MAC: Mines and Communities

Mexico To Shut Down New Gold's Cerro de San Pedro Project

Published by MAC on 2009-11-16
Source: MiningWatch Canada, FAO, Al Jazeera (2009-11-13)

Mexico To Shut Down New Gold's Cerro de San Pedro Project

Joint News Release - MiningWatch Canada and the FAO (Frente Amplio Opositor)

11 November 2009

Canadian Parliamentarians and Mexican Congress members urge company to comply with the law

MONTREAL - In a press conference held in Mexico City on November 10th, Mauricio Limón, Undersecretary for Environmental Protection at the Mexican ministry of the Environment and Natural Resources (SEMARNAT), declared that the ministry would enforce a recent superior court ruling and withdraw New Gold's (TSX:NGD) environmental impact permit between now and Friday, November 13th. The company, he declared, would at that point have to cease operations at its Cerro de San Pedro project. The Undersecretary's statements were reported in the November 11th edition of La Jornada, one of Mexico's leading national newspapers.*

On September 24th, the Federal Fiscal and Administrative Justice Tribunal of Mexico ruled that the SEMARNAT must retire the permit granted to the company back in April 2006. The tribunal gave the ministry until the 13th of November to apply this ruling.

In response, a bi-national declaration was signed this week by Canadian Parliamentarians and members of the Mexican congress urging the relevant Mexican authorities to enforce the tribunal's decision. It was signed by Gilles Duceppe, Pierre Paquette, Francine Lalonde and Johanne Deschamps for the Bloc Québecois; Jack Layton, Peter Julian and Paul Dewar for the New Democratic Party; Elizabeth May for the Green Party; Alejandro Encinas Rodríguez for the seventy members of the Partido de la Revolución Democratica; and Pedro Vásquez González for the thirteen members of the Partido del Trabajo.

The declaration notes the severe and in many cases irremediable damages that New Gold's project has wrought to the valley of San Luis Potosí - inhabited by approximately 1.3 million people - since it began operations in 2006. It supports the ruling of the Mexican tribunals in putting an end to this project, calls upon the relevant Mexican authorities to enforce this ruling and demands that New Gold-Minera San Xavier respect the laws of Mexico.

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For more information please contact:
David Schecter: 514-209-2666, cerrodesanpedro@gmail.com (English)
Lazar Konforti, 514-827-7486, cerrodesanpedro@gmail.com (Français)

* http://www.jornada.unam.mx/2009/11/11/index.php?section=sociedad&article=040n1soc


Canadian Company Accused of Disobeying Court, Misleading Shareholders

Citizens' group argues New Gold violated disclosure rules in a complaint lodged with BC Securities Commission

FAO Press release

9 November 2009

MONTREAL - Controversy continues to embroil Canadian New Gold Inc. (TSX:NGD) and its Cerro de San Pedro mining operation as the November 2nd press release issued by its public-relations firm Peak Communicators Ltd. regarding a recent ruling of the Mexican Federal Tribunal of Administrative and Fiscal Justice is put into question.

Dr. Juan Carlos Ruiz Guadalajara, spokesperson for the FAO, a coalition opposing New Gold's open-pit gold mine at Cerro de San Pedro, is shocked by the company's press release: "We are used to the company massaging the truth, managing its message, but we are taken aback by how blatantly it has misrepresented a final judgment by the Federal Tribunal. Either the Canadian office is misinformed by its Mexican associates or it is misinforming the public. Either way, shareholders in this company should be concerned."

On Tuesday November 10th the FAO has responded by lodging a complaint with the British Columbia Securities Commission (BCSC) and the Toronto Stock Exchange accusing the company of withholding and misrepresenting information that "is of central importance to shareholders."

The controversy centers on the September 24th ruling that unequivocally declares the Change of Land Use permit necessary to operate the mine, "null and void" while the company maintains that it still holds "all necessary permits." Says Ruiz Guadalajara: "We don't understand the dispute. We know that New Gold's subsidiary in Mexico, Minera San Xavier, was officially notified of the court's decision on October 14th 2009. We know all mining activity since then has been declared illegal."

New Gold's claim that it filed for an appeal of the Tribunal's decision on October 28th was further called into question. The FTAFJ court is the highest instance of appeal in Mexican administrative law; its decision is final and binding. Furthermore, the local environmental group Pro San Luis Ecológico that has led the legal proceedings against the company must by law be notified of any further legal action taken on this case. As of November 8th, 2009, their lawyers had received no such notification.

