Chile y su medio ambiente

Abstract

In this paper, the environmental case of the construction of Pascua-Lama mine in the Chilean-Argentinean Andes border is analyzed. Pascua Lama is a mining project that will take place in the Andes mountain range in the border between Argentina and Chile starting in September 2007. There are many interesting, uncertain and complex features about the project that make it challenging to analyze and discuss.

To correctly understand the mining project and its impacts, multiple variables in geographical, social, environmental and economical setting are researched and described. Moreover, the benefits and costs of Pascua-Lama are studied under the different perspective of the various stakeholders.

The results of the research lead to the conclusion that on one hand the benefits will be unequally distributed among stakeholders, concentrating most gains in a small group of mayor actors, meanwhile on the other hand, the risks of possible negative impacts over the local population and environment will be much higher than the expected benefits perceived by a small group of stakeholders. Thus, the research impels the governmental authorities for a new process of shared revisal of the project and its future implications.

Key Words: Pascua Lama project, regional studies, gold mining in the Andes, glacier removal, Barrick Corporation, Huasco valley.
Introduction

In the Chilean–Argentinean border high in the Andes, near a field of glaciers, lays an ore body that by mining industry estimates is large enough to yield 750,000 ounces of gold every year for 20 years. Whether these valuable metals would stay in the ground, at least for the foreseeable future, or be extracted in an open pit mine is the topic of an ongoing tug-of-war between environmentalists and Canada’s Barrick Gold Corporation, the claim holder and one of the world’s largest gold mines.8

What makes this environmental case so interesting is the complexity and uncertainty of the project and the stakeholders, environment and other multiple factors involved in it. The mine will be constructed between the glaciers of the Andes Mountains in the border of two countries and in the proximity of the Atacama Desert, the driest place on earth. The government has already approved the EIA (Environmental Impact Analysis) even though the risks of the project are enormous and within the complexity of natural relations there is no way to fully understand the possible impacts that this project could have on today’s local population and on future generations. Not only the impacts and its costs are uncertain, but also the benefits of the projects for different stakeholders are unclear.
In a time where the price of the gold has raised more than double in the last 5 years reaching a price of over 630 dollars per onze, the bet made by Barrick is enormous. With 17 Moz of gold, 689 Moz of silver and 595 M pounds of copper, Pascua Lama represents a 25% of Barrick’s world-wide ore reserves.16

The bet of the local population is not smaller. Their traditional life styles will be under high pressure and risk of disappearing. They depend on the agriculture and the waters that come down the mountains for domestic use and irrigation in the desertic zones. They will be staying there years after the closing of the mine, suffering its impacts.

The following work intends to incorporate all the variables needed to understand the social, economical and environmental conflict. These aspects will be covered in the chapters of project description and framing of the case. The next step after having the most complete background possible, will be discussing the case’s impacts and benefits.

The Project

The Mine to be constructed by Barrick Gold during the year 2007 will be located in the Andes mountain range in the border between Argentina and Chile. The construction will take place in a location called the Huasco Province in the Chilean side and in the San Juan Region in Argentina.

Pascua-Lama is an open mine project that will have a short life span, expected to be around 20 years, which is a minimal time for resource exhaustion.10

Some characteristics of the open gold mining activities are: a) They are done through a sodium cyanide leaching process. b) They have an intensive use of explosives at superficial levels which produce high emissions of particulate matter into the atmosphere. c) Open pit extraction has higher impacts on the environment and higher energy consumption compared to the closed mining. d) High probabilities of generating water acidification that could risk the water quality of the zone.

Some particularities of the Pascua-Lama project are: i) Around 5% of the gold and silver lie under glaciers. ii) The site is located on land in two countries. iii) The metal is located at a high altitude between the 4.200 and 5.200 m. above sea level. iv) Tremors and regional earthquakes are no stranger to Huasco Valley. Mayor earthquakes (6.8 magnitude) have occurred in the region the last years.2 v) More than 2.000 million tons of rocks will be deposited in the source of the Estrecho river. The arsenic and heavy metals present in the deposited rocks could probably pollute the waters of the river and the whole valley actually used by local communities.

Chronogram of the project

The initial project of ore extraction presented by Barrick Gold to the environmental authorities was approved in 2001. In its evaluation, the regional representation of the National Commission for the Environment (CONAMA) did not pay attention to the fact that the vein of the mine was covered by three glaciers and that the company was planning to remove 300,000 cubic meters (20 hectares) of ice belonging to three glaciers in the high Andes, Toro 1, Toro 2 and Esperanza, in order to be able to commence the gold exploitation. This intervention would have probably melted the three glaciers, significantly diminishing the water perceived by the whole Huasco basin’s population and environment. At the moment there are no international examples of successful moving of glacier in the whole world.

It was the farmers, who are the most knowledgeable about the Andes, and who were dismayed for the development of the project, who first protested against the company and the environmental authorities due to the imminent destruction of the glaciers that brought water to their cultivation. These glaciers had already been disturbed during the exploration stage of the project.

The farmers’ denunciation with regard to the impact of mining on the glaciers forced CONAMA (Chilean governmental environment department) to demand an explanation from the company about the removal of the glaciers, receiving as a response that the glaciers were going to be relocated to a similar place for their conservation. It was the only thing that the company could come up with as a potential solution at the time. CONAMA proceeded to demand the presentation of a plan for handling the Glaciers three months before the start of the operation.

