Gold Mining Activities in Esquel

What is the project about?

The project is about a scattered gold deposit that can only be exploited by open pit mining. The original project covers an area that is 2.5 kilometers long and 500 meters wide, located in the south end of the Esquel mountain range, 5 kilometers away from the city. But in reality, this involves the arrival of a mega-project of multinational nature that has the intent to transform this region of Andean-Patagonic forests into a mining district of international relevance.

More than 180,000 hectares have already been conceded for exploration, and exploration permits are continuously being granted in areas that will affect not only the river basin of Futaleufú (which flows into the Pacific) including the National Park Los Alerces, but also the springs of river Chubut (which flows into the Atlantic.)

What is the technology that will be used and what are the corresponding risks?

The mineral will be extracted by applying dynamite to over 30,000 tons of rock per day, of which 3,000 tons will be grinded to rock powder (70 micron). The gold is extracted by treating the grinded mineral with potassium cyanide (2.7 tons per day) diluted in water. The consequences of the use of this technology are:

• An enormous amount of water consumption that may lead to the drying of river streams, depletion of lake Esquel (the source for reproduction season of Salmon in the Baggilt river), scarcity of water in the river branches used in the nearby fields and small farms, and the risk of endangering the water provision for the city.

• Noise pollution due to the explosions.

• The generation of great amounts of suspended dust, especially in the summer when rain is limited.

• The risk of all kinds of accidents during the transportation and use of these great quantities of cyanide, which is considered one of the most potent poisons known to man. The quantity of cyanide equivalent to a grain of wheat is enough to provoke the death of an adult, and the poison can enter the human body by all possible ways: eye contact, skin absorption, ingestion and inhalation. The accidents that have occurred over the world are self explanatory:
- Minería de oro a cielo abierto y sus impactos ambientales
- Cyanide spill could have a longer impact

• Problems derived from the residual action of cyanide and its derivatives remain for decades, even after the cease of operations.

• The production of acid drainages, which cause the solubilization of heavy metals that are highly toxic. Acid drainages can occur even after the mine is abandoned, but its effects will remain for centuries continuously polluting the rivers, lakes, and subterranean waters. This has happened in many open pit mining sites.
- Cúmulos de oro, lagunas de veneno y manantiales de cianuro

• All of the above without forgetting that where once there were mountains and forests, there will be plain terrains with a few weak pine trees trying to grow in the toxic waste.

The guarantees offered by the company, in respect to the hazardous toxic waste and the technologies to prevent its dispersion, at most decrease the probability of catastrophic accidents, but the problem is merely transferred to next generations. There is no risk-free technique in these kinds of technologies, which are defined as radically non-sustainable, with an unacceptable impact on the ecosystem and the human race.

To this date, what has been the role played by the local and provincial authorities?

The project initially advanced, at first achieving approval from the community based on work opportunities and prosperity promises, but the real environmental, social, and economic consequences were systematically hidden.

Our local authorities, compelled by the grim social reality, reached out a hand and accepted this poisonous rope, as a way of holding on to the public opinion and increasing their electoral probabilities. Instead of acting impartially and controlling the progress, which is the inherent duty of elected governmental authorities, they became spokesmen and diffusers of the company, limiting and margining the opposing voices.

• The provincial Director of Mines, Eng. Guillermo Hughes has at all times acted more as a partner of the company than as a government official. In July 2002 the Commission of Control of the Mining Progress was created by municipal law, in which, curiously enough, the provincial Director of Mines also participates.

• Mr. Rafael Williams, governor of Esquel, and his immediate collaborators have self imposed the right to define the destiny of this community as a mining town, when just a year before the town pronounced for itself a future in tourism, forest development, and other supplemental activities. (Esquel SEAS : Participative Plan of Local, Social, Economic and Environmental Sustainable Development). Due to the governor´s sudden change of plans the official employees who did not agree with this charade were harassed and finally "relocated".

• The Chubut authorities systematically ignore the laws and agreements in effect for the native territories, by authorizing the execution of mining exploration activities without previous consultation (which is mandatory) with the communities. (Agreement No. 169 of the International Labor Organization of Indigenous and Tribal Towns, agreement ratified by our country, in effect by National Law No. 24.071). For example, the Huisca Antieco Community presented a legal recourse action to the Mining Direction for granting permission without prior consultation. To the present date, the areas conceded include at least three indigenous communities.

How was the gold discovered in the Esquel mountain range?

In early 2001 there was an investigation headed by Prosecutor Romero of the Administrative Researches of the Chubut Province, regarding a formal complaint of the usurpation of the ownership rights of the original finding of the deposit. The brother of the Director of Mine was involved, as he was the person who would have sold the rights to the El Desquite Mining for one million dollars. The current state of this investigation is unknown.

Is the National Park Los Alerces safe?

