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EL SALVADOR
Government’s mining double-talk
Edgardo Ayala
3/12/2009
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President agrees to stop new mining projects amid political pressure.

A year ago, it seemed a sure bet that big mining was on its way to El Salvador. Commodities prices were sky-high — gold alone touched US$1,000 an ounce — and foreign mining companies were ready to set up shop in the Central American country, governed by a pro-free market president.

Growing opposition pressuring leaders during elections has put large-scale mining projects here in doubt.

Twenty-five projects run mostly by large US and Canadian miners, planned to extract 12 million ounces of gold and 78 million ounces of silver, according to a December report by organizations Cáritas of El Salvador and the Salvadoran Ecological Unity.

The study, “The Dark Side of Gold: The Impacts of Metallic Mining in El Salvador,” said that these projects would generate $10 billion, of which the companies would receive $9.8 billion and the remaining the Salvadoran government, $200 million.

Employment motor
It was estimated by the mining sector that these projects would generate 14,000 direct and indirect jobs, but civil society organizations as Cáritas and the Salvadoran Ecological Unity say that that represents just 0.3 percent of the economically active population in the country.

Another study by Oxfam America on Central American on metallic mining and sustainable development alleges that the mining sector exaggerates its impact on employment, and fails to consider the social and environmental costs of the industry. Oxfam criticized a study led by former Finance Minister Manuel Hinds that said the Canadian mining company Pacific Rim´s Santa Rita and El Dorado gold projects in the country, which are expected to generate 450 jobs, would create 36,000 direct and indirect jobs.

Pacific Rim is now in the eye of the political storm as it pressures the government to give it permission to begin operations at the El Dorado project, 65 kilometers northeast of San Salvador, in the Cabañas department.

The company requested permission in 2005 to operate the mine for six years, which is estimated to hold some 1.4 million ounces of gold. Since then, the company is scrambling to calm fears from several sectors over its environmental impact study.

In 2008, the company launched an aggressive media campaign, marketing the idea that it would conduct “green mining” and “sustainable mining,” to target skeptical environmentalists and the general public.

Coveted votes
But Pacific Rim has been faced with new setbacks. Mining generally has very little support from the Salvadoran public, and as the ruling National Republican Alliance Party, or ARENA, party faced an uphill battle against the presidential race frontrunners, the leftist Farabundo Martí National Liberation Front, the government shifted its stance on El Dorado, ahead of the March 15 vote.

“The country has every right to grant or deny mining permits,” President Antonio Elías Saca told reporters in February. The president says that there are still doubts over the industry´s merits because of possible detrimental effects to people and the environment.

The Catholic Church, a major force in El Salvador, has also spoke out against the projects.

San Salvador’s new archbishop, Mons. José Luis Escobar, said in a Feb. 22 press conference that mining is not "convenient" for the country “because we don’t have the resources or the capacity to drill for it in our favor.” Mons. Escobar succeeds Mons. Fernando Sáenz Lacalle, from the Opus Dei, who had a more pro-business stance.

On Dec. 9, the Canadian company, whose exploration office is in the western US state of Nevada, threatened to open a suit against El Salvador´s government for denying it the right to drill, citing investment protection clauses in the Central American Free Trade Agreement (CAFTA). The company could seek damages of $75 million, the amount Pacific Rim says it has invested in the mine so far.

But organizations against the mine say there are hidden interests.

The National Front against Metallic Mining, an umbrella group of various anti-mining groups, took out a paid statement in several newspapers that accused Saca of rejecting mining publicly but planning to offer Pacific Rim permits after the March 15 vote.

The project could put the water supply of the communities around El Dorado in jeopardy, the Caritas study said. Some water sources are already drying up, residents complain, and the mine is only in the exploration stage.

“We´ve seen some wells that are almost dry and it wasn´t like that before,” said Guadalupe Avilés, a young resident of the San Isidro village, near El Dorado.

Avilés is one of 50 San Isidro residents that marched to Congress in San Salvador on March 3 to demand that lawmakers pass a shelved bill from three years ago to ban mining.

Cyanide, the Caritas report says, may reappear in ecosystems around the mine, contaminating by evaporating and returning as toxic rain. Other substances such as arsenic, mercury, chrome, may do the same, and it could reach the capital, since the Lempa River, which supplies San Salvador with water, flows through mining zones.
—Latinamerica Press.


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Mining has little support among Salvadorans. (Photo: Democracy in Action)
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