Gold Diggers: Big companies push small prospectors aside in hunt for Burma’s riches

Gold Diggers: Big companies push small prospectors aside in hunt for Burma’s riches

Charles Large: The Irrawaddy

October 2005

In Alice in Wonderland, the Red Queen tells Alice: “A word means what I want it to mean.” That sums up in one sentence the state of Burma’s statute books—particularly those decrees relating to mining the country’s rich resources. Roger Moody, in his 1998 “Report on Mining in Burma,” put it more directly. The law on mining passed by the Rangoon regime in 1994, he said, “is not just one, but a parade of farts in a bucket.”

The law makes no provisions for holding mining companies responsible for failure to stabilize workings and waste piles, nor for rehabilitating closed mines. There are no requirements for an environmental and reclamation bond to be posted by a mining company, no need for an environment and social impact assessment, nor for an independent monitor to ensure compliance during mining and post-closure operations.

The law allows private citizens to prospect for gold, but they are not permitted to use machinery. People granted permits must sign an agreement to turn over 30 percent of their refined gold to the Ministry of Mines. Citizens are also permitted to pan for placer gold found in streams, although they are increasingly being edged out by Chinese contractors dredging the Irrawaddy River.

Little protection is offered by the law to employees of foreign mining companies. Says Moody: “There seems to be no proper prescribing of... wages, salaries and other fees (for workers) nor the fixing of working days or safety, health, and welfare plans per se in this law nor in any law or regulation. We are also told that if the State so decides, the land can be compulsorily acquired in accordance with the existing law, while public water can also be sequestered by permission (presumably from the government) for company purposes, if its use is really necessary.” So the government can appropriate anyone’s land for mining purposes and authorize water use with no thought to contamination.

The 1994 law is merely an invitation to exploitative mining companies to apply for a permit and to carry on as they wish, providing that all fees are paid to the proper persons and agencies. Human rights groups say that far from protecting workers’ rights, the law turns a blind eye to exploitation and the use of forced labor, which enable mining companies in Burma to extract gold at a cost at least 20 percent lower than anywhere else in the world.

Human rights groups say that gold mines, in addition to many other industries, use forced labor. Local contractors affiliated with the army provide the workers, so foreign companies are able to deny complicity in their labor practices.

In 1981, Canadian-born Robert Friedland launched his first mineral venture, Galactic Resources. Galactic opened a gold mine at Summitville, Colorado, in 1985. Shortly afterwards, cyanide solution began overflowing from ore heaps, along with acidic wastes laced with heavy metals. Mining was halted in 1991, but heap leaching continued until 1992, when the US Environmental Protection Agency belatedly stepped in. Galactic was declared bankrupt in 1993. Final cleanup costs will exceed US $100 million. With the EPA in hot pursuit, Friedland fled.

Friedland bought his way into a Canadian company, Golden Star Resources, which sealed a deal with Cambior of Canada and the government of Guyana to exploit gold fields in that South American country. In 1995 the tailings dam collapsed, sending millions of cubic meters of diluted cyanide and heavy metals into Guyana’s Essequibo River. These disasters earned Friedland the epithet “Toxic Bob.”

In the same year as the disaster in Guyana, the Burmese regime began offering large stakes of Burma’s mineral resources to outside companies, and Friedland’s Ivanhoe Myanmar Holdings secured eight of the initial 16 concessions. Ivanhoe is now prospecting for gold south of Mandalay. Two other companies, Canada’s Leeward Capital Corp and Jet Gold, are also test drilling on a gold mining concession of 70,000 hectares in northern Shan State, a project where the Burmese regime holds a 25 percent stake.

In 1996, Friedland acquired 50 percent of the Monywa copper project, the largest in Burma, sharing ownership with the state-owned Mining Enterprise 1. Copper mining produces the largest amount of uncontrolled and dangerous wastes in the industry, and people living near the Ivanhoe workings soon reported skin irritation from water polluted by discharges from the plant. In 2004 the company’s board of directors issued a statement saying: “Extensive training has been provided to enable the workforce to operate state-of-the-art, zero-emission technology.” Again, the truth was being bent to suit the circumstances—even the most developed nations do not have zero-emission technology. Even if zero-emission technology is installed and correctly operated, it will probably come too late to reverse the environmental damage caused so far by mining operations in Burma.