After the approval of the project, the fall of gold prices forced Barrick to postpone the start of work until prices went back up. However, activities for the regular maintenance of the installations were maintained in the surrounding area. Three years later, with more convenient metal prices, the company decided to relaunch the project, incorporating an expansion of the deposit resulting from the finding of the existence of larger volumes of minerals in a neighbouring area. 17

During the year 2004 the exploitation of the new nearby gold deposit, called Penelope, was included in the Environmental Impact Assessment presented to CONAMA. This new deposit increases the exploitation rate of extraction from 37.000 tons of ore per day to 48.000 tons. 18

During the year 2005 Barrick Gold Corporation starts a public project review process with local farmers and water users grouped in the Huasco Water Users Cooperative. Following the review process, the Chilean approval of Pascua-Lama stated that “the company shall only access the ore in a manner that does not remove, relocate, destroy or physically intervene the Toro 1, Toro 2, and Esperanza glaciers.” The condition relating to the protection of icefields/glaciers was among over 400 conditions that were included in the approval of the project (Resolution RCA 024/February 2006).4 Allowing in this way the beginning of the mine construction in September 2007.

Technical information of the mine’s operations

To operate the mine, toxic material must be transported toward the mine through a mountain road, crossing the nearby villages. The truck movement per month toward the mine is estimated to be almost 600 trips divided in the following way:9
120 trucks with high concentration of copper
• 70 trucks with chemical reactives
• 17 trucks with sodium cyanide
2 trucks per year with Mercury
• 200 trucks with explosives
• 180 trucks with Petrol
• 1 truck with Benzene

The quantity of trips, the difficulty of the mountain road and the contents of the truckload will highly rise the probabilities of dangerous accidents.

The mineral extracted from the open pit mine will be sent with trucks to a first processing plant in Chile were the material will be reduced. From there it will be transported by a conveyor belt to the Argentinean territory where all the chemical process will be carried out. Finally the processed metal will be transported to Chilean or Argentinean harbors to be dispatched to the exterior.
The process plant located in the Chilean territory will be underground and it will have dust collection mechanism.4
The sterile wastes from the mine, rocks and minerals, will be deposited in Chilean territory near the sources of the Estrecho River, which feeds Chollay and the Huasco rivers. Other facilities that will be constructed in that zone are the primary processing factory, the maintenance of equipment buildings, the explosive cellar and the waste management plant.11

The treatment of the extracted material in the Argentinean side will be through sodium cyanide leaching, a substance that poses great danger to human health.3
The waste management process includes: a) Incineration of organic residuals with emission control, thus reducing the waste that goes to sanitary backfills and utilizing the energy produced by the incineration in the maintenance buildings. b) The disposition of non-industrial residuals will be done in recovered holes that include systems of leaching recovery and management.4 c) The project will not have liquid residuals. All the waters and chemical from the sodium-cyanide leaching process will continue circulating. The solid waste from the chemical process will be disposed in holes in Argentina.18
Framing the Environmental Case

The Pascua-Lama project description is not sufficient to understand its implications in the environmental, social and economical spheres. To start realizing the effects of such a project it is necessary first to frame the problem.

The framing of environmental cases is one of the most important parts of understanding an environmental case. It is in this step when the physical geographical and social borders are drawn. Moreover, it is in this stage when the size and shape of the area of study and the quantity and quality of the stakeholders are chosen.

If the framing is too narrow (eg: choosing just the area where the project will be developed), then there is the danger of not including relevant actors and information necessary to understand the causes and consequences of the problem. This can lead most of the times to short-term solutions which could bring bigger problems in the future. On the other hand, if the framing is too broad (eg: the whole country), relations can be too complex to analyze, loosing the main focus of the problem. If this is the case, the proposed solutions are often too complex, they can leave unsatisfied parts and most of the times they are not viable to apply.

Another important aspect about framing an environmental problem is that people analyzing the case are always introducing own values, perceptions and interests when doing so, even if they do not intend to. For example, it is a political decision which groups are considered as stakeholders in a particular conflict.

These are the main reasons why this process must be carefully done in order to rightly understand the environmental conflict and its implications.

The intention of this particular framing process is to include all the relevant dimensions in which the environmental case should be approached; trying to be as inclusive as possible in order to understand the problem.

The dimensions to be considered are Location (geography), Climate, Environment (ecosystems, species, hydro resources), Stakeholders (society, culture, company, government) and Economy (local productive activities, mining benefits).

1. Geo-Political Location

The studied area is located in the north of Chile and Argentina, in the southern cone of South America.
Pascua-Lama itself is a cross-border property located in the highly prospective Frontera District, which straddles Chile’s Region III (Atacama Region) and Argentina’s San Juan Province. It is located approximately 150 kilometers southeast of the city of Vallenar in Chile and 300 kilometers northwest of the city of San Juan in Argentina. 4 The mine site is situated between 4,200 and 5,200 meters above sea level in the Andes mountain range at 290 20’S Latitude. The Pascua-Lama site is mountainous terrain. 11
Eventhough the property is directly located in the Alto del Carmen commune (in strong red in the picture) which limits directly with Argentina, the measurable impacts of this mining project will be much broader. For this reason, in this geo-political framing, the whole Huasco province is included in the analysis.

Chile’s political division consists in 13 regions. The project is located in the III Region of Chile also known as Atacama Region, one of the driest spots on earth.

The Atacama Region (shown in the right picture) has 3 provinces (Chañaral, Copiapo and Huasco). The study will focus on the whole Huasco province because the fertile valleys of the four communes that belong to Huasco; Alto del Carmen, Freirina, Huasco and Vallenar (the four southernmost communes in the region picture) depend on the waters of the glaciers located in the nearby zone where the construction site of Pascua Lama will be. A basic assumption of this investigation is that the geographical environmental impacts of the Pascua-Lama project influence the whole Huasco province, not only the commune of Alto del Carmen.

