pit mining is a powerful additional factor causing greater water stress, which implies a dangerous reduction in the water suitable for human consumption. This represents a risk for Central America as a whole in the near future and one already at El Salvador’s gates. Ángel Ibarra explained to us how the cyanide leaching method uses 10 liters of water per second, or 900,000 liters of water a day in each mine. The pumping to keep a subterranean mine of depths of up to 450 meters dry requires 55-119 liters of water per second, or 4.5 to 8.6 million liters of water per day in each mine.
This excessive water consumption reduces the quality of the surface and underground water systems and in the worst of cases the water obtained from these systems is no longer potable. This consumption also drastically reduces the subterranean water and the river water that inter-communicates with the subterranean aquifers, thus contributing to desertification.
The capacity for damage of such disasters is multiplied in the “tailings,” those large ponds where the residual waters from mining exploitation are stored. Even in the best of cases—excellent sealing of the land occupied by the tailings pond, to prevent these poisoned waters from infiltrating the surrounding lands—what cannot be avoided is evaporation of the cyanide, particularly due to the heat during the dry season, with the subsequent rainfall contaminated with the cyanide condensed in the atmosphere.
Global tendenciesManuel Pérez Rocha, a member of the US Institute for Policy Studies, shared with us the context behind the increased mineral extraction. The background to this scenario is a crisis of global deregulation and speculation, which we could call the exacerbation of the civilization of capital. With less and less regulation of capital by States to channel it towards a certain common good, the global economy has become a casino economy where the production of more money is increasing relentlessly, particularly for casino owners because fewer and fewer goods and services are being produced compared to the money being produced for real bets in the “global casino.”
Pérez Rocha stated that this crisis is unsustainable, an assertion he based on three tendencies. The first is the trend toward reduced commodity prices, i.e. the prices of the resources produced from the earth whether through cultivation (maize, wheat, barley, oats, sorghum, soya, coffee, tea, mate, etc.) or extraction (gold, silver, platinum, diamonds, petroleum, natural gas, iron, copper, lead, aluminum, magnesium, coltan and the like). The long price cycle for these products, which started around 2000, is now heading downward, although China’s influence on prices must be taken into account given that it is both the greatest producer and consumer and wants to back the yuan with gold reserves. In 2000, an ounce of gold was worth US$282 in the market. After having peaked at $1,900, it has now fallen to around $1,700 and the gold companies fear it could drop to $1,140 in the long term.
The second trend is the drop in financing for mining companies, particularly those known as “juniors,” such as Pacific Rim, which are the ones trying to invade Central America, acting as the vanguard for giant corporations such as Goldcorp.
The third trend is the spread of political resistance by certain States, which are demanding greater participation via taxes or benefits, as recently occurred in the Dominican Republic and Indonesia. There is also social resistance from the inhabitants of the places where the mines are located, who are demanding the right to be consulted before concessions or contracts are granted and are engaging in wide-ranging protests if this right is not respected.
Pérez Rocha concluded that the extractive economic model is facing a multidimensional crisis and coming up with solutions that produce shock waves in the mining locations whose origin isn’t always clearly perceived. For example, the companies are trying to compensate for the drop in prices by cutting wages, reducing environmental care even more and increasing their participation as investors, squeezing the State out of the picture. Above all, their search for solutions isn’t holding back on intensifying authoritarian and pillaging extractivism, the use of criminal pressure or even war. The best example, which demonstrates the use of such means in regions far removed from the media’s day-to-day attention, is what’s happening in eastern Congo, where Congo, Ruanda and Burundi meet, in which the fight over coltan, a mineral formed out of columbite and tantalite, has fed a war for over 20 years.
More and more casesDependence on the extractive economy stops mining countries from programming increasing diversification over the long term. The States’ political efforts to improve their benefits in their relationship with the mining companies by using their sovereignty to grant or deny concessions are increasingly running up against free trade agreements and other commercial pacts. In 2000, the World Bank’s International Center for Settlement of Investment Disputes (ICSID) had only three pending cases related to investments in petroleum, gas and mining, but by March 2013 it already had 169 investor versus State cases, of which 60 (35.7%) were related to petroleum, gas or mining. In 2012 alone, 48 new cases were filed, 17 of them (35%) related to these extractive products in developing countries.
Latin American countries make up approximately 14% of ICSID’s affiliates, but are the target of 51% of the pending cases from extractive industries in 2013 (31 of the 60 cases). A year ago, Ecuador was sentenced to pay $2.4 billion ($1.7 billion plus interest, around 3% of its GDP), to Occidental Petroleum, the most expensive arbitral decision to date, and $700 million to Chevron in compensation for cancelling their petroleum concessions.
