MAC: Mines and Communities

Latin American Update

Published by MAC on 2006-08-20

Latin American Update

20th August 2006

The government of Peru is moving closer to exempting multinational mining companies from paying increased taxes on their windfall profits, substituting instead "voluntary" contributions to "social welfare." Understandably, the proposal has aroused the ire of many Peruvian citizens.

Fifty six weapons and many rounds of ammunition have been seized from the "security" force employed by Newmont at its Yanacocha gold mine in Cajamarca province, following the killing of a farmer during a peaceful protest against alleged contamination of water supplies and failure by the company to provide jobs.

Our Latin American editor, Luis Claps, reports from the border region of Chile/Argentina where local communities are stepping-up their moblisation against the world's biggest gold producer, Barrick of Canada.

BHPBilliton has closed down the world's biggest copper mine, Escondida (in which Rio Tinto, Mitsubishi and the World Bank/IFC have minority shareholdings), as a strike by the main trade union enters its third week.

The workers are demanding a 10-13 per cent pay rise while the company is offering just three per cent over three years, claiming this to be "the best remuneration and labour conditions offer in the history of Chilean mining" [Financial Times August 19-20 2006].

Last week BHPBilliton chalked up a threefold rise in profits for the first half of the year, as against January-June 2005. Its share price also rose last Saturday, due to a 3% increase in the copper price as a result of the mine closure.

Buyers clearly believe that the strike will soon be broken and BHPBilliton will reap benefits from the whirlwind it's helped to sow.


Mining Referendum Promoted

Lima, (CNR)

16th August 2006

The Development Front of Piura is promoting a popular consultation to decide which economic development model is the most appropriate for them, and whether in that model, mining activities can be included or not.

This is according to information from Ximena Warnaars, in charge of the Free, Prior and Informed Consent project of CooperAccion, who adds that at present they are collecting signatures to support the consultation.

Warnaars questions the fact that the mining companies are creating farmers' organisations parallel to the existing ones with the sole objective of obtaining supposed consent. "The communities of Ayabaca and Huancabamba have decided to have a dialogue with the State and not with the mining companies, since they are there illegally. The problem is that the representatives of the State want the mining companies also to participate in the dialogue" she says.

With respect to the voluntary contribution the mining companies are promoting in order not to pay taxes on excess profits, Warnaars declares that it is unacceptable to allow them just to give whatever seems best to them.

"The communities must be given what they need. How can there be economic development if they are just going to give voluntary contributions? They need to pay their taxes." She stated.

[National Radio Coordination (CNR), copyright 2006. Reproduction of this material is allowed as long as the source is quoted.]

García takes softer line on Peruvian resources

by Mary Powers in Lima, Financial Times

10th August 2006

Alan García, Peru's new president, is treading more lightly in his relations with natural resources companies operating in the country than his colleagues in neighbouring Bolivia and Ecuador.

Despite campaign pledges to impose a windfall profits tax on mining firms and reduce prices of natural gas-based fuels, Mr Garcia's administration is instead asking them for a voluntary contribution towards social projects.

Meanwhile, the government and shareholders of the Camisea natural gas project are reviewing possible changes in a pricing formula that could hold natural gas prices at their current level.

"We are doing this in a friendly environment. It's not a confrontation. It's not a negotiation with pistols on the table," Prime Minister Jorge del Castillo said on August 1.

In Bolivia, by contrast, President Evo Morales is facing resistance from Brazil's Petrobras as he tries to move ahead with plans to nationalise the country's gas reserves. And in Ecuador, oil sector investment has slowed after Congress approved changes to the Hydrocarbons Law in March that will oblige foreign oil firms to hand over 60 per cent of excess earnings to the government.

Mr García, who became president for the second time on July 28, said that new taxes could lead to lawsuits against the Peruvian state. Around a dozen mining companies, including units of BHP Billiton, Falconbridge, Newmont Mining Corp and Phelps Dodge, have signed stability contracts with the government, thus exempting them from new taxes or royalties.

But perhaps more important are the billions of dollars in pending investment in the mining, hydrocarbons and electricity sectors. The private National Mining, Petroleum and Energy Society (SNMPE) calculates that figure at $10bn. Peru is one of the world's major producers of copper, gold, silver, zinc, lead and tin and its exports this year are expected to reach $22bn, about 60 per cent of which are minerals.

