[greenyes] Re: Communism in anti-mining

The discussion in greenyes digest about religion and environmentalism is interesting enough. Here's another topic, described in this weeks Economist, about how the Trotsky-ists are getting into mining protests. The enemy of my enemy may be my friend, but I'd be much more comfortable with the recycling community as an anti-mining, anti-forestry advocate. As the article describes, even the best-run mining and smelting operation makes a worse neighbor than a landfill, and almost as sorry an employer.

I think part of the problem is that there's unlikely to be any corporate sponsorship for this effort. The very largest recycling companies are very aware that their raw materials customers benefit enormously from land use subsidies. While Bureau of Land Management reforms would be wonderful for recyclers, no copper or paper or metal recycling company is going to get caught advocating for it.

A PLEASANT town in a broad green valley in northern Peru, Cajamarca is the site of one of history's great betrayals. Some 200 yards from the main square, through a Spanish colonial doorway, stands a stone building known as the ?Ransom Room?. Though this particular building may in fact have been his prison, in 1532 Atahualpa, the Inca ruler, offered to fill such a room with gold artefacts in order to win freedom from his conquistador captors. He kept his side of the bargain?but was murdered anyway. Now, once again, some people in Cajamarca complain that Peru's gold is being carried off by foreigners?and they are trying to stop it.

Astride the Andean watershed an hour north of Cajamarca is Yanacocha, one of the world's biggest and most profitable gold mines. Run by Newmont, a Denver-based company which owns it with Peru's Buenaventura, Yanacocha is a world away from the dark and dangerous gold mines of the past. At five separate sites, giant scoops slice the sides from mountains, loading 300,000 tonnes of rock a day into 250-tonne trucks, each the height of a four-storey building. The rock is laid out in terraces, sealed in black plastic, and injected with cyanide solution. This process yields an ounce of gold from each tonne of rock. So successful has Yanacocha been that its output has soared from 81,000 ounces of gold in 1993 to 3m ounces last year.

This headlong expansion has injected wealth into Cajamarca, though it is still one of Peru's poorest departments. The mine has produced fears and resentment too. For a fortnight last September, thousands of protesters blocked the road to the mine; supplies and staff had to be ferried to and fro by helicopter. The protest was against Newmont's decision to prospect on Cerro Quilish, a mountain which locals say feeds streams that supply the city with drinking water. The protesters won hands down. Humbled, Yanacocha agreed to stop prospecting, asked the government to revoke its licence to do so, and issued an unprecedented public apology.

Two months later, at La Zanja, a six-hour journey from Cajamarca, a mob of some 350 locals, stirred up by extreme leftists, burnt and sacked a prospecting camp run by Buenaventura; they destroyed ten years' worth of rock samples. In December, three provinces in the area were shut down by a two-day protest strike against mining, while at Rio Blanco, close to Peru's border with Ecuador, a local-radio reporter was kidnapped by opponents of another proposed mine.

These events are widely seen as a turning point for mining in Peru?in more ways than one. ?The pace at which we've expanded will be difficult to maintain,? admits Brant Hinze, an American who is Yanacocha's general manager. The protests also pose some broader questions. Will Peru remain one of the world's top mining countries? Will an alliance of local activists and rich-world NGOs thwart investment in a crucial industry? Or will both sides work together to ensure that mining is compatible with the environment and social development? The riot at La Zanja prompted several NGOs to issue a statement condemning violence. The government has sent police reinforcements to mining areas. ?The state has drawn a line...[the threat to mining] is being seen as being as serious as drug-trafficking and terrorism,? says José Miguel Morales of the National Mining Society, who is also Buenaventura's general counsel.

The protests typically mix genuine grievance with ignorant fears that are whipped up by political extremists. In part, they are a sign of a more vigorous, if chaotic, democracy. They also reflect a mining boom. Although Peru has been a mining country since pre-Inca times, since 1992 output has tripled. In the decade to 2003, foreign mining companies invested some $6.7 billion in the country. Projects involving potential investment of more than $10 billion?and many of the world's top mining firms?are being explored.

