Reflections on the Mining Mandate
Thursday, May 01, 2008
en espaniol cuando tenga un chance.. Reflections on Ecuador's Mining Mandate. It's easy to see why Canada's mining companies have spent so much money on publicity to try to lessen the public relations nightmare caused by the Constitutient Assembly's 95-1 passing of Ecuador's Mining Mandate, which annulled 88% of the country's mining concessions- including all of the big ones held by the Canadian companies. It's even understandable that Canada's Ambassador to Ecuador would go with a squad of Canadian mining company owners and managers to meet with Ecuador's president so publicly as they did last week. When there's so much at stake, anything goes. Just what is at stake? The Mining Mandate abolished 4,474 mining concessions by passing the Mining Mandate this past 15th of April; approximately 600 were left after the onslaught, most are small mines and medium non-metallic projects (cement and building materials). Not a single large-scale metallic mine project should be left standing if the Mandate is implemented as it was meant to be by the Assembly. The main parameters for the abolition of concession rights include: Concessions owners may only own three concessions (totalling 15,000 hectares) It forbids mining in protected areas and their buffer zones, as well as if the project threatens water resources (what metallic mining project doesn't?); It abolishes concessions rights if the concessions were given to government functionaries, or their relatives. There's rumors that this could hit the Ecuacorrientes project, among others. It puts a freeze on all mining activities: the only exceptions are the 600 small projects not affected by the Mandate It prohibits the approval of new mining concessions Any concessions owner not up to date on their payment of patents to operate lose their concessions. The Mandate also calls for the creation of a state-owned mining company- which has a lot of mining company owners very worried. The mandate does allows mining to go ahead if the companies have invested in exploration and related activities, but not if it falls under the other categories. In other words, none of the large project will remain viable. These measures are effect until a new mining law is drafted, in about six months time- which must be approved by the same Constitutient Assembly that approved the current Mandate! And not even the president can veto the mandate. By the way, the anti-mining crowd cheered the Mandate, though not too loudly, because some expected the mandate to once-and-for-all call for a large-scale mining ban. The parameters, if applied objectively, will stop all of IMC, IAMGOLD, Aurelian, Dynasty's, All Metals, Corriente Resources (Ecuacorrientes project), and Lowell's - as well as most other metallic mining project in the country, unless they were exploiting at the time of the Mandate's approval. Ascendant Copper lost their JUNIN concessions in January of this year, but this new legal mesures means the loss is permanent (the project poses a great threat to water resources). None of these companies were exploiting minerals- and most- if not all- do not even have their environmental impact studies approved for exploitation or exploration. What happened in Montecristi? The Mandate's overwhelming approval took pro-mining circles here by surprise (to say the least). This was in part because many thought Assembly members would go a bit easier on the Mandate, given President Correa's seeming support for mining. But, inside the Assembly there is a very strong anti large-scale mining faction, led by the very popular ex-Minister of Energy and Mines, Economist Alberto Acosta, who belongs to Correa's Alianza Pais political party. Mr. Acosta has no problem stating his anti-large scale and open pit metallic mining stance. He's an economist and knows very well what mining means to developing countries. This issue, more than any other to date, has caused a deep divide within the Alianza Pais, who won 60% of the Assembly's seats in last year's election. Counter attack..... So, nowadays the companies are applying tremendous pressure-- not to have the Mandate abolished or vetoed (which is impossible), but to soften it as much as possible. They've also enlisted Canada's Ambassador (!) and Ecuador's Chamber of Mining (plus, unfortunately, the press is blindly-and well paid- on their side). The companies and their public relations firms are using scare tactics (thousands laid off, the country will go bankrupt, investors will flee....!!), and threats (we'll hold off on the international lawsuits if only...). And, a lot of money is being spent on trying to convince Ecuadorians that mining will really lift them out of poverty and will solve all of the country's problems- and it won't pollute!! Mr Correa has recently shown signs of weakness by making pro-mining statements and rabidly attacking the opposition to mining every chance he gets- though he has been vague enough to possibly let it be interpreted that he is not against STATE-OWNED mining. The President also means to renegotiate mining deals if private mining is permitted in order for Ecuador to actually make money from mining (a radical idea indeed...!) This would include high royalties (perhaps as high as20%), and a 70-80% Windfall Profit Tax (which has been discussed by Ministry of Energy and Mines official