Coro Mining firmly rejected by Mendoza's legislature, Argentina
Published by MAC on 2011-08-30Source: Financial Post, statements
What made Coro's CEO Mr. Stephens believe he would succeed?
The legislature of Mendoza province in Argentina voted last week against approving a key environmental certification for the already-delayed San Jorge copper-gold project near northern Uspallata.
The project has been strongly contested over the past two years. See: Canadians aim to float mining anew in Mendoza and Massive anti-mining march takes over Mendoza legislature (photo).
After getting the bad news, Coro Mining's CEO, Alan Stephens, announced that the company would seek "legal redress and compensation through Argentine and international courts".
Coro Mining Corp, a Vancouver based company managed by former members of First Quantum senior management team, optioned the San Jorge property from Global Copper in May 2006.
Then already mining companies were clearly not welcome in the province: a subsidiary of the Lundin Group was kicked out of Mendoza the year before. See: Permits Denied for Mining Exploration in San Carlos, and the San Carlos district passed and ordinance to prohibit mining.
A number of Canadian junior companies were also having a hard time in the south of the province. See: Over 1000 persons march against "dirty mining" in General Alvear and by the end of 2006, open pit mining was suspended completely. See: Argentine province halts mining on pollution fears.
In 2007, the province also passed a law banning the use of sulphuric acid and cyanide in mining activities. See: Mendoza province bans in situ leach mining.
What made Coro's Mr. Stephens believe he would succeed where Lundin-Tenke-Depromin-Suramina, Anglo American, Portal Resources, Exeter Resources, Chapleau Resources, and even the National Government of Argentina nuclear agency (CNEA) have failed? See: Uranium? No thanks, says San Rafael and CNEA ordered not to reopen Sierra Pintada
Nonetheless, Coro Mining's shareholders may be pleased to know that many mining companies that have lost assets in "resource rebel" Argentinian provinces (Chubut and Mendoza most notably) have not had their interests adversely affected in provinces where they have stronger political influence - notably in Santa Cruz and San Juan.
For example: Exeter Resources was rejected in southern Mendoza but then acquired the Cerro Moro prospect in Santa Cruz (later spinned out to a new company, Extorre).
Patagonia Gold also saw its Huemules project rejected by Chubut in 2006. But it rapidly regained value when various of its enterprises (like the Lomada de Leiva cyanide test plant) were permitted in Santa Cruz.
It would not be surprising if Coro Mining itself announced the "acquisition" of a mining project in those provinces in the near future.
That might be preferable to its seeking compensation for the loss of San Jorge, via a protracted and costly action in a national or international court - and which it could well lose...
[Comment by Luis Manuel Claps, MAC Latin American editor, 28 August 2011].
Argentina rejects Coro's flagship project
By Peter Koven
Financial Post
25 August 2011
TORONTO - A provincial government in Argentina has rejected Coro Mining Corp.'s flagship project, dealing the company a huge blow and highlighting the political risk hampering Canadian miners in parts of South America.
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| Massive anti-mining march in Mendoza, Argentina on Feb 25 2011 Source: Los Andes |
Coro shares plunged 54% on Thursday after the legislature in Mendoza province voted against an environmental approval the Vancouver-based company needed to develop its San Jorge copper-gold project. The rejection was made even though Coro's Environmental Impact Statement was ratified by the government at several different stages.
Coro believes the rejection was purely political.
Provincial elections in Mendoza are scheduled for October, and San Jorge emerged as a controversial issue, especially among young voters who are opposed to mining.
The head of the Lower House in Mendoza recommended that the legislature put off a decision on the project until after the election, so that it would not be decided in the heat of a campaign and its merits could be properly judged.
Instead, the political parties fought back and forth on the issue, and a decision was made to quickly vote on it. Then came the rejection.
"Both parties decided it was to their advantage to paint the other as being more pro-mining, and decided the best bet was to kill the project right there and then," Coro chief executive Alan Stephens said in an interview.
"Unfortunately, the heat of the political campaign superimposed itself on what you would consider a rational response to the problem."
He traveled to Mendoza this week to try to negotiate a deal that would give the province a carried interest in the project. He thought that would provide some assurance that the mine would meet international standards. Instead, he found out that the legislature voted it down.
He blamed anti-mining environmentalists for poisoning public opinion against the project.