"The government clearly understands that changing the rules will affect investment and wants to avoid this," Carlos del Solar, president of the SNMPE, told the Financial Times.

He said, however, that it will not be easy for the mining companies in the SNMPE, about 30 in all, to come up with a formula with which they can all be happy for making their voluntary contribution. Each firm has its own reality - different operating costs, different prices depending on the metal and some are already paying royalties on sales.

"The companies still have to agree and this has not happened. What we have to try to avoid is the tax," he said.

On the Camisea project, Mr del Solar said he expects the negotiations to go more smoothly. The main issue is the formula by which natural gas prices are determined. Currently, it is linked to the price of residual fuel, whose price has almost tripled since the contracts were signed in late 2000. Norberto Benito, general manager of the local unit of Argentina's Pluspetrol which leads Camisea's upstream consortium, said the talks will not lead to lower natural gas prices; they will only help avoid rises in the future.

Still, some Peruvians have voiced dissent about Mr Garcia's back-pedalling.

"Part of the environmental conflicts [with mining companies], have to do with the fact that the people feel that natural resources are being extracted and that not everyone is benefiting from this wealth," said Marco Arana, a Jesuit priest who runs Grufides, an non-governmental organisation in Cajamarca, home to Latin America's largest gold producer Minera Yanacocha.

Weapons arsenal of Yanacocha security company seized

Living in Peru

8th August 2006

Fifty six military guns were seized by district attorney Alfredo Rebaza at facilities owned by security company “Forza”, in charge of protecting the Yanacocha gold mine in Cajamarca.

Rebaza is investigating the murder of farmer Isidro Chavarría who was killed by three bullet wounds during a confrontation between local protesters, the police and the miner's employees and security guards last Wednesday.

Several AK-47 Kalashnikovs, FAL and German G-3's, 12 handguns, and almost 2,000 rounds of ammunition, were confiscated from the arsenal located on the Yanacocha premises.

Police authorities are trying to find out if the lethal shots were fired by one of those weapons and how the "Forza" company obtained this arsenal of military equipment.

Yanacocha recognized that 47 “Forza” guards were employed to provide security during Wednesday's clash, although they denied that shots were fired from one of these arms and that in fact none of the weapons had even been used in the altercation. Prosecutor Rebaza transferred the arsenal to the police lab in Chiclayo for ballistic tests.

The crackdown was initiated by the National Police under the presence of "Forza" representatives.

On Wednesday, August 2nd, local workers and settlers from Combayo raised a protest by bursting onto the miner's premises, accusing Yanacocha of contaminating the water and not providing enough jobs, among other demands.

The Yanacocha gold mine, owned by USA-based Newmont Mining Company with its headquarters in Denver, Colorado, is located in the hills of Maqui Maqui, Carachugo and Chaquicocha, near the city of Cajamarca in Northwestern Peru.

Isidro Chavarría leaves behind his widow and six children.

Since then hostilities have ceased after local representatives of Combayo -- a community of 18 small villages-- and the Yanacocha mining company agreed on a dialogue to negotiate a better deal for the benefit of the people. One of the first agreements is that the mining company pays for Isidro Chavarría's funeral.


From San Félix to Rodeo: A Letter for the Resistance

by Luis Claps (MAC Latin America editor)

18th August 2006

When I visited the folks of Colectivo Reexistencia in San Félix (in Alto del Carmen of the III Region of Chile), they asked me to undertake the lovely mission of hand-carrying a letter, directed at the people of the other side of the Andes, on the Argentine side, also affected by the Barrick Gold's mega-mining project, Pascua Lama.

In these times of internet, telecommunications and miniature telephones, a handwritten card, in a sealed envelope, may appear to be a tiny act against a great storm. But it had so much meaning for us! To unite both sides of the border in a symbolic manner,with a handwritten letter. We were seeking to stimulate the union and solidarity of both peoples in the face of the transnational Barrick Gold. A small action, a simple letter, but, at least to us, with global implications.

When I arrived in San Juan, I didn`t know to whom the card was to be delivered. We'll see, I thought. In Rodeo, in the northern San Juan department of Iglesia, finally we visited FM Radio La Cumbre, and opened the card, and journalist Jorge Sotomayor read it on air. It was an unforgettable moment: We chatted for more than an hour on the air, that Saturday morning, about the letter, the Pascua Lama project, Barrick Gold and the communities of Chile and Argentina.