this year). The upshot of all this is that there are many mining company owners that are worried sick- and not just about losing a few hundred million dollars here in Ecuador, but about the potential spread of the Mining Mandate affect to other developing countries. They may not be too worried about whole-scale nationalization of mines (though I would be if I was them), but the steep rise in royalties and windfall profit tax must keep them up at night. Everyone knows that natural resources of these countries have been ripped off left and right by transnationals for centuries, ruining economies, and leaving the people impoverished, and to face long-lasting social and environmental havoc. All Ecuadorians have to do is look over the Andes at the horror left behind by 30 years of petroleum exploitation in the Amazon to know this isn't just talk. So... the rush is on by the transnationals and their in-house plenipotentiary representatives to kill this initiative before it spreads like wildfire. A Mayor from an anti-mining local government has publicly said there are hundreds of millions of dollars earmarked by mining companies to win the hearts and votes of Assembly members. On the other hand, the resistance to large-scale metallic mining has never been stronger in Ecuador. Unlike in the past, the resistance now includes all of the powerful indigenous organizations, who this year joined with all of the human-rights, communities, and environmental groups. And, given that the vote was so overwhelmingly pro-communities and anti- mining last month, there's every chance that no matter how much the companies spend, the Assembleistas are not going to sell their vote to betray they something they so whole-heartily belive in- an Ecuador free of large-scale metallic mining. Carlos Zorrilla
IT'S ALL OVER FOR LARGE-SCALE MINING IN ECUADOR.
Friday, April 18, 2008
IT'S ALL OVER FOR LARGE-SCALE MINING IN ECUADOR (Español ya mismo....) In the last few months, the mining companies spent millions of dollars in publicity to try and convince Ecuadorians that large-scale mining would get them out of poverty, create thousands of new jobs, and bring millions in rents for the government as well as prosperity for everyone. However, today, Ecuador's national Constitutional Assembly passed the Mining Mandate, which will cause the "extinction" of most of the nation's mining concessions. The Mandate was passed by a 95 to 1 margin, with 25 abstentions. The Mandate, composed of 12 articles, sets out the reasons for the extinction- without recourse for recompension- of all the mining concessions where no previous consultation took place with the communities, as of March 31 2007-- Just this measure alone will annul all- or nearly all- the mining concessions given out by the government since the 1998 Constitution, the year this safeguard went into effect. This measure should extinguish about 90% of Ecuador's large-scale metal mining projects- including Canada's Ascendant Copper's, IAMGOLD, AURELIAN, ECUACORRIENTE (CORRIENTE RESOURCES), AVALANCHE, ALL METALS, DYNASTY, LOWELL, and many others. The Mandate sets out other causes for the extinction the concessions- including all mining projects that may impact water resources , and those found within private or public protected areas and their buffer areas (article 3). Those projects that have not kept up their dues with the Ministry of Mines and Petroleum will also lose their concessions, as well as those who have not invested in exploration activities, or in developing their projects. The only metallic mining projects able to continue operation, according to article eight of the Mandate, are those which are currently in the exploitation phase and which have complied with the previous consultation constitutional guarantee. It's worth mentioning that there are no large-scale metal mining projects in the exploitation phase in Ecuador. NEW MINING LEGISLATION Six months from today, was the time given by the Mandate for the government to draw a new mining legislation- which will include a national mining company- something spelled out in the Mandate. LIMITS TO CONCESSIONS: THREE PER COMPANY Concessions numbering more than three per individual or company (including subsidiaries), are likewise extinguished. this limits the number of hectares per company or individual to 15,000 hectares (5000 hectare per concession max). Most companies own dozens of concessions- including Ascendant, Ecuacorrientes, etc. In the case of Ecuacorrientes, until 12 noon today, they owned more than 62,000 hectares within more than a dozen concessions. Now, depending on how the Mandate is interpreted, they own nothing. Ascendant is in a similar boat- if they didn't lose all their concessions for failing to undertake the previous consultation (and we are not aware that the communities were legally consulted anywhere in Ecuador), they will lose all but three of their concessions. Their crown jewels, Golden 1 and Golden 2, the company lost in January of this year as a consequence of legal decision taken by the Ministry of Mines and Petroleum- the Mandate is a far stronger legal measure, which leaves no room for a legal challenge. The nature of the powers vested in the National Constitutional Assembly makes it impossible to legally challenge the body's decisions- and not even Ecuador's president can do anything about it. At least in the