The commune of Alto del Carmen is located between the 28º 44´ de S y 70º 30´ O almost in the center of the Macrozone known as Norte Chico that goes from the Salado River until the Aconcagua River. This region has an extension of 5.938,7 km2, which corresponds to the 7,9% of the whole Atacama region.
The community has a total of 70 small villages and it includes physical elements as the Andes mountain range, and the Huasco river basin where Alto del Carmen town is located.
The main sources of the Huasco river, are the Transito and Carmen rivers. Each of them creates two extense valleys (Valle del Transito y de San Felix) that extend from east to west and divide the provincial geography. The nearest inhabited villages to the gold deposit are El Corral (55 km) in the San Felix Valley and Chollay in the Transito valley (35 km).
Geographical Details can be seen in the picture to the right. Pascua-Lama would be located ate the side of the place called El Nevado.
It is finally important to point out that, in the author’s opinion, the framing of this study will remain incomplete until the Argentinean affected zones are included in the analysis.

2. Climate

The northern area of Chile is characterized for its dryness, corresponding to one of the toughest ecosystems worldwide. The Atacama Desert exists due to the presence of the Subtropical Anticiclon from the Southern Pacific strengthened by the cold waters from the Humboldt Current and reinforced by the rain shadow effect from the Andes Mountains that intercepts the penetration of air masses coming form the tropical east zones.

The studied area has at least three different types of climate. The main one in the location of Pascua-Lama 28º S is the altitude marginal desert (light green area in the climate map). This climate exists over the 2.000 m, with colder temperatures compared with other desertic climates, winter precipitation (From May to August) mostly as snow and with eternal snow peaks over the 5.000 m and clear skies.
The other two climates; desert with abundant fog (yellow) and low marginal desert (light blue) are the ones corresponding to the valleys and the coast crossed by the Huasco basin.
The first one appears in coastal regions with abundant night fog, temperatures that maintain during the day and night and low annual precipitations of 20 mm. The second one is a drier climate with steppe vegetation and important variability of temperature between day and night.21

In the heart of the Atacama Region there are places without rainfall for several years. The annual mean rainfall of the region is barely 52 mm with an almost inexistent vegetal cover near the Andes. This region is one of the most significant climate-vegetation limits in the whole South America.

Additionally in this area there is important rain variability between years. The occurrence of a phenomenon called “Oscilación del Sur” associated with “La Niña” phenomenon every 3 to 6 years results in a specially dry and cold climate. 13
3. Environment

3.1 Ecosystem and Species

The peculiarity of the ecosystem in the studied region is related to the existence of hydric resources surrounded by a so dry and desertic area. The valleys created from the waters that come from the Andean glaciers and that cross the desertic area of the Atacama region are important biodiversity hotspots of the north of Chile. Five out of 10 endemic plant species are present in this zone. The fragility of the biodiversity comes from the narrow and fragmented spatial distribution of these species (narrow valleys) and from the climate conditions.

In this area it is also possible to find numerous threatened, vulnerable and protected species (Pacul, Yareta de Centro, Algarrobo, etc.). Some examples of the most representative mammals and birds of the zone are: Guanaco, Condor, Halcon Peregrino, Venado, between other species. As a matter of fact, in the Argentinean side of the Andes there is an UNESCO Biosphere Reserve (National Monument of San Guillermo).

The following chart shows the biodiversity seen as number of species present between the 1600 m and 4300 m altitude (superior limit of the vegetation) in the Transito valley (Laguna Grande and Valeriano principal sources of the Huasco River). The chart shows the existence of over 280 vascular plant species.13

Due to the semidesertic conditions of the zone, the species tend to have a fragmented distribution, restricted mostly to habitats with groundwater affluence or areas near surface streams.

Especially interesting ecosystems are the Vegas and Bofedales Altoandinos, discontinued vegetation formations that appear in places of snow thaw.
Most animals are restricted to the humid areas near the streams, as is the case of fishes, amphibians and different kinds of birds.

The biodiversity understood by high genetic differentiation between local populations of species in the valley areas can be evidenced due to the following factors:
a) High concentration of desertic Andean richness of species.
b) High level of local endemic species.
c) Narrow geographical distribution of the species.
d) Isolation and fragmentation of the local populations depending on the water spots.

It is important to consider that the conservation of populations with mayor genetic variability is extremely relevant to maintain the potential of species to respond to fast climate changes. Thus, the conservation of the biota in this area that has historically developed in a though, dry and with strong climate fluctuations scenario, should be a governmental priority.

In the following pictures it is possible to appreciate several native species of the studied area.1

3.2 Hydro Resources19

The Huasco valley is a narrow green land strip inserted in the Atacama Desert region. The valley flows from the Andes (East) toward the Pacific Ocean (West) in the same direction as the rivers coming down from the Andean Glaciers.

In order to analyze the water resources of this valley and their relation to the project and stakeholders, it is necessary to include the superficial waters, underground waters and glaciers (all of them are strongly interrelated). The main factors to be analyzed are the availability, quality and accessibility of water for the local population and environment.
There are three glaciers in the proximity of the project’s area: Toro I, Toro II and Esperanza. These glaciers have already been reduced in around a 65% of their total surface since the year 2001, when first activities of the company started taking place in the zone. It is important to recall the existence of other larger glacier fields in the zone, like Guanaco and Estrecho. A second relevant issue is to remember the ecological function of glaciers as regulators of excess water resources in winter, by capturing rainfall that occurs over the mountains and as water reservoirs in summer.
The main superficial waters in the Chilean side are the Toro and the Estrecho rivers, both located in the mining camp. They are respectively the sources of the Transito and Carmen rivers which ultimately feed the Huasco River.
The water consumption of the mining project ascends to 370 l/s of water. 42 l/s will be obtained from the Chilean side. This is the equivalent to the 12% of the average water volume measured in the Estrecho River in a normal year and it represents the 60% of the volume of the Estrecho and Chollay rivers in a dry year.

