Carlos De Miguel III, the General Manager of Hanrine Ecuadorian Excploration and Mining SA, a subsidiary of Gina Rinehart’s Hancock Prospecting, was apprehended by police for an alleged illegal weapons cache. Mr De Miguel was found with several pistols, rifles, and more than 9,500 rounds of ammunition.
CREDIT: MATT GOLDING, Sydney Morning Herald
A spokesman for Hancock in Australia said in a statement that Carlos De Miguel held “the correct permits for these weapons which are approved by the Ecuadorian Ministry of Defence. The spokesperson went on to note "the safety of employees at Hanrine is very important to Hancock Prospecting Pty Ltd (HPPL), and executives of HPPL visit the project from time to time, their safety while visiting Ecuador is also important.”
The discovery of the weapons cache raises one obvious question; why is Ecuador considered so unsafe that Hanrine executives need to possess such advanced weaponry and vast quantities of ammunition?
To understand the sovereign risks of doing business in Ecuador, we need to touch upon the history of Hanrine's mining concessions, and the clouds of controversy hanging over their purchase; along with the dangers of operating so close to the unstable Colombian border region.
Police inspect a guns and ammo cache of Hanrine General Manager, Carlos De Miguel III in Ecuador. (Video still)
Hanrine obtained six exploratory concessions (totaling 27032 ha) located just south of Solgold-Cornerstone's Cascabel concession, in January and March 2018. According to Ecuadorian media reports, Hanrine was controversially awarded these mining concessions after the government had previously pledged to suspend the mining cadastre and cancel more than 2000 mining concessions.
On Dec 11th, 2017, Ecuadorian president Lenin Moreno had announced his mining policy u-turn following an uprising by indigenous groups and mass protests lead by the Prefect of the province of Azuay, Yaku Perez; along with the Confederation of Indigenous Nationalities of Ecuador (CONAIE).
Indigenous groups led a long march from the province of Zamora to the capital Quito, in defense of water catchments and against large-scale extractive industries. The protests brought the capital to a stand still and led to the resignation of former Minister of Mining, Javier Cordova, who had failed to halt the allocation of mining concessions during the contested period.
Illegal mining in Buenos Aires (Hanrine Mining Concession), Ecuador. Image credit: Ecuavisa 2018
The nationwide protests eventually led to a popular referendum in February 2018 in which Ecuadorians approved, among other proposals, to prohibit metal mining in protected areas, intangible zones and urban centers. President Moreno even publicly declared that mining had left a hundred rivers "severely" contaminated in the country.
Moreover, concerns have also been raised by the Ecuadorian press about the process by which Hanrine obtained these 6 disputed concessions in just a few short weeks rather than the 8 months or more it usually takes to secure mining titles. On 27 September, 2018, the assemblyman for Imbabura, Marcelo Simbaña, formalised a complaint before the General Comptroller of the State regarding inconsistencies in awarding the mining concessions to Hanrine.
Gina's Hanrine concession areas in yellow. Image credit: Rainforest Action Group
In February 2018, just a month after awarding Hanrine the disputed concessions, a state of emergency in Buenos Aires is declared. Police and military are called in to begin confiscating hundreds of tons of mining material and clear out the illegal 'wildcat' miners and heavily armed rebel groups that had prevented Hanrine workers from accessing their concession areas.
The Hanrine concessions sit dangerously close to the Colombian border, an area renowned for para-military drug trafficking, corruption and money laundering. The area has been subject to significant unrest, with thousands of illegal miners, a number of deaths (including a 14-year-old child), and complaints of organised crime, drug trafficking and prostitution rings running alongside the illegal mining. After numerous arrests for illegal mining, the artisanal miners formed The National Union of Miners in Ecuador at El Triunfo (August 2018) to argue for the legalisation of their small scale mining operations on Hanrine concessions.
Ecuador army entering Rinehart concession. Image credit: El Pais
In July 2019, a massive military operation is organised to put an end to the illegal mining and organised crime and violence it attracted, with only mixed success. It's quite clear Hancock Prospecting's subsidiary is operating in an incredibly dangerous and complex business environment, facing strong opposition from small-scale miners, indigenous groups and environmental NGOs that are united in their opposition to large-scale mining in the region.
In a surprising twist, Hanrine is also facing an increasingly hostile government. Tension between the Ecuadorian Government and Hanrine is now building. According to the complainant, the arrest of Carlos De Miguel is a premeditated attack to block his activities as manager of the company he represents "due to clear and evident private interests of the minister [Maria Paula Romo], who in due course will have to explain them to the country."
