Mining taps deep reserves of rage in Peru – by Andres Schipani (Financial Times – April 20, 2016)

http://www.ft.com/

Cocachacra, Peru – In a corner of southern Peru the land is so barren that Nasa uses it as a stand-in for Mars to see if potatoes can be grown on that lifeless planet. But the desert of red dirt gives way to the green Tambo river valley, where farmers live off an abundance of onions, rice and sugar cane.

Some locals are taking up arms to protect this oasis. Last year, three were killed and hundreds wounded in violent clashes over the $1.4bn Tía María copper and gold mine, owned by Southern Copper, which is perched by the valley. Black-clad anti-riot police are now stationed there.

“Whoever is the next president will have to deal with mining conflicts because neither companies nor governments respect communities,” says Jesús Cornejo, head of the water users’ association in the nearby town of Cocachacra, which is peppered with green flags reading: “Yes to farming, no to the mine.”

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How a $900-million lawsuit is shaping the future of Canada’s natural resource landscape – by Damon van der Linde (Financial Post – April 15, 2016)

http://business.financialpost.com/

SEPT-ÎLES, QUE. — Flying in a helicopter over the Bay of Sept-Îles, Alexandre Pinette points to the mouth of the Moisie River where it empties from the north into the St. Lawrence River. Members of his Innu community used to live by the river every summer to fish salmon and trap, but he said they were moved by the government in 1949 to the permanent Uashat and Maliotenam reservations.

“When the Innu came back in spring, their houses were destroyed. They had disappeared,” said Pinette, his voice crackling over the helicopter intercom. He adds that Innu were also displaced between 1948 and 1950 from what is now the Iron Ore Co. of Canada’s port, where huge mounds of the sparkling mineral are sorted and then loaded into waiting cargo ships.

A 578-kilometre railway stretches north from Sept-Îles’ deep-water port to where the mineral is dug from the ground. Here, the Innu claim the mines and other facilities have ruined the environment, displaced members from their territory and prevented them from practising their traditional way of life, while not giving much back to the community.

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In Latin America’s drug hotbeds, illegal gold is more valuable than cocaine, report says – by Marina Jimenez (Toronto Star – April 15, 2016)

http://www.thestar.com/

In Peru and Colombia, the world’s top producers of cocaine, illegally mined gold is now a more valuable export than cocaine, according to a new study.

Organized criminal groups have moved into this sector, leaving workers vulnerable to labour exploitation, human trafficking and sexual offences, the study says.

“It is staggering when you go to these illegal mines and you see that the government is not responding and all the negative impacts on the environment and on the people,” said Livia Wagner, who wrote the report for the Global Initiative against Transnational Organized Crime, based in Switzerland. “Illegal mining funds criminal and terrorist groups, facilitates money laundering and corruption … and creates sex trafficking.”

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NEWS RELEASE: Organized Crime and Illegally Mined Gold in Latin America – by The Global Initiative Against Transnational Organized Crime (April 2016)

Click here for full report: http://www.globalinitiative.net/download/global-initiative/Global%20Initaitive%20-%20Organized%20Crime%20and%20Illegally%20Mined%20Gold%20in%20Latin%20America%20-%20April%202016%20(web).pdf

Throughout history, man has venerated gold. Gold was the first of the three gifts of the Magi to Jesus. For much of the 19th and 20th centuries, the values of world currencies were fixed in terms of gold (the Gold Standard). Olympic athletes vie for gold medals and the best footballer in the world is awarded the Ballon d’Or. An extremely well behaved child is ‘as good as gold’ and a generous person has ‘a heart of gold’.

It is only natural to think positively about gold, just as it is equally natural to think negatively about drugs. But, as the Global Initiative proves in its latest research report: Organized Crime and Illegally Mined Gold in Latin America, illegally mined gold is now more important to organized crime in some countries of Latin America than narcotics:

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Mexican Indigenous Protests Shine a Spotlight on the Damage Done by Canadian Mines – by Nathaniel Janowitz (Vice News – April 13, 2016)

https://news.vice.com/

Indigenous groups and small farmers from six Mexican states have been marching in the capital this week with a long list of demands. These range from policies to reactivate the rural economy to greater legal protection against massive infrastructure projects on their land.

The thousands of marchers — most of them wearing traditional clothes or cowboy hats and large belt buckles — have caused several days of traffic chaos. They have also set up a tent city around the interior ministry.

Francisco Jiménez, one of the main organizers of the protests, said the most immediate demand is for talks with Interior Minister Miguel Angel Osorio Chong.

