Almost two months after Ecuador’s Ministry of Energy and Mines rejected Ascendant Copper’s Environmental Impact Study for the controversial and locally unpopular Junin copper mine project, the company’s shares plummeted to a measly $0.47 per share on Monday.
In addition to the rejection of the company’s environmental study (a prerequisite to begin the exploration phase), which was nixed because of a lack of consultation with local communities (a decision Ascendant president Gary E. Davis angrily described as "asinine"), there have been a number of other setbacks that may explain the lack of investor confidence about the viability of the company’s project.
First, the company was ordered to stop all work on the project. Then there was the presence of what human rights organizations called "paramilitaries." These "paramilitaries" attacked unarmed residents who oppose the mine by firing live rounds and discharging pepper spray. Besides the bad international press, this did little to win the affection of the then forthcoming Correa administration. The new president made it very clear of his dissatisfaction of how the extractive industries have done business in his oil and mineral rich country.
Also, the United Nations human rights commissioner announced in December she is investigating whether people affiliated with the company framed a local environmental activist and prominent critic of the mine for assault and burglary. Carlos Zorilla, a member of Defensa y Conservación Ecológica de Intag (DECOIN), a local environmental NGO, had his home violently raided by the police, his family was harassed and he was forced to go into hiding.
More recently, the Ministry of Labor determined that the contractors working for the company, such as Falericorp, have been operating in the country illegally. There has been talk locally that the government might forcibly evict company employees from the area.
Finally, a Superior Court Judge threw out a case against two local campesinos who were falsely arrested for allegedly kidnapping company employees. The judge ruled there was a lack of evidence. This contradicts an Ascendant press release which stated "two of the kidnappers have been arrested, arraigned, and are in prison awaiting sentencing." The company also called the two falsely accused campesinos "eco-terrorists."
Company personnel have yet to apologize to the two for these slanderous remarks. Though, they soon may have to apologize to investors for running what many believe is an unethical, socially irresponsible and widely unpopular project.