Gold Digging in Colombia: Mining Throughout Latin AmericaBy: COHA Research Associates Zoë Amerigian and Lindsey Pace
• Mining is an important source of foreign investment and development
• Rural populations are among the prime losers in mining operations
• Environmental protection is no match for multinational greed
• Governments are selling out their citizens
In the 16th century, the Spanish conquistadors were drawn to the Americas by a quest for riches; in their pursuit they were soon exploiting the land of its resources. Today, remarkably little has changed. Like the conquistadors, foreign companies today are seeking the fabled deposits of ores and minerals found in the western cordillera, the Andes chain. Mining technology has dramatically changed since the Spanish first reached South America: hand-dug tunnels have been replaced by open pits, and pickaxes supplanted by heavy machinery, explosives, and gargantuan dredgers. These mining methods, at times taking place in the heart of the Amazon, have had devastating consequences for the surrounding environment and local populations. In this respect, Colombia has become a poster child for irresponsible mining practices.
Currently, South America has more mining exploration than any other area in the world. 38% of global investment in metallurgical prospecting goes to South America, as well as 27% of all gold exploration. The area is particularly appealing to foreign investors because it contains a huge supply of cheap labor and because its mineral reserves are relatively untouched compared to the rest of the world. Although metal prices slumped from 2006 to 2009, they have since surged and we are now witnessing mining companies scrambling to invest. Analysts predict that in 2011 and 2012 alone, at least USD 29 billion of mining investment will be funneled into the two mining leaders of the area, Chile and Peru. In Colombia, the mining sector constituted 4.5% of GDP and provided 24.8% of the country’s total exports, or USD 7.3 billion dollars, in 2009. Mining continues to be a significant source of foreign investment and resource development for Colombia and the South America region.
Illegal Mining in Rural Colombia
Colombia’s rural population has been born into a system that continuously places their lives and welfare at a disadvantage and has perpetuated predictable intergenerational bouts of poverty. This system is being exacerbated by a longstanding tradition of questionable mining processes practiced by both domestic and foreign-owned operations. Former President Álvaro Uribe encouraged “Seguridad Democrática”, a policy that sought to lower crime and to dismantle the Fuerzas Armadas Revolucionarias de Colombia (FARC) guerillas as well as the former right-wing vigilante organization, Autodefensas Unidas de Colombia (AUC). As it turned out, the decrease in crime rates, while impressive, pertained mainly to the population living in urban areas. As paramilitary groups and guerrilla fighters were pushed out of urban streets, they subsequently relocated to the relatively un-policed, dirt roads of rural Colombia.
Despite a 63% drop in kidnappings during Uribe’s first term and a 40% decline in assassinations and “disappearances” at the hands of the AUC, the rural population remains at high risk. Nowadays, illegal gold mining is helping to fund the FARC and surviving vigilante groups, fueling the plight of rural people. These illegal mines do not follow worker safety regulations and the land is often forcefully taken before it is exploited. Since Santos came into office, the government has shut down 56 illegal mines and 573 people have been arrested, but the problem persists and lawmakers are still investigating strategies to counteract illicit operations.
Canada and Mining Multinationals in Colombia
As the fifth largest coal exporter in the world, Colombia depends on mining for employment. Small mining towns, such as Marmato in the Caldas region of northeastern Colombia, historically have participated in ‘subsistence’ mining – small mining operations that produce just enough income to survive. This type of extractive mining does not create environmental hazards like the large-scale mining practices followed by international corporations. Additionally, because the environment is preserved through smaller, less obtrusive operations, subsistence mining is generally more beneficial for local populations than its corporate counterpart because it usually creates long-term employment. “El Burro,” a mountain located in Marmato, has characterized the local people, shaping the history of the town since before the Spanish encounter of the Americas.
But a big change is in the making. In less than 20 years, Colombia Goldfields Ltd. (a deceptively named Canadian company) will unravel the fiber of mining culture in Colombia. Open pit operations, the preferred practice of most resource-processing transnational corporations, excavate the ground of rock and soil in order to extract the desired mineral. However, the process does not favor the work of individuals, but rather the systematic use of explosives to get the job done. As the open land of the community is progressively bought up, and subsequently blown-up, the inhabitants are forced to find jobs and obtain scarce housing from the neighboring areas. Those who remain are often forced by the job shortage to participate in certain informal sectors of the economy; locals note that prostitution and crime inevitably increase after the mining companies move in. The results tend to be that residents are economically displaced while foreign economies reap the benefits of local natural resources.
