“Pascua-Lama is a third country in the Andes cordillera” – by Catherine Solyom (Montreal Gazette – December 15, 2012)


This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency

Barrick Gold’s Pascua-Lama mine project will have its own hospital, complete with operating room and X-ray facilities, an indoor sports centre, and housing for up to 10,000 people. It has its own customs and immigration office at one of the highest border crossings in the world, at an elevation of 3,700 metres.

And exclusive charter flights leave La Serena, Chile, and the country’s capital, Santiago, carrying engineers, mine workers and the occasional journalist, just barely clearing the tops of the jagged Andes mountains before landing on the Pascua-Lama airstrip.

It even has its own soccer team – probably a successful one, given the altitude at which the players train.

It is governed by a special tax treaty, which establishes how it will pay taxes and royalties to Chile and Argentina, and by the rules set down in the Bi-National Integrated Mining Treaty signed between the two countries in 1997.

Among other things, the mining treaty gives a company exclusive rights to use the water and other natural resources found within the territory, and suspends both countries’ constitutional prohibitions on economic activity or foreign property ownership near the border.

The Specific Pascua-Lama Protocol, an addendum to the treaty, cedes the 438-square-kilometre territory to Bar-rick Gold and establishes where exactly the mine pit and processing plant will be, among other details.

For Barrick Gold, the unique legal framework of Pascua-Lama – the first bi-national mine in the world – is all about practicalities. It has its own immigration office so that workers, once they have entered the territory won’t have to show their passports every time they cross the Chile-Argentina border to travel between the mine pit and the processing plant, for example.

And it ensures that Barrick won’t pay taxes twice on the same goods and services.

Barrick’s intention, said Rod Jiménez, the company’s vice-president of corporate affairs in South America, is to develop mining all along the border.

“The entire industry is watching this very closely,” Ji-ménez said. “Others are looking at how they can do it, too.”

But while Barrick and other Canadian mining companies see unfettered opportunity in the peaks along the border, critics see Pascua-Lama as a dangerous precedent, in which a mining concession for all intents and purposes acts as an independent country, wedged between two others – and, they fear, controlled by none.

For the rest of this article, please go to the Montreal Gazette website: http://www.montrealgazette.com/news/Pascua+Lama+third+country+Andes+cordillera/7703081/story.html