And what the press is not telling the world
Carlos Zorrilla (January 2023)
Now that the international arbitration requested by the Chilean mining giant Codelco against the Ecuador is attracting worldwide attention, it feels like the right time to inform the public a little bit about what is behind the arbitration, and call the press for such shoddy reporting on this mining project.
The mining concession of nearly 5,000 hectares known as Llurimagua is located in the Toisán mountain range in northwestern Ecuador, encompassing primary and secondary forests and hundreds of endangered species. In addition, it is within the buffer zone of one of the most important protected areas on the planet, the Cotacachi Cayapas National Park.
Before Codelco acquired the concession, without any kind of public auction, as required by law, and without the Ecuadorian state consulting with the communities, as required by the Ecuadorian Constitution, the mining concession was in the hands of, first, a subsidiary of the giant Mitsubishi Corporation in the 1990s, and in the 2000s of a Canadian company. Both had to abandon the project due to strong resistance from the communities and organizations of the Intag area and the rest of the country.
This resistance is still very much alive, and it was what forced the government of President Rafael Correa, in May 2014, to use hundreds of elite police and military personnel to violently enter the mining concession. There was no other way. It is, in short, a mining project that was born illegitimate and is plagued with problems.
Arbitration
The issue of international arbitration is not new for this copper mining project. In 2011, the Canadian-owned Copper Mesa Corporation sued Ecuador for breach of the bi-national investment protection agreement. It is the only mining project in Ecuador that has been taken to international tribunals. Twice.
The mining project has been on standby since November 2018 when Codelco withdrew its drilling rigs and abandoned the area pending approval of the second phase of exploration. And, four years and some months later, it is still waiting. The reasons, apart from civil society opposition, are due to several other factors; including reports by the State Comptroller General’s Office and the Ombudsman’s Office in 2019 which detected dozens of irregularities and illegalities, to which the government has yet to respond. There is also strong opposition within the government to turn over the concession on Codelco’s terms. But that is not all…
The trial of the frogs
Another problem that is keeping Codelco’s CEOs up at night, and one the media didn’t mentioned, is that Ecuador lost a Constitutional case in October of 2020 based on the probable impacts that the mining would cause to the habitat of dozens of endangered species and to the rights of Nature, a right enshrined in the nation’s Constitution. Several of species within the mining concession are critically endangered, including one of the world’s most endangered primates, the brown-headed spider monkey. Two frog species, the Longnose Harlequin and the Confusing Rocket Frog, have only been reported within the mining concession and nowhere else in the world. Until they were rediscovered, they were considered extinct. Experts believe that several other “extinct” species will eventually be found in the area.
In 2021 a similar case was filed by civil society actors in Intag, but it was enhanced by including violation to the community’s Constitutional right to be previously consulted. That case is now awaiting resolution in the provincial court (Jan 2023).
The threat to the likely extinction of two species of frogs has been gathering support from all kinds of actors, including the activist-movie actor Leonoardo DiCaprio, who has tweeted and Instagrammed four times to support the fight to save these, and the dozens of other species in danger of extinction. Report on the struggle against Codelco has also been reported in The Guardian newspaper, Mongabay, and The Ecologist.
Other problems in sight
Another “inconvenient issue” for the company and, especially for the company’s investors, is that the Cotacachi county government, where the mining concession is located, has passed several environmental ordinances to protect its enviable biodiversity and abundant water resources. The Cotacachi government was the first subnational government Latin America to pass such a law. The Ordinance that declared the entire County as Ecological, in force since 2000, imposes restrictions on land use, which would prevent mining. In 2018, another county government legislation was approved, the Intag-Toisan Municipal Conservation and Sustainable Use Area (Acusmit). The law, which is also currently in force, zoned the entire territory of Intag, and excludes mining.
