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Mining in the citizen revolution

Mining in the citizen revolution

By Pablo Ospina Peralta

In the case of the citizen's revolution, the financing pressures of developmental economic policies and redistributive social policies lead it to favor an economic path where the expectation of a rapid capture of liquid funds prevails. Mining not only goes against any revolutionary change in the dominant economic model but can only be imposed by blood and fire.


On March 5, the government of the citizen revolution signed the first large-scale metal mining contract in Ecuador with the company Ecuacorrientes S.A. for twenty-five years [1]. Months before, on September 21, it was announced that the Ministry of the Environment had granted the environmental license to said company for an investment of 1.63 billion dollars in the Mirado Project in the province of Zamora Chinchipe. The government's mining plan foresees that by 2014 the investments of foreign companies in the mining sector will amount to 5.5 billion dollars [2].

Three days later, on March 8, a social mobilization called by CONAIE began its journey in Zamora and would end it triumphantly in Quito, with the journey of a gigantic march conservatively estimated at 20,000 people. The first point of the nineteen that formed the agenda of the march was precisely the opposition to large-scale metal mining and the demand for the reversal of the contract with Ecuacorrientes.

These episodes are just the latest installment of a defense that began with the start of the government and that will continue. Should the country embark on large-scale metal mining as a strategy for its economic development?

The arguments

The best defense of mining was made by the President of the Republic in his ultimatum to the National Constituent Assembly when it began its work, at the end of 2007:

Regarding the environmental impacts of the exploitation of non-renewable resources, we are all deeply committed to the environment, we even believe that the beings of creation have intrinsic rights, breaking the anthropocentric vision of the economy and society, a vision that even it can also be incorporated into the new constitution. We know that there are fundamental principles, ethical and moral, of respect for nature, and we fully adhere to them, but neither can we fall into the naïveté of ignoring the cost-benefit analysis. Who can be in favor of open pit mining on their own? Who ethically and aesthetically can agree that where there was primary forest, there is now an oil well? But if that mine has a present value of one hundred billion dollars, if that well has a potential of twenty billion dollars, perhaps the opposite would be immoral, losing, due to fundamentalist views, that great opportunity for the development of the country . We cannot afford to be so naive. It should be noted that the mining and oil examples that I just gave you are real [3]

It is not a strange or unfamiliar argument. All the presidents have invoked it: the damages are painful but tolerable for the economic benefits they bring. A second argument, increasingly stronger in the presidential speeches of 2011, contradictory with the previous one, emphasizes that there is much exaggeration in this of pollution because modern technologies avoid “false dilemmas” between nature and mining:

And then come the dishonest who do nothing more than lie and, as I said at the beginning, present us with false dilemmas: "Water is worth more than gold" and the applause of the respectable start again, assuming that if we exploited gold, that if we took advantage of the mining, water is damaged, and this is another falsehood. The new mining techniques of large-scale mining, precisely, allow water to be recycled [4]

One hand ensures that major impacts are offset by money; while the other says that the impacts are negligible. In my opinion, the change of discourse reveals the diminishing weight of environmental concerns in the government of the citizens' revolution. The government itself could surely try to reconcile them by saying that there is enough technology to minimize damage but that even if some errors and undesirable impacts do slip, these are tolerable for the immense money they report.

Faced with the argument that these impacts are devastating, as evidenced by forty years of oil exploitation in the Amazon; region that is one of the poorest, forgotten and polluted of Ecuador; the answer is the following:

But it doesn't have to be that way, the one who tells you it has to be that way is lying. Of course, if the surrender, irresponsible governments of yesteryear come, it will be like that; But we have a government that all of Ecuador knows is with clean hands, lucid minds and burning hearts for the Homeland and we will not allow that, and we have changed the laws and now twelve percent of oil profits remain for local development and, in the case of mining, at least sixty percent of mining royalties and twelve percent of the profits of mining companies -which used to go to workers [5]

In this new argument, then, the underlying problem is the lucidity of the rulers, the cleanliness of their hands and love for the country. We must trust our leaders and choose well. What arguments make in the face of this rhetoric?

The development model

Although much of the public debate of these years concerns the possibility or not of really controlling the environmental impacts of large-scale mining, the substantive debate refers to the country's development model. The idea of ​​creating a state mining company and increasing royalties for the State, as embodied in the mining law approved in January 2009, is not the essence of the problem with rural and environmental organizations [6].