While some miners may retain their jobs for long periods of time, the conditions in which they work are typically treacherous and the companies that employ them rarely adhere to international or domestic labor standards. One company, Carbones de Cerrejón, has been accused of causing mine-related illnesses in over 20 percent of its labor force due to poor working conditions. The company, now a joint corporation called Cerrojón Coal Company involving Anglo American, Glencor International and BHP Billiton, was also cited as having bulldozed the town of Tabaco in August 2001. The new mining site was located on reservation land of the Wayuu indigenous group, requiring the forceful evacuation of 700 residents by 500 soldiers and 200 police backing the mine owner. The town leveling destroyed a clinic and a cemetery, with the town’s people having no opportunity to retrieve their belongings. Cerrejón expanded in June 2004 and pushed out even more indigenous Wayuu and Afro-Colombian communities. Sintracarbon, a coal mining union, attempted to protect the displaced groups, but received menacing calls from paramilitary groups threatening bodily harm and extortion of some of their assets.
Last May, the Permanent People’s Tribunal (TPP) in Madrid attempted to shed light on this situation by putting the corporation on a “people’s” trial. The function of the group was to bring attention to crimes against humanity and the environment for which justice, legal action, or compensation have not been successfully sought. Unfortunately, the tribunal received scant media coverage and the indigenous and Afro-Colombian groups ultimately received no compensation.
Gold Mining and the Colombian Environment
While all types of mining can bring hardship to miners and rural communities, gold mining has been cited as the “dirtiest” and most environmentally hazardous mining process. Since gold prices reached an all-time high in December, renewed attention is being paid to the yellow mineral. Mining operations in Colombia inflict especially severe consequences on local ecosystems, as the Amazon and surrounding rainforests possess some of the highest levels of biodiversity in the world. But the government is eager to exploit its gold reserves because of the attractive numbers that accompany them: according to the Miner’s Association of Colombia, Asomineros, gold mining could attract USD 3.3 billion in investment in just a few years. As is often the case, this lucrative enterprise comes with enormous environmental cost that is often being blithely shunted aside.
In an area of the eastern Andes of Colombia named the páramos, huge ecological value is being ignored and mining operations under the Canadian company, Greystar Resources, are in their initial stages. The regulation of mining seems to make little difference – the Colombian constitution requires areas of ecological importance to be protected, and mining in the páramos is specifically banned in the Mining Code, a set of legislative regulations pertaining to mining. But the projected mine in the páramos holds a tempting 10.2 million Troy ounces of measured gold reserves, and Greystar has planned investments of USD 600 million in this particular site. The need to develop Colombia’s resources and create jobs has, not surprisingly, trumped and effortlessly overwhelmed ecological concerns.
What exactly is at stake if gold mining companies are allowed to work in the páramos? Environmentally speaking, the ramifications are huge. The páramos have high levels of biodiversity and are home to various endangered species as well as flora and fauna found only in that area. Additionally, the páramos are a massive collection center for precipitation that eventually turns into ponds and lakes, providing needed water for the local ecological systems and human populations. The unique soil of the area is also particularly adept at storing carbon, an important tool in fighting climate change caused by greenhouse gases. The páramos provide important services for humans and ecosystems that must be protected.
Modern mining techniques can be extremely harmful to the environment because of the nature of the equipment and chemicals used during the mining process. Greystar practices open-pit mining, which will require approximately 1,100 hectares of land to be removed for this particular project. The surrounding habitats of the páramos will be literally erased and the natural systems destroyed. Gold mining also requires huge amounts of water –Greystar’s operations will use approximately 250,000 liters of water every hour during the leaching (extracting) process. This water will be diverted from natural water sources, depleting ground water and lessening river supplies for the 2.2 million people in the surrounding area who rely on them. Lack of ground water can deplete the nutrients of and physically weaken surface soils, further damaging the natural ecosystems. Even more worrisome is that sodium cyanide will be used – about 500 milligrams per liter of water –in the extracting process. While sodium cyanide may be preferable to mercury – another substance that is commonly involved in extracting gold – its use still risks contaminating local drinking water. Exacerbating this risk is the poor and inadequate infrastructure in the mountains that may make transporting the chemical safely a challenging task. Sodium cyanide may also evaporate and return to the soil in the form of acid rain, which could appear miles away and affect areas with no connection to the mining operations.
