Argentina's Supreme Court upholds glacier protection law

Published by MAC on 2012-07-11
Source: Statement, Reuters, mining.com, Globe & Mail

Will Pascua Lama be put out to grass?

Barrick Gold Suffers Legal Defeat in Argentine Supreme Court

Glacier Protection Law Holds and Mining Companies Must Reveal Impacts

CEDHA release

3 July 2012

Buenos Aires, Argentina - Barrick Gold, the company that had proposed dynamiting glaciers and hauling them off in dump trucks so they could get at gold reserves at their Pascua Lama project, suffered a major setback today in the Argentine National Supreme Court. An injunction order originally granted to Barrick by a local federal circuit court judge suspending the recently approved National Glacier Act, was terminally revoked. The glacier law is now back in full force for Barrick and other mining companies operating in Argentina.

Glacier allegedly damaged by Barrick's Veladero mine road Source: CEDHA

Mining companies investing in exploration activities all along the Andes mountains were quietly awaiting the ruling by the Argentine Supreme Court which issued an 8 page verdict today stating firmly that the glacier law holds and Barrick and a slew of other mining companies exploring for minerals in the high Andes mountains, will now have to file glacier impact reports on their operations and adhere to the law. If they are found to be in glacier areas, or impacting glaciers, according to the law, they will have to redesign their projects, or worse, pack their bags and go home. Barrick's Veladero project and the not-yet-extracting Pascua Lama project (a binational project with Chile) both fall under the scope of the law and would have to produce glacier impact studies to continue operations.

The verdict, labeled Complainant: Barrick Gold Exploraciones Argentina, S.A. and others vs. the National Government, reversed a previous court order in 2011, from federal circuit judge (Galvez) in San Juan province which favored the Canadian mining giant stating that the National Glacier Act created a state of "uncertainty" and "lack of tranquility" for mining companies operating in glacier zones, where the national law states clearly, mining shall not impact glaciers or periglacial environments (permafrost).

The problem for mining projects in provinces like San Juan or La Rioja, is that much of the terrain above 4,000 meters, is where the vast majority of new projects are searching for minerals in the high Andes mountains.

The Supreme Court slapped the circuit court judge Galvez on the wrist, stating that his granting of the injunction was poorly justified. National laws, say the Supreme Court, can only be suspended when the originating concerns are severe, not the case they say for the mining companies, which simply have to ensure they are not impacting glaciers or permafrost. The National Glacier Inventory must be carried out, says the Supreme Court, and then we'll see what that means for the mining companies.

The earlier verdict granted to Barrick (a similar injunction request was granted to Xstrata Copper) which had effectively suspended the National Glacier Act for companies such as Barrick Gold (Pascua Lama and Veladero) and Xstrata Copper (El Pachón), was a great windfall for several hundred exploratory mining projects in the high Andes mountains not only in San Juan province but also in high altitude provinces such as La Rioja, Catamarca, Jujuy, Salta, and Mendoza, where glaciers and permafrost abound.

The doubt remains hence, what the strict ruling will mean for companies whose concessions are surrounded by, or coincide with glaciers and more generally with frozen grounds (permafrost) which are also protected by the law.

At first glance, these companies will have to prove they are not impacting glaciers or permafrost or they will be in regulatory trouble.

Many other mining companies such as NGEx Resources (Vicuña, Las Flechas, José Maria), McEwen Mining (Los Azules), Peregrine Metals (El Altar), Glencore (Aguilar), Malbex (Del Carmen), Anglo American (Cerro Verde), Osisko (Famatina), and many others, were betting that less stringent provincial glacier protection laws, which covered fewer types of glaciers and some of which do not protect permafrost zones, would prevail over the national law, which is the strictest of a dozen or so glaciers laws that have appeared in the last two years.

The Supreme Court verdict specifies that the National Glacier Law rightly and justly calls for a National Glacier Inventory to determine what areas should be protected by the law and where mining activity might be affecting glaciers and periglacial environments. The fear from the mining sector and from the provincial government which has been betting on mining for developing its economy is more than warranted.

Recently, the national glacier institute, the IANIGLA, revealed its first official inventory results for the Mendoza River, an uncontroversial area rich in glaciers but where no mining is planned. The IANIGLA came out loudly indicating specifically that in the zones surrounding the more than 1,600 glaciers in the Mendoza River basin, mining is now prohibited. The official statement by the IANIGLA was a bucket of ice thrown at the mining sector, as it is clear indicator confirming that the National Glacier Act will begin to set no-go zones for mining operations due to potential glacier and permafrost impacts.