While mining provides relatively few jobs, it is vital to Peru's economy in other ways. Thanks both to high mineral prices and rising output, mineral exports were up by almost half last year, and accounted for 55% of total exports. Mining brings in 29% of total tax revenues. Of this money, the government last year returned $138m as a local royalty to mining areas, most of which are otherwise poor and remote.

Because of its scale and prominence, Yanacocha may hold the key to mining's future in Peru. ?If Yanacocha does things better, it will open the door to all mining projects in the north of Peru. If it doesn't, it will close the door to these projects,? says Marco Arana, a Catholic priest who led the protests over Cerro Quilish. The mine's critics focus on two things: its environmental impact, and its alleged lack of benefits for local people, many of whom are poor farmers.

Many of the environmental complaints, such as claims that the mine has polluted Cajamarca's drinking water with cyanide or mercury, look specious. An independent report by Stratus, a Colorado consultancy, found that while the mine's operations have ?altered water quality and quantity in some locations and at some times? they have posed no threat to human health nor to drinking water. But the mine's rapid expansion has affected farmers. Several irrigation channels have dried up, while extra sediment in rivers has killed trout. Yanacocha has dealt with some of these complaints: it is spending $30m on three large dams to filter run-off water. In 2000, a contractor's truck carrying mercury from the mine had an accident; dozens of people in Choropampa, a nearby village, were taken ill. The mine spent $16m on cleaning up and compensation and has tightened procedures for the transport of dangerous materials.

It is hard to gainsay the mine's economic impact. Its 8,000 workers are well paid by local standards; another 40,000 jobs depend on the mine. Under pressure, Yanacocha is increasing the amount of supplies and services it buys locally. Cajamarca has the air of a boom town, with big new houses going up?along with brothels and noisy night clubs. In 2003, some $70m of Yanacocha's tax payments returned to Cajamarca as local royalty?a huge sum for a town of some 150,000. In addition, the company spent $14m on local social programmes, such as donations to schools and a regional hospital.

Scratch deeper, and other things lie behind the discontent. One is history: for centuries, mining companies (some of them state-owned) dumped toxic residues freely in Peru's fields and rivers. Since 1992, they have faced tighter environmental rules. The industry has spent $1 billion on cleaning up. But past pollution?and accidents such as at Choropampa?make farmers scared of new mines and of prospectors. And mines?like many farmers?do not pay for the water they use.

Second is Yanacocha's sheer scale: economically and politically, it dominates the city of Cajamarca. That generates great expectations and, since many in the area remain poor, envy and frustration. Some farmers sold their land cheaply to the mine and have watched land prices soar. ?Yanacocha asks why they are seen as able to solve all the community's problems. It's because they've given that image...they use social investment as a means of social control,? says Father Arana.

Mr Hinze concedes that rapid expansion ?caused us to overlook details?. He has told his managers to make greater efforts to listen to the communities around the mine. But he also points out that his company must strike a difficult balance: ?it's our responsibility to return to communities some of the wealth?. But, he adds, ?if you're not careful you become the government. We shouldn't become it.?

Indeed so. At the root of many of the conflicts over mining lies the weakness of the Peruvian state. If there is still much poverty in mining areas, that is not mainly the fault of the industry. Local governments are often corrupt and spend their mining riches badly. The corruption of the authoritarian regime of Alberto Fujimori, which ran the country from 1990 to 2000, robbed environmental regulation of credibility. Alejandro Toledo, the unpopular current president, has lacked authority and has struggled to keep order. In some places, says Dante Vera, a former interior ministry official now advising Yanacocha, protests are being whipped up by drug traffickers, former guerrillas and other extreme leftists. He worries that mining's expansion and the radicalisation of its opponents could lead to violence.

Yet there are some hopeful signs. In December, after three years of talks, the managers of Tintaya, a copper mine run by BHP Billiton, signed a wide-ranging agreement with local communities backed by NGOs. Environmental and social responsibility have become part of the price of operating a mine in Peru. With prices high, that is fine. If and when they drop, the country may face some hard choices. For Peru cannot afford to do without mining.