There are significant probabilities, in the 20 year life span of the project, to find time lapses of 3 months in which the water volume is inferior to the ecological referential volume. This would directly affect the water availability and accessibility for agriculture, domestic purposes, food preparation, drinking, evacuation of residuals, etc.

The dimension of water quality could be also risked in case of underground leakages of heavy metals and toxic residuals if the acid drainage system fails. The acidification of the valleys water is a high risk for the environment and human health due the proximity between the mining sterile dump and the waters of the Estrecho River. There are several reasons why the drainage system could fail; one example is the strong earthquakes which are likely to occur in this highly seismic zone.
4. Stakeholders
4.1 Local Community: Demography, Society and Culture

The community of Alto del Carmen is composed by almost 5.000 inhabitants, which represent a 2% of the total regional population according to the statistics of the Chilean National Statistic Institute (INE).7
The density of the population is of 0,81 inhab/km2 with all of its population categorized as rural.

In Alto del Carmen commune 80% of the population is considered to be poor with around a 20,6 % being extremely poor. The poverty together with the commune’s emigration rate (around 8% per year) are some of the main social problems of the commune. In the last 20 years there has been a negative demographic growth. This phenomenon affects mainly young population, thus transforming the population of the zone in elder population with a 14% over 60 years.11 The mean school attendance is of 6,56 years per person. The total surface of the commune is of 5.939 Km2.
The whole Huasco Province population which is concentrated in the basin of the Huasco river borders the 70.000 people distributed in the following pattern: Vallenar has almost 50.000 inhabitants with 10% rural population. Huasco has around 8.000 inhabitants from which a 20% corresponds to rural population. Freirina with a population of almost 6.000 inhabitants has a rural percentage of 42%.

The main groups present in the Huasco society are small farmers of the valleys, Diaguitas indigenous people, the grape and wine producers represented by the Huasco Water Users Cooperative and the rest of the population.

The Commune of Alto del Carmen has a strong cultural background where the local handcraft, the traditional feasts, the singular architecture, the old chapels, the typical dishes and the tranquility and harmony of its villages stands out.

Some examples of the handicrafts are the Diaguita ceramic and the cooper, wood, cotton and textile products developed mainly by women. Some typical dishes are the Patay and the Chañar arrope. The architecture of the valley presents the particularity that its houses are around 70% done out of clay with straw roofs. On the other hand there are over 20 different religious festivities annually carried out in the commune. Some of the most important ones are: “El Tránsito de la Virgen” in el Tránsito; “Virgen del Carmen” in Alto del Carmen; “Virgen de la Merced” from San Félix y “Nuestra Señora de la Merced” in Pinte. In these festivities it is possible to observe dances of groups that come from other cities of the region.11
It is also important to mention the existence of historical archeological sites in the zone.

4.2 Indigenous communities

Native communities that can be found in the area are the Diaguitas (An agricultural community). One group of representatives of the Diaguita indigenous community are “Los Huasco altinos” which represents around 262 families located in the Municipality of “Alto del Carmen” and distributed in 22 small villages.

The Huasco Altinos are an organized group trying to be recognized within the Chilean indigenous law which benefits native inhabitants. They are demanding the recognition of their ancestral lands (390.000 hectares). Their lands would include large areas that could be affected by the Pascua-Lama project. This indigenous group lives mainly in the Transit valley sector. They not only want recognition of their ancestral lands but also the capacity to regulate the property rights over different water bodies (rivers, lakes, streams).5

This Diaguita community has gradually lost their lands since colonial times through spurious mechanisms even though they have property rights recognized by the Chilean state in 1903.

The Diaguita community was not recognized by the government as an indigenous group until the year 2006. The existence of the Pascua Lama project fostered the organization of the Diaguitas folks until they were finally recognized as a native ethnical group of Chile with rights and properties.5

The Diaguita ancestors are known for their marvelous and original handicrafts and for being one of the few agricultural native ethnic groups in Chilean territory.

4.3 Huasco Water Users Cooperative

“Junta de vigilancia de la cuenca del rio Huasco y sus afluentes” is an agrupation of local farmers, mainly pisco producers (nacional drink made out of grapes). They are the successors from a regional water association constituted in 1908 (Asociación de Canalistas). They are actually the main organism in charge of managing the hydrical resources of the Huasco basin.
The Pascua Lama project was reviewed, analyzed, and recommendations were done to it by technical experts of the Huasco Water Users Cooperative during the year 2005. As major stakeholders of the project, due their close dependence with the Huasco River’s quality and quantity of water for agricultural reasons, the cooperative experts pointed out important changes to the project’s design in order to address prevention, mitigation, and compensation issues regarding the water resources.
4.4 Barrick Gold Corporation

