AS GLOBAL DEMAND FOR METALS SOARS, MINING COMPANIES SEEK TO UNEARTH ECUADOR'S RICHES, STIRRING PROTEST FROM ENVIRONMENTALISTS
BY CARLA D'NAN BASS
Special to The Miami Herald, July 16, 2007
But now big-time mining companies may be about to export the region's wealth -- not Atahualpa's treasure, but gold and other valuable metals still in the ground.
A booming international metal market is hungry for any reserves, including Ecuador's estimated 1.5 million metric tons of mainly gold, silver and copper. Exports could reach $4 billion annually, according to some industry estimates -- about two-thirds the value of oil exports, Ecuador's current main money maker.
International mining companies including Corriente Resources, Iamgold Corp. and Ascendant Copper have explored and say they are ready to begin producing in their concession areas.
CHANGE IS IMMINENT
''Ecuador is at a transition point in mining,'' Vice Minister of Mines Jorge Jurado said. ``We are facing the imminent possibility of large-scale mining.''
Now, less than 1 percent of Ecuador's gross domestic product is generated by small and medium-scale miners now operating in this small Andean country. And this number includes miners' production of nonmetals such as construction materials.
But some Ecuadoreans consider the prospects for large-scale mining another curse, especially since the sought-after metals are lying under one of the most biodiverse topographies in the world.
Around the southern highland city of Cuenca, Indians and other local activists blocked roads and clashed with police off and on throughout most of June, and organizers said they plan to regroup soon. The most radical want all large-scale mining concessions canceled, while others want them suspended until more studies are conducted.
Sitting at one intersection blocked by a barricade of burning tires, 48-year-old grandmother Inez Cochancela squatted on a curb, smoothed her traditional indigenous embroidered skirt and explained her opposition. She and about 200 other locals were making a last stand near the small community of Victoria del Portete outside of Cuenca after police drove them from other protest points.
''One of the few things we poor people have is water,'' she said. ``Mining will damage that.''
This type of opposition has prompted the leftist government of President Rafael Correa to launch a review of the country's 4,112 mining concessions -- most not producing -- totaling about 2.8 million hectares.
The government also has rejected environmental impact studies, necessary to begin production, for Corriente Resources and Ascendent. In addition, officials plan to propose reforms to the existing mining law to increase the state's take from the income and place more restrictions on the industry.
Some mining representatives who accuse the government of siding with protesters have said they agree that the industry needs reform, even regarding the issue of government revenue. But they accuse activists of whipping up exaggerated fears and point to the jobs mining would create in the impoverished areas.
''Modern mining is compatible with environmental and social concerns,'' said César Espinosa, president of the Ecuadorean Chamber of Mining. ``This is a new type of mining which the country has not yet experienced.''
But many communities have had bad experiences with less controlled small-scale mining and clumsy attempts at community relations by big mining companies.
''These conflicts are the fruit of some bad practices of mining companies until now,'' said Patricio Vargas, president of the Cuenca Mining Chamber. ``You can't just show up with candy and soccer balls at the schools. You have to have a serious proposal for community development.''
GREEN PROMISES
Correa, seen as a ''green'' president when he took office in January, promised not to repeat the same environmental and community relations mistakes that occurred with oil, the country's most valuable export. The oil-producing Amazon region is the site of constant conflict between locals and oil companies.
The Correa government had proposed creating a new model of community relations through a ''national mining dialog,'' but street protests indicate it is not working.
''This dialog should have taken place in the 1980s, before this started,'' said Lina Solano, leader of the more radical band of opponents in Cuenca. ``We want Ecuador to be declared a country free of large-scale mining.''
Correa has ruled out canceling concessions, however, and ordered police to remove protesters blocking roads.
REPERCUSSIONS
Although increased income from mining could help finance his populist campaign promises, if current laws are reformed, Correa could take a hit on popularity.
His administration's green credentials already suffered with the recent resignation of Energy Minister Alberto Acosta, who clashed with state oil-company officials over his plan to block the development of oil fields in a national rain-forest park.
Acosta had also promised to prohibit mining in areas where it causes social conflict. Protesters seem to have noted that last point.
''We are going to talk to the government,'' said Carlos Pérez, a lawyer and leader of Cuenca's less radical opposition group, which focuses on protecting water supplies. ``But if that does not work, we will protest with even more force.''
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