The treaty of Mining Integration signed with Chile, effective for all frontier borders, does not have a clause for preservation of the integrity and ecology of the parks and reserves in provinces nor on a national level.

It is necessary to raise an alert over the recent reactivation of a project for the exchange of lands between the southern area of the National Park Los Alerces (that includes part of the Amutui Quimei water reservoir) and the area located in the north (a zone that includes lake Cholila) that belongs to the Chubut province. This exchange that apparently has a natural logic, requires a second interpretation due to the present context of intense mining exploration all over the northeast of Chubut. This project was recently presented by Sergio Sepiurka, Mario Cordoba and Esteban Guitart, who are publicly known as political participants of the radical party that supports the mining "development" of the province.

• A former inhabitant of the National Park claims to have "thrown out" a commission that came with intentions of making prospects and sampling activities inside the park.

• The same statement is made by employees of the National Park, who witnessed search activities made in this jurisdiction.

• A year ago, a forest guard of the National Park Los Alerces sent a written report to the Park Management, warning of mining activities that will affect Lake Rivadavia. The report is being kept dormant in the drawers of the bureaucracy.

• Accounts from a worker of the Geological Commissions of the National Park during the 80s are a testimony to the existence of a potentially important gold deposit in the Piramides mountain range, which limits the area included in the intended land exchange.

If this begins in this way, how will it evolve?

• The evaluation of environmental impact was presented on the 21st of October, 2002; nevertheless, the project had already started to enter an advanced stage without a previous impact evaluation. Many roads have now been built, forests have been demolished, and more than 70 kilometers of perforations have been made. Laboratories that should be in an industrial area have been installed in urban areas in Esquel and Trevelin, in clear incompliance with the current regulations.

• Initially the Direction of Mines stated that the mountain cut would not be visible from the city. However this is not accurate because one end of the mountain cut would advance towards the Pacific (over the city of Esquel.)

• 31 permits have been requested for searching activities since last year. Recently one permit request included areas near the city, in the private fields of Mr. Rubilar Martínez.

• A second deposit would be located directly under the Center of Winter Sports La Hoya, and word has been spread that it will be completely relocated. It is important to add that this site is also one of the main water resources of the city of Esquel.

• Authorities never informed the population about the progress of the explorations. There has been verification of the entrance of several tens of trucks of unknown content into the zone.

• The opening of six brothels has recently been authorized.

The company Meridian Gold, in conjunction with the Provincial Direction of Mines, offered informative sessions where all kinds of irregularities were presented; as examples:

• Engineering activities would be starting in January 2003, when they had not yet defined the appropriate treatment plans of the cyanide residual, heavy metals, and acid drainages as results of the explosions. Every time the subject came up in the information sessions the company was not able to give reasonable and acceptable answers from a scientific perspective, or they gave evasive answers about the technology that will be used.

• One of the information sessions about cyanide was hosted by a DuPont representative, this company being a prospective provider. An infinite amount of inaccurate facts and mistakes were presented (pointed out publicly at a later time by professors of the Natural Sciences Faculty of the UNPAT, Esquel location.) The assistant for the images projection was Mr. Hughes, the Director of Mines himself, and the people who distributed the DuPont brochures were two local representatives of the Direction of Mines. Is this ethical?

• An accident occurred where the mine was being installed (the nature of the accident was never exposed...) and the police, ambulance, civil defense, and firemen were not allowed on the scene because the pass was closed by poles with locks (as published in local newspapers).

All of the facts above create a lot of uncertainty in the local community.

How will the region and the country benefit?

The law establishes a 2% of royalty payment over the mine value of the unrefined material and not over the final product value. The mining companies have fiscal exemptions applicable for all taxes national, provincial or local for five years.

Different from what it is established in national regulations, the mining related activities in Chubut are also exempt from the seal taxation (Provincial Law No. 004018 of 1994, Sotomayor-Aubía). The mining enterprise has a 10 year duration period, not to mention the frequent change of company owners. The mining industry has free availability of exporting 100% of the generated income, without any control being executed by any currency authority department in Argentina.

The royalty percentage that the city of Esquel will receive is less than the amount of the discounts of 13%, which are given in a compulsive manner by the national government over the amount of official salaries of this city.

These numbers by themselves avoid bigger comments about the "gift-sacking" of the national assets. When Mr. Tufino, manager of Meridian Gold, was asked if the company had made the cautionary deposit (guarantee required in the first world countries,) his answer was that in Argentina this deposit was not mandatory and that "there is a great international competition for the investments" ... See La Minería en el Tercer Mundo

The promises included 300 direct job opportunities in the higher peak of the operations, from which 80% will be chosen from local workers.

At the same time that the community is exposed to significant environmental risks, it is evident that official government employees, far from complying with their duties of protecting the compromised assets (the environment and the public health), are subordinate to the requirements of the company's economic power and they are only protecting their own interests and those of the companies, which constitutes as undeniable evidence of corruption.