Barrick Gold is the Corporation that pursuits the exploitation of the gold mines. They will be the ones to operate it and the main beneficiaries of the revenues obtained from the mine. In the following paragraphs a short description of the Corporation, a summary of other significant operations around the world and a chronology of their intervention in the Huasco Province are given.
Barrick is the world’s largest gold producer, with a portfolio of 27 operating mines, many advanced exploration and development projects located across five continents, and large land positions on the most prolific and prospective mineral trends. The Company also has the largest reserves in the industry, with 123 million ounces of proven and probable gold reserves, 6 billion pounds of copper reserves and 964 million ounces of contained silver within gold reserves as at December 31, 2006.
In 2006, Barrick produced 8.64 million ounces of gold at a cash cost of $282 per ounce, in the bottom third of the global cost curve. In addition, the Company produced 367 million pounds of copper at a total cash cost of $0.79 per pound.
The Company has a track record of mine development around the world, having completed the construction of the Tulawaka, Lagunas Norte and Veladero mines in 2005, the Cowal mine in early 2006, and the re-opening of the Ruby Hill mine in early 2007. Barrick has many more projects at various stages of exploration and development. Barrick is actively exploring for gold in more than 15 countries around the world.4
Barrick shares are traded on the Toronto, New York and London stock exchanges.
With its head office in Toronto, Canada, Barrick Gold Corporation has as a precedent for its mining actions in Chile, the work undertaken up to 2001 in the deposit of El Indio in the 4th Region, which has been closed due to the exhaustion of the deposits and the high costs of gold exploitation.

Some of the episodes related to that deposit are infamous: in July 1993, the quality of the water of the Elqui River was seriously affected by filtrations from the tailing dam of the El Indio plant that affected wide sectors from the cities of Vicuña, La Serena and Coquimbo, whose populations were forced to restrict the use of water due to the risk of cyanide and arsenic contents. A similar alarm was issued in 1995.

In addition, there are denunciations made by communities and organizations in Australia in response to Barrick’s involvement in environmental contamination in that country. At the same time, there are serious objections to the intervention of Barrick Gold in Tanzania.17

In Chile, Barrick Corporation represented by Minera Nevada ltda., acquired the property of Pascua-Lama which contained 1.8 million ounces of gold in 1994. The company made investment in exploration and finds that the multi-million ounce ore body extends into the Argentine side of the border; Barrick starts to build thorough database for environmental impacts study.

The Mining Integration Treaty is ratified by both Chile and Argentina to facilitate development of cross-border mining in the year 2000. At the same time Barrick submits an Environmental Impact Assessment (EIA) to Chilean authorities.

In July 2004 Barrick announces that it will proceed with the project’s development and in December Barrick submits modifications to the project.

Extensive public discussions and consultations occur throughout the year 2005 due to the strong resistance to the project. Barrick works with some stakeholders, particularly farmers who are represented by the Huasco Water Users.

In February of 2006 the Chilean authorities and the regional environmental authority, pass a resolution (RCA 024/2006) granting conditional approval of Pascua-Lama and place more than 400 conditions to ensure its development is to the highest standards; COREMA says that “the company shall only access the ore in a manner that does not remove, relocate, destroy or physically intervene the Toro 1, Toro 2, and Esperanza glaciers.”

On February 2007 Barrick confirmed gold reserves at Pascua-Lama had been reduced by approximately one million ounces in order to ensure protection of nearby icefields. At the same time, San Juan province announced final approval for Pascua-Lama in Argentina, concluding the environmental impact assessment phase.4

4.5 Government

The Government’s involved in this case are the ones of Chile and Argentina. In the year 2000, both Governments completed the ratification of a Mining Treaty between their two countries and in third quarter 2004 it was officially signed into law.

The main organisms of the Chilean government involved in the authorization of the mine’s operation are CONAMA (National Corporation of Environment) and COREMA (Regional Corporation of Environment).18

In the year 2001 CONAMA approved the EIA from Pascua Lama conditioned to a management plan for the glaciers before starting the project. The enterprise did not develop the project. A new EIA is presented in 2004 including a new development for 1.500 million USD. In the year 2005 the CONAMA from the Atacama Region delivers a whole set of considerations and observations for the approval of the project, asking Barrick to consider the combination of closed underground and open pit mining. At the beginning of 2006 CONAMA approves the final project with over 400 environmental considerations included.

The other public institutions that operate in the zone are the regional governor, the majors of the Alto del Carmen, Vallenar, Freirina and Huasco municipalities and the General Water Department.

4.6 NGO´s

There are at least four different groups working as NGO´s in the Pascua Lama case. The main three tasks accomplished by these groups are: 1) Informing the local, national and international population about the project and its hazards. 3) Making the process transparent to the whole community. Previously, the mining construction project was only negotiated between the government and the mining company. 3) Fostering the local citizen and indigenous participation.
Each of the following NGO´s has a different scope and conflict approach method:

a) Citizen Movement against Pascua-Lama. They are civil society and ecologists that reside mainly in Vallenar and in Santiago and that are totally against the project. There is even a Comitee Pro Defense of the Huasco Valley located in Vallenar.

b) Oceana. Ecologist Non profit association dedicated to Project the ocean around the World through scientific, legal and civil educative arguments. It was founded in 2001, it counts with activists in more than 150 countries and its South American office is located in Santiago de Chile.

c) OLCA (Observatorio Latinoamericano de Conflictos Ambientales). They are an organization that brings awareness of the Latin-American environmental conflicts. They are consultants of environmental issues for the affected communities. They raise issues of citizen rights and environmental awareness in Latin-America.

d) Church agrupations that foster the defense of the traditional life systems and the human rights.
5. Economy
In the next paragraphs the productive activity of the zone and the mining economical information will be described.

