Welcome to Eureka Street

back to site

El Salvador suffers Australia's maleficent miners


El Salvador mapIn Australia, as elsewhere, the main business of mining companies is to find and seize opportunities to mine profitably. In order to proceed, they must also persuade governments that their proposals are in the national interest. Here, governments will be interested in the economic benefits of mining, as well as potential social and environmental impacts.

Although these requirements and processes are often lacking in rigour, large mining companies themselves recognise the importance of meeting them. The damage to their reputations caused by taking short cuts and alienating significant sections of the population can be far more costly than the profit made by particular mines.

But what is true of their behavior at home often does not hold true for the overseas operations of Australian mining companies. The recent visit to Australia of Vidalina Morales, who belongs to a community in El Salvador that oppose proposals to mine for gold by a company (Pacific Rim Mining) whose majority shareholder is Australia based miner OceanaGold, shows how the welfare of people is often jeopardised in the quest for profit.

The gold deposits that are to be mined by Pacific Rim are low grade, and so involve processing large quantities of ore. This requires a great deal of water and the use of cyanide to treat the gold. In El Salvador this process has many difficulties.

El Salvador is a small, largely agricultural society with one of the highest population densities in the world. It is mountainous, has five active volcanos and is subject to periodic earthquakes and violent storms. The areas suitable for mining are surrounded by small settlements which already lack a reliable source of water. The River Lempa into which the local rivers drain is the source of water for San Salvador, the capital with over a million inhabitants.

The effects of large scale mining are predictable and catastrophic. The mines will take much of the water from the aquifers and streams on which the local population depends. They will also be affected by the dust from mines. The soil is rich in sulphur, so that when exposed to water it becomes acidic and reacts with other elements to pollute soil and water. Even if the cyanide is held in tailing dams, the geological and climatic risks are high.

Finally, the mountains in which mining is proposed were centres of resistance to military and economic repression in the 1980s. Mining risks reopening social unrest amongst a people who have already suffered so much.

In the face of this reality and sustained community pressure, the El Salvadorean government in 2009 suspended the approval of mining. Nevertheless overseas companies, mainly Pacific Rim based in Canada, have pressed for permits to mine. They have naturally tried to persuade politicians of the economic benefits of the mines and targeted parties belonging to the political opposition.

Pacific Rim has also placed economic pressure on the government. Under the rules of the Central American Free Trade Agreement (CAFTA) the company is able to sue the El Salvador Government for preventing the mine from going ahead. The case will be heard in the United States. The amount sought is $200 million, a large part of the national education budget.

The experience of Vidalina Morales and the people of El Salvador are similar to those reported through Catholic Church and other humanitarian agencies working with poor rural communities in the Philippines, India and other Latin American nations. The people affected by mining projects led by companies from developed countries have no say in the decisions that will affect their health and livelihood, and the differences between those who will benefit from mining and those who will be harmed by it often lead to civil strife, which mining companies have been accused of instigating or encouraging.

In Australia the environmental impacts, health, welfare and aspirations of people in areas affected by mining are central in the granting of permits to mine. In such cases it is understood that the economy is for people and not people for the economy. A question for us as a community is whether we are willing to accept a lowering of these standards for the overseas operations of Australian companies. Although these operations may appear distant and of no concern to us, it is often our bank investments and superannuation that funds these projects.

Andrew Hamilton headshotAndrew Hamilton is consulting editor of Eureka Street.

El Salvador map from Shutterstock

Topic tags: Andrew Hamilton, El Salvador, mining



submit a comment

Existing comments

Miners certainly can be maleficent, just as the character from Sleeping Beauty, Maleficent, was ruined by invading humans. (It's handy sometimes being a grandparent). The effects of mining everywhere are catastrophic, not just in El Salvador. Australia is a rich country due, in large part, to mining but at what cost to the environment? We've just elected a government whose mantra is "The Economy". So it does appear we are a country willing to forgo environmental concerns in pursuit of wealth.

Pam | 28 November 2013  

Can we do no more than read or write about this disaster? Can we protest to the company or the Salvadoran Govt.? What about a petition?

Noel Fitzsimons | 28 November 2013  

Financial wealth and its accumulation is the way of the world. Those best at it have treaties and agreements of all kinds to protect and endorse their ways ie CAFTA. Where does this and similar come from? I'm sure they are signed by elected governments. Why do we elect such signatorees? Can we ask our elected reps about their support for such treaties? Can we ask our reps if they have dealings with Pacific Rim? Can we enquire about who share holders in Pacific Rim are? Just a few thoughts of one seemingly hapless voter.