The verdict also emphasises the responsibility of mining companies to produce within 180 days of the passage of the National Glacier Act, a detailed glacier impact study to determine if the glacier law applies to the project in question, including projects already under operations, making the National Glacier Act retroactive for project's such as Barrick's Veladero gold mine.

Finally the court throws out corporate concerns that the National Glacier Act might hinder mining activity, orders that the National Glacier Inventory be carried out and calls on Barrick to submit to a glacier impact study, after which it shall be determined how the National Glacier Law applies to Barrick.

For more information:

Jorge Daniel Taillant
Center for Human Rights and Environment (CEDHA)
cel: +54 9 351 507 8376

Link to the verdict: (in Spanish only)

Link to the Argentine National Glacier Act (unofficial English Translation)

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Argentine court upholds glacier law in mining area

Reuters

3 July 2012

BUENOS AIRES - Argentina's Supreme Court ruled on Tuesday that key articles of a glacier protection law should apply in a northern province where Barrick Gold Corp, the world's largest gold miner, is building a huge mine high in the Andes.

Tuesday's ruling scraps a 2010 decision by a federal judge in San Juan province, who suspended the application of six articles of the law after a complaint by mining industry groups.

"The Supreme Court revokes the precautionary measures that suspended the application of the glacier law in the province of San Juan," the official judicial news agency said.

San Juan province is home to Barrick's Veladero mine, which is at an altitude of more than 4,000 meters (13,000 feet) not far from the company's huge Pascua Lama project. Pascua Lama is a roughly $5 billion gold-silver mine that straddles the border with Chile and is set to enter production in 2013.

When the law passed Congress two years ago, mining industry analysts warned that it could hinder construction of Pascua Lama, but Barrick has said that it does not operate on glaciers and that it complies with all environmental regulations.

"We are in the process of evaluating the text of the decision. However, it is important to point out that our activities do not take place on glaciers," said Rodrigo Jimenez, Barrick's vice president for corporate affairs in South America. "We believe we are legally entitled to continue our current activities on the basis of existing approvals."

"The federal legislation also draws a distinction between new projects and those already underway. Our Veladero mine has been in operation since 2005 and construction at Pascua Lama has been underway since 2009," he said.

The law, which bans mining and oil drilling on glaciers and the surrounding areas, is designed to preserve water reserves.

President Cristina Fernandez vetoed a similar law in 2008 on the grounds that it would hamper provincial economies, and caused controversy in a country where anti-mining sentiment is strong.

Compared with neighboring Chile or Peru, Argentina's mining industry is relatively undeveloped. This has drawn interest from global companies and overall investment reached a record $2.6 billion in 2011.

(Reporting by Karina Grazina; Writing by Helen Popper)

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Glaciers stop progress of Barrick Gold's mining plans in Argentina

By Cecilia Jamasmie

Mining.com

4 July 2012

The world's largest gold company, Barrick Gold, suffered a major setback Tuesday as the Argentine National Supreme Court reversed preliminary injunctions that have blocked key parts of a glacier protection law, now back in full force for all mining companies.

The National Glacier Act requires a thorough national inventory of Argentina's remaining glaciers as well as "periglacial" areas where the ice has recently retreated but water remains below the surface.

Terra.com reports that the Canadian company is evaluating the ruling and will not stop the work already in progress at its Pascua Lama gold and silver project, in San Juan Province, straddling the border between Chile and Argentina:

"We are legally entitled to continue our current activities on the basis of existing approvals," said Rodrigo Jimenez, vice president of corporate affairs for Barrick South America in a statement.

Other companies operating in the country will also be affected by the Supreme Court's decision, including Xstrata Copper, Anglo American, NGEx Resources and McEwen Mining. Most of them have projects in areas surrounded by hundreds, and in some cases thousands, of glaciers, according to Jorge Daniel Taillant, mining, environment and human rights coordinator with Argentina's Centre for Human Rights and Environment (CEDHA).

