Global Policy Forum

El Salvador: Gold Mining ‘Is A Huge Rip-Off’ – Environmentalists


By Raul Gutierrez

Inter Press Service
December 8, 2008

A black coffin was consigned to the flames amid music and fireworks as dozens of people from Salvadoran communities that fear the impacts of gold and silver mining celebrated a "symbolic burial" of the Pacific Rim Mining Corporation, a Canadian-based company. "We want the El Dorado mine to close," said 21-year-old Juan Carlos Moreno, who took part in the Dec. 5 demonstration held in downtown El Salvador. The protest was held by the "I Reject Metal Mining" campaign launched by members of organisations opposed to the granting of mining concessions because of the threats to water resources and public health.

Pacific Rim hopes to start mining for gold and silver at the El Dorado mine in the village of San Isidro in the department (province) of Cabañas, about 65 kilometres from San Salvador, once it obtains the necessary permits from the government. The company acquired the property, an area of 144 square kilometres, in 2002 when it merged with the Dayton Mining Corporation. Since then, it has been granted exploration licenses. According to the company's estimates, it could extract 1.2 million ounces of gold and 7.4 million ounces of silver in a period of just over six years. However, environmentalists believe that these figures are lower than the true potential yields.

The price of gold currently stands at 850 dollars an ounce. In January, Luis Trejo, Pacific Rim's environmental adviser, told IPS the mine would create 2,000 direct and indirect jobs, and would pay the state up to three percent tax on gross sales. Twenty-four mining projects with exploration licenses in El Salvador are waiting for a mining law, currently being discussed in parliament, to come into force. The law would give the go-ahead to exploit concessions, which are currently suspended. The draft law, introduced by the right-wing National Conciliation Party (PCN), is intended to provide mining with three pillars: "a clear regulatory framework, a monitoring body to enforce the law, and a classification of companies that comply with international standards," said PCN lawmaker Orlando Arévalo.

But in the view of the left-wing opposition, the initiative would create an autonomous authority in charge of granting concessions, taking over that power from the ministries, and without requiring environmental impact studies. Environmentalists warn that if the door is opened to the mining industry, El Salvador will suffer severe social and environmental impacts from acid drainage, water pollution, and evaporation of cyanide, used in the leaching process to separate gold and silver from rock. Mining would also exacerbate water shortages in a number of areas, scientists say.

The most severe impact would be caused by cyanide evaporation, which occurs at 26 degrees Celsius; afterwards, rainfall would spread it far and wide, not only in the mining areas but in a sizeable part of the Central American region, depending on wind speeds, said Florian Erzinger, an environmental chemist who specialises in aquatic systems at the Federal Institute of Technology (ETH) in Zurich, Switzerland. Pollution needs no passport to cross borders, said Erzinger, the author of a study on "Environmental impact of extractive mining on the Lempa river and its consequences for the metropolitan area of San Salvador," presented on Nov. 17 in the capital.

One-third of the water consumed by the over two million people in the metropolitan area of San Salvador comes from the Lempa river, which rises in southeastern Guatemala, flows through Honduras, enters El Salvador in the northwest and winds through most of the country until it reaches the Pacific ocean. The 24 mining projects are concentrated in the north of the country, a farming region crossed by the Lempa river. The Lempa basin in El Salvador has an area of over 10,000 square kilometres and a number of tributaries, such as the San Francisco river, which would be polluted by acid drainage, according to the study. "Acid drainage" of mercury, cyanide, arsenic, zinc and aluminium, at levels "much higher than permitted levels," will pollute surface waters and cause many health problems, according to the study which was sponsored by the Catholic organisation Caritas-El Salvador and the non-governmental Salvadoran Ecological Unit (UNES).

Large amounts of water are needed in precious metal mines for leaching, so "the water table will fall to a depth of about 400 metres," the scientist said. For example, Erzinger said the El Dorado mine would pump between 75 and 110 litres per second from groundwater sources and from the San Francisco river, which supplies the local population with water. The average Salvadoran uses half that quantity of water per day, Erzinger said. Mining operations would affect four million people, environmentalists say. According to official figures, the country's population is 5.7 million (other sources estimate it at seven million), and more than 1.5 million people do not have access to clean drinking water.

El Salvador has no mining tradition. The first mining projects were developed in the late 19th century, but they closed down a few years later. Mining was revived in 1940, but declined again in the 1950s. There have been complaints that several rivers around the village of San Sebastián, in the eastern province of La Unión, were polluted with iron, copper and aluminium due to extraction operations from 1950 to 1981 at a nearby gold mine by the Commerce Group Corporation. The local community sued the company in 2007.

The Roman Catholic Bishop's Conference last year stated its position against mining, saying it "causes irreversible damage to the environment and to the surrounding communities." The costs will be paid by the Salvadoran people, while the mining companies will take almost all the profits, í?ngel Ibarra, the head of UNES, told IPS. The 24 mining projects would make "over nine billion dollars for the companies" in 10 or 15 years of extraction, the environmentalist said, quoting Erzinger's estimates based on the quantities of precious metals that would be recovered. Out of these profits the companies would have to pay royalties and taxes of about 180 million dollars to the national government and to local municipalities in the mining regions. "It's a huge rip-off," Ibarra concluded.

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