Is a legal challenge between embattled Hanrine and the Ecuadorian Government in the wind?
Stay tuned for future updates on this high-stakes legal battle currently underway in Ecuador.
Full English-language articles here and here and Spanish-language sources here and here
A forest reserve in one of the world’s most biodiverse regions, originally set up with Australian Government support and home to over 200 species at risk of extinction, has been scheduled for a landmark legal case. In a precedent-setting move, the Constitutional Court of Ecuador has announced it will take on the case of the Los Cedros Protected Forest, which is threatened by grand-scale copper and gold mining, by using unique Rights of Nature laws enshrined in the constitution.
Edgar Merlo, who heads the legal team for Los Cedros, says: “The [Constitutional] Court’s ruling in this case would be a first in Ecuador: on the Rights of Nature, the right to prior consultation of communities, and the right to legal certainty, since concessions were granted without respecting the declaration of protective forests. The final judgement by the Constitutional Court in this case could change the legal focus in Ecuador, South America, and the entire world on the Rights of Nature and the rights of local communities, so that mining concessions are not granted in Protected Forests.”
One of the UK’s leading environmentalists, Jonathon Porritt echoed this view: “Ecuador was the first nation to include the Rights of Nature in its constitution,” he said. “It could now become the first nation to protect large swathes of biodiversity, based upon this constitutional innovation. This would set an invaluable precedent worldwide.”
Plate-billed Mountain Toucan. Image credit: Murray Cooper
Los Cedros Biological Reserve in north-western Ecuador was established in 1988 with the help of a grant from the Australian Government’s Development Assistance Bureau and the support of Australian not-for-profit organisation the Rainforest Information Centre.
Los Cedros is one of the most biologically diverse habitats in the world, with more than 4,800 hectares of primary cloud forest, and it safeguards the headwaters of four important watersheds. It protects over 200 species with high extinction risk, five of which are regarded as critically endangered by the Ecuadorian government. (see Roy et al. 2018, iNaturalist, and the Los Cedros website for more information.)
“The remoteness and high-quality of the habitat explain why there are six species of cats and three species of primate, including some of the last critically endangered brown-headed spider monkeys in the world, as well as the endangered Andean spectacled bear. New species are also being discovered every year,” explained Dr Mika Peck from Sussex University.
“This biodiversity was recognised when the Constitutional Court specifically cited the importance of Los Cedros in preserving the last populations of the spider monkey and the Andean spectacled bear which is in danger of extinction,” says John Seed, founder of the Rainforest Information Centre.
José DeCoux, the manager of Los Cedros says: “Mining in Protected Forests is a violation of the legal status of declared Protected Areas, the collective rights of indigenous peoples, the Rights of Nature, and the right of communities to prior consultation before potential environmental damages.”
Mining concessions in and around Los Cedros Reserve. Image credit: Rainforest Action Group
In 2017, the Ecuadorian government announced new concessions for mining exploration on over 2.9m hectares (6.17m acres) of land, a roughly 300% increase. Many of these exploratory concessions are in previously protected forests and indigenous territories. Mining exploration is also occurring in headwater ecosystems and biodiversity hotspots of global importance like Los Credos, and appears to be in violation of Ecuadorian law and international treaties.
“More than 30% of Protected Forests have been under imminent threat from mining since 2017, when a policy change within the Ecuadorian government allowed these protected lands to be included in mining concessions,” explained Paul Gilding, former Executive Director of Greenpeace Australia and Greenpeace International.
As part of this rapid mining expansion, BHP and Canadian mining company Cornerstone Capital Resources were given mining permits in collaboration with the Ecuadorian state mining company, ENAMI.
“The permit for mining was given despite the Ministry of Environment’s own publication citing Los Cedros in its ‘Areas of Priority for the Conservation of Biodiversity in Ecuador’,” says John Seed.
The Los Cedros Protected Forest authorities won their case for an Action of Protection in the Provincial Court of Imbabura in June 2019, which stripped the mining companies of their operating permits. The government, working alongside the mining companies, subsequently appealed against the decision.
Meanwhile, the mining company Cornerstone Capital Resources continued exploration within the protected area in direct contravention of the court order, despite overwhelming opposition in the region, and without the appropriate permits.
“This case expresses the current conflict between the Ecuadorian government and its intention to open the country’s untapped oil and mineral reserves to foreign investment and the long-held public sentiment in Ecuador against extractionist economic development,” says John Seed.
“The case will help determine the balance between short-term economic gains through mining development and the slower — but generally more sustainable — economic development that accompanies long-term biodiversity conservation,” explained John Seed.