case of the mining concessions in the Intag area, not a single mining project has dutifully complied with this constitutional guarantee. This not only includes Ascendant Copper, but also Avalanche, and Lowell Mining, as well as others. At the national level, this will cut down 3,000 or more concessions- mostly belonging to Canadian companies. Many analysts feel the mandate seeks to wipe the slate clean with mining in Ecuador, in order to create much more favorable conditions benefitting the country. The current mining law, modified and paid for by a World Bank project in the 90's, is seen as a particularly harmful for the country's interests. The law exclusively beneffited the mining companies. A big question remains whether the new mining law, which should be ready in 180 days, will permanently prohibit all large and medium scale metal mining in Ecuador. There is widescale support within and without the National Assembly for an Ecuador free of large and medium scale metal mining. After the Mandate, the conditions could hardly be better for it to come about. We in Intag see it as an amzing victory of people power over huge vested interests. As mentioned earlier, the mining companies spent millions of dollars to publicize their pro-mining agenda. Just in the past 48 hours alone, the TV, radio and printed press were indundated with such publicity. There were also wide-spread rumors of hundreds of millions of dollars invested in vote gathering within the Assembly. In the face of this unbelieable onslaught, it is nothing if not amazing that our position won- with the support of some very couragous and ethical members of the Assembly. TONIGHT WE CELEBRATE THIS TRULY AMAZING VICTORY OF RIGHT OVER MIGHT AND BELIEVE THAT IT WILL LEAD TO AN ECUADOR FREE OF LARGE AND MEDIUM SCALE METAL MINING IN THE NEAR FUTURE!
END TO LARGE SCALE MINING IN ECUADOR? FIN DE LA GRAN MINERIA EN EL ECUADOR?
Wednesday, April 16, 2008
Mining Mandate: end to large-scale mining in Ecuador / (español ya mismo...) For the past three months, Ecuador’s Constitutional Assembly has been working on a mining mandate meant to fix some of the worst aspects of the discredited mining law, which did little besides legalize the trafficking of mining concessions, leaving the country without any real benefits. Yesterday, the Assembly finally issued the final text of the Mandate which will be debated and likely approved by the end of this week. The Mandate will revoke all mining concessions that, among other things: a) Have not invested in exploration activities to March 31 2007 b) Have not presented, nor have their environmental impact study approved c) Number more than three concessions per company or individual d) Threaten water resources or are found within or inside protected areas STOP WORK ORDER. In addition the mandate puts and end to all activities within all large and medium scale metallic mining projects not affected by the previous limitations until a new mining law is enacted- which should come about not later than five months after the new constitution comes into effect. FREEZE ON NEW CONCESSIONS The mandate also orders a moratorium on the issuance of new mining concessions until the new mining law is enacted (this is a process that could take about a year) Finally, the mandate calls for the creation of a state-owned mining company- which is wreaking havoc on the nerves of most mining companies The effects of the mandate, once approved, will revoke more than 90% of the country’s concessions- and possibly 100% of those not in the exploitation phase. The nature of the Constitutional Assembly makes it illegal for any of its decisions to be overturned. For Ascendant Copper's Junin project, it means the end, since the company has notinvested in exploratory activities (according to Ecuadorian law), nor does it have their environmental impact study approved. In addition, the project heavily threatens water resources, and is within a protected area's buffer zone. The measure has been described by Ecuador's mining chamber as a confiscation. Source: http://www.eluniverso.com/2008/04/16/0001/8/569738D66AB34E7CB62845700C400771.aspx MandatoMinero : fin a la mayoria de las concesiones en el Ecuador Durante los ultimos tres meses, la Asamblea Constitucional del Ecuador ha estado trabajando en un mandato minero para arreglar algunos de los peores aspectos de la desacreditada Ley de Mineria , que no sirvio mas alla que para legalizar el trafico de concesiones mineras, y no ha significado ningun beneficio para el pais. Ayer, la Asamblea emitio finalmente el texto final del Mandato, el cual se debatira y probablemente sera aprobado antes de finales de esta semana. El Mandato revocara todas las concesiones mineras que incursan en las siguientes causas: A) No haber invertido en actividades de exploracion al 31 de marzo de 2007 B) No haber presentado, ni tienen su estudio de impacto ambiental aprobado C) Que sobrepase de tres por persona natural o empresa D) amenazan a los recursos hidricos o se encuentran dentrode, o en el interior de las areas protegidas o sus zonas de amortiguamiento Ademas, el mandato pone fin a todas las actividades dentro de todas las grandes y medianas escala de los proyectos mineros no metalicos no afectadas por las limitaciones anteriores, hasta una nueva ley de mineria sea promulgada-lo que deberia producirse a mas tardar cinco meses despues