Gold Fever in Patagonia

2005 saw two trends in the mining industry: the spectacular rise in gold, silver and copper prices accompanied by a growing interest in the activities of the industry in Latin America. Investigative reports focusing on the "dirty deeds" of big global companies such as Placer Dome, Barrick, Newmont, and Anglo American appeared in major dailies such as the New York Times. I want to bring to your attention the activities of smaller gold mining companies in Latin America know as "juniors".

They are usually "upstarts" run by "venture capitalists" struck with gold fever. Like the "majors" these "upstarts" are ruthlessly trampling on the rights of communities affected by mining.  Their "cost effective" operations are just as damaging to the environment as their bigger rivals are. Yet unlike the big players their reputations are not at risk in the industry. If for instance a junior’s mining bonanza goes bust they can disappear from the stock markets’ radar screen for a while, change names and then reappear under a new name and restart mining operation elsewhere. This brings us to focus on the unraveling dispute for control over Patagonia’s largest silver and gold mine, the Navidad Calatreu – IMA – Aquiline case. The case involves IMA and Aquiline, two Canadian companies, whose shares are traded on both the Vancouver and Toronto stock exchanges. 

One front of the battle is located in a remote part of Patagonia on a site known as the Navidad (Christmas, in Spanish) – Calcatreu Silver and Gold mine which straddles the Rio Negro – Chubut provinces. Ownership to the Navidad silver-rich part of the mine is being contested by two Canadian "junior" mining firms. A simplification of this saga goes like this: Aquiline which already controls the Calcatreu gold mine site claims it was duped by rival IMA over the true quantity of silver on the neighboring Navidad portion of the designated mining site.

The other front of this battle is the Supreme Court of British Columbia where Aquiline lawyers claim its client was intentionally provided with inaccurate and faulty data by IMA, whose geologists deliberately concealed the true extent of the Navidad deposits’ mineral wealth. Aquiline argues the company was the victim of a sly deception perpetrated by IMA’s venal mining executives. What makes this case so noteworthy is that Aquiline has taken IMA to court over this" inconsistency" not in Argentina where the dispute is most relevant to the residents of Patagonia but to far flung Canada where as it happens most of the world’s mining conflicts originate.

As the two companies are trading accusations and recriminations, their lawyers argue over who owns the mine. Meanwhile, back in Patagonia a total information blackout keeps residents of Rio Negro and Chubut in the dark about this intriguing courtroom drama. The trial began in October of 2005 and in December 2005 final arguments were heard from both sides of the dispute. "Industry insiders" speculate that the two warring parties will come to some kind of gentleman’s agreement in order to alley investors concerns and as well not to draw further attention to the case which might further compromise the mining sector’s less than lustrous image already tainted by countless civil conflicts, environmental disasters and lawsuits filed by governments against Canadian mining perditions world wide.

Another oddity about this case is that as the two companies vying for control in Canada over ownership of the Navidad-Caltareu project are making minimal news in Argentina. Until now, no mainstream media outlet has questioned why in 2005, as if in colonial times, a foreign court room tussle which directly effects the sovereignty and territorial integrity of the nation receives barley any coverage in Argentina. These decisions are effectively being made completely above the heads of Argentinean citizens in a Canadian courtroom without any representation present from Patagonia there to represent the residents of Rio Negro and Chubut province at the hearings. The IMA – Aquiline Navdiad case has raised another issue; who will control Argentina’s rich resources in the future.

This case also seems to be overlooked in the political arena, almost as if this matter was a trifle or of little consequences to elected officials. Whatever the final decision, any "just" settlement in this case is bound to be prejudicial to the people of Patagonia since a foreign judicial system beholden to Canadian mining interests is unlikely to care what impact the decision might have back in Patagonia on locals opposed to the current mining invasion. One might ask – does this case not deserve to be examined or addressed by the Argentine judicial system, not in a foreign land? Argentina, after all, is a flourishing democracy and an independent state with a functional judiciary not a "banana republic". Regretfully, the IMA Aquiline case hardly endorses such bold assertions.

On the ground in Patagonia where Navidad – Calcatreu is located, the two provinces of Rio Negro and Chubut have harmonized laws. Regionally, cyanide mining is supposed to be banned, yet both IMA and Aquiline are gingerly proceeding with drilling in preparation for a full scale activation of the mine. That’s because provincial authorities have neither the where with all nor the technical means to enforce this ban and the company executives regardless of the ongoing court case know it also and exploit this weakness. They also know that despite this ban, local authorities rely too heavily on technical data furnished by "independent" consultant firms hired by the company. Often technical reports authored by these "independent" consulting firms contain misleading at times doctored or even distorted data designed to minimize the very quantifiable and scientifically verifiable damage to ground water and eco systems which results form cyanide mining.

There is also the question of geography as the contested Navidad -Calcatreu site is situated on or straddles both sides of the provincial Rio Negro Chubut border. This makes provincially legislated laws even more complicated to enforce with respect to the cyanide open pit mining ban in both provinces and begs the question: why hasn’t a nationwide ban been yet legislated on a federal level to protect the population from harmful environmental effects of this toxic process?

Due to the lack of enforcement, the local population resorts to mounting protests or conducting their own "non binding" referendums to keep mining companies out of their communities as the case with Canadian owned Manhattan mine project in Tambogrande, Peru demonstrated . In addition to the mines facing opposition from locals, the native peoples or the Mapuche Indians are also against these projects and often join forces with the citizenry in a common front which forms a collective political force opposed to the miners and their local political cronies. In the process of granting operating licenses to mining companies authorities in this case in Patagonia often ignore the public’s concerns and leave locals "out of the loop" because they fail to consult properly, in an honest and transparent manner with those who are opposed or concerned about the adverse impact on their community of open pit cyanide mining. In some instances company representatives do meet with parties likely to be most effected by the mining.

Yet they do so with ill will. Such overtures are usually designed to ally their concerns and "nip them in the bud" or engage them in public relations campaigns often using disinformation techniques to lull the populace into a false sense of compliance about the negative effects mining has on human health and surrounding eco systems. These tactics are not always successful as the Tambogrande – Manhattan minerals case in Peru demonstrated, despite enticing yet dishonest claims made by Manhattan mines executives and echoed by government officials that many jobs would result from the mine.

Yet farmers fearing that their lucrative fruit crops and water sources would be poisoned by chemicals used in gold extraction overwhelmingly rejected a proposed mine on their land in a region-wide referendum. In a more serious case in Guatemala earlier this year, fatal clashes between police backed by private security forces resulted when local residents opposed a Canadian mine run by Glamis minerals. If these incidents are any indication, the tense stand off between mining companies and local civil society groups in Patagonia is likely to continue.

Michael Werbowski is part of the No to Navidad Calatreu Campaign.

For more on this topic in Spanish, check out Una Navidad chubutense en Canadá