“This case has implications not just for Los Cedros, but for all 186 Protected Forests in Ecuador, totalling some 2.4m hectares,” said Dr Bitty Roy, Professor of Biology at the University of Oregon and one of a number of scientists for whom Los Cedros is a research base.
Globally, this is the first case where constitutional protections for nature will be evoked at a national level to protect an ecosystem from large-scale mining. Ecuador remains the only country in the world to have enshrined these rights in its Constitution. It is also a country that has recently attracted a massive amount of interest from transnational mining companies, who see vast potential in its mineral wealth, particularly copper and gold.
Australia is Ecuador’s biggest investor, with companies like SolGold, BHP, Newcrest, Hancock Prospecting, Fortescue Metals, Titan and Tempus Resources pouring millions into copper and gold exploration.
Around 750,000 hectares of legally Protected Forests across the country are currently covered by mining exploration concessions. Australian mining companies stand to be impacted by any positive ruling on the case, with at least 67 concessions covering, in whole or part, Indigenous territories or Protected Forests.
Aussie miner SolGold would be most impacted by the ruling, with 19 concessions covering Protected Forests and 18 covering Indigenous territories.
Roy, Bitty A., Martin Zorrilla, Lorena Endara, Dan C. Thomas, Roo Vandegrift, Jesse M. Rubenstein, Tobias Policha, Blanca Rios-Touma, and Morley Read. (2018). New mining concessions could severely decrease biodiversity and ecosystem services in Ecuador. Tropical Conservation Science. 11: 1940082918780427. https://journals.sagepub.com/doi/full/10.1177/ 19400829187804
Hancock Prospecting Pty Ltd. (HPPL) put in an offer in 2017 to buy ENAMI stake in the Llurimagua project in northern Ecuador, according to Via Minera.
Full article here (in Spanish) with explosive commentary on situation at Llurimagua as well as information on issues with ENAMI/Codelco partnership, the collapse of copper, and interest from both BHP and Chinese mining companies in the project. Below is an excerpt from the Via Minera article.
Garry Korte, CEO of Hancock Prospecting Pty Ltd., HPPL, sent a letter on October 16, 2017 to then-Enami CEO Raúl Brito, saying that he wanted to buy the Ecuadorian state-owned company's stake in the Llurimagua project. HPPL has a long history of working with governments to establish and grow mining industries, exploring and carrying out mining projects through development and operation, the letter said in its opening lines.
At some point the local press circulated a story that Hancock wanted to partner with Enami to make the Llurimagua project a reality, but the truth differs. Hancock wanted to get Enami out of Llurimagua, buy their 51%, and ally with Codelco. It is also not true that Rinehart was willing to pay US$400 million for Enami's share of the project.
Image credit: Via Minera
That is clearly written in the documents. Hancock boasted a lot of financial capacity and offered to pay not only what they considered Llurimagua to cost, but to buy, almost in cash, all the concessions that the Ecuadorian state mining company had at that time.
"Although HPPL does not yet have the initial exploration data on which to accurately base a bid, HPPL is pleased to make this formal bid to acquire all (Enami's) interests under a multi-tiered compensation structure, starting with a baseline of US$102 million based on the results of drilling completed to date, plus additional payments if increased resources are demonstrated.”
In other words, HPPL what it offered in 2017 and continues to offer, as we will see later, is a first payment of $102 million.
In addition, the letter indicates the willingness of HPPL to allocate US$5 million annually in each of the six Enami projects, up to a total of $30 million; and to pay a royalty of 2% of the net profit after taxes. It also explained that the basic offer for 51% of Enami, of $102 million, has been formulated on the basis that Llurimagua contains 10 million metric tons.
In the first letter to the president of Enami, HPPL indicated that in the event of an agreement, the purchase would be made by its Ecuadorian subsidiary, Hanrine Ecuadorian Exploration Mining. Hanrine insisted on the purchase again in March last year. President Lenin Moreno was addressed directly and, simultaneously, to other authorities, in almost the same tone, that is, boasting of its economic strength. The proposal, pointed out by experienced people, if received, jeopardizes the country's credibility as a partner of foreign companies to which it is attracted by ensuring legal stability.
It is not just a matter of prestige as they generate discomfort, the fact is that Codelco has achieved the signing of Enami and could demand compliance with the agreements, here or in some international court.
A major Australian company has reportedly put in a US$420 million offer for the controversial Codelco-ENAMI Llurimagua project in the Intag region of Ecuador according to mineral expert lawyer.