"The Andes are full of ice and as the glacier inventory becomes official, the areas off-limits to mining operations will increase," Taillant predicts. "It's estimated that San Juan Province, the most mining-friendly province by far, has over 12,000 glaciers above 10,000 ft., where most of the exploratory mining operations are now underway. San Juan alone has over 100 mining projects in the pipeline that could potentially be permanently stalled by the reality that glaciers are ubiquitous in the area."

Xstrata Copper, which has a project in San Juan, said in a statement provided to MINING.com that it "takes its environmental responsibilities seriously and adheres to the highest international standards of sustainable development."

Regarding its El Pachón copper project in San Juan, it says it is located in a periglacial environment. As such, "feasibility update studies and an environmental impact assessment are currently underway and a glacier impact assessment is being undertaken as part of these specialist studies. Our El Pachón Project continues to operate in full compliance with all applicable Argentine laws."

Meanwhile, McEwen Mining stated in a June 27, 2011 news release that, results from exploratory drilling and glaciology studies found "no ice glaciers are present in the project area" of its Los Azules copper project, also in San Juan.

First approved by the Argentine Congress in 2008, the glacier protection act was vetoed by President Cristina Fernandez a month later that year. However, in September of 2010, a new version of the act was ratified in the Argentine Senate in a 35 pro, 33 against vote. Barrick Gold is currently seeking to have the act declared unconstitutional and the case is before the Argentine Supreme Court.

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Argentine ruling won't stop project, Barrick says

By  Pav Jordan, Mining Reporter

The Globe and Mail

5 July 2012

A law banning mining around glaciers in Argentina will not derail development of one of the world's largest new gold projects, Barrick Gold Corp. said.

The Pascua-Lama project is on track to go into production in 2013 after years of fighting over its environmental impact.

Argentina's Congress passed the law - which also bans drilling on oil rigs - about two years ago in an effort to protect water reserves, but opponents held it off with an injunction that was overthrown by the Supreme Court on Tuesday, driving Barrick Gold stock lower amid concerns Pascua-Lama may be halted.

"The impact of the law on Barrick is nil," said Barrick spokesman Andy Lloyd, pointing out that there are no glaciers near the mine on the Argentine side of the cross-border project with Chile, where 70 per cent of the mine is being built.

Barrick stock stumbled on news of the ruling earlier this week because it raised alarm bells that Pascua-Lama might be thwarted by the same environmental concerns it already faced down nearly a decade ago, when a media storm echoed from Andean capitals in Buenos Aires and Santiago to Barrick headquarters in Toronto.

The project, nestled between Andean peaks along the ridge of mountains separating Chile and Argentina, is due to start production in the middle of next year, about 20 years after Barrick acquired the property. Barrick is counting on the new mine to drive much of its growth in the next five years, contributing as much as 850,000 ounces of gold to production.

"The potential impact on glaciers has already been evaluated and those have been approved by the provincial government with the participation of federal agencies,"Mr. Lloyd said. "And those EIAs (Environmental Impact Assessments) determined that the mine would not have an adverse impact on glaciers."

Barrick spent millions of dollars and years of effort just to get the Pascua-Lama project approved for construction in 2009, fulfilling hundreds of environmental requirements in Argentina and Chile that included promises not to touch the ice near the open pit operation. Those pledges meant it had to leave about a billion dollars worth of resources in the ground.

The glacier protection law requires a national inventory of all glaciers in the country and a ban on mining and oil and gas activity in those areas.

The review could take years and has faced opposition from key mining provinces that say it is unconstitutional because natural resources are under provincial jurisdiction in Argentina.

Once built, Pascua-Lama will be one of the world's largest producers of gold and silver.

A special prosecutor in San Juan province, where Barrick's operations are located, was quoted in local media on Tuesday saying it would not affect mining in the province.

"There is no fear that this ruling will affect mining, industry or public works," state prosecutor Guillermo De Sanctis told the Tiempo de San Juan publication. "Because the court has not said, ‘stop the presses, stop producing,' what it has said is that you cannot suspend the law if the inventory of glaciers has not even begun to be taken."

Thanks to revenue from silver sales, the mine will have negative average cash costs of production for gold in the first five years of operation.

Pascua-Lama and two other developments are Barrick's three main pillars of growth at a time when large ore deposits are becoming increasingly difficult to find in safe and accessible jurisdictions. The mine has proven and probable reserves of 17.9-million ounces of gold, with 676-million ounces of contained silver, according to the most recent data.