The principal economical activity of the Huasco valley is agriculture. With sophisticated irrigation methods, local farmers (including Diaguita indigenous people) have become fruit, grape, avocado and olive exporters to Europe, Japan and United States.16

The main productive activity of Alto del Carmen – actual and potential – is the agricultural development fostered by the prosperous fruit industry, principally the production of grape for exportation and for the elaboration of the national drink: the pisco. Other products of the valleys are avocado, citrus trees and vegetables. Even tough agriculture is practiced without sufficient diversification, it produces high employment rate in harvest seasons, when the activity absorbs not only local workers but also workers from other communes. Most of the families work on small agricultural terrains or herding goats, mainly producing for self consuming purposes. Additionally the commune offers a great variety of local products as piscos, pajaretes, honey, eggs, goat cheese, marmalades, sweets, and dry fruits.6

The other big potential economical developments of the area could be tourism. The lack of infrastructure and services due low investment in this area has been a barrier for the development of this activity. Nevertheless, actual governmental projects as a trekking path of 30 kilometers in the Andes sector that link the localities of El Transito and San Felix could foster the tourism in the area. Other potential touristic offers of the sector are places like the several small lakes, green gorges, streams with crystalline water and the attractive nearby villages. This would complement the agricultural activity.11

Referring to the mining production; Pascua-Lama’s average annual production in the first five years is expected to be 750,000-775,000 ounces of gold and 35 million ounces of silver at total cash costs of $40-50 per ounce of gold. Life-of-mine annual production is expected to average about 600,000 ounces of gold and 23 million ounces of silver at total cash costs of $130-160 per ounce of gold. An open pit mine, the processing facilities envision a 45,000 ton per day processing facility. The updated capital cost estimate is $2.3-2.4 billion, an increase from the 2004 estimate of $1.4-1.5 billion reflecting design improvements, changes and inflationary pressures affecting the mining industry. While the capital required is higher, operating costs have been reduced from the 2004 estimate of $90-100 per ounce to $40-50 per ounce for the first five years. Pascua-Lama’s costs are expected to be near the bottom of the operating cost curve for the industry.4-12 With a low investment of 2.3 to 2.4 billion dollars, Barrick expects revenues of over 100 billion dollars in only 17 to 20 years of expected life of the mine.6

Discussion

In the previous chapters, the Pascua-Lama project and its framing were analyzed. The results show us an extremely complex setting, traduced in the quantity and quality of stakeholders and in interrelated environmental, social and economical aspects.

Even tough we now posses relevant information to understand the project and its general implications, we have not yet come to realize the deepness of the social and environmental impacts or costs of the projects and its benefits.

To asses the costs and benefits and who perceives them, we will try to interrelate the different framing dimensions studied with the technical issues from the project.

A first step to accomplish this task is to relate the geographical environmental setting with the economical activities and the project itself.

Some of the environmental and economical issues that make this case so delicate are:
1) The arid climate conditions of the zone that makes it so sensible to water variations.
2) The high altitude and the mountainous terrain of Pascua-Lama that makes the operations of the mine and material transport extremely dangerous.
3) The earthquake tendency of the zone that risks the integrity of the buildings and environmental installations.
4) The unique biodiversity structure of the area that is closely linked to the water resources of the area.
5) The river basin structure of the Huasco valley, in which the ones on the top (in this case Pascua-Lama) directly affect the rest of the stakeholders under them until the river flows into the ocean.
6) The almost total dependency of the population on the agricultural activities which implies that risks to the fertility of the valley directly affects the survival of the population.
7) The toxicity of the gold mining activity which increases the environmental and human health risks.6
8) The proximity of the mine to glacier fields.

Looking at point 8, in the first instance of the Pascua-Lama case, the project described the alteration of 4 to 5 hectares of the ice fields. Nevertheless, due to citizen pressures, the authorities questioned the company’s plans. The answer of Barrick was the relocation of the glaciers. Finally the COREMA resolved that “the company shall only access the ore in a manner that does not remove, relocate, destroy or physically intervene the Toro 1, Toro 2, and Esperanza glaciers”.

Nevertheless, there are still important uncertainties of the impact that the mine operations will have on the glaciers. The topic is so complex that there are no scientific investigations that could correctly assess the possible decrease of glacier volume, the actual relevance of these glaciers to the overall water resources of the valleys and the meaning of their disappearance for the future hydrological balance.

One example of the indirect effect of the mining operations on the glaciers is the emission of particulate matter from explosions and of mining operations that will affect the nearby glaciers by changing their luminosity (the albedo), contributing in this way to their degradation. A second example is the effect on glaciers of vibrations generated by mining explosions and intensified by the heavy vehicle movement. Due the complexity of the problem, it is at the moment impossible to quantify the level of degradation that the glaciers will have as a result of these factors. The uncertainties of the impacts of the mining operations on the glaciers are a reason to stop operations in order to comply with the precautionary principle of the Rio statements.

Moreover, the though and arid location of the valley, at the south of the Atacama Desert implies that the lost of hydrological resources has high impacts over the environment by reducing the biodiversity of species, and thus the beauty and diversity of the surrounding valleys by turning them into dry hostile areas alienated to humankind.

Because of these uncertainties and hazards, including the possible water contamination, the Chilean government is at the moment in no position to assure the fundamental rights of availability, accessibility and quality of the water for the population of the Huasco Valley.

A second step in assessing cost and benefits from the project is relating the socioeconomic characteristics of the conflict with the differentiated costs and benefits that each stakeholder perceives.

The direct benefits for Barrick are clearly superior to the costs they perceive. This can be seen in the dollar balance between the direct costs of the project and its projected benefits. If there would be no benefits for the company the project would not even exist.