Minerals expert lawyer Stevie Gamboa Valladares said in Prensa Minera on April 10: "Llurimagua is a mining project located near the Intag forest, an area of enormous conflict. It is a strategic alliance between the National Mining Company of Ecuador ENAMI and CODELCO, which is the National Copper Corporation of Chile. This project, which is part of a binational agreement, has been suspended for several months as both countries have failed to define the appropriate conditions for their alliance and association."
Twenty three reasons why Codelco should stay out of Intag
This then, is an attempt to draw attention to some of the hurdles Codelco, or any mining company, would face if they tried to open up a mine in Intag.
Cloudforest. Image credit: Carlos Zorilla
Studies and more Studies
To justify their existence in certain projects, mining companies, when they can afford it, hire hot-shot NGO’s to carry out interviews and studies to ascertain popular perception on mining, identify key players, and confirm that they are loved. Then they actually go ahead and base their decisions on the study’s results! Even though they know they are lies at worst, or at best, written to please the funders. As if an area’s complexity and attitudes could be studied in a few days or weeks.
A Brand New Century
If there’s anyone interested in investing in Intag’s mining project reading this, you probably know- or should know- as all responsible mining companies can attest to (as well as key players like the World Bank), that support from the Executive Branch of government is not nearly enough guarantee a project’s success. You need genuine (not manufactured or self-delusional) social license issued freely, without pressures or intimidation. In fact, national government support is no guarantee at all the project will succeed. So, do NOT bank on the government’s enthusiastic endorsement. You’ll lose. Big time.
I am positive that if most INVESTORS were find out about all the risks and obstacles facing mining in this corner of Ecuador, they would pull out.
This, then, is one more attempt to try to inform of the reality behind the lies and distortions being generated around the Junín mining project, and just 21 of the reasons why this project, as BN Americas pointed out, is bound to fail (click here).
IMPACTS
Equipment installed in Junin by Codelco.
A. Based on the Bishi Metals Environmental Impact Assessment of mining in Intag, and on a small (450,000 ton) copper mine (a couple of years later they inferred the existence of 5x more copper)
1. Intag is no like the Atacama desert, where Codelco has its copper mines. Besides being super biodiverse, there are communities all over the place. According to the Study, the mining project would relocate hundreds of families from four communities. Afterwards, the Japanese found more five times more copper, which could increase the number of communities affected by two- at the very least. Relocation of communities is more than enough to stop most extractive projects.
2. It would impact primary cloud forests. What’s so special about cloud forests? Less than 2.5% of the world’s tropical forests are cloud forests. They are not only exceptionally biologically diverse- as well as severely threatened- but they play an outsize role in protecting important headwater watersheds.
3. The project would cause massive deforestation (in the words of the experts preparing the Study). The small mine would directly impact 4,025 hectares.
4. The deforestation, according to the Japanese, would lead to drying of local climate, affecting thousands of small farmers (the EIA used the word desertification). You think communities will let this happen once they truly get the picture???
A rare frog from the Intag region. Image credit: Carlos Zorilla
5. Intag’s forests belong to the world’s top Biodiversity Hotspot; the Tropical Andes. The scientist working on the study identified 12 species of mammals and birds facing extinction that would be impacted by the project, including jaguars, spectacled bears, mountain tapirs and the brown-faced spider monkey. (Based on incomplete studies, Decoin identified more than 30 species of threatened or endangered plants and animals, and there could be dozens more).
Every year new species are found in Ecuador’s cloud forests, and this includes the spectacular Prince Charles frog, as well as the only carnivore discovered in the Western Hemisphere in the last 35 years. In addition, the area has several other endemic species, such as the recently discovered Shape-shifting frog (Pristimantis mutabilis), and the Black-breasted Puffleg Hummingbird, which exists in only two patches of high altitude cloud forests- one of them located in Intag.
6. There are pristine rivers and streams everywhere within the concession. The EIA predicted they would be contaminated with lead, arsenic, chromium, cadmium and other toxic substances.
7. The project would, unquestionably, destroy pre-Incan Yumbo archeological sites. This is one of the least studied cultures in Ecuador.
8. It would impact the Cotacachi-Capayas Ecological Reserve (one of the world’s most biologically diverse protected areas and the only large one in all of western Ecuador).
Besides these very worrying impacts identified in the Study (for a mine a fraction of what it could end up being)… there are other significant hurdles.
B. Legal hassles
9. Large-scale mining would violate the legally-binding Cotacachi County Ecological Ordinance created in 2000. Only the Constitutional Tribunal can rule on the validity of the Ordinance in light of the new Constitution. And the Tribunal has not.
