San José, Costa Rica, since 1956

Gold Mining Company Comes Under New Fire

Officials from the Environment and Energy Ministry (MINAE) are reviewing all documentation associated with the controversial Las Crucitas gold mining concession, awarded to Industrias Infinito S.A. in 2001 and annulled last year.

The review order came from the ministry’s Department of Geology and Mines on the heels of a company statement that referred to a much smaller quantity of gold than the firm had previously announced – a statement that raised red flags among environmental groups that have long battled the controversial open-pit mine project planned in the country’s northern region.

Industrias Infinito was awarded a concession to extract 660,000 ounces of gold, but in the statement – released Jan. 12 in Canada –the Costa Rican company’s Canada-based parent corporation, Vannessa Ventures, refers to only 194,546 ounces of the metal.

While Industrias Infinito officials here insist nothing is amiss and the gold is still there, the mining opposition movement is up in arms over that and other announcements in the recent statement.

Anti-mining activists also recently claimed to have found high levels of arsenic in a stream coming from the Las Crucitas farm, and accused Vannessa Ventures of planning to expand its proposed mining operations. Activists have requested that MINAE revoke the recent approval of Industrias Infinito’s environmental-impact study by the ministry’s Technical Secretariat (SETENA).

Then, last week, a Nicaraguan environmental group added its voice to the chorus with a letter sent to new Nicaragua President Daniel Ortega, other Nicaraguan officials and Costa Rican officials. In the letter, Amado Ordóñez, president of the environmental organization Centro Humboldt, expressed his “enormous concern over the environmental risks and threat” that the mining project would pose for the communities on both sides of the border.

Amado says the Las Crucitas site lies five kilometers from the San Juan River, which

forms part of the border between Costa Rica and Nicaragua and empties into the Caribbean.

Angélica Alfaro, of Centro Humboldt, explained that the organization is concerned that mining waste will end up in the San Juan River and be carried into protected areas in Nicaragua such as the Indio-Maíz Biological Reserve and the Río San Juan Wildlife Refuge.

The organization also wants the Nicaraguan government to reactivate a special commission that was assembled to look into the mining project. Alfaro said the HumboldtCenter sent a similar letter to then-President Enrique Bolaños in 2004 and again in 2005, but did not get a response. It sent the letter to Ortega Feb. 12, and has yet to receive a response.

Buried Gold and Poison

Costa Rica’s Constitutional Chamber of the Supreme Court (Sala IV) last year stripped Industrias Infinito of its mining concession (TT, Dec. 15, 2006).

According to the court, the concession is invalid because the mining company had not yet submitted an environmental-impact study for the open-pit mine when it received the concession. MINAE did not approve the company’s study until 2005 (TT, Sept. 2, 2005).

The company has filed a request that the Sala IV reconsider its decision, insisting it followed all the regulations at the time, and the order of permits was switched on them mid-process.

While the concession annulment is good news to environmentalists who have long fought to keep the mine from becoming reality, they are not convinced they’ve won their battle.

“We celebrated the Sala IV’s decision,” said Fredy Vargas, of the Ditso Association of Popular Initiatives, a part of the Opposition Front Against Mining in the Northern Zone.

“But we have not stopped being active, and we are… monitoring and following up on the administrative level and in the field.”

Marco Tulio Araya, of the Opposition Front Against Mining, told The Tico Times a team of investigators recently took water from a stream coming from Las Crucitas to a chemical lab at the University of Costa Rica (UCR) for testing and discovered “very high levels of arsenic.”

“We cannot say that it is from the company, but the river comes from the project,”

Araya said. “These quantities (of arsenic) are used only in mining or herbicides.”

Industrias Infinito spokesman Andrés Soto denied the company has used any arsenic at the property. He said the only activity going on at Las Crucitas is the standard upkeep of the pastures and cows – regular farm work.While the company bides its time and pursues its legal battles, it is focusing on social responsibility programs in the surrounding community, Soto said, which provide job training, computer classes at a computer center it built, restoration of the local school and other projects.

Controversial Report

Environmentalists are also angry about the statement released by Vannessa Ventures last month, in which the company announced the results of a new feasibility study of the mining project and asserts that, “The Company has in place an Exploitation Permit which provides the rights to mine the Crucitas Exploitation Concession.” Environmentalists point out that the Sala IV annulled the company’s concession last year.

Opponents also question inconsistencies between the statistics given in the statement and those maintained by the company before the Costa Rican authorities.

In a statement, Sonia Torres, of the Association of Nicoya Gulf Environmental Communities (CEUS), questions why the company reports “the existence of only 194,000 ounces of gold in the saprolite (clay), instead of the 700,000 ounces reported eight years ago… Did they lose 500,000 ounces of gold?”

Industrias Infinito spokesman Soto says no. “These anti-mining people are using (the report) to confuse and pervert what is an act of the highest transparency that is required by the Canadian government,” he said.

According to Soto, the difference in numbers is rooted in the difference between “measured resources” and “inferred resources” – that is, the gold the company knows is there, and the gold it believes is there.

Within the saprolite – a technical term for clay – under Las Crucitas, there are 194,646 ounces of measured gold, according to the Vannessa Venture report. The company has inferred that there are also another 123,772 ounces. In the hard rock, the company has measured 790,295 ounces, and infers there are another 372,300 ounces.

References in the statement to gold in the surrounding hard rock is, according to the anti-mining camp, evidence the company is planning on expanding the mine in order to make it more profitable, a process that would require a new environmental-impact study and other trámites.

“Their shares have gone to the floor, so in order to reassure investors, they are talking about expanding the operation into the hard rock,” Araya said. “It’s like changing all the environmental rules in the middle of the game. Before, they said they wouldn’t be bringing in dynamite, but with hard rock, they’ll have to use explosives.”

Las Crucitas spokesman Soto confirmed that the concession was valid only for the gold buried in the saprolite. He admitted the company is now considering extracting from surrounding hard rock, and would have to file a new environmental-impact permit to obtain a new concession.

Las Crucitas is one of two mines exempted from a 2002 decree by former President Abel Pacheco (2002-2006) placing a moratorium on all open-pit mining operations, because its concession had been awarded prior to the decree.

Current President Oscar Arias has said he will permit mining projects with approved environmental-impact studies (TT, Sept. 8, 2006).


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