Doubts rise over Pascua Lama

Doubts rise over Pascua Lama

10th January 2006

Chile: Presidential Candidates Voice Doubts about Pascua-Lama Project

DIARIO SIETE, OCEAN PRESS RELEASE

by Wanda Praamsma (editor@santiagotimes.cl)

The future looks uncertain for the controversial Pascua Lama gold mine project in Chile's northern Region III. Environmental advisors to both presidential candidates now vying for office say their new, incoming government will not support the gold mine.

The US$1.5 billion project, which straddles the Chilean/Argentine border, is proposed by Canada's Barrick Gold, one of the world's most important gold mining companies.

In the run-off vote on Sunday, Chileans will choose between the centre-left candidate, Michelle Bachelet of the governing Concertación coalition, and billionaire businessman Sebastián Piñera, the conservative leader of the National Renovation (RN) party. Both candidates have voiced strong reservations about Pascua Lama because of the environmental risks it poses.

The Pascua Lama project contemplates moving three glaciers in order to access vast reserves (17.6 million ounces) of gold and silver deposits. But environmentalists and some community leaders say the project risks contaminating the water supply and livelihoods of the farming communities in the Huasco Valley, directly beneath the proposed mine site,

In December, Bachelet explicitly said her intention is to "protect the glaciers and not approve their removal and/or destruction." In a recent interview with Diario Siete, Bachelet's environmental advisor, Manuel Baquedano, added that, "In Bachelet's administration, this project will be completely reviewed. Therefore, the future for (Pascua Lama) is uncertain. In my view, it will be very difficult for the project to go on as originally planned by the company."

Although less aggressively, Piñera's camp also expressed opposition to the mine, with his environmental advisor saying that the project will only move forward "in the event that the glaciers remain untouched and that contamination of all the water in the Huasco Valley basin is completely avoided."

Advisors in both camps said the project will only be viable if the local ecosystem is taken into account. "In the area of the glaciers where they want to intervene, they will have to make an underground mine" (rather than an open pit mine), said Antonio Horvath, an environmental advisor to Piñera. "They'll have to re-adapt the project and extract the minerals underground." Bachelet's advisor agreed.

The risks associated with Pascua Lama have outraged environmentalists and demonstrations have been held continuously since the project first came to the public's attention in August, 2004. On Jan. 6 dozens of protesters rallied outside the Canadian Embassy in Santiago's upscale Las Condes neighbourhood, holding flags that read "Stop, Arrêt Pascua Lama" and "No a Barrick, No a Pascua Lama."

Marcel Claude, the executive director of Oceana, the environmental NGO which organized the protest, said the protesters wanted Canadian authorities to hear their rage, especially because the mine will produce up to US$10 billion in profits for the Canadian company, and "do nothing for Chile except destroy its environment."

"Pascua Lama will probably not pay much in taxes (in Chile) and its impact in terms of jobs is insignificant," Claude said in a press release. "Therefore, we can say with conviction that (Pascua Lama) will contribute absolutely nothing to Chile's development."

Aside from the political debate, the project has encountered numerous technical roadblocks, and cannot move ahead without the approval of the Regional Environmental Commission (COREMA). Barrick has submitted several versions of an environmental report to COREMA, addressing the risks the mine poses. Each time, however, COREMA has asked for revisions of the report.

Most recently, on Dec. 30, COREMA asked Barrick, for the third time in the past year, to revise its 5,000-page environmental report and explain certain aspects of its plan to move the three glaciers.

In the report, submitted in November, Barrick stated that the company will not move three glaciers to access the mine. Rather, the company asserted that the glaciers are really just "reserves of ice" and that five hectares, instead of the initial 10, will be intercepted by the company. The other five hectares, the company said, will diminish over time through natural melting processes, allowing the company access to the gold reserves (ST, Nov. 14).

The environmental commission only gave Barrick one week to address COREMA's questions, leading the company to seek a five-day extension that ends today, Tuesday [January 10]. COREMA will most likely officially give a "yes" or "no" response to the project in February.

In the whole of this long, drawn-out process, Barrick can only take credit for one success: the acceptance of the mine by the Huasco Valley's "Junta de Vigilancia," a group representing 2,000 of the area's farmers. The Junta agreed to a protocol agreement with Barrick Gold that gives local farmers US$60 million in compensation, to be doled out over the course of 20 years. The money, a fraction of what Barrick stands to make if the mine goes forward, is meant to safeguard farmers' interests in the event that their water supplies are contaminated. Environmentalists called the arrangement a bribe.

Still, COREMA director Plácido Ávila said the agreement between Barrick and the farmers will not have any weight in the evaluation of the project. "In the evaluation, only technical aspects will be taken into account. The agreement with the Junta is not environmental, therefore, it won't be considered."