We left the letter at the radio station. "It will remain here for all to see," Sotomayor told us. Before leaving, we went to make some photocopies of the letter in a nearby store. The owner had been listening to the radio while he attended to his few customers. He didn't charge us for the copies. A small act of resistance? For us, this instantly confirmed that the trip had not been in vain. We read the card as well in Tudcum and Jáchal, also in Santa María, Catamarca. We hope it continues its journey, round and round, arriving at unexpected places. There will be other cards, perhaps thousands.

The letter:

Chile, July 2006

"Dear friends of the Province of San Juan, Argentina:

"We salute you from the other side of the Andes. We manifest our support in your struggle, which is also our struggle, against the transnational plunderers and for the defense of our natural resources and for a life with dignity in a healthy environment.

"We live in the Huasco Valley, a fertile valley, free of contamination, the last of its kind in the north of Chile, located at the same latitude as the Province of San Juan. Just like you all, our lives and our environment depend upon the precious pure water, born in the heights of our Andes, a scarce and vital element which is constantly threatened by the mafias of the transnational mining projects, with the complicity of corrupt politicians who claim to represent us.

"Until now, the mining companies have acted with absolute impunity, plundering resources and riches, contaminating the environment, profiting without scruples and generating poverty and desolation in our people. Now we have become conscious of the web of lies, fraud and coercion with which these rogues operate, and, just like you all, we are not willing to let them continue robbing and polluting.

"The victories against the mining companies won by the people of Esquel and Ingeniero Jacobacci in Argentina have inspired our resistance. Here in Chile, the people have also organized to win important triumphs against the thieving companies. Now we are coming together, to resist and work together - Chileans and Argentinians - against the mining company Barrick Gold, which has shown itself to be a mining firm that is irresponsible, exploitative and destructive on both sides of the borders where it operates.

"The struggle unites us, and we must struggle together as brothers and sisters. Since the year 2000, we of the Huasco Valley have been on alert and resisting the malignant mining project Pascua Lama, with massive demonstrations, legal actions and community work. Thanks to this, the conflict has gained notoriety on a national level, building consciousness of our struggle for dignity. However, the Chilean government has turned a deaf ear towards the popular outcry, and instead of defending the rights of the citizens, they gave the go-ahead to the contamination and destruction, putting the lives of 70,000 directly-affected inhabitants of the valley at sure risk, and handing over riches in exchange for the environmental, social, cultural and economic destruction of the region.

"The bleak prospect rapidly approaching us is a product of the tactics of fraud and cheating practiced by Barrick Gold. They acquired the land where their sinister project is to be located in a fraudulant manner. As a result of this, the company faces a halting of their operations for up to two years because of a judicial case against them. This shows, once again, that this company, and others who openly operate illegally and fraudulently cannot always count on the judicial system to continue favoring and supporting their actions; that the complicity of state power with their plunder does have its limits.

"Despute this unfolding new situation, we, the defenders of life and dignity, common people with nothing more than the strength of our convictions, cannot rest. We are confronting colossal powers, and we have to remain alert and mobilized against death and those who profit from it. Now more than ever, we must continue fighting in order to stop them.

"Ever since the sell-out governments of Frei and Menem signed the "Bi-national Mining Treaty" written by the mining companies in order to expand their uncontrolled wealth, the transnational mining companies have not respected borders to their plunder and destruction. But we also do not need borders to defend our land and our lives. We will organize to liberate ourselves from those who wish to destroy us. We will defend life with our lives if necessary. Now more than ever, they will not pass. ¡Out with the transnationals! The Andes is Ours! AMERICA IS OURS!

"Fraternal greetings from your friends in the Huasco Valley and throughout all of Chile!"

Collective Resistance
House-Center La Lucha
Barbara, Silvia, Paulina, Cristóbal, Papo and many others...



POST: Casa Taller La Lucha
San Félix, Comuna de Alto del Carmen
II Región, Chile

Radio La Cumbre, San Juan (Argentina)

No a Pascua Lama web site (Chile)


Chile's Escondida mine losing up to $16 mln daily on strike

16th August 2006

SANTIAGO (MarketWatch) -- Chilean copper mine Escondida, controlled and operated by BHP Billiton PLC (BHP), will lose up to $16 million a day on the now 10-day-old strike, the mining company said in a Wednesday filing to the SVS local securities overseer.