10. Ecuador’s new Constitution demands that communities be consulted before any project impacting their social or natural environment takes place; a Constitutional guarantee that has been disregarded from day one. The Constitution also grants nature rights, and the people right to Sumak Kawsay, or a Good Life (also translatable as Harmonious Life) . Good luck trying to convince a decent government and world opinion that open pit mining will not violate these two fundamental rights (no matter how obscenely the government decides to define the indigenous concept of a “Good Life”). Just because a government does its best to distort the Constitution does not mean a future one will do the same.
Waning political support
11. One of the things the government likes to underline is that it has the area´s political support. As of February 2014 this is no longer true, as the president’s party, Alianza País, lost badly in local government elections in Imbabura province, site of the mining project. In fact, Imbabura was one of the provinces where Mr. Correa’s party lost more municipalities (5 out of 6) than anywhere else in the country. One of those Municipalities is the Cotacachi, which encompasses the Llurimagua mining concession. The new Mayor, Jomar Cevallos, is firmly opposed to mining.
Protests in the capital, Quito. Image credit: Carlos Zorilla
C. Opposition
There is widespread opposition to the Intag mining project. This includes:
12. The Parish township governments the concession is located at, plus County-wide indigenous and campesino organizations. The new threat has actually mobilized more organization at the local, county and national level, than ever before.
Community Opposition. Most communities surrounding the mining project are still, after all these years, opposed to the project. Eighteen years of resistance has honed their skill in resisting (the right to resist is now a right protected by the Constitution). In fact, on November 2013 the government tried to carry out an environmental impact study were stopped by the communities- in spite of heavy police presence, and military in the area..
D. Human Rights
13. After years of stopping dozens of attempts by government and private companies of accessing the mining concession that overlap communal land in order to carry out the environmental impact study and begin exploration, the government and Codelco only succeeded in carrying out the study in May of 2014 with the help of hundreds of police that terrorized the area for two months and violated rights, such as the right to freely circulate. To intensify the intimidation, a month earlier Javier Ramírez, president of the Junín community was arrested and jailed under highly irregular circumstances, which have been denounced by human rights organizations such as Amnesty International, and The International Human Rights Federation, as well as several national human rights groups. Javier was released after being sentenced in February of 2015 but only after serving 10 months in jail. His brother Victor Hugo remains in hiding accused of sabotage, the same criminal offense as his brother, for putting up resistance to the presence of Enami employees in their territory.
14. 90% of NGO’s in Cotacachi County and Intag oppose the project. In late 2012, the most important civil society organizations in Intag wrote a letter to Chile’s president to make sure he understood that the organizations would again rise to defend the area if Codelco or anyone went ahead and tried to revive the project. .
Looking at contaminated waterfalls. Image credit: Carlos Zorilla
E. Exaggerated Copper Claims
15. In 2007, Micon International, the entity contracted by Ascendant Copper to evaluate the Junin copper deposit, said that it could not confirm their earlier estimates due to degradation of samples. Copper Mesa had been saying all along that the Junin copper deposit had four times more copper than what the Japanese inferred after years of exploration. In all, 2.26 million tons were inferred by the Japanese, which is a little less than 1/10th of what the world consumes annually (and it would take decades to mine it all out).
The pristine waters of Intag, under threat. Image credit: Carlos Zorilla
F. Further environmental challenges
16. The area receives between 3000 and 4000 millimeters of annual rainfall. Heavy rainfall, abundant underground aquifers, and heavy metals in the ore make for a deadly mix. Not only that, but they raise the price of mining considerably, while greatly increasing the risks of man-made disasters, such as landslides. For an idea of what a landslide can do in an open pit mine, go here:
17. The ore contains toxic heavy metals and sulfur (which will cause Acid Mine Drainage).
18. There is a superabundance of underground water (according to Japanese EIA). This is bad news for mining companies and even worse news for the environment.
19. The area where they found the copper is exceptionally steep and mountainous, making mining much more difficult and expensive than most mines.
20. There are clear indications that Junín’s copper is very deep, making mining much more environmentally destructive and economically risky. Emphasis on Economically risky.
21. The Toisan Range has many geological faults, posing significant earthquake risks.
22 & 23. The 2019 discovery of the two endemic frogs (see above) that will, without a doubt, become extinct if mining is permitted. An issue ripe for the equivalent of the Supreme Court to decide if it violates the Constitutional Rights of Nature.