que la nueva Constitucion entre en vigor. Las revocatorias no se aplican a la mineria a pequeña escala. Congelacion de las nuevas concesiones El mandato tambien ordena una moratoria de la emision de nuevas concesiones mineras hasta que la nueva ley de mineria se promulga (se trata de un proceso que podria tomar cerca de un año) finalmente, el mandato crea una corporación minera estatal- preocupando el sector minero privado. Una vez aprobado, el mandato causara la revocatoria de mas del 90% de las concesiones del pais-y, posiblemente, el 100% de los que no se encuentren en la fase de explotacion. La naturaleza de la Asamblea Constituyente, hace ilegal para que sus decisiones sean a cualquier de sus decisiones. El mandato minero significa el FIN Para el proyecto JUNIN de Ascendant Copper, ya que la empresa no ha invertido en actividades exploratorias (de acuerdo a la legislacion ecuatoriana), ni tiene su estudio de impacto ambiental aprobado. Ademas, el proyecto pone en riesgo recursos hidricos, y se encuentra dentro de una zona de amortiguamiento de una area protegida. (disculpas por la faltas ortográficas- esta vaina no tiene tildes) http://www.eluniverso.com/2008/04/16/0001/8/569738D66AB34E7CB62845700C400771.aspx
Ascendant's Incredible 2007 Reports/ increíbles informes de Ascendant del 2007
Monday, March 31, 2008
Ascendant's Unbelievable 2007 Year-end Reports Yes, it's that time of year again!! Ascendant just published it's 2007 Financial and Management and Discussion Analysis reports, and here are some of the more interesting information contained in the reports and what they "forgot" to include. The documents avoid mentioning important events that could profoundly affect Ascendant's future in Ecuador, which transpired during the past 12 months, and makes the following incorrect claims: a) It says nothing of the fact the government legally annulled the company's main concessions in Ecuador; its Golden 1 and Golden 2 concessions. The reports state that the company received a government communication that purports to annul said concessions, but in fact, the annulment is legal and is in full effect. In spite of the loss of the concessions, the company continues to list the ex-properties as currently owned. The loss of the concessions clearly constitutes a material event which was not reported. b) The company's purposely avoids mentioning that in October of 2007, the government, through it's National Institute for Agricultural Development (Spanish acronym: INDA ), annulled the ownership rights to 17 of the company's properties in the Junin area. The company had purchased these properties, as it has maintained in the past, to access its Junin mining concessions. Loss of the properties puts the future development of the Junin project at risks. c) The company fails to disclose that in late 2006 its Environmental Impact Study was rejected by Ministry of Mines and Petroleum officials. It misinforms the public by stating that it is in the process of responding to observations made to the study. There is huge difference between making observations to an EIA, and having it outright rejected on technical and legal grounds by government officials. d) The company is still maintaining that it owns the challenged inferred mineral deposits in its Golden 1 and Golden 2 Junin concessions, even though: i. It no longer owns the concessions ii. Micon International affirmed in 2007 it could no longer verify its earlier, and inflated, estimates due to damage, loss and or theft of original core samples. As you recall, in 2005 CEDA challenged the legality of MICON's work in establishing the inferred mineral content of the company's Junin deposit. e) As in previous years, the company claims to have incurred exploration costs on its Junin mining concessions. For 2007, it claims to have incurred 1,9 million dollars in such costs. Yet, the last year any exploration activity was carried out in the Junin area was in 1996. Furthermore, and as the company itself admits in the reports, the company has been unable to get it's Environmental Impacts Study for exploration approved. It is illegal to undertake any mining activities in Ecuador without approval of Environmental studies. The misleading information published by the company could give investors a false idea that the company is engaged in exploration activities in the Junin concessions when nothing could be further from the truth. f) There are several business transactions between ex-company directors and the present board involving hundreds of thousands of dollars (see Telimbela and Magdalena properties, pages 13-14 Consolidated Financial Statements). In light of the uncertainties surrounding the future of mining in Ecuador resulting from the change in government and the fact that Ascendant already has lost the title to several mining concessions, plus the government's widely publicized plans to re-write the mining legislation and to pass a mining mandate that would annul thousands of mining concessions, some of these dealings are highly suspect. g) Losses. 2007 was a record year for Ascendant. The company lost $10.4 million in the past 12 months, and claim to having spent $ 5.6 million of that on exploration; about 50% more than in 2006. As the company was busy losing money, properties and whole concessions, the wages and benefits, nonetheless, increased from $1 million to $1.7 million.
