The El Dorado gold mine project proposed by the Pacific Rim has been at the center of the debate regarding natural resource extraction in El Salvador.
According to Pacific Rim, a Canadian company, the mine project has widespread local support because of the employment it would provide, and poses no threat to the environment. The project would use the newest and best techniques, and include a water treatment plant. The practices would be so safe in fact that, according to CEO Tom Shrake, the tailings pond could eventually be used as a reservoir. (See article on Mineweb.)
However, local anti-mining activists, Oxfam America, and the Roman Catholic bishops tell a different story. They say the mine would contaminate drinking water with cyanide, irreparably damage the environment, and produce little economic benefit for local communities. (See article on Upside Down World.)
Because of the politically delicate nature of the issue, the Saca administration –going against its neo-liberal reputation– has refused to grant Pacific Rim the permits necessary to move ahead with the project. In July of last year, Pacific Rim announced a slow down, and that it was laying-off 42 of their 267 employees based in El Salvador until the government granted them the permits. After little response from the government, in December 2008 Pacific Rim filed a notice of intent to seek arbitration under CAFTA regulations for $77 million in indirect appropriation, giving the government until March 9 2009 to respond.
Yesterday (February 16 2009) at the regional forum on metals mining, the new Archbishop of San Salvador, Monseñor José Luis Escobar, declared his opposition to mining because of the danger it poses to the environment and human health. He urged the nation to wait to extract the minerals until the industry develops better technologies and techniques that will not pose these threats. The archbishop went on to say that he is also concerned with the degree of power that the government grants transnational corporations.
These comments came only 4 days after Pacific Rim announced that it will freeze its feasibility study, citing the current volatility in the costs of inputs such as steel and fuel. They stated that activity will be halted until the market stabilizes, however it is unclear when that will be.