There are, in fact, more than 23 reasons for Codelco to stay out of Intag. But these should suffice for any company that considers itself responsible and to realize that Intag’s forests and inhabitants should be a no go zone. https://youtu.be/QRinnhejBIw
The Rainforest Action Group is deeply concerned about the implications of the State of Emergency declared by Ecuadorian president Lenin Moreno on October 3rd. The action gives police and military the power to use extreme force to repress the widespread mobilisation of the populace occurring throughout Ecuador after the implementation of austerity measures known as the “paquetazo” (package) on October 1.
Alicia Cahuiya, leader of the Waorani women's organisation (AMWAE) standing beside the crowd in the central square of Quito
The US $20 billion fiscal reform package includes axing fuel subsidies – a move that saw diesel prices rise from US$1.03 to $2.30 per gallon, and petrol rise to US$2.39 from $1.85. Public service wages were cut by 20 per cent, and workplace security and job security safeguards removed. Thousands of public-sector employees were also dismissed and education and healthcare spending slashed. The resulting protests have seen hundreds injured and at least one dead, with police shooting unarmed protesters and the government leaving the capital over safety concerns. Hundreds of people have also been arrested.
“The reforms by the Ecuadorian government are part of IMF mandates that seek to open Ecuador further to international investment, and pave the way for widespread copper and gold mining despite resistance from the population. Austerity measures in a country where the level of structural poverty sits at 25.5% and extreme poverty levels of 9.5% is unfathomable. Given the isolated terrain of much of Ecuador, the fuel price rises will see the poorest Ecuadorians and small-scale farmers hit the worst,” says Rebekah Hayden.
“The move directly implicates Australian mining companies in the repression of the populace, who overwhelmingly voted last year against mining in Indigenous territories and protected forests in the Amazon and Andes. Despite this, the government continues to move ahead with plans to increase mining concessions, axing taxes so that mining companies can operate with lower overheads, and providing armed forces to ensure the security on the sites of these proposed mines. The IMF loan was provisioned on foreign investment, particularly the strategic mining projects such as SolGold’s proposed Cascabel mine which acts as collateral for the loans.” Ms Hayden added.
Australian mining companies are leading investment in Ecuador, holding almost 30% of mining concessions across the country, totalling 536,101 hectares in early 2019.
“Australian mining companies like to promote mining as an opportunity to provide jobs and increase local wealth, however these austerity measures by the government indicate that local communities will be far worse off after foreign investment than they were before,” Rebekah stated.
Protesters occupying Ecuador's National Assembly. Click for video.
The Confederation of Indigenous Nations of Ecuador (Conaie) released a statement in mid 2018 denouncing the Government’s selling of around 2 million hectares of Indigenous territories and protected forests to mining companies, and declaring a unilateral stance against all industrial foreign investment projects, including mining, oil and hydroelectricity, in indigenous lands. Last week, in response to the release of the austerity package, indigenous people apprehended and detained around 50 police and military personnel trying to enter communities in the Andean provinces of Chimborazo and Imbabura. To date, many of those held have not been released. In a statement on 3rd October, Conaie declared: “Military and police who approach indigenous territories will be detained and subjected to indigenous justice.’
Meanwhile, also on 3rd October, protestors burned down a mining camp at Río Blanco in the province of Azuay. Río Blanco, owned by Chinese company Ecuagoldmining, has been for several years a social and political flashpoint. Sustained community resistance against the gold mine resulted in a legal case which in June 2018 forced the project to shut down. However, as part of his swathe of new enforcements following the signing of the IMF deal, President Moreno promised to do whatever it took to re-open Río Blanco.
In recent months there have been a number of other declarations released by communities denouncing moves to mine their land. They say they were not consulted about plans to mine. An assembly in the province of Intag on August 20th was attended by 1500 people, who released a statement giving mining companies, including BHP (five concessions in the area) and Gina Rinehart’s Hanrine, two months to withdraw from their communities.
On August 23rd, the Shuar Arutam Indigenous People’s government declared itself free of mining, demanding the exit of mining companies which include Australian companies SolGold, Andrew Forrest’s Fortescue Metals Group, Newcrest (who part-owns the flagship gold mining project Fruta del Norte) and BHP. More than 50% of Shuar territory is covered with mining concessions, and nearly 100% is concessioned to oil companies. At this moment, Shuar Arutam demonstrators are being harshly treated by the military, being gassed, shot at and beaten.
“Australian companies are naively pushing ahead with mining in communities that do not want them to operate on their land, in an environment that is increasingly fraught, and at a time when global concerns about climate change require deeper scrutiny of any new mines – particularly in such vital forests as the Amazon. Any mining in Ecuador can only go ahead with increasing force against the populace – making Australian companies directly responsible for any fatalities that result.” Ms Hayden concluded.