http://www.ascendantcopper.com/Content/FlashPaperEng/ACX_MDA%20YE123107%20FINAL.swf
http://www.ascendantcopper.com/Content/FlashPaperEng/ACX%20FS%20YE123107-FINAL.swf Los increibles informes de Ascendant para el 2007
Ascendant acaba de publicar sus informes gerencial y economicos del anio 2007. Entre las cosas mas destacable que alegan, es la siguiente: El informe alega u omite la siguiente informacion: a) No menciona la revocatoria de la Golden 1 y Golden 2 (alegan que el oficio del gobierno pretende, o alega, revocar las concesiones) b) Debido a varias ilegalidades, el Instituto Nacional de Desarrollo Agricola anulo 17 titulos de propiedades de Ascendant en 2007. Sin embargo, los informes no lo mencionan. En anteriores ocasiones, la empresa habia dicho que habia adquirido dichas propiedades para acceder a sus concesiones. c) La empresa sigue insistiendo que es propietaria de las concesiones Golden 1 y Golden 2 d) Todavia usan el exagerado calculo del yacimiento de cobre hecho por Micon Internacional en el 2005 (4X mas alto de que los japoneses encontraron). En el 2007 Micon alego publicamente no poder confirmar su calculo debido a danios a las muestras geologicas!! e) En vez de decir que el gobierno le rechazo el Estudio de Impacto Ambiental, dice que la empresa se encuentra "estudiando" las observaciones hechas a dicho estudio. f) y alegan que la decision de suspender sus actividades (en sept) fue decision de la empresa g) Perdidas. Ascendant rompio records en el 2007. La empresa perdio $10.4 millones durante los ultimos 12 meses, y alega haber gastado $ 5.6 en exploracion; aproximadamente 50% mas que en el 2006. A la vez que la empresa estaba perdiendo plata, propiedades, y concesiones, los salarios y beneficios, sin embargo, incrementaron de $1 millon, a $1.7 millones.
http://www.ascendantcopper.com/Content/FlashPaperEng/ACX_MDA%20YE123107%20FINAL.swf
One Step Closer to Nationalization / Nuevas de Intag
Sunday, March 23, 2008
Ecuador Takes One Step Closer to Nationalizing Its Mining Industry (and other news….) On his weekly radio address to the nation on the 15th of March, Ecuador's president told Ecuadorians he would exploit its mineral resources in the south of the country through the creation of a national mining corporation. The last 6 or so months, Correa has expressed support for exploiting the four large gold-copper deposits in the south (belonging to Aurelian, Corrientes Resources, Iamgold and IMC- all Canadian corporations) As for Ascendant’s ex-Junin project, when mining comes up in Correa’s pro-mining speeches Junin and Intag are never mentioned, and no mining is planned for the north of the country (the status of Ascendant’s ex-Junin concessions has not changed- they are in the hands of the government) The seemingly pro-mining stance by the president is in direct opposition to the anti large-scale mining position most Constitutional Assembly members, and most of Ecuador's civil society holds. Additionally, in all the public forums organized by the Constitutional Assembly, the answer has been a resounding NO to large-scale mining projects. During the past 3 months, this position has received very strong support from Ecuador’s largest indigenous organizations, including CONAIE and ECUARUNARI. The latest manifestation of rejection to large-scale mining came on the 11th of March as part of a multitudinous march on the capital by thousands of indigenous from all over the country. It is the Constitutional Assembly, and not the President, who will re-write the constitution. In this context, there are calls from several important sectors of the nation, including major political parties, to ban all large-scale metallic mining projects. It is this issue, more than any other, which has created the most friction within Correa's own party. Meanwhile, the plans for the mining mandate are on hold. The mandate would annul those concessions that were not annulled in January of 2008,until such a time that a new mining law is approved by the yet-to-be