The real question is if the benefits for the rest of the stakeholders are superior to their costs. In the case of the NGO´s it is again clear. Costs are greater than benefits. The costs for these organizations are measured in the impacts that the project will have over the community and the environment. In the case of the environment, as we have already seen, the company’s operation is only bringing great risks and no benefits. In the case of the community the issue is more complicated.

When we talk about community we are talking about different groups of stakeholders. In the first place we have the Huasco Water Users Cooperative that includes around 2.000 persons in the whole Huasco Valley. They have already approved the project under several conditions such as significant payment to deal with the agricultural risks of having polluted waters or lack of water in certain periods. The quantity of money received and the extra environmental restrictions that Barrick should fulfill by law represent for this group of stakeholders a greater benefit than the risk (cost) of loosing their crops; at least in the short run.

A second group of community stakeholders are the indigenous people represented by the Huascoaltino group. To this stakeholder group, the costs are much higher than the benefits. They have already lost spiritual archeological sites and terrains of their ancestors because of this project. The next cost they will perceive is the risk of loosing their traditional life style. They will not have the harmony they nowadays have with the quantity of workers and truck movement of the project. They have great risks of loosing their crops and animals because of the possible lack or bad quality of water. They do not perceive benefits of this project as they do not seek the same life style as the rest of the population. Just as a positive externality, it is relevant to mention that the danger perceived with the arrival of the company pushed them to organize and be recognized as natives by the government; with all the benefits that that implies.

The last group of the community stakeholders is the rest of the population living in the valley. In their case the costs and benefits are unclear. We know that unemployment of the area is large compared to other provinces of Chile. Pascua-Lama is offering 5,500 jobs during the construction stage and then 1,660 jobs for the following 20 years. Is that a benefit for the local workers? The large initial input of workers will have to be brought from other regions considering the low population of the Alto del Carmen commune and the existence of other economical activities. This would mean a large input of foreigners into the province for the first 3 years and then a great unemployment rate due the low offer of mining places the next years (considering that less than half of the 1.660 employees will be Chileans) and thus a growth of the poverty index of the province. It is also important not only to refer to the quantity of work but also the quality of it. Many of the independent farmers will turn into dependant miners turning the traditional culture of the valley into a mining urbanization model in which high vehicle movement, prostitution, and alcoholism are present in every corner. The risks of being a miner in such harsh mountain conditions are enormous. Security and quality characteristics of mining activities are worse than in farming activities, but payment is better. On the other hand, services such as restaurants, transport, shopping, hotels, etc. for the miners will have to be developed, allowing an economical growth of the region. Mining suppliers should also see an increase in their benefits. These benefits and costs are going to be shared with the Argentinean communities. The company also made the compromise of improving education, health, infrastructure, small business capacity and local production capabilities, including manufacturing and agro-industrial projects. Nevertheless the question remains. Are the benefits of changing the agricultural setting of the valley into a mining setting greater than the costs of loosing the traditional life-styles?

The next relevant stakeholders are the governments. In the case of the Chilean government the question brings a huge interrogation sign. What are the benefits and costs that they perceive? The answer should be easy. They should perceive great incomes from the taxes that the transnational corporation must pay and the costs should be irrelevant, just a piece of land full of rocks in the Andes Mountains and some political cost translated in a small percentage of Huasco valley inhabitants not voting for them in the next elections. But reality is different. Most international mining companies that operate in Chile do not pay taxes. They apply a couple of mechanisms of tax evasion during years of operations. This mechanisms are better described in “El exilio del Condor”11, but summarizing it, the transnational companies declare negative benefits to the Chilean government thus not paying taxes. There are cases of transnational (Exxon) extracting copper from Chile for 25 years and always declaring negative benefits. The entire mineral was taken and no cent was left for the Chilean government. Why should Barrick operate in a different way? In the particular case of Pascua-Lama, tax payment is even more complicated. The mineral will go out of Chile through a private tunnel (owned by Barrick) without border duty and it will be processed in Argentina. That implies that the production will go out from Argentina.15 It will finally be unclear to which country Barrick will pay and how will it be controlled. The governments will loose the opportunity to perceive the benefits from this project.

This clearly leaves the government without benefits, but what about the costs? The Pascua-Lama case was of such relevance for the Chilean public that during the presidential elections of the December 2005, the elected candidate promised that the Pascua-Lama glaciers would not be touched. Most of the population of Chile is already aware of the problem. The political cost of the destruction of the glaciers or of a crisis in the valley is huge. Maybe the government does not see the potential political risk or maybe they trust in the short memory of the voters.

So the question remains. Why is the government easily approving this complex project if their visible benefits are not clearly superior to their visible costs?

The last group of stakeholders that will be analyzed in this paper is the future generations to be born in the valley. Are their benefits of growing in wealthier mining towns greater than the benefits of growing in a healthy environment? Are the costs of risking living in dry arid area smaller than the costs of the actual unemployment and poverty of the region? What is it going to be left when the company goes away? The same environment with just a hole or will the glaciers melt and the water reserves disappear? Will the future generation have the need to migrate to the big cities and out of the valley? These long term costs appear to be greater than the possible wealth benefits of a closed mine. For the future generation the questions remain, nevertheless the uncertainty of the issue calls us again to stick to the precautionary environmental principle.

To finalize the discussion, the author wants to point out that not all stakeholders should weigh equally. There are some relevant actors who are directly affected by the project as the local community and the government meanwhile other actors, like Barrick and the NGO´s, who do not directly perceive the externalities of the project, should not be weighted as highly as the community.

In the framing process not all stakeholders were addressed for simplicity reasons. In future analysis there is the necessity to include other relevant stakeholders such as tourists, the international public, IGO´s and the whole Chilean and Argentinean population. After all, the disappearance of the glaciers is also a global issue.