The problem is the role of mining in the national economy. The government's promise is gargantuan:

Here is the opportunity to get out of poverty [shows the first gold ingot from the state mining company] (…) to lift our people out of poverty, lift the Shuar out of poverty, lift Ecuador out of poverty (… ). God has rewarded us with an abundance of natural resources (…). Here is the great opportunity that God has given us to get out of poverty (…). Morona Santiago may have the second largest copper mine in the world. The first is in Chile, which is the most developed country in Latin America, basically thanks to mining (…). That takes us out of poverty compatriots [7]

Chile, the most developed country in Latin America? Thanks to mining? Wasn't it the model country of neoliberalism? The best example of the reprimarization of Latin American economies? The top ten of inequality in the world? [8] The excess of expectations was very well represented by the banner that Alianza País supporters proudly raised in the corridors of the Legislative Commission on the day the law was approved: "Yesterday oil, today mining" [9].

The underlying problem, therefore, is not only the dimension of pollution but the expectation that mining can serve as a way out of underdevelopment. That the great mineral wealth could replace oil and that later its income could be distributed with equity and in healthy investments. The problem is not the letter of the mining law but its spirit. It is not an article but the philosophy that inspires it.

Mining projects (2009)[10]


The table above summarizes the estimates of the government's priority mining projects. If these reserve estimates, prepared by the companies themselves, are taken seriously, their current value would be equal to 70% of Ecuador's proven oil reserves (1.4 trillion dollars), most of it coming from copper. Alberto Acosta concludes that they are clearly oversized calculations [11]. Several geologists doubt the Ecuadorian mining potential, which would be confirmed by the scarce development of the sector in the past despite even the fact that in the 1990s a very favorable law was issued to companies and very modest in state aspirations [12]. The overestimation of reserves would have more speculative purposes. It is very likely, then, that we have many damages and few benefits.

But let's better fix the tenor of the benefits. Let's assume for a moment that everything is true, that the mining companies and their best spokesperson, the president, are right. In this case, when it is considered the axis of the strategy to “get out of poverty”, it is that if mining can (perhaps) be relatively controlled in some places in its most harmful environmental effects (such as high water consumption) The truth is that expanding it to the scale necessary to make it the axis of national economic development makes its environmental and social impacts unmanageable. The scale of the intervention completely changes the scale of the impacts. Furthermore, it turns the State not into a controller, but into an ally of those who extract the economic resources that finance its budget. As with the environmental impacts of oil, the lack of control by the state is not just a problem of incompetence or bad faith. It is not a problem of "clean hands" and "burning hearts" but a structural problem. How can an oil-addicted (or mining-addicted) state control the activity on which it depends?


In the case of the citizen's revolution, the financing pressures of developmental economic policies and redistributive social policies lead it to favor an economic path where the expectation of a rapid capture of liquid funds prevails. While tourism, the axis projected for the new “accumulation model” as promised by the Plan for Good Living [13], cannot pay advance royalties, the Mirador project contract includes the payment of 100 million dollars in advance; so early that they did not even wait to obtain the final environmental permits.

Aiming to change the extractivist model by accentuating dependence on resources from extraction is a paradox that cannot be solved by the good faith of enlightened leaders. Why was it so difficult in the past, as was said at the time, oil ”after having reaped so many dollars? For the simple reason that these economic activities not only leave money in the pockets but also create power structures. The options taken today limit the room for maneuver for those who will come tomorrow. They sediment the floor of society with something harder than simple malleable clay in the skilled hands of well (or bad) intentioned rulers. They create almost impregnable economic foundations of powerful interests and tangled political ties.

The conflicts

Mining not only goes against any revolutionary change in the dominant economic model but can only be imposed by blood and fire. The violence of the anti-mining strike in early 2009 in southern Ecuador revealed a growing link between artisanal miners and rural peasant and artisan communities. The former fear, rightly, the competition from large companies that together with copper will extract the gold from which they live. The latter fear, also rightly, the threat of an economic activity that promises all kinds of disasters on their lands.

