Canadian Mining Company at Odds with Mexican Locals

Canadian Mining Company at Odds with Mexican Locals

By Sharda Vaidyanath, The Epoch Times

27 April 2005

The gold in the historic Mexican community of Cerro de San Pedro isn't glittering for the Canadian mining company Metallica Resources Inc.. And in a four-page letter to The Epoch Times, General Manager Donald E. Hulse of the company's Mexican subsidiary responded to critics of its mining operation in Mexico.

At issue were reports by the KAIROS ecumenical council, a Canadian NGO, regarding NAFTA failures in Mexico, and a press bulletin from Mexican community activist Ana Maria Alvarado Garcia. The Epoch Times sent Alvarado Garcia's statement to Metallica Resources for a response.

Hulse wrote, "Neither company has ever engaged in irregular acts at any level of the Mexican government and meets the standards in both Canadian and US securities laws." Advocacy groups in Canada and Mexico disagree.

NAFTA facilitated the entry of Canadian mining company Metallica Resources and its Mexican subsidiary Minera San Xavier (MSX) to mine for gold in Cerro de San Pedro in 1995. The MSX mining project is located 20 km northeast of the state's capital city, San Luis Potosí. Members of KAIROS who went on a fact-finding mission to Mexico say, "We were shocked to learn that one of our own companies is pursuing a project that the villagers told us would destroy their homes, damage the unique ecosystem, and contaminate the water supply."

Hulse responds, "As an act of good faith, MSX accepted the inclusion of 100 permit conditions in addition to the laws of Mexico, as well as 99 recommendationsS A mine with these standards could be permitted in any country in the world."

Alvarado Garcia, a resident of Cerro de San Pedro and an agricultural engineer, represented a large group of independent organizations opposing the mining by MSX. She spoke through an interpreter last Wednesday at Ottawa's National Press Club: "It is difficult for me, as a foreigner, to explain how a Canadian company has been involved with local and federal governments in corruption acts causing great damage to our community."

She says that after the exploration phase, MSX announced that the town must be evacuated because the proposed mining project would require the destruction of its urban core and the mountains surrounding it. In exchange, she says, the company promised a new town, with all needed infrastructure, far from the mining zone. The people of Cerro de San Pedro refused to move, says Alvarado Garcia, and "that is how the legal battle to save the town began."

Hulse wrote, "Moving the town of Cerro de San Pedro is not contemplated as a part of the project and all appropriate measures have been taken to be sure that the town remains whole, and that the population can continue to live there during the life of the mineS No mountains will be destroyed either."

He further explains that 17 of the 24 families who permanently reside in the town have accepted MSX's offer of relocation and will eventually receive the deeds to their new homes while also retaining their old homes in Cerro de San Pedro. Mexican census statistics record the town's population as 4,000.

Alvarado Garcia raised the issue of several cancelled licenses for MSX operations-for the use of land, use of water, and use of explosives, which damaged historic monuments. She also cited a National Institute of Anthropology and History lawsuit against MSX.

The MSX letter responded, "At this time the operating and environmental permits are valid, although they have been challenged in court. The challenge to the environment permit has been overturned twice already, and MSX believes that the permit will be upheld again."

To Alvarado Garcia's complaints regarding open-pit mining and cyanide leaching, Hulse wrote, "MSX has signed commitments with state and federal agencies to voluntarily accept higher standards than the law requires."

He adds, "The existence of the mine does not prevent Cerro de San Pedro from continuing to be attractive to tourists." Hulse cites Bisbee, Arizona as an example of a place that combines the two themes.

Alvarado Garcia also spoke of MSX spending millions to bolster its image, with the local government supporting its media campaign.

MSX has allocated US$500,000 for the restoration of two local churches, San Nicholas Tolentino and San Pedro Apostle, which suffered damage due to "poor construction practice"; the company placed 2.5 million pesos in a trust fund for the latter. MSX says it will also clean up toxic waste and correct "collapses in the hills and S unstable rock on the hillsides" resulting from a previous mining company's operations. MSX also provided a travelling doctor and a dentist to Cerro de San Pedro, which-as one of the poorest areas in the state of San Luis Potosí-had been without medical care for years.

According to KAIROS, Metallica Resources' research states that the mine will operate for six to eight years and employ only 150-200 people, with 50 hired locally at minimum wage. And for this, "It will permanently destroy the village and local ecosystem in the name of profits, which are actually projected to be quite low."

Anglican bishop Sue Moxley from Nova Scotia, who went to Mexico in March as part of a KAIROS fact-finding mission, said the situation is so bad that the slogan "Foreigners go home" now means "Canadians go home."

Andrew Hannan, a spokesperson for the Department of Foreign Affairs and International Trade, said the Canadian embassy in Mexico had received representations from various sides of the discussions and has encouraged further dialogue between the parties. He declined to comment on issues raised in this article "as the matter is currently being considered by the courts in Mexico." Hannan does not think that this is a "NAFTA problem."

Ed Broadbent, former NDP leader and current MP for Ottawa Centre, disagrees. He says there is currently no Canadian law or rule in NAFTA that protects the rights of local people from exploitation by foreign companies. Broadbent is introducing a private member's bill to do just that. A senior Mexican embassy official in charge of NAFTA asked not to be identified and claimed no knowledge of the mining legal battles in Cerro de San Pedro.

The town is now racing with time to have UNESCO declare it a world heritage site. After almost five centuries of existence, it may finally see the glitter of its gold.