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Le Monde diplomatique: The Colombian gold rush, august 2010

Le Monde diplomatique: The Colombian gold rush, august 2010

As the price of raw materials rises, Latin-American governments are selling off their raw resources. Colombia wants the big companies to come and mine

by Laurence Mazure

The Colombian military shelled a home in Alto Guayabal, on the borders of Antioquia and Chocó provinces in northeastern Colombia, before dawn on 30 January. The traditional house belonged to a family from the Embera Katío tribe: a young child was killed, four people were injured, the household pets died. Subsistence crops were destroyed. The army immediately talked of a "mistake" in its campaign to flush out guerrilla fighters of the Revolutionary Armed Forces of Colombia (Farc). Amerindian organisations saw it as part of the offensive led by transnational mining corporations. The attack hit one of the communities that surrounds Careperro, a sacred mountain that interests the American transnational Muriel Mining Corporation (MMC) because of its gold-bearing ore. Was this a coincidence?

The Embera Katíos are trying to return to their ancestral lands, having been displaced in 2000 by the conflict. The 1991 constitution gave them the right to do so. But in their absence, the government agency Ingeominas issued MMC with nine exploration and exploitation licences. It did not consult local communities, although that is prescribed by law. According to William Carupia, of the Indigenous Organisation of Antioquia, the community has been experiencing "another forced displacement" over the past two years.

In a country where justice only too often becomes might is right, the Constitutional Court decided in favour of the Amerindian and Afro-Colombian communities of Chocó and Antioquia on 29 March 2010. It created a legal precedent that confirmed the specific constitutional rights of these communities and highlighted the obligation on everyone - including transnational corporations - to respect legal process and the imperative of protecting biodiversity (1). This represented considerable progress, since the Embera Katíos had to confront representatives of the ministries of the interior and justice, the environment, defence, social affairs, and mining and energy, as well as the armed forces - a committee that could not have been constituted by chance.

On 21 September 1999, President Bill Clinton and his Colombian counterpart, Andrés Pastrana, launched Plan Colombia for "peace, prosperity and the strengthening of the state". They promised that it was aimed at combating drug trafficking. By paying $1.6bn over three years, they also intended to help the Colombian army defeat guerrillas.

On 20 October 1999, a proposed amendment highlighted the plan's second rationale: encouraging foreign investment by "insist[ing] that the Government of Colombia complete urgent reform measures intended to open its economy fully to foreign investment and commerce" (2). In the signatories' minds, the objectives were closely linked - especially in mining. A few years later, the national mining development plan 2019 (published in 2006) stated that "only the private sector is capable of developing Colombia's mining industry". The purpose of this statement was to identify companies that would need "security".

A member of Colombia's mining association (Asominas), Arturo Quiróz, rejoiced: "Today, we have a dynamic sector... that attracts some of the largest companies in the world" (3). With the arrival of AngloGold Ashanti (South-African), BHP Billiton (Anglo-Australian), Greystar Resources Ltd (Canadian), Drummond Company and MMC (both American), foreign direct investment in the mining sector rose from $436m in 1999 to $3bn in 2009, an increase of 640% (4). In 2009, this sector registered the strongest growth rate in the Colombian economy and represented 1.5% of gross national product. The target over the next 10 years is to exceed 6%, as is already the case in Peru and Chile.

To that end, the government has just spent more than $5bn on infrastructure projects linked to the mining and energy sector. This is two-and-a-half times its infrastructure expenditure for transport, 10 times the amount on housing, and 20 times more than for the telecommunications network (5). President Álvaro Uribe Vélez, in power since 2002, also relaxed the mining code in 2009 to make it easier to obtain and register exploration concessions. These have been extended from five to 11 years, and land-use tax, which could previously be as high as $2,000 per hectare per year, has been brought back to $8 per hectare per year, whatever the plot.

But, for Arturo Quiróz, "the keen international interest in Colombia as a large centre of mining activity" can be explained by the security policy of the Uribe administration. Thanks to Plan Colombia, it "has made the fight against insurgent groups a priority" (6). If this conflict incidentally leads to the unfortunate (but opportune) displacement of populations like the Embera Katíos, whose ancestors settled on top of abundant deposits, then the mining companies will not complain.

To understand the full extent of this "keen interest", look at the map of the Colombian ministry of the environment that outlines the areas subject to concession applications. More than 40% of territory is involved, including areas that are supposed to be protected.

What they're looking for is platinum, uranium and rare metals and earths such as molybdenum and coltan, but especially gold. The online economics review, Portafolio.com, recently referred to a new gold rush, a "sudden fever spike". From 2006 to 2009, gold production in Colombia increased threefold, reaching 1.75m oz (56,000 tonnes) in 2009. This trend was reinforced by the growth in global market rates, which increased by more than 30% in one year. Forecasts for 2012 are 3m oz (96,000 tonnes).

But the mining industry is young. The director of the Colombian geology and mining institute Ingeominas, Mario Ballesteros, estimated that a total surface area of 1.69m hectares is currently being explored. A specialist in mining issues for the national health, environment and work centre (Censat, an NGO), Andrés Idárraga, says that "there are very few projects actually at the exploitation stage". The current "fever" is driven by speculation: "Small companies carry out exploratory work with a view to selling on their concessions to the transnationals, counting on a profit if the presence of ore is confirmed." The 19,800 applications that have already been registered would also end up with the majors: although there are 5,000 mining companies in Colombia, only three - AngloGold Ashanti, Greystar and MMC - share the sector between them, mostly through subsidiaries.