"A small number of very motivated and noisy people have convinced the general population in Mendoza that mining is evil, and you can't have mining without contamination, and all foreign companies are thieves," he said. "The government didn't make an effort themselves to educate their population about it."
Coro now plans to meet with its lawyers and study its legal options. Mr. Stephens said it is to soon to decide what action the company will take.
The rejection of San Jorge comes two months after the Peruvian government rejected Bear Creek Mining Corp.'s Santa Ana project. It shows that some pockets of South America remain very hostile to large-scale mining. In response, Bear Creek applied for an injunction against the government.
In Argentina, some provinces are strongly pro-mining while others feature a lot of opposition. One of the most difficult is Chubut province, where Vancouver-based Pan American Silver Corp. is trying to win approval for its Navidad project.
Benton Resources Corp.: Provincial Legislature Denies Ratification of San Jorge Environmental Impact Declaration
Benton Resources Press Release
25 August 2011
THUNDER BAY, ONTARIO -- Benton Resources Corp. CA:BTC +3.77% ("Benton") regrets to announce that it has been advised by Coro Mining Corp. ("Coro" or the "Company") CA:COP +3.64% that the Provincial Legislature of Mendoza has voted against the ratification of the Company's approved Environmental Impact Declaration ("EID"). Stephen Stares, President and CEO of Benton Resources made the following statement: "We are very disappointed that the Mendoza Government has decided not to ratify the San Jorge Project, especially after all the hard work, expense and mining education of the highest quality that was provided by the Coro team. Benton gives Coro its full support in taking the necessary steps to protect shareholders interest".
Below is Coro's Press Release that was disseminated today:
Coro Mining Corp. ("Coro" or the "Company") CA:COP +3.64% regrets to announce that the Provincial Legislature of Mendoza has voted against the ratification of the Company's approved Environmental Impact Declaration ("EID"), notwithstanding that the EID was conditional, inter alia, upon the Company's Argentinean subsidiary, Minera San Jorge ("MSJ"), complying with the highest standards of environmental protection, control and monitoring prior to, and during the construction and operation of the project. Over the past 3 years, Coro has strictly complied with all laws and regulations, including the 7722 law which required the ratification of the approved EID, and has made every effort to ensure that the legislators were fully informed about the project. In addition, a Mendoza court recently determined that the process which led to the approval of the EID was neither illegitimate nor arbitrary, and therefore fully complied with provincial law.
As recently as August 24th, the head of the Lower House confirmed that the ratification vote would take place after the elections scheduled for October, in order that the decision could be taken based on the merits of the project and not on a calculation of electoral advantage. Unfortunately, the vote took place in any event, without consideration of the conclusions of the legislature's commissions who have spent the last several months evaluating the EID, and more pertinently, the validity of the process which led to its approval. The decision to not ratify the EID was taken against the clearly expressed wishes of the current government, with whom the Company was in advanced discussions aimed at delivering a carried 10% interest in MSJ to the province.
Coro will now consider its alternatives to seek legal redress and compensation through the Argentinean and international courts. In particular, the 7722 law is currently subject to legal challenges of its constitutionality by Coro and several other parties. We anticipate that this law suit may be resolved by mid 2012 and in the event that the courts find that the law is indeed unconstitutional, the denial of legislative ratification of the Company's valid and approved EID, may be deemed to be null and void.
Finally, we wish to express our gratitude to the people of Uspallata who had supported the development of San Jorge. We sincerely regret the rejection our project by your elected representatives, especially given the rigorous review and consultation process that has taken place over the past 3 years. Coro had hoped to work with you in raising your living standards and demonstrating the economic and social benefits that San Jorge could have brought to your community; unfortunately, this opportunity has now been denied to us."
Coro Mining Sinks Nearly 60% After Provincial Legislation Nixes Environment Permit
25 August 2011
Coro Mining Corp. is down nearly 60% at 23 cents a share, falling 34 cents after saying provincial officials in Argentina voted down the company's Environmental Impact Declaration for its Minera San Jorge project.
Coro said it will now consider its alternatives to seek legal redress and compensation through the Argentinean and international courts. In particular, the 7722 law is currently subject to legal challenges of its constitutionality by Coro and several other parties. We anticipate that this lawsuit may be resolved by mid 2012 and in the event that the courts find that the law is indeed unconstitutional, the denial of legislative ratification of the Company's valid and approved EID, may be deemed to be null and void.