Greystar argues that its gold mine will not damage the surrounding environment –a conclusion supported, not surprisingly, by the company’s own environmental study – but many Colombian government officials disagree. The environmental authority from the nearby city of Bucaramanga opposes the project, and the federal official appointed to investigate the complaints against Greystar has recommended the government withhold an environmental license for the project. By law, Greystar is also required to consult local communities before they begin mining. With assurances of jobs and other community benefits, Greystar has easily won over the support of local residents, if not government officials.
But the community might well serve itself by exercising caution in giving its approval so readily. Hundreds of miles away, in the western Colombian Andes, there is a town that has a strikingly similar story. In 2006, a South African mining company moved in on gold reserves in the town of Cajamarca that, like the páramos , should have been barred from mining operations because they were located in a forest reserve established in 1959. It also held important water supplies, and, like in the páramos, the locals were initially excited to have new industry and well-paying jobs in the area. But the excitement soon faded in late 2007 when they realized the effects that mining would have on the surrounding environment. The mining operations in Cajamarca have been suspended ever since because of local opposition, and the community is still fighting the resumption of mining today. They offer an example that residents of the páramos should take note of – that foreign mining companies might come with lavish promises of improved living standards and jobs, but these will not mitigate the permanent damages that accompany open-pit mining.
While the government deliberates on whether it will grant an environmental license or not, Greystar’s operations are on hold. If the government rejects their request for a license, the Canadian company may alter the project to be underground rather than an open pit, which would decrease its environmental impact. But Greystar is only one example of negligent practices on the sometimes sordid Colombian gold mining scene.
More troubling is the popularity of illegal gold mining, which encourages avoidance of environmental regulation completely. Illegal mines are known for utilizing chemicals carelessly and contaminating water and soil. While the Colombian government has made great efforts to shut down these illegal mines, the overall task of properly balancing the economy and the environment persists.
The Economics of Colombian Mining – is it Helping or Hindering?
Former President Uribe certainly encouraged foreign direct investment in Colombia. Before he left office in 2010, the number of hectares with mining concessions had increased eight-fold, showing his determination to stimulate the mining sector. But, as with many of his policies, this investment strategy had limited success. Foreign mining companies, like Greystar Resources and Colombian Mines Corporation, have dominated the Colombian economy while profits from natural extraction have inexorably gone abroad. When multinational corporations move into a country, they do so because the host country believes that the corporation will benefit the people by providing badly needed infrastructure and employment. In the case of Colombian Mines Corporation, a Canadian multinational operating in Colombia, they buy up mines in rural towns with the promise of offering employment. The reality is that the mining operations offer only short-term employment, displace the dwellers who had previously lived on the land, and leave behind a tell-tale crater where a community once stood. The often ephemeral financial benefits brought on by the mining industry are reflected in the Colombian gross domestic product because the extraction takes place within the nation’s borders. However, the profits from the business actually factor into the Canadian gross national product rather than the Colombian, which economically is seen as the true measure of wealth. Thus, multinationals invest their capital into other countries, mine their resources over a finite number of years, displace the local people and disrupt their economies, all for the gain of the exporting country at the expense of the host.
Mining Throughout Latin America
Colombia is not the only nation to fall victim to the lethal price exacted by mining. Although the prevalence of specific mining hazards varies from country to country, most Latin American mining nations have witnessed the inevitable scars of poor labor standards, social disruption, and environmental degradation.
