Massive protests against cyanide and open pit mining in Bariloche, Argentina

Published by MAC on 2012-01-23
Source: Statement, MiningWatch, blog

Pan American Silver Comments on Changes to Mining Legislation in Rio Negro, Argentina

Pan American Silver Press Release

19 January 2012

VANCOUVER, BRITISH COLUMBIA - Pan American Silver Corp. owns 100% of the Calcatreu gold development project, located in the Province of Rio Negro, in Argentina. Since acquiring the Project in early 2010 as part of the purchase of Aquiline Resources, the Company has performed only a modest amount of new work due to the fact that Rio Negro had banned the use of sodium cyanide, which is critical to the recovery of gold from Calcatreu's mineral resource.

Massive 'cyanide poisoning' protest in Bariloche, Argentina. Photo by Chiwi Giambirtone (Piuke)

On December 29, 2011, Rio Negro's provincial legislature passed law Nr. 4738, which among other things, allows for the use of chemical substances, including sodium cyanide, in mineral processing. The new law replaced law 3981 that limited mining activity. The new legislation was signed, published and enacted into law on January 9, 2012 and it also established the evaluation process for the filing and approval of an Environmental Impact Assessment ("EIA"), which is necessary to mine and process minerals in the province.

Pan American's President & CEO, Geoff Burns, commented, "This is a very positive development for Rio Negro and for Argentina. While the previous legislation allowed open pit mining, it banned the use of cyanide in mineral processing, effectively rendering our Calcatreu gold project uneconomic. By reversing this ban, the provincial and municipal governments have clearly reaffirmed their commitment to responsible, environmentally sensitive mining development, which will bring significant investment and the associated benefits for all stakeholders, particularly the local communities."

In 2011, Pan American Silver invested $1.7 million at Calcatreu, completing 2,932 meters of diamond drilling, mostly as confirmation holes and to collect fresh metallurgical sample materials. Results on testing performed on these materials are still pending and the Company has not yet had an opportunity to confirm and update the resource estimates, which were prepared in April 2008 by Micon for Aquiline Resources Inc. According to those estimates, the Project hosts an indicated resource of 8 million tonnes grading 2.63 gpt gold and 25.7 gpt silver, with additional inferred resources of 3.4 million tonnes grading 2.06 gpt gold and 16.6 gpt silver, representing a potentially significant undeveloped gold resource within the Company's portfolio.

In 2012, the Company intends to accelerate development activities at the Project, which will include further diamond drilling, metallurgical testing, environmental baseline studies and preliminary engineering, as it works towards producing a Preliminary Assessment and an EIA for Calcatreu.

Calcatreu is less than 140 kilometres due north of Pan American's most important silver development project, Navidad, which is also located in the central Meseta region of Patagonia, just across the border, in the neighboring province of Chubut.

There has clearly been a positive shift in attitude towards mining and mining investment in Argentina since the recent re-election of President Cristina Fernandez de Kirchner, and it is gratifying to see Rio Negro take a leading role in responding to this change.

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Since January 2nd, local residents have blocked the entry of Osisko Mining Corporation onto the Famatina Mountain Range in the province of La Rioja, Argentina. Protests began in anticipation of scheduled exploration activities.

In August 2011, Osisko signed an agreement with the provincial state company, Energy and Minerals State Society (ESME by its initials in Spanish). The agreement for the Famatina gold project included a $500,000 USD cash payment to ESME within 15 days of its signing and a commitment to invest $10 million USD within the first year of exploration. The company was expected to begin exploration work yesterday.

During the past two weeks, protests have garnered broad participation from the town of Famatina. The Argentinian press has reported that up to half of the town of 7,000 people have participated, including the mayor and the local priest. Town residents first protested the project immediately following signing of the deal in August.

The local mayor gave statements to the Argentinian press on Monday saying that the town of Famatina “is not interested in discussing royalties or provincial revenues.” Ismael Bordagaray a member of the national ruling party said that “what the town is saying is that it doesn’t want a resource such as water to be contaminated, or to be left with the environmental impacts that large-scale mining will generate.”

“The people don’t see mining as an option for development in the area,” he added.

In another statement to the press, Bordagaray commented, “The town of Famatina doesn’t want mining for our region. Rather they are looking to tourism or the production of nuts, peaches, grapes and pears.” The Famatina valley is the most important viticultural area in the province with award winning vineyards.

Provincial governor, Luis Beder Herrera, also a member of President Cristina Kirchner’s national ruling party, the Front for Victory, supports the project. The governor deployed a special police force to the area leading Nobel Laureate Adolfo Pérez Esquivel to write the governor warning against possible repression and urging him to recognize the population’s right to protest.  