Last week, in a separate filing, the company had said it wouldn't suffer any medium-term financial damages on the strike, as it had put a contigency plan into place to mitigate the impact of the walkout.

The company on Monday released its first half earnings, posting a $2.92 billion net profit, tripling its January-June 2005 net profit of $936.91 million. Escondida's first half earnings were the largest of all Chile's privately owned firms and the second largest of all firms after state owned mining giant Corporacion Nacional del Cobre de Chile, or Codelco.

BHP Billiton PLC controls the Escondida operation with a 57.5% stake, while Rio Tinto PLC (RTP) holds 30%, a Mitsubishi Corp. (8058.TO)-led Japanese consortium 10%, and International Finance Corp. with 2.5%.


Impulsan referendo sobre minería

Lima, 16/08/2006 (CNR)

El Frente de Desarrollo de Piura impulsa una consulta popular para que los pobladores de dicha región decidan qué modelo de desarrollo económico es el que más les conviene, y si en ese modelo se incluyen las actividades mineras.

Así lo informó Ximena Warnaars, encargada del Proyecto de Consentimiento Previo, Libre e Informado de la ONG CooperAcción, quien precisó que en este momentose encuentran en la etapa de recojo de firmas.

Warnaars cuestionó el hecho que las empresas mineras estén creando organizaciones campesinas paralelas a las ya existentes con el solo objetivo de conseguir un supuesto consentimiento.

"Los pueblos de Ayabaca y Huancabamba han decidido dialogar con el Estado y no con las mineras porque éstas están allí en forma ilegal. El problema es que los representantes del Estado quieren que en el diálogo también participen las mineras", dijo.

Respecto al aporte voluntario que plantean las empresas mineras para no pagar impuestos a las sobreganancias, Warmaars manifestó que no se les debe aceptar que den lo que les parece.

"A las comunidades hay que darles lo que necesitan. ¿Dónde está el desarrollo económico si ellos van a dar aportes voluntarios?. Tienen que pagar impuestos", puntualizó.

Una producción de la Coordinadora Nacional de Radio Copyright 2006.
Se autoriza la reproducción de este material citando la fuente.


De San Félix a Rodeo, una carta por la resistencia*

Luis Claps (MAC) 18/6/2006

Cuando visité a los chicos del Colectivo Reexistencia en San Félix (Comuna de Alto el Carmen, III Región, Chile), me encomendaron la linda misión de llevar una carta al otro lado de la Cordillera de los Andes, del lado argentino afectado por el mega proyecto minero Pascua Lama. En tiempos de Internet, telecomunicaciones y teléfonos miniatura, una carta manuscrita, en un sobre cerrado, parecía como un soplido en medio de la tormenta. ¡Pero cuánto sentido tuvo para nosotros! Unir ambos lados de la frontera de manera simbólica, con una carta. Buscábamos estimular la unión y solidaridad de ambos pueblos frente a la transnacional Barrick Gold. Una pequeña acción, una simple carta pero, al menos para nosotros, con implicancias globales.

Al llegar a San Juan, no sabía cuál sería el destino de la carta. Ya veremos, pensaba. En Rodeo, finalmente, visitamos Radio FM La Cumbre, abrimos la carta y el periodista Jorge Sotomayor la leyó al aire. Fue un momento para no olvidar. Estuvimos, en aquella mañana de sábado, charlando más de una hora sobre la carta, el proyecto Pascua Lama, Barrick Gold y las comunidades de Chile y Argentina.

Dejamos el original de la carta en la radio. "Quedará aquí como estandarte" nos dijo Sotomayor. Antes fuimos a hacer unas fotocopias de las cuatro hojas de la carta en un almacén cercano. Su dueño estaba escuchando la radio mientras atendía a los ocasionales clientes. No nos quiso cobrar las fotocopias. ¿Un pequeño acto de resistencia? Para nosotros, instantánea confirmación de que el viaje no había sido en vano. La carta la leímos también en Tudcum y Jáchal. Incluso en Santa María, Catamarca. Queremos que siga viajando, dando vueltas, llegando a lugares inesperados. Habrá otras cartas, tal vez miles.

