Only a few European mining corporations are present in Latin America, but they are still very important. Monterrico Metals, Anglo-American, Rio Tinto, Xtrata are some of them.

They are operating in the main countries with a mining vocation of the region. Although there are minerals in most Latin American countries, they are mainly situated in those countries that offer better guarantees for foreign investments, they are registered at the International Centre for Settlement of Investment Disputes (ICSID), and they have negotiated legal and tax stability contracts.

Therefore, they make huge profits and run few risks, as a part of a policy of investment protection and guarantee of safe profits.

Companies Under Fire

These investments are not exempt from criticism on the part of the affected communities.

One proof of this is that at least Monterrico Metals will be subject to trial at the Permanent Peoples’ Tribunal taking place in Lima in the middle of May.

Its practices in northern Peru are being questioned, and in spite of having sold an important part of its actions in Majaz to a Chinese company, its responsibility remains because the company has been the designer of the project. Also because it has designed the campaign for social cooptation, division of communities, and threats to and intimidation of local leaders.

The people of Majaz have revolted against the company’s mining plans in September 2007. An outright NO to MINES was the communal response to these extraction activities. Today, those leaders and persons who supported the consultation in Majaz are being prosecuted for terrorism. It is well-known that in Peru, one easily and quickly gets prosecuted for exercising and defending rights when it is about communities and organizations of civil society.

However, all the European mining industries deserve prosecution for their practices towards the affected communities and for destroying ecosystems, mainly for the pollution of water.

There is no mining company, be it European or of other origin, free from serious environmental and social impacts and which does not, incidentally, set in check sustainable development in those countries where it operates.

With regards to the way the mining companies use the water resources, it is worth mentioning that Escondida in Chile uses 2,950.74 liters per second, operating one of the world’s largest copper mines in one of the planet’s driest zones: the desert of northern Chile.

The English Rio Tinto owns 30% of that company, which, in spite of upholding an important social and environmental image, is not free from conflicts.

The exhaustion of its water sources in a very near future, and the refusal to bore new wells on the part of the Chilean environmental ministry, have led this company to initiate a project of water imports from Argentina. The conflict over water transcends frontiers.

The contribution of the mining industry to climate change is an unknown issue to most of the population.

Even before the new mining boom of the last 5 years, Earthworks declared that the mining industry consumed between 7 and 10% of global energy, which correspondingly contributed to the greenhouse effect.

Escondida consumes 29.6% of all energy in Chile, in a zone where energy is produced from fossil fuels. This does not include the fuel, mainly oil, it uses for its operations.

So, according to the data of Earthworks and Escondida, we can only conclude that there is a tendency to an increased use of energy and, accordingly, contribution to global warming.

The Responsibility of Investors

What is the responsibility of European institutions in all this? We have seen that the mining companies are not numerous but important. However, those who, to a great extent, are responsible for the development of the mining industry and its unsustainability, are the European financial institutions.

Pension funds invest an important part of the Europeans’ savings in stocks and shares. A recent scandal in Norway led the state fund to withdraw from mining investments due to denouncements made by affected communities and organizations of southern countries, caused by the bad behavior of involved mining businesses.

It is probable, and we do hope, that this tendency will grow the more the European population becomes conscious of its contribution to the destruction of our ecosystems, global problems and violations of human rights and of democracy in southern countries, especially in South America, where the main investments in mining exploration are concentrated.

In reality, the most important European actors in the mining business, more than companies or contributions to pension funds, are banks.

There is a great number of European banks that make mining industry beyond their own frontiers possible. Without this support, the mining companies could not carry out all their projects they way they do at present.

Huge Profits

Mining exploitation is an activity with a significant degree of financial security. The cost calculations are carried out carefully, taking into account minimal gains. The rise in prices of metals has caused a substantial increase in mining companies: an extra profit which goes beyond anything considered even by the greatest optimists.

Escondido made profits which reached US$ 6,467 million in 2007, while Anglo American and Xstrata, owners of the Collahuasi mine, obtained a profit of US$ 1,825 million. Anglo American, which owns the Los Bronces mine, declared a profit of 1,309 million.

Some of these figures, obtained in only one year, by mining corporations, exceed all their investments undertaken up to date.

So European banks do not have to worry about their investments in the mining industry. There really is no risk.

These banks are: (between 2000 and 2006) Credit Suisse with 14,477 million; ABN Amro with 14,306 million; Deutsche Bank with 13, 232 million; BNP Paribas with 12,245 million; Société Générale with 11,150 million; Royal Bank of Scotland (RBS) with 7,132 million; ING with 6,454 million; Dresdner Kleinworth with 5,331 million.

The European responsibility is hidden behind these investments which make mining industry in the south feasible, and which do not ask much about its behavior regarding democracy, human rights, or ecosystems, to mention only well-established rights.

We are not posing the question here about the real contribution of these mining businesses that obtain credits from these European banks, to those countries and the local communities.

In the latter case, the communities are reporting more plundering than real contributions to development.

In this juncture, the trade agreements between the European Union and Latin American countries seem to hide a reality of interests which nobody talks about at the moment the national populations are being informed.

The banks and financial entities get rich through their branches in our countries. They also do so with health insurance companies and pension funds. Other service companies in the electricity, sanitary, infrastructure building, and road sector, etc. may be added.

It is patently clear what the economic interests are that drive the different actors to negotiate agreements.

Nevertheless, civil society has much to say. The only thing missing are real channels for dialogue and agreement. Not just a decorative dialogue, but one that respects and puts into practice the real national interests, beyond the interests of elites and companies, as has been the case up to now. (Translation: ALAI).

- César Padilla Ormeño is Executive Coordinator of the Latin American Mining Conflict Watch (OCMAL) and member of the Socio-environmental Rights Area of the Center of Ecology and Andean Peoples, Cepa de Oruro, Bolivia