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Canadian miners face uphill battle to collect on arbitration wins – by Peter Koven (Financial Post – April 11, 2016)

http://business.financialpost.com/

Crystallex International Corp. completed the easy part last week: It won an arbitration award against Venezuela worth nearly US$1.4 billion. Now comes the hard part: actually collecting that money.

Over the past couple of years, Canadian mining companies have won several international arbitration cases against governments in developing countries that expropriated their properties. A key lesson from these cases is that if governments refuse to recognize these awards, compelling them to do so is very difficult. The easier thing to do is settle for pennies on the dollar or reach a non-cash settlement.

In the case of Venezuela, the collection problems are compounded by the country’s massive economic crisis. Venezuela simply can’t afford to shell out US$1.4 billion to an insolvent Canadian firm that isn’t adding a penny of value to its economy.

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Brazil wants Samarco to stop leaks before operations resume – by Marta Nogueira (Reuters U.S. – April 6, 2016)

http://www.reuters.com/

RIO DE JANEIRO – Samarco Mineração SA will not receive Brazilian government authorization to resume iron ore mining operations at the site of a dam burst that killed 19 people until leaks of tailings are stopped, environmental protection officials said on Wednesday.

Samarco, which is jointly owned by mining companies Vale SA and BHP Billiton Plc, hopes to resume operations at the start of the first quarter to be able to pay for a 20 billion real (US$5.53 billion) damages settlement.

The restart depends on authorization from the Minas Gerais state environmental agency Semad, which told Reuters that the miner needs to find a solution for the leaks from dikes built after the dam burst. Tailings are mineral waste and water sludge left over from mining operations and stored in ponds.

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Mining Dams Grow to Colossal Heights, and So Do the Risks – by Paul Kiernan (Wall Street Journal – April 4, 2016)

http://www.wsj.com/

Engineers say Brazilian disaster shows world-wide danger from Hoover Dam-size earthen structures holding ‘tailings’ waste

MARIANA, Brazil—Half an hour’s drive from this colonial town in southeast Brazil, trees suddenly give way to what looks like a desert salt flat. It is a 2-mile-wide valley filled with mine waste.

On Nov. 5, an earthen dam holding back this sea of sludge collapsed, releasing a deluge that killed 19 people, destroyed villages and traveled more than 400 miles to the Atlantic Ocean, where it left a reddish-brown plume visible from space. As tall as a 30-story building and holding enough refuse to fill 19 Dallas Cowboys stadiums, the dam was the largest structure of its kind ever to give way.

It won’t be the last. From Chile to Australia to the U.S., the quest for economies of scale has prompted mining companies to dig larger and deeper pits, creating record volumes of waste.

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[Codelco] Scissor-Hands CEO Is Hero for Chile and Villain for Copper Bulls – by Javiera Quiroga and Agnieszka De Sousa (Bloomberg News – April 4, 2016)

http://www.bloomberg.com/

When soft-spoken septuagenarian Nelson Pizarro took the helm of Chile’s state copper behemoth in mid-2014 he noticed how happy people were at one of its underperforming mines. So he removed all the key managers. The result: costs fell and output reached capacity for the first time.

“A sense of vulnerability was lacking,” he said in an interview from Santiago, where executives from the world’s biggest mining companies are meeting this week. “People must understand the company’s financial health.”

The anecdote reflects a management philosophy honed over a five-decade career in the mining industry that earned Pizarro the nickname “scissor-hands.” On his watch, the world No. 1 copper miner has brought down costs by about 15 percent, more than many of its private-sector rivals.

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Guatemalan Women’s Claims Put Focus on Canadian Firms’ Conduct Abroad – by Suzanne Daley (New York Times – April 2, 2016)

http://www.nytimes.com/

LOTE OCHO, Guatemala — Her husband was away in the fields, she said, when the truckloads of soldiers, police officers and mining security officials arrived. A half-dozen armed men swarmed into her one-room house, blocking her exit and helping themselves to the meal she had made for her children.

For a long time, the woman, Margarita Caal Caal, did not talk about what happened next that afternoon. None of the women in this tiny village high in the hills of eastern Guatemala did, not even to each other. But that day, Mrs. Caal said, the men who had come to evict her from land they said belonged to a Canadian mining company also took turns raping her. After that, they dragged her from her home and set it ablaze.

“The fear is not over,” she said recently, staring down at her hands while her daughter served coffee to visitors. “I still fear, all the time.”