La carta

Chile, julio de 2006
"Estimados amigos de la provincia de San Juan:

"Les saludamos desde el otro lado de la cordillera para manifestarles nuestro apoyo en su lucha, que también es la nuestra, en contra de las transnacionales usurpadoras y por la defensa de nuestros recursos naturales y la vida digna en un ambiente limpio.

"Somos habitantes del valle del Huasco, un valle fértil, el último libre de contaminación en el norte de Chile, ubicado en la misma latitud que la Provincia de San Juan. Al igual que ustedes, nuestra vida y la de nuestro medio ambiente depende de las escasas aguas puras que nacen en las alturas de nuestra cordillera, elemento vital que se ve constantemente amenazado por la mafia de los proyectos mineros transnacionales, con la complicidad de los políticos corruptos que dicen representarnos.

"Hasta el momento las empresas mineras han actuado con absoluta impunidad, saqueando recursos y riquezas, contaminando el medio ambiente, lucrando sin escrúpulos y generando pobreza y desolación en nuestros pueblos. Hoy hemos vuelto a tomar conciencia de las mentiras y chantajes con las que operan estos canallas y, al igual que ustedes, no estamos dispuestos a permitir que nos sigan robando y envenenando.

"Las victorias contra las mineras logradas por la población en Esquel y Jacobacci en Argentina son un referente para nuestra resistencia. En Chile la comunidad organizada también ha logrado importantes triunfos contra las empresas ladronas. Hoy nos toca unirnos, resistir y trabajar juntos, chilenos y argentinos, contra la empresa minera Barrick Gold, que ya ha demostrado ser una minera irresponsable, explotadora y destructiva en todos los lugares donde ha operado. La lucha nos hermana y tenemos que darla juntos.

Desde el año 2000 los habitantes del valle del Huasco hemos estado alerta y resistido al maligno proyecto Pascua Lama con manifestaciones masivas, recursos judiciales y trabajo comunitario. Gracias a esto el conflicto se hizo conocido a nivel nacional y mundial, sumando conciencias a la lucha por la dignidad. Sin embargo el gobierno chileno desoyó el clamor popular y, en vez de defender los derechos de los ciudadanos, le dio luz verde a la contaminación y a la infamia, poniendo en peligro cierto la vida de 70.000habitantes del valle, directamente afectados, y entregando las riquezas a cambio de la destrucción ambiental, social, cultural, económica, etc.

"El panorama desolador que parecía avecinarse de manera inminente hoy está en suspenso producto de las mismas prácticas tramposas de la transnacional Barrick Gold, la que adquirió de manera fraudulenta los terrenos en donde se emplaza parte importante de su siniestro proyecto. Producto de esto la empresa se ha visto obligada a paralizar sus faenas por dos años al encontrarse sujeta a proceso judicial en su contra. Esto demuestra, una vez más, que esta y otras empresas actúan de manera alevosa en la ilegalidad y la estafa, y la justicia no puede favorecer y respaldar a las transnacionales, y la complicidad de los poderes de los estados con el saqueo tiene un límite.

"A pesar de este nuevo escenario, los defensores de la vida y la dignidad, personas comunes y corrientes sin mayor poder que el de nuestra convicción, no podemos quedarnos dormidos. Nos enfrentamos a poderes colosales y nos tenemos que mantener alerta y movilizados, contra la muerte y quienes lucran con ella. Ahora más que nunca es cuando tenemos que seguir golpeándolos para detenerlos.

"Desde que los gobiernos entreguistas de Menem y Frei firmaron el "Tratado de Integración Minera" elaborado por las empresas explotadoras para aumentar su lucro desmedido, las transnacionales no tienen fronteras para el saqueo y la destrucción. Nosotros no tengamos fronteras para defender nuestra tierra y nuestras vidas.

"Organicémonos para liberarnos de los que quieren destruirnos. Defendamos la vida con nuestras vidas de ser necesario. Ahora más que nunca no pasarán. ¡Fuera las transnacionales! ¡La Cordillera es Nuestra! ¡AMERICA ES NUESTRA!

"Saludos fraternales de vuestros amigos del Valle y de todo Chile."

Colectivo Rexistencia
Casa Taller La Lucha
Bárbara, Silvia, Paulina, Cristóbal, Papo y muchos otros...



CORREO POSTAL: Casa Taller La Lucha
San Félix, Comuna de Alto del Carmen
II Región, Chile


Radio La Cumbre, San Juan (Argentina)

No a Pascua Lama web site (Chile)

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