In Bolivia, the mining situation is dominated by multinationals that displace and exploit inhabitants as cheap local labor. Potosí is such a mining city, known previously for its copious amounts of silver that eventually reached Spain after being carried across the Isthmus of Panama. In the 1600s, the city’s population was larger than that of Paris and it was the jewel of the Spanish Empire . Today, silver, zinc and tin are being mined there. Despite child labor laws in Bolivia, 10% of the miners in Cerro Rico, the largest mine in the country, are under 18 years old. Additionally, the majority of them are indigenous Quechua men and boys. Within ten to thirty years they are usually affected by a mine-related illness, which leads to health complications and in certain cases, death. There is no compensation for their families. The government has not yet intervened, but the United Nations Refugee Agency (UNHCR) has taken notice of the exposed nature of the population. Unfortunately, the effort to keep children in school and their families healthy has not gone further than this.
Conversely, the mining situation in Chile has been cast in an ill-deserved positive light given the recent rescue of 33 miners from a mining shaft after being trapped for ten weeks. Despite this apparent success, one month before the miners were rescued, the owner of the San Sebastian Group declared bankruptcy, posing a threat to any compensation that would be offered to the 33 trapped and 300 other unpaid workers. This is not the first time the San Sebastian Group has been scrutinized as the result of an accident. Their mining sites were more dangerous than the average Chilean mine due to a labor code established in 1980 under the brutal dictator, Augusto Pinochet. The strongman’s free market policies eradicated labor rights for working class Chileans. Current President Sebastian Piñera claims that “not only in the mining sector; we are revising our standards in many other sectors in order to guarantee that we are doing our best in terms of protecting lives, health, and integrity of our workers.” However, the Pinochet-era labor laws are still in effect.
In Peru, the fourth largest gold producer in the world, mining has produced the same problems and challenges. At Yanacocha, the largest gold mine in Latin America, the indigenous people have protested adamantly against further expansion of the mine because of the negative effects it has had on their environment and society. Since mining began in Yanacocha, local residents say, poverty has gone up, an increasing number of inhabitants have been forced to move out of their homes, and indigenous cultural practices have diminished. These results are not specific to Yanacocha – Peru has seen a general trend whereby mining operations have been followed by poverty, environmental degradation, prostitution, and health problems. This is exacerbated by the fact that about one quarter of Peruvian gold is produced illegally, which means health and environmental regulations are slim to none.
In Brazil, a primary consequence of gold mining has been mercury contamination of soil and water and mercury poisoning among workers. In a survey of Brazilian miners, roughly 30% had mercury levels above World Health Organization (WHO) standards. High levels were reported in those who lived near gold refining areas as well. In a field survey of Amazonian waters adjacent to gold mines, edible fish contained mercury levels over five times the Brazilian standard that is safe for consumption. Often, miners are uneducated about the severe health effects of mercury and do little to protect themselves. The Brazilian government has made minimal efforts to address these health dangers.
The only sure way to avoid the social and environmental destruction that all too often accompanies open-pit mining would be to completely discontinue the practice. Many cite eco-tourism as a way to “exploit” the natural resources of ecological treasure troves and the folklore appeal of rural communities without destroying them. These are the suggestions of idealists and they will not likely ever come to fruition. However, there are several ways mining practices could be modified to improve health standards and reduce damage to the environment.
The first priority should be to crack down on illegal mining operations, which do not respect any regulations and are not held accountable for pollution or on-site accidents. A second priority should be better education for miners on health hazards and how to minimize environmental damage; often, miners have no idea that they are working with toxic chemicals. For example, one Peruvian miner interviewed by the BBC was under the belief that mercury exposure had cured his heart condition. Such potentially fatal misconceptions could be easily corrected with better education. Miners should also be instructed in proper clean-up and disposal methods of the chemicals they are using. Another way to mitigate environmental damage would be to opt for underground shaft mines, which are by no means eco-friendly, but are distinctly less harmful than stripping the land with open-pit mines. Latin American governments need to step up enforcement of labor and environmental standards and not let tantalizing foreign investment corrupt their integrity or their vision of what is best for their local communities.
In addition to requiring environmental licenses to engage in mining pursuits, companies should be required to obtain “community licenses.” That is, they need to develop plans for working with locals to maximize local employment, provide proper compensation for displaced peoples, and diminish the impact of baleful damages to the area. On a larger scale, governments should consider renegotiating contracts with foreign companies to provide tougher restrictions in order to retain better control over their own resources. Until they do this they will not only continue to send the benefits of their own natural resources to other countries, but profoundly injure their own people in the process.
References for this article are available here.