"New Gold may have the resources, money, and political influence," says Ruiz Guadalajara, "but we have the justice provided by a definitive ruling of a superior court." He notes with concern the company's attempt to convince shareholders and the public that the case is simply about an Environmental Impact Statement. He believes that Canadian mining companies in Mexico benefit from the lack of clear information about their operations. They use the language barrier and a confusing foreign legal system to operate with impunity. "Our complaint to the BCSC aims to clarify the truth and allow New Gold's investors to be informed of what's really happening here."

The BCSC complaint and the court ruling are available at http://www.miningwatch.ca/en/canadian-company-accused-disobeying-court-misleading-shareholders-citizens-group-argues-new-gold-vio.

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For more information please contact:
David Schecter: 514-209-2666, cerrodesanpedro@gmail.com (English)
Lazar Konforti, 514-827-7486, cerrodesanpedro@gmail.com (Français)



Mexicans up in arms against mine

By John Holman in San Pedro, Mexico, Al Jazeera

13 November 2009

Armando Mendoza points to the huge cracks in the walls of his house in San Pedro, Mexico.

Gesturing to the ceiling that recently fell in, he shows the damage caused by the daily explosions from the Canadian-owned mine San Xavier, which crouches over this small village.

Armando is one of the residents who opposed the mine when it was proposed by New Gold, the Canadian gold-mining company, in 1996.

The community has been bitterly split over the project, which has brought jobs to some, but also razed the hill behind this former tourist destination.

The explosions from the mines have caused fast-spreading damage, breaking apart buildings, including a colonial-era church.

But now, the local population have also had to contend with wire fences set up around the roads, marking off the green spaces within the village.

Armando says they were erected by local authorities in collusion with the mine.

"The fences have been put up by the mine to get us out, so that we don't have space to move. That is the ambition of this company, that we leave the village," he said.

Access to mineral wealth

San Xavier is owned by the Corporation New Gold, one of several Canadian mining companies attracted to Mexico by low royalty payments, an accommodating government and easy access to mineral wealth under relaxed Mexican laws.

Opponents of the mine claim that it has already wreaked irreversible environmental damage on the region, introducing cyanide into the water system that serves the state capital.

The region, with its rare species of cactus and fauna, was in the process of becoming a protected environmental site.

Now the area exploited by the mine resembles a lunar crater.

For their part, the mine operators say that they constantly monitor subterranean water to check contamination levels and that the company has rescued more than 23,330 cacti from five protected species, as well as pursuing a reforestation plan.

Hector Barrí, the local lawyer who heads the legal opposition to the mine, has obtained three federal tribunal orders to cease its operation on environmental grounds.

Resistance

However, the Mexican Environmental Secretary (SEMARNAT) has so far failed to enforce the sentence, allowing the mine to continue operating.

With the latest court order against the mine, decreed this October, Barri feels the government will now be forced to act.

"The Mexican environmental secretary cannot give a third permission [to Mina San Xavier] because it would be obvious that it had sold itself to a transnational company."

In the meantime, local residents continue to oppose the mine despite the dangers they may face.

Enrique Rivera Sierra, a lawyer and protester, was badly beaten whilst handing out literature against the mine.

Fellow activists say that the case against the two attackers has been shelved indefinitely by the local authorities.

In other parts of the country the government has intervened against anti-mine protesters.

This August in Chiapas, Southern Mexico, activist Mariano Abarca was herded into an unmarked van by gunmen and then held for three days without contact with his family.

Reports later indicated that the capture was actually an arrest by undercover state police.

Economic revival?

"The local town economy and investment becomes linked to the mining industry ... That's why you see phantom villages where the mine has closed"

Valeria Scorza, PRODES

She says that the jobs are fleeting and that the environmental and eventual economical cost is high.

"The life of a mine on average is between 15 and 20 years. Obviously if it is an open pit mine it causes ecological devastation and enormous health problems. Also the local town economy and investment becomes linked to the mining industry.

"So there is no development of other economical activities which can be sustainable in the long-term future.

"That's why you see phantom villages where the mine has closed, there's no economy for people to work in and there is a large amount of migration."

It is unlikely that Canadian firms will stop their rush for precious metals in Mexico with important new discoveries still being made.

The poor southern states of Oaxaca and Chiapas appear top of their list with 72 mining concessions already granted in Chiapas alone between 2003 and 2006, according to a report titled 'Made in Canada Violence: Mining in Mexico'.

With little help from the Mexican government, it will be left to those local communities to fight alone for their water, their livelihoods and their land.

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