Llurimagua mining concession. Carlos Zorrilla
Biodiversity Issue
The site where Codelco is exploring is rich in primary cloud forests; considered a fragile area in Ecuador’s Constitution. The forests are also part of the world’s most important and threated Biodiversity Hotspot: yhe Tropical Andes. Ecuador’s montane forests, where the concession is located, are home to many more endangered species per square kilometers than their better known lower Amazonian cousins. This holds true no less true than in the 4,929 hectare Llurimagua mining concession with its great altitudinal range. To date, and with scares resources available, 59 species of animals and plants have been identified within the concession. A few of these have shown up in the different environmental impact study financed by Codelco.. This includes two monkey species considered critically endangered in Ecuador: The brown-headed spider monkey and the white-faced capuchin. The spider monkey is considered one of the world’s most threated primate and is listed as critically endangered by the IUCN.
It is remarkable how much Codelco has kept from investors and its majority owners, the people of Chile. In most instances, the company would be tossed out of the stock exchanges it trades under for withholding material information from its investors. And, as sleazy mining companies are wont to do, they are wildly inflating their ore deposit after 4 years of exploration. Unless the ore body is independently verified, their estimation is pure fantasy.
The Environmental Impact Assessment
To begin to understand the opposition to what would be one of the world’s most destructive mines, it is necessary to understand the environmental and social impacts identified for a small open-pit copper mine by Japanese experts working for Japan Mining and Minerals in the 1990s. Despite being based on a copper deposit 2% the size of what Codelco’s unproven claims the Llurimagua deposit could contain, the Japanese scientists predicted that four communities would have to be relocated and that crime would increase. The mine and facilities, the study goes on, would cause massive deforestation, which would cause the area’s climate to dry up, and rivers would be contaminated with lead, arsenic, cadmium and other heavy metals. The scientist also predicted that mining would impact the habitat of endangered species, as well as the Cotacachi Cayapas National Park(1).
Then there are the popular referendums
One of the things that some of the reporting got right is the fear companies have of the effect of the growing popularity of referendums to decide the future of mining projects. Both local governments and even civil society are making use of referendums to ask the local populations to decide on whether they would like to allow mining in their jurisdictions. If the results from Cuenca, Ecuador’s third largest city, is a sign of where this initiative is heading, mining is in deep trouble in the country. In that referendum, held in February of 2021, 80% of the population voted against mining. The next referendum is set to take place in the Quito Municipal District in early 2023, which includes a large swathe of the forested region of Northwest Ecuador, and which lies close to the Intag area. My money is on another crushing defeat for the mining sector.
Llurimagua’s Deadly Copper
Chile’s copper is getting more and more expensive to mine. There are several reasons for this, but it’s mainly due to lower metal content of the copper in the ore bodies, and the ore is getting deeper to get at, which means it is getting more expensive to access. The arsenic content of most of Codelco’s mines is also rising. Water is also a huge problem where Codelco gets most of its copper; the Atacama desert, the driest in the world. They will face similar issues with the arsenic and water in the Llurimagua project. Ironically, whereas water scarcity is a huge problem for the company in Chile, in Llurimagua it´s the opposite. In Llurimagua the issue with the water is that it rains too much; between 3000 and 5000 millimeters annually. So much rain combined with very steep valleys makes mining not only more expensive, but much more dangerous and more subject to natural disasters. On the other hand, Ecuador’s ore deposit are as rich, or richer, in arsenic than Codelco’s ore deposits. One proposed gold mine in the south of the country (Loma Larga), for example, predicts its gold-copper concentrate will have 10% arsenic. This not only lowers the price per ton of the concentrate, but more importantly, very few smelters are willing to process copper with an arsenic content above 0,5%(2).
Llurimagua was Codelcos’ first real attempt at what they see at internationalization of its operation. Win or lose ,the arbitration gambit has turned that dream into a resounding failure. And, hopefully, it should also serve as a lesson for other transnationals that think that they can mine wherever they like with only with the support of the national government. Especially in such a megadiverse country in terms of species and cultures, and with such a long history of resistance to extractive projects.
- https://codelcoecuador.com/2019/11/11/codelco-fuera-de-intag/
- https://www.ft.com/content/30eee87e-d041-11e3-af2b-00144feabdc0
For more information, see: www.codelcoecuador.com
www.decoin.org