Pérez Rocha shared the following scandalous case with us. In 2011, the US Renco Group Inc., whose executive president and main shareholder was Ira Rennert, sued the Peruvian State for $800 million on behalf of Renco and its subsidiary Doe Run Company, which was operating a metal smelter (high levels of lead, copper, zinc and sulfur dioxide) in La Oroya, Peru, one of the most contaminated sites in the world. Renco has even been sued in the United States for contaminating Utah’s Great Salt Lake with magnesium and Doe Run has been sued for contaminating Herculaneum, Missouri, with high levels of lead, arsenic and cadmium. Meanwhile, Rennert, whose personal fortune is calculated at $6.5 billion, has built a $200-million sea-front mansion in The Hamptons, New York, which anyone can view on the internet by googling “Ira Rennert mansion.”
The seductive glitter of goldGold is seductive, shining. It shines in a way that makes people fall in love with it. India is the country that uses the most gold in jewelry. People have been enslaved, tortured and killed for gold. It and many other minerals have been turned into gods. The film “Blood Diamond,” staring Leonardo DiCaprio, is set against the background of the civil war in Sierra Leone, funded through the sale of diamonds. In 2013, the former President of Sierra Leone, Charles Taylor, was sentenced to 50 years in prison for crimes against humanity.
People have also been killed for coltan, the main metallic component of 42 minerals required to produce the cell phones that have become so essential to us. Twelve million people have died due to coltan extraction in the Congo-Ruanda-Burundi triangle in central Africa during the last 20 years. Every day, their blood rings in our ears. It’s the war, funded by big world powers, that appears in John Le Carré’s novel The Mission Song.
Poor people are also seduced by “gold.” It’s not only the rich who place their happiness in it. They also teach the poor to do the same. Daniel Day Lewis’s marvelous performance in the film “There Will Be Blood”—which we watched during the seminar—shows how wealth seduces. The character had been born poor and envied the magnificent houses of the rich in his hometown in Wisconsin. He travelled the country to find oil. He knew its value and deceived, or tried to deceive, California farmers into selling him their farms. Deceit and lies led him to murder to get his hands on the oil that would make him rich.
Gold, diamonds, coltan and money turned god are idols that produce countless victims and must be fought against. As Jesus of Nazareth said, “You cannot serve both God and Mammon.” Happiness for Jesus lay in patience with others, in the hunger for justice, in peace-building, in transparency of the heart, in compassion, in dignifying work because it makes us creators of life, and also in the willingness to be persecuted for justice’s sake.
We will continue to resistOur seminar ended with the declaration published in the previous edition of envío. We would like to repeat the first two paragraphs here:
“We declare that we’re inspired by the love of life, solidarity and commitment to the victims and the dedication of the martyrs of a predatory system that results in violence and poverty. We’re motivated by the conviction of being jointly responsible for our planet as a gift from the God of Life for us to share in dignity as our only communal home.
“We declare that we’re in permanent resistance against the mining industry and its exploitative transnational companies that generate social and environmental disasters, which constitute a growing threat to the life of the communities. Although mining is wealth, it currently operates within the rationale of multinationals that take that wealth abroad, in collusion with associates within each country.”
Mining company CEOs in the VaticanA few days after our seminar, a meeting was held in the offices of the Vatican’s Pontifical Council for Justice and Peace involving Council members, other Church authorities and the managers of several of the world’s main mining companies. Other participants included Caritas Internationalis and NGOs such as Oxfam America. Cardinal Peter Kodwo Turkson, president of the Justice and Peace Council, who was present at the meeting, was a bishop in Ghana where he witnessed the damaging consequences of the exploitation of a gold mine by Anglo Gold Ashanti. Two of that mining company’s top executives were also in the meeting.
A letter dated September 3 from Tarsicio Bertone, former Cardinal-Secretary of State, was read out in the name of Pope Francis during the meeting. It said: “The extractive industries are perceived, not always without justification, as unjust exploiters of local resources and populations, making use of even slavery and the expulsion of entire populations. As an old Israeli proverb puts it, ‘The fathers have eaten sour grapes, and the children’s teeth are set on edge’ (Jeremiah 31:29). This warning has a continuing validity. Not only does it allude to the complexity of the ethical questions, which are not easily resolved with an answer valid for everyone, but it also reminds us of the seriousness of human actions. Mining, like many other industrial activities, brings with it ecological and social consequences that reach beyond national borders and are transmitted from one generation to the next.”
The need to safeguard democracyIn order to assert the importance of these grave consequences in each country, it is absolutely necessary to take very seriously the struggle for a democracy that provides legal safeguards for the interests of the majorities and is continually less permeable to the corruption of bribery.
We’ll close with this reflection by Costa Rican journalist Andrés Mora in 2010: “In their race toward ill-named ‘development,’ the Central American elites at the service of transnational capital are rapidly squandering the immense wealth of our biodiversity, at the same time accelerating the region’s environmental and social collapse. That is their ritual of greed, spurred on by impatience, which always demands new victims, starting with nature and followed by humans.”
Juan Hernández Pico, sj, is the envío correspondent in Guatemala.