Osisko Mining has not issued a statement on the protests and local press reports that neither company representatives in Argentina nor the head office have so far responded to requests for comment.  

Protests five years ago led Barrick Gold to abandon the area.

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People power! Mining protests spread to Argentina

By Jude Webber

Beyond BRICS

17 January 2012

Argentina is striving to attract foreign investment and its mineral potential - in mining, and energy - offer attractive possibilities. But a social conflict playing out in the northwestern province of La Rioja could be a taste of things to come as environmentalists and increasingly local communities seek to halt extractive projects that could bring in millions in investment but, they say, at too high a price for their livelihoods.

Residents in the northwestern Argentine town of Famatina are on a war footing, determined to oust Canada's Osisko Mining Corporation from the Famatina gold project that they say will poison their scarce water supplies and ruin their environment.

The open-pit project has long been a subject of fierce controversy. Barrick Gold Corp, the world's top bullion producer, tried to develop the project but finally threw in the towel in 2007 after the town joined ranks against it under the slogan "Don't touch Famatina". That slogan has been reprised and locals say opposition in the town is virtually 100 per cent of the 5,800 population, with only a couple of people having been found to defend it. The town's mayor and priest are firmly opposed to mining.

Since January 2, protesters have been blocking the only route up to the site, at an altitude of nearly 2,000 metres. The mine was previously  explored and Osisko said last August it was planning to invest an initial $10m in the project, in partnership with the La Rioja provincial mining company, EMSE.

January 16 was the deadline for Osisko to start exploration work, and although no sign had been seen of company representatives since mid-December, residents were taking no chances. Some 3,000 people turned out in a protest "caravan" and had a picnic at the roadblock, in the blazing sun and more than 40 degree heat, waiting.

"There is no social licence for any mega mining project in Famatina and La Rioja," Carina Díaz Moreno, a spokeswoman for one of the protest groups that has been campaigning against mining since the days of Barrick, told beyondbrics. "No matter how many contracts (La Rioja provincial governor Luis) Beder Herrera signs, people won't give him social licence," she said. "We will be keeping the blocade until Beder Herrera gives in."

He shows no sign of doing so. The provincial governor, an ardent supporter of Cristina Fernández, the president, performed a spectacular U-turn on the issue in 2007, switching from a mining opponent when he was deputy governor to a supporter after he had ousted former governor Angel Maza in what analysts say was a palace coup. He says mining is one of the only prospects for his poor province - a place in which, in fact, 80 per cent of the workforce is employed by the state.

Tetra Pak, the Swedish packaging maker, has a plant in the province but there is little industry and some farming, but as much of the land is desert, it is not prime agricultural land either. As a result, Beder Herrera has embraced mining and though it is still in its infancy, there are a number of uranium exploration projects in the province, which also draw local wrath.

Protesters, who have organised into citizens' assemblies, have been emboldened by their success in ejecting Barrick and, convinced they will triumph this time too, say they will wait as long as it takes. What is more, Díaz Moreno says the opposition has grown even stronger since the days of Barrick. "You can't compare," she said of Monday's turnout, compared with protests five years ago.

Community opposition to mining is the flip-side of the global commodities boom as people in emerging market countries demand environmental responsibility and a greater share of booming prices, and it is certainly not confined to Famatina.

Peru, with its vast mineral riches and large indigenous and poor communities, has been particularly affected by battles for social licence. Nearly a decade ago, in 2003, a fruit-producing town, Tambogrande, in northern Peru halted a major gold and copper project. More recently, Newmont Mining's Conga project has been beset by serious protests.

Also in Peru, Southern Copper's Tia Maria project was scrapped after the government ruled it "unacceptable" following protests. Bear Creek of Canada saw its Santa Ana silver project shot down and as the protests which killed it fanned out into the jungle, the Inambari dam planned by Brazilian consortium Egasur was cancelled. Another dam project, Tambo-40, was scrubbed by Odebrecht following indigenous protests.

Unlike Peru, Argentina sees itself as a "country with mining" rather than a "mining country", but it is home to some world-class projects, such as Barrick's Pascua Lama, which straddles the Andes into Chile, and Vale's major potassium project in Mendoza. The industry in Argentina is far more open than, say, the tightly-regulated energy sector, and as long as minerals prices remain attractive, Argentina is likely to remain a lure.

Osisko could not be reached for comment as the uneasy wait continued in Famatina. It looks like being a long fight. And it is a fight that could well be replicated as Argentina seeks to exploit what promise to be the world's third biggest shale gas riches.