John Pettit | 28 November 2013  

I would add two comments to the information Andrew has provided. Tailings dams are unreliable in high rainfall mountainous areas, as shown by the Ok Tedi disaster in Papua New Guinea - also from an Australian-owned mine. It is very likely that the cyanide will not all be retained in the tailings dam, given the risk of dam failure after several high rainfall events and/or seepage of cyanide-contaminated tailings into ground water aquifers. The second comment is a warning for Australia as we currently consider conditions for joining USA's Western Pacific 'free market'. Just as Pacific Rim can sue the El Salvadorean government if that government stops the mine, so any American company will be able to sue a future Australian government in similar circumstances if we join the proposed West Pacific trading bloc.

Ian Fraser | 28 November 2013  

I do not want t be responsible for this by way of my superannuation and investments. How do I stop this? (via superannuation)

Nikki | 28 November 2013  

I was born in El Salvador and came to Australia in 1989 deu to the civil war the country was destroyed with this situation will destroy almost everything. Any ideas who to write to?

Roberto | 28 November 2013  

Here is a relevant website: http://www.stopesmining.org/j25/index.php/water-not-gold-tour/259-press-release-australia-tour And here's an Oxfam petition: https://secure.oxfamamerica.org/site/Advocacy?cmd=display&page=UserAction&id=1309

Linda | 29 November 2013  

'Dear Jim, OceanaGold has a strong track record of success developing and operating mines over the past 23 years in New Zealand, a country with stringent environmental and community engagement standards. We would not be able to operate a sustainable business in New Zealand without operating to the highest of standards. We have carried this standard of care and operation to the Philippines where we successfully commissioned the Didipio Mine earlier this year. This was a major milestone and would not have been possible had the project not received the strong endorsement from local and surrounding communities as well as the many stakeholder groups throughout the Philippines. We plan on applying this same high standard and care across our business in El Salvador. The El Dorado asset has the potential to be an economic engine for El Salvador much like how the Didipio Mine has been for northern Luzon in the Philippines. We plan on working closely with our local community and government partners in establishing a roadmap to unlock the opportunity for the people of El Salvador.' THIS WAS THE REPLY I RECEIVED FROM OCEANAGOLD. LIVING IN THE SURAT BASIN NEXT TO GAS AND COAL MINING VENTURES, I KNOW THAT MANY LONG-TERM PROBLEMS ARE UNADDRESSED IN FAVOUR OF NEXT YEAR'S BALANCE SHEET! JIM

Jim Cronin | 29 November 2013  

It seems that the Australian company Oceania Gold has bought Pacific Rim. Will it continue the action of suing the El Salvador government for loss of earnings under CAFTA is a question. Alarmingly, similar provisions are proposed in the Trans Pacific Partnership (TPP) trade agreements that Australia may sign meaning, our governments can be sued by international companies for loss of earnings by regulating for social or environmental justice and brought before an unelected international tribunal.

Fr Charles Rue | 29 November 2013  

Response to Noel Fitzsimons: Noel, be the light, start the protest yourself. I just re-visited Australia and was appalled at the reaction (kneejerk!) I received when I quietly stood up at the NQCC to protest the dredging of the WH GBR. It's ours, bellowed the rednecks, we'll do what we bloody like with the Reef. I responded, no, it belongs to the world, is World Heritage listed and has been growing for a million years. You and I (white incomers) have been here barely 200 years, and we do not have the moral right to destroy a single part of the Great Barrier Reef. Alas not even avaaz had penetrated Australian awareness where we, in the rest of the world, have been signing petitions for the past six months against your dredging of 'our' Reef. Thank heavens for 'leaks'; we know are kept alert. My point, Noel, is that you can alert avaaz.com, or you can start your own petition - but if you feel strongly then go for it. The way for evil to proliferate is for good men to do nothing. Good luck, Zoé

Name | 29 November 2013  

Roberto, I would be delighted to support your petition. Apathy encourages the greedy destruction of our planet and the cruel arrogance of multinationals towards innocent people. For some Shareholders It's out of sight, out of mind, but many would be appalled, so let's remind them who and what their lifestyle is destroying;-).

