More Mining Companies Solicit Exploration and Exploitation Permits in El Salvador

FMLN diputada Lourdes Palacios, representative to the Legislative Assembly’s Committee on the Environment and Climate Change recently voiced concern about the country’s stance on mining practices in an October 21 Diario CoLatino piece. Her primary concern is the increase in applications (from 26 to now 73) for metallic mining exploration permits to the Ministry of Environment and Natural Resources (MARN, according to its Spanish acronym).  She said that while the Committee has neither made much progress on the new Mining Act (which would ban mining) nor on reforms to the current Mining Act (which has been in force since 1996), it is still important to continue discussing the issue and seek out information and opinions.  She affirmed that the Committee considers the issue to be urgent, both with regards to reforming the law and, in the FMLN’s stance, definitively banning mining in El Salvador. ARENA diputado Vicente Menjívar said he supported the idea of allowing these metallic mining exploration permits under “a good law.”

Herman Rosa Chávez, head of the Ministry of the Environment and Natural Resources, brought the issue to light on October 12 in front of the Committee, stating that the 73 applications for metallic mining permits were not the only cause of concern.  Additionally, there are another 10 applications for extracting subsoil metals.  “The Minister of Environment himself has confirmed to us that there are more applications for exploration, and not only for extracting gold and silver, but also for bronze, aluminum and cadmium… There are other minerals in the country, as is known, but metallic mining is incompatible due to the territory’s limited space and socio-environmental damages,” Palacios emphasized.

Rosa Chávez stated that MARN is currently conducting a “Strategic Environmental Evaluation of Mining,” and posited that the government should consider enacting a moratorium to effectively ban incoming applications for mining permits until MARN finishes its evaluation.  He estimated that the evaluation would be ready in the first quarter of 2011. The Spanish government is funding the $200 million-dollar study. He also noted that MARN had not conducted any public consultations with the settlements near the zones where exploration permits had been requested, nor would he reveal any specifics about the companies or exploration sites. Rosa Chávez clarified in an October 13 Diario CoLatino article that MARN could not release its official position on the mining issue until the study is concluded, since little is known about the harm that these minerals under consideration in the permits (such as copper, aluminum, and thallium) can cause to the environment and human health.

The recent applications for exploration and exploitation permits were submitted with full knowledge of the country’s stand, or lack thereof on mining. An article posted on NoALaMina.org, posits that these mining companies hope the government will deny their applications so they may also file claims with the International Centre for Settlement of Investment Disputes (ICSID) and demand millions of dollars in compensation for lost profits, just as Pacific Rim Mining Company and the Commerce Group have done. NoALaMina.org believes that the mining companies are abusing the Central American Free Trade Agreement and that El Salvador could potentially face as many as 83 multi-million dollar lawsuits from unscrupulous companies. Even if the mining companies are not looking for a lawsuit, they may be soliciting permits in anticipation of a ban on mining, hoping fora grandfather clause that would allow them to mine.

Mining interests may also see the government’s Environmental Evaluation of Mining as a sign that the government will begin granting permits. In January 2010, when Salvadoran officials announced their plan for the Environmental Evaluation, mining activists in Cabañas were concerned that the government was producing a report that would justify mining. In September 2010, when the government contracted with the Tau Group to conduct the survey, Condor Resources PLC, a UK-based exploration company, stated that they were encouraged by the government’s action and hoped they would soon have permits for their projects in San Miguel and on the border of Cabañas and San Vicente. Mark Child, the Chairman of Condor, even stated,

“The EAE will inform the Government how to conduct exploration and mining in a safe, secure and environmentally friendly manner. The hope is that the Government adopts recommendations from the EAE, amends the current mining law accordingly and issues permits. Condor awaits the findings of the EAE with interest.”

Whether the mining companies soliciting permits are laying the groundwork for more claims under CAFTA or believe El Salvador will soon grant permits is impossible to know at this point. No matter the motive, Lourdes Palacios and others on the Committee on the Environment and Climate Change ought to continue pressuring for more information and a real ban on mining.