It remains to be seen where, precisely, the concessions are. The government minutely controls access to the land register (in spite of a law stipulating that ministry of environment maps must be public). The provisions for formulating applications (Law 685 of 2001) add to the confusion. Any concession application automatically allows exploratory work, without any environmental study being required. Applications have been facilitated as much as possible: they can be done online by giving four GPS coordinates that form a polygon, an identity card or passport number, a name, a postal address and a phone number. The application must be accompanied by $400 in registration fees. No checks are carried out on the concession-seeker's bank guarantee or on his police record. Since the only condition is that polygons do not coincide completely, several applications can overlap. This is often the case.

People overlooked
The law, which aims to establish a "climate of confidence that encourages foreign investors", pays little heed to the general interest or to environmental issues. On 9 February 2010, Law 1382 was passed to protect the páramos (the high-altitude, neo-tropical eco-systems of the Colombian Andes) as well as 500,000 hectares of strategic forest reserves threatened by concessions and applications. But the law has no retroactive effect on concessions already granted. Tribunals have been known to agree with the transnationals' claims that restrictive legislation gets in the way of development.

In May 2010 Greystar won an appeal against the government, which had been asking for a new environmental impact assessment on its planned installations in Angostura, in the mountains of the Santander region. The Colombian authorities believed that the project for a gigantic opencast gold mine risked damaging local eco-systems. They also considered that units for treating the ore (with cyanide) situated high up in the Andes posed a threat to the river network downstream of the páramos, which function as huge natural sponges that feed rivers and streams. They did not count on Greystar's desire for 10m oz of gold. With an ounce of gold valued at over $1,235 (as of 8 June 2010), this deposit was worth a fight, which was easily won. According to its executive vice-president, Frederick Felder, the company was never worried: "Throughout this period, we conducted feasibility studies. We never doubted that the government would end up agreeing with our submissions" (7).

But problems related to mining are not only environmental. Adelso Gallo Toscano lobbies against the stranglehold of the few large mining corporations as a member of the Red Colombia committee, which gathers together associations, trade unions and agricultural cooperatives.

"We are not saying we are against the mine as such. It could be an interesting activity for the development of the country if the government would only discuss the projects with social organisations. And if the exploitation of natural resources was carried out to the benefit of the population, by nationalising the industry or at least by ensuring a technology transfer, to avoid being dependent on foreign capital later on."

Gallo cites Ecuador, Venezuela and Bolivia, where things are supposedly better. Colombia is not the only country to promote mining as an axis of economic development: Latin America, which only received about 12% of total global investment in the mining sector in the 1990s, now gets a third (8). But extracting Ecuadorian and Venezuelan oil or Bolivian gas does encounter resistance. Even though this improves general living standards by funding social programmes - which does not seem to be the intention in Colombia - it still causes concern about ecological issues and indigenous rights, and about development that reinforces the "primary sector" character of the region's economies. Nonetheless, in these countries the debate has been opened - if at times violently. Colombia has been counting its dead.

In Suárez in the Cauca region, where AngloGold Ashanti has a strong presence, threats were made in December 2009 against the trade union representative of the united federation of Colombian workers (CUT), which had been leading a movement opposing the transnationals. On 13 February, the torture and murder of Omar Alonso Restrepo and his brother José de Jesús - known for their mobilisation against AngloGold Ashanti - became public knowledge. As members of the community action committee in the small town of Dorado, they had been prominent in an organisation of small miners and farmers that has denounced the environmental, economic and social havoc caused by transnationals for several years. Twenty-six organisations have signed a communiqué condemning the assassinations and emphasising "the macabre alliance between the government and gold multinationals such as AngloGold Ashanti", as well as the "militarisation of the region that makes it possible for paramilitary groups to act".

The promise made by the Colombian president-elect, Juan Manuel Santos, on 17 May has made the situation even more serious: "In the mining sector, we will do everything we can to stimulate the strongest growth possible, while showing ourselves to be responsible where the environment is concerned" (9). Since Santos has chosen his predecessor Uribe as model, it is unlikely the mining transnationals will have much to complain about.

war

               

Translated by Tom Genrich


Laurence Mazure is a journalist

(1) Decree T-796-32009 of the Constitutional Court.
(2) "S 1758: Alliance with Colombia and the Andean Region (ALIANZA) Act of 1999", 106th Congress (1999-2000), Washington, 20 October 1999.

(3) Quoted by Adam Thomson in "Mining: vast resources remain largely untapped", The Financial Times, London, 23 September 2009.
(4) According to the information portal on mining activity in Colombia (www.imcportal.com), 2009 figures are provisional.
(5) Naomi Mapstone, "Infrastructure: eager to link up disjointed land", The Financial Times, 6 April 2010.

(6) Quoted by Adam Thomson, op cit.
(7) Diana Delgado, "Greystar says Colombia accepts its gold mine appeal", Reuters, 31 May 2010.
(8) Anthony Bebbington, "The new extraction: rewriting the political ecology of the Andes?", NACLA Report on the Americas, vol 42, no 5, New York, September 2009.

(9) Interview given to Yamid Amat, 17 May 2010; Galeriapolitica.com

© Le Monde diplomatique