Trish | 29 November 2013  

I am encouraged by the comments on this page. For those who want help, there is a recently established group in Australia working on long term strategies to support the people of El Salvador. There is also an international coalition of organizations from the US, Canada and Australia in support of the anti-mining movement in El Salvador. For further info you may contact me at stopesmining@gmail.com

Pedro Cabezas | 03 December 2013  

I don’t have a dog in the fight between PacRim and the El Salvador government. As an Austrian economics/paleocon, I instinctively suspect there to be dirty hands on both sides of agreements between the state and many mining companies, just as I instinctively don’t believe that zealous anti-mining/development groups are always speaking on behalf of a unanimous, little red book-waving local citizenry. Nevertheless I think the title of this article: “El Salvador suffers Australia's maleficent miners” is, with yawning predictability, a tad overblown. PacRim, to my knowledge, has explored for gold, and, with no environmental damage to date, found some worth mining. In good faith, it has invested millions on this exploration/feasibility project already, on the agreed understanding that it would get the go ahead, subject to environmental controls (comparable to those in the U.S.), it has in its submissions, agreed to execute. A recent El Salvador regime has seemingly arbitrarily refused to progress with the agreement, thereby violating (PacRim will argue) a term of the agreement. Was that because PacRim refused to offer bribes to specific officials of the government? That’s one of the possibilities suggested. Whatever: PacRim, on behalf of its shareholders (rich and poor) is perfectly within its rights, according to natural justice, to allege there’s been a reneging by the El Salvadorean government with respect to the agreed terms of a contract, and to recover damages in accordance with that contract. In sum: what justification does Eureka Street have at this point in time to pontificate that PacRim is “maleficient”? I mean, doesn’t this site portray itself to be the ground zero of “dialogue”, “conversation” and “reaching out to the other’? Was there any attempt to get a defense witness to express a point of view? I’m also curious that many wringing their hands about the possible lethal effects of a temporary tailings dam proposed by PacRim, and indeed wanting to totally ban mining in El Salvador, for the sake of human lives, are not with proportionate (i.e. vastly greater) energy urging that the El Salvador government evacuate San Salvador altogether … or at least the vast suburbs creeping up the slopes of the San Salvador volcano, given that it last erupted in 1917 and in recent history has claimed scores of lives. It makes me suspect their motives, or at least question their sense of priorities.

HH | 04 December 2013  

No we should not accept a lowering of standards by Australian companies for overseas operations,especially when it is the poor who are being exploited and have little or no say in their Government's decision.

Margaret Guy | 09 December 2013  

Dear HH, You are right to say that the Salvadoran Government should evacuate, or at least introduce policies to mitigate potential environmental calamities caused by an eruption of the San Salvador volcanoe. This is one of the issues that should be addressed in a national sustanablity plan for a country that, according to the UN, is one of the most vulnerable to climate change. Other issues to be addressed include the protections of our limited water resources, the recovery of our natural forest, and the implementation of a food sovereignty policy to ensure the health of the upcoming generations of Salvadoreans. I don't buy the notion that you take no sides on this issue, you know the company's line of argument too well. I agree with PacRim that a good segment of Salvadoran officials are corrupt, however the company was happy to rub their hands as long as they signed on to an EIA full of lies and deception. When a well organized national resistance to mining forced to government to implement a moratorioum, then PacRim cried wolf. What is irresponsible for share holders here is Oceana Gold's purchase of this doomed project. They will have to mine over the dead bodies of millions of Salvadorans who have said no to mining.

Juan Pueblo | 13 December 2013  

Thanks Juan. No, I'm not a shill for Pac Rim. I just use the internet to find what both sides of the argument have to say, rather than condemn one side unheard. PacRim's prospectus is there online for all to see, if they have an open mind. So just tell me where I'm wrong, rather than impute motives. I agree with Ian Fraser's well-founded concerns expressed above re. the dangers of tailings dams containing dangerous chemicals such as cyanide. But I note this mine was to be in operation for only 6 years and the associated tailings dam to be completely removed by PacRim after that. Is that window of risk worth the millions that would flow into the El Salvadorean economy were the mine to go ahead? It's a difficult question - and that's why I'm suspicious of ridiculously dogmatic assertions that no mining should ever occur in El Salvador again, which is what opponents of Pac Rim are saying. The fact that they're not jumping up and down about the endangered suburbs on the San Salvador volcano hints to me they are not really concerned (as you are) about the lives of El Salvadoreans, but about suppressing capitalism wherever they see it, whether or not it benefits the community.

HH | 13 December 2013  

Similar Articles

Spies like us

  • Bill Calcutt
  • 25 November 2013

The recent observation by a close Asian ally that 'spying on friends is amoral' belies an apparently growing gap between the illusion of civility and honesty and the reality of our suspicious relations with 'foreigners'. While the justification for the development of ubiquitous electronic surveillance capabilities is counter-terrorism, the greatest beneficiaries may be private business interests gaining a competitive advantage in a global free market.


JFK and the myth of American innocence

  • Ray Cassin
  • 22 November 2013

The assassination of John F. Kennedy 50 years ago elicited a particular quality of grief. It was not only a matter of mourning the violent death of a world leader who, at the time, was much admired. The notion also stuck that something called innocence had been lost because of what had happened in Dallas. That sense has withered under reassessments of Kennedy's character and record in office but it has never been extinguished entirely.