This increase in conflict associated with an eventual expansion of the large-scale mining border cannot be underestimated: the strength of the opposition to mining is not so much in the political support of CONAIE or the prefectures of Zamora and Azuay , but in an authentic and powerful indignation in the affected peasant communities. That is something that the presidential stubbornness does not seem to understand [14].

Here too scale matters. Currently, mining as a whole represents less than 0.3% of GDP. Less than half of that amount comes from metal mining. If, with these dimensions, mining causes conflicts of the proportions seen at the beginning of January, it would not be strange that the intention to expand it and turn it into an axis of economic development, would produce something similar to a civil war. Large-scale metal mining has to intervene in densely populated regions where resistance is fierce.

Perhaps the presidential obsession with mining, his contempt in the face of adversaries and the arguments that oppose him, his evident undervaluation of the environmental costs that it entails and the weakness of his commitment to changing the axis of the accumulation model that his planners promised , have a powerful cultural root. At the inauguration of the Manta-Leticia-Manaos Multimodal Route, on July 15, 2011, President Rafael Correa quoted the famous speech of Simón Bolívar after an earthquake in Caracas: “If nature opposes our designs, we will fight against her and we will defeat her ”. Bolívar may have had the excuse of having said it after a catastrophe of gigantic proportions, but it is unjustifiable in a Rafael Correa who repeats it in the Amazon, where disasters have been caused by society, not nature. Above all, it repeats it two centuries after Bolívar, with several decades on the back of growing global awareness of the dangers to which it leads us to fight valiantly against a nature that opposes "our designs". A revealing slip of the insignificant role played by a renewed environmental ethic in the president's thinking and in the project he leads.

Pablo Ospina Peralta

References:

[1] “The State negotiates the Río Blanco contract”, El Tiempo, March 16, 2012, at http: //www.eltiempo.com.ec…

[2] "First license for mining exploitation in Ecuador granted", Ecuador Inmediato, (09/21/2011) http: //www.ecuadorinmediato.com…

[3] Speech by President of the Republic, Rafael Correa, at the inauguration ceremony of the National Constituent Assembly, Montecristi 11/30/07.

[4] Rafael Correa Speech “Mirador Project. Subscription of the contract ”. Quito, March 5, 2012. At http: //www.presidencia.gob.ec…

[5] Ibid.

[6] The mining law "restores the minimum 5% of royalties on sales and 70% of taxes on extraordinary income (article 93), in addition to creating the National Mining Company (articles 5 and 12)"; cfr. Sara Latorre Tomás 2010. "Popular environmentalism in Ecuador: past and present." Quito: FLACSO - IEE. Unpublished, social movements project in Ecuador. See also "Legislative acquiesces and approves the Mining Law", El Telégrafo, January 27, 2009.

[7] Rafael Correa "Being smart about mining." Saturday link of December 10, 2011. Reprinted at http://www.youtube.com/…

[8] “In Chile we have four multi-billionaires in dollars (…). The fortune of these four distinguished Chilean families is equivalent to the annual income of 80% of the Chilean population "(Julio Berdegué," Inequality and extreme wealth in Chile ", El counter.blogs & opinion, June 10, 2011, at http: // www.elmostrador.cl….

[9] "Controversial second mining law debate", El Telégrafo, January 13, 2009.

[10] Sources: Alberto Acosta 2009. The curse of abundance. Quito: Swissaid / Abya - Yala / CEP, pp. 110; Sara Latorre 2009. Op. Cit., Pp. 16-9.

[11] Acosta, The curse…, p. 113. See also William Sacher and Alberto Acosta 2012. Large-scale mining in Ecuador. Analysis and statistical data on industrial mining in Ecuador. Quito: Abya - Yala / CAAP, p. 73.

[12] Pablo Duque 2011. Mining Potential of Ecuador. View from the current knowledge of the Geology of the country. In Perverse verses of mining. www.extractivismo.com www.infomineria.org

[13] Republic of Ecuador, National Secretariat for Planning and Development 2009. National Plan for Good Living 2009 - 2013: Building a Plurinational and Intercultural State. Quito: SENPLADES, p. 94-98.

[14] The government persists in attributing the violence to “agitators” without realizing the deep roots of the grassroots resistance against mining in affected and densely populated peasant areas. Cf. “Stones to presidential car in Azuay; a fellow prisoner ”, El Universo, October 26, 2011.


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