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BHP Facing Billions in Disaster Payouts Boosts Brazil Staff – by Rt Watson (Bloomberg News – April 1, 2016)

http://www.bloomberg.com/

Facing the prospect of billions of dollars in damages and debt obligations after the Samarco mine disaster, BHP Billiton Ltd. has more than tripled its staffing in Brazil, adding two top executives to the mix to oversee a push to restart operations.

On Nov. 5, a dam filled with sludge from the mine burst, killing as many as 19 people and leaving hundreds homeless. If Samarco Mineracao SA, the BHP-Vale SA joint venture that ran the mine can’t reopen it, the partnership won’t be able to meet $1 billion in debt obligations due in 2022, or pay damages valued as high as 12 billion reais ($3.3 billion).

In that case, Brazil’s Vale and Australia’s BHP, the world’s largest miner, would be required to pick up the cleanup bill. In an era of depressed commodity prices, BHP, whose stock has dipped 42 percent in 12 months, has already made deep cuts to its dividend and trimmed capital spending. That’s raised the stakes to lessen the disaster’s impact.

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Sex trafficking ‘staggering’ in illegal Latin American gold mines: researchers – by Anastasia Moloney (Reuters U.S. – March 30, 2016)

http://www.reuters.com/

BOGOTA (Thomson Reuters Foundation) – The scale of sex trafficking around illegal gold mines in parts of Latin America is “staggering,” and thousands of people working there are prey to labor exploitation by organized crime groups, a think-tank said on Wednesday.

“When these mines are directly controlled by criminal groups, or in areas controlled by organized crime, there is an elevated risk of human trafficking,” the report by the Geneva-based organization said.

“In Colombia and Peru particularly, and to a lesser extent in the other countries studied, our research uncovered numerous instances of labor trafficking and exploitation, sex trafficking and child labor.”

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From Muzo emerald mine, Colombia’s ‘green fire’ goes global – by Richard Emblin (The City Paper – March 29, 2016)

http://thecitypaperbogota.com/

Changing an industry with a sometimes dark past

Green was the color of the day, from the stripes on the Bell helicopter, to the pilot’s gloves and headset, to the precious stones glittering within the mountains below.

Just a 40-minute chopper ride northeast of Bogotá, the famed Muzo emerald mines of Colombia are undergoing a profound physical and cultural transformation. In the central department of Boyacá, a North American company is formalizing a once outlaw industry still tarnished by its violent past.

Until his death from cancer in April 2013, Victor Carranza was the undisputed czar of Colombia’s “green fire.” Over the decades, illegal actors in the nation’s armed conflict vied to overtake the lucrative business, including left-wing guerrillas and right-wing paramilitaries.

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Lithium Boom Takes Chile’s SQM Across Andes in Argentine Venture – by Eduardo Thomson (Bloomberg News – March 28, 2016)

http://www.bloomberg.com/

The race to supply lithium to the rechargeable batteries used in cell phones and electric cars is taking Soc. Quimica & Minera de Chile SA over the Andes as Argentina’s new government seeks to open up its reserves.

SQM, the second-biggest lithium carbonate producer, agreed to pay $25 million to Lithium Americas Corp. for 50 percent of Minera Exar, which owns a project in northern Argentina’s Cauchari, the Santiago-based company said in a statement Monday. Exar will update a feasibility study for a project that may produce 40,000 metric tons a year for more than 30 years.

Controlled by Julio Ponce, the former son-in-law of dictator Augusto Pinochet, SQM is looking to join South Korea’s Posco and FMC Corp. in Argentina where President Mauricio Macri has removed capital and currency controls and an export tax in a bid to jumpstart its mining industry.

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Roger Agnelli Transformed Vale Into One of the World’s Biggest Miners: 1959-2016 – by James R. Hagerty and Jeffrey T. Lewis (Wall Street Journal – March 25, 2016)

http://www.wsj.com/

Roger Agnelli exploited surging iron-ore prices and his own charisma to transform a sleepy Brazilian company into one of the world’s biggest miners. Then Brazilian politics ended his career as chief executive of Vale SA in 2011 and forced him to start over.

Mr. Agnelli, 56 years old, was still reinventing himself when his private plane crashed shortly after takeoff March 19 in São Paulo, killing him, his wife, his two grown children, and three others, including the pilot.

While other Brazilian business moguls won control of global brands in beer (Budweiser) and packaged food (Kraft and Heinz), Mr. Agnelli focused on minerals. Bearing a passing resemblance to actor Omar Sharif, he owed some of his success to charm that dazzled business partners and even competitors. Cynthia Carroll, a former CEO of the mining company Anglo American PLC, said Mr. Agnelli always greeted her with a bear hug.

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