elected national congress (which could be a very long time). There are several versions up for debate, and most of them call for ban on large-scale and open-pit metallic mining in Ecuador. And other news…. Ascendant has made the news in other forums. For example, it had the distinction of being on the list of mining companies criticized by the February 14 report of the Earthworks-Oxfam’s No Dirty Gold Campaign, which lists companies criticized for various unethical behavior, including violating human rights, dumping wastes on rivers and oceans, for their alleged involvement in armed or militarized conflict, or forced relocation of nearby landowners and/or indigenous peoples. http://www.mineweb.com/mineweb/view/mineweb/en/page68?oid=46846&sn=Detail In the “Additional News From the Weird” category, it now seems official that Ascendant will acquire St Genevieve Resources. The Montreal-based company has a couple of highly unproductive mines in Arizona and seemed on the brink of total meltdown. The company’s stock price has hovered at 1cent per share lately (yes, $0.01). Ascendant’s own shares have hovered in the 10 cent range recently, and have been on a downhill ride for quite sometime. Without its Junin mining concessions, and the disappointing Chaucha drill results (bad enough to scare off its Chilean partner earlier last year), there’s really nothing to Ascendant. Chaucha’s exploration results, it’s worth mentioning, was earlier evaluated by a paid Ascendant employee. La nacionalizacion de los recursos mineros mas cerca en el Ecuador El presidente Rafael Correa, en su ultimo discurso semanal radiofonico (Sabado (15-03) le dijo a la nacion que explotaria el cobre y el oro en el sur del pais a traves de la creacion de una corporacion minera nacional. Durante los ultimos seis meses, Correa ha expresado su apoyado a la explotacion de cuatro yacimientos de oro y cobre en el sur del pais (pertenecientes a Aurelian, Corrientes Resources, Iamgold and IMC- todas empresas canadienses) Junin e Intag nunca se mencionan, y ninguna mineria esta concebida para el norte del pais (el estatus de las ex-concesiones de Ascendant en Junin no ha cambiado- permanecen en manos del gobierno) Esta postura por el presidente se encuentra en oposicion directa a la posicion de la mayoria de los asambleistas, y la mayoria de la sociedad civil ecuatoriana. Ademas, en todos los foros publicos organizados por la Asamblea Constituyente, la respuesta a sido un contundente NO a la mineria a gran escala. Durante los ultimos 3 meses, dicha posicion ha recibido un fuete respaldo de parte de las organizaciones indigenas mas grande del Ecuador, incluyendo a CONAIE y ECUARUNARI. Es la Asamblea Constituyente, y no el presidente, quien elaborara la constitucion. Y, dentro de este contexto, ha habido varios reclamos de importantes sectores del pais, incluyendo de parte de importantes partidos politicos, para prohibir todo proyecto minero metalico a gran escala. Mas que cualquier otro tema, este es el que mas friccion ha creado dentro del partido de Correa. Mientras tanto, los planes para el mandato minero esta en espera (yamismito). El mandato anularia las concesiones que no fueron anuladas en enero del 2007, y suspenderia nuevas concesiones hasta que la nueva ley de mineria sea redactada por el congreso nacional, aun por elegirse (lo cual podria demorar mucho tiempo). Existen varias versiones en discusion del mandato, y la mayoria prohibirian la mineria metalica y a cielo abierto en el Ecuador. Por otro lado (y en la categoria de Aunque Usted no lo Crea), Ascendant se encuentra en proceso de adquirir a St Genevieve Resources, una pequenia y practicamente bancarrota empresa canadiense con un par de minas impresionantemente improductivas en el estado norteamericano de Arizona. El precio de las acciones de St Genevieve es de un centavo de dolar por accion- la de Ascendant esta por los 10 centavos de dolares... ¿Que estaran pensando los inversionistas??
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