As this is being written, Ecuador is in lockdown due to a nationwide strike and escalating unrest. Citing security fears, the government has temporarily moved from the capital, Quito, to Guayaquil.
SolGold joins Gina Rinehart’s Hancock Prospecting as the latest Aussie company to face challenges on their Ecuadorian mining concessions. Illegal miners who were evicted from Rinehart’s concession at Buenos Aires in July, have been active on SolGold concessions in the Imbabura and Carchi provinces, while ongoing community resistance is thwarting SolGold’s plans to develop mining operations in the country. Despite PR announcements to the contrary, SolGold is facing a wave of resistance from locals who want the company and its subsidiaries out of their parishes.
The biggest headache for SolGold in Ecuador centres around ambiguities over the legal status of many of its concessions (including at least half of its "priority projects") due to concerns over Indigenous land, Protected Forests and a constitutional requirement for consultation with local communities. Widespread resistance from local communities to industrial scale mining, and rampant illegal mining (often with ties to international criminal cartels), seem likely to further derail hopes the company has of launching a successful mining operation in the country.
Rainforest Action Group map showing SolGold concessions (yellow outlined in red), Protected Forests (purple) and Indigenous territory (green) with areas of community unrest (yellow pins).
Community unrest
The province of Loja has been a hotbed of unrest for years. A successful court case against Chinese mining company Junefield shut down operations at their Rio Blanco mine in August 2018. In latest news, residents of Gualel who are surrounded by three SolGold concessions (El Cisne 2A/2B/2C), plan to radicalise protests if mining concessions are not withdrawn. They propose to march with residents from the Azuay, Loja, El Oro and Zamora Chinchipe provinces, stating on 30 July that if they are not heard they will go on a hunger strike.
More meetings are expected to take place in the first weeks of August in parishes and cantons in Zamora Chinchipe that are threatened by mining activity.
Popular consultations against mining
Numerous local parishes and cantons have been voting on mining across the country in recent months. These popular votes could form a significant legal challenge for the government and impede the development of mining projects across the country.
After a massive event involving 140 delegates from the provinces of Esmeraldas, Carchi, Imbabura and Sucumbíos, the Awá announced on 25 July the total rejection of mining in the territory. This was the fourth time they had passed a mandate to ban mining in their territory. SolGold holds 3 concessions that overlap Awá territory, while one is held by Hanrine Ecuadorian Exploration and Mining SA (HEEM) – a Rinehart-owned subsidiary.
“This resolution prohibits mining intervention in Awá territory and megaprojects that are not in line with the needs of our people. Our territory must be respected,” said Jairo Cantincus, president of the Awá.
Further south, communities and social organizations in the Bolivar province announced they want SolGold subsidiary Valle Rico mining out of the region, with a declaration on 28 July 2019 declaring the parish free of mining and calling for a permanent mobilisation to defend its territory of the mining company Valle Rico resources.
On the 30th July, a protection action was presented in the Yantzaza canton in the Zamora Chinchipe province to reject mining in Alto Nangaritza, where SolGold holds six concessions. This was due to this area being part of the Cerro Plateado biological reserve and declared Protected Forest by ministerial agreement.
SolGold stocks took a battering in May after media reports of a potential referendum on mining in Imbabura, where Cascabel is located. The case by Wilmer Meneses Ibarra hinged around the lack of community consultation. However, the Constitutional Court ended up throwing it out because applicant failed to adhere to the procedural requirements for launching such a case. The core concerns of the community regarding consultation were not addressed.
This point was largely overlooked in international media, with Reuters claiming on July 31 that: “the Constitutional Court ruled against a request to require community consultations over the Cascabel mine”. Such a ruling would potentially contravene SolGold’s UN and OPEC obligations in which foreign companies must ensure the support of Indigenous and local groups before proceeding with such an enterprise.
Provinces of Ecuador – Reference Map. Copyright not owned by Rainforest Action Group
There have been at least five similar cases where the application was competently presented which proved successful, showing that courts do generally support communities’ claims about the lack of consultation. Three landmark cases over the past year involving the communities of the Waorani, the A’I Cofán and the Rio Blanco mine in Cuenca were won because the government had not informed communities their territories were being opened up for oil or mineral exploitation.
Indigenous Kichwa Prefect Yaku Perez, an environmental and human rights lawyer, has been assisting parishes within the Azuay province to vote on mining in order to establish a proper consultation process.
Pérez presented a petition to the Constitutional Court to ban mining in the Azuay province on July 22 after his call for popular consultation in the Provincial Chamber of Azuay passed with a simple majority, but did not achieve the three-fourths majority that would allow it to be immediately executed. The Constitutional Court has twenty days to make a decision.