Conclusions: Is it possible to find a balance?

First of all, it is important to notice that Pascua-Lama discussion should not be reduced to the glaciers. There are many other factors in risk that should also be considered.

Then, to answer the conclusion question we have to start analyzing the legitimacy and accountability of Barrick Gold Corporation. The way they started the process (not in a transparent way), the history of not accomplishing rules and environmental promises and the objectives they follow, so opposed to the objectives of the rest of the stakeholders, makes it hard to trust them.

Even if the government can design control mechanisms and fees that Barrick has to pay if they do not fulfill the standards, the risks and uncertainties remain there. How are they going to be accountable for the water pollution, for the melting of the glaciers, for the lost of biodiversity? If conditions get too stringent, Barrick will just stop operations, taking what they can from the gold and leaving the environmental and social problems.
Companies can promise many things, but how are they going to guarantee them? Which kind of mechanisms will the government use to make the mining company follow the rules? One alternative is valuing everything in money and then making the company pay fines if they do not fulfill standards. If the company fails to access the ore without intervening the glaciers (high probability of occurrence) then the state con only ask for money in exchange for the lost glacier. How can you measure in money the lost of the glaciers? It is possible to measure the quantity of water the local people will need when the glacier is not there anymore, but then, for how many years is the company going to pay for that water. If they even pay the fines, how is that money going to be traduced in drinkable water for the population or in the lost perceived by the ecosystem?
Even if Barrick was the most responsible mining company in the world, how are they going to deal with the great risks and uncertainties present in this case? Environmental uncertainties and complexity are too great to try to value them under economic aspects. In this case, the precautionary principle for Rio should be followed in order to at least during some time keep the integrity of the glaciers thus allowing the water flow into the valleys of the Atacama region.
Moreover, why should the project continue if the cost-benefit analysis shows us that the benefits are concentrated in the company and the costs in the community, government and future generations? The short term benefits could be huge but the risks traduced in costs could be much greater in the long term.

The question of the conclusion can then be answered by another question: In this particular case, is it even worth trying to find a balance? If the Huasco community is really interested in extracting and commercializing the gold that lies under the Andes Mountains, then they should be included in the design of the mining project and its benefits and not only in the assessment of the impacts of the project.

There is still some time to rethink the project and better evaluate its impacts. This paper is a call for the government to redesign their evaluation methods including a more system and participatory approach orientation considering the biggest amount of stakeholders and environmental factors possible.
References

1) Pascua Lama: Amenaza a la Biodiversidad. Villagrán Carolina. OCEANA http://www.oceana.org/. January 2006.

2) The Price of Gold in Chile. Fields Scott. Environmental Health Perspectives. Volume 114, Nº 9, September 2006.

3) Casos emblemáticos para la institucionalidad ambiental chilena. Kausel Teodoro. Expansiva 2006.

4) Barrick Gold Corporation, http://www.barrick.com/

5) Carta de la Comunidad Agrícola Indígena Diaguita Los Huascoaltinos a su Excelencia, Sra. Michelle Bachelet Jeria, Presidenta de la República. August 2006.
6) El oro de Los Andes. Francisco Marin. Magazine Proceso de México 2005.
7) http://www.ine.cl/ Instituto nacional de estadísticas de Chile

8) The price of Gold in Chile. Environmental Health Perspectives. Scott Fields VOLUME 114, Nº 9 September 2006

9) El ABC del Proyecto Minero Pascua Lama. Observatorio Latinoamericano de Conflictos Ambientales. http://www.olca.cl/ 2005.

10) Casos emblemáticos para la institucionalidad ambiental chilena. Teodoro Kausel. Expansiva 2006. http://www.expansiva.cl/

11) El Exilio del Cóndor. Hegemonía transnacional en la frontera. Diego Luna Quevedo, César Padilla Ormeño, Julián Alcayaga Olivares. Observatorio Latinoamericano de Conflictos Ambientales 2004.

12) Proyección de Inversión en la Minería Chilena del Cobre y del Oro Comisión chilena del Cobre. Enero 2006.

14) Protocolo entre junta de vigilancia de la cuenca del rio Huasco y sus afluentes y compañía minera nevada ltda. Santiago. Junio 2005.
15) El Proyecto Minero de Pascua-Lama. Claudio Pérez Díaz. Febrero 2006.

16) ¡TANTO ORO! pero los agricultores andinos ven también los grandes riesgos. Larry Rohter. The NewYork Times INTERNATIONAL Sunday, July 30, 2006.

17) Canadian mining exploitation in chile, community rights and the environment. Cesar Padilla MA. Latin American Observatory for Environmental Conflicts, OLCA. April 2005.

18) Estudio Impacto Ambiental (EIA) proyecto Pascua-Lama. CONAMA diciembre 2004 www.conama.cl.

19) El proyecto minero Pascua Lama y sus implicancias sobre el derecho al agua. Informe Clínica DESC – Escuela de Derecho UDP 2006.

20) No a Pascua-Lama. http://www.noapascualama.org/ 2007.

21) http://www.meteochile.cl/precipitacion.html. Chilean Meteorological department.

Chile y su medio ambiente

lunes, 3 de mayo de 2010

Introducción

martes, 24 de junio de 2008

Tienda

lunes, 7 de mayo de 2007

Que medio ambiente cuidamos? Por Diego Fontecilla

jueves, 3 de mayo de 2007

Pascua Lama: “The Chilean Gold Pot” By Javier Raña (Estudiante Magister en Medio Ambiente Universität Freiburg MAY 2007)

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