If the Constitutional Court agrees to a popular consultation, mining companies may be able to sue the Ecuadorian government before an international tribunal for reneging on its commitments. Such a case could put mining interests on hold for years.
Voters in the Girón canton in Azuay voted overwhelmingly to ban mining on March 24, with 86.79 per cent of the canton’s 15,000 voters rejecting mining in the area. SolGold has two priority projects in Azuay: 'Cisne Loja' and 'Sharug'. Sharug entirely covers a Protected Forest, while Cisne Loja – comprised of two concessions – has approximately 90 per cent of one concession within a Protected Forest, while about 15 per cent of the other is within Protected Forest.
On top of this, there is near unanimous community opposition in the region. Illegal mining raids by the Ecuadorian Army in Azuay on the 31st of July were also only 30 kilometres away from these projects.
Illegal mining
Illegal mining is becoming the poster child for chaos for mining investors, with the Ecudorian Army being sent into the provinces of Carchi and Imbabura in July to attempt to secure the area after illegal miners were found prospecting there. SolGold holds nine concessions in the region under the subsidiary Carnegie Ridge Resources S.A.
This is in the wake of military evictions at the illegal mining operation at Buenos Aires, on concessions owned by Gina Rinehart in July, when more than 5000 local and international miners were evicted. Buenos Aires had up to 10,000 miners descend on the region at the height of its activity. Mining operations were purportedly run by various militia groups – with Colombian, Venezuelan and Mexican crime cartels vying for control.
These illegal miners are now exploring other prospective sites in the country using mining company reports to scour for likely locations.
Rainforest Action Group summary
The Rainforest Action Group is a research and advocacy group investigating Australian mining companies and their operations, particularly in Ecuador. Rainforest Action Group spokesperson Martin Daley says it is clear that despite government claims to the contrary, mining in Ecuador is not wanted.
“We are very concerned that Australian mining companies such as SolGold are continuing to push forward with plans to mine in the area, despite Indigenous and local communities clearly being resistant to these plans,” Martin says.
“Copper is being greenwashed as a sustainable resource to fuel the growing electric car market, however it comes at a great cost to the Andean and Amazonian biospheres, which include some of the last virgin tropical rainforests in the world, and the world's most biodiverse ecosystems.”
“Recent studies show that planting 3 trillion trees might be the most effective way of combatting climate change. We believe that protecting and extending the rich ecosystems that are already in place is a far more sustainable outcome, as is supporting local people to build economies that are not dependent on fossil fuels or mining. Global development just cannot continue at the rate it has been.”
With thousands expected to join protests planned in Melbourne in October to oppose the International Mining and Resources Conference (IMARC) and protest government inaction on climate change, it is apparent that resistance to mining is growing globally.
SolGold holds 75 mineral concessions in Ecuador through four subsidiaries. Financial Times states that: “Year on year SolGold plc's net income fell 341.77% from a loss of 4.42m to a larger loss of 19.52m despite flat revenues”.
A flyover of Ecuador here shows SolGold concessions, overlaps with Protected Forests and Indigenous territories, and community conflicts. Maps by Rainforest Action Group and Forest Network.
Contact details and full media release with appendices here.
MAFIA BATTLE FOR CONTROL OF ILLEGAL MINING OPERATION
A twelve-hour gunfight near Buenos Aires in the north of Ecuador injured 19 people with an unknown number of deaths during the early hours of Sunday 23 June. The illegal mining operation is on a concession owned by Australian mining magnate Gina Rinehart.
At least 19 people were injured in a twelve-hour shoot-out between rival organised crime gangs in Hanrine's lucrative gold mining concession in northwestern Ecuador. The gunfight near Buenos Aires killed an unknown number of people, with bodies reportedly hastily buried or dumped down mine shafts where the confrontation took place. A truck transporting local residents and some of the wounded from the area also overturned, injuring 15.
The gunfight took place on Imba 2, a mining concession owned by Hanrine, a subsidiary of Gina Rinehart's Hancock Prospecting, where an illegal mining enterprise has been operating since December 2017.
Thousands of miners from Ecuador, Colombia, Venezuela and other countries descended on the site when gold was discovered in late 2017. As many as ten thousand people have since moved into the area to mine for gold.
Rival mafia gangs have been vying for control of the lucrative trade since early 2019. Tens of millions of dollars in gold has left the site to be processed in the south of the country, with onground sources suggesting that police officers have simply watched truck drivers pay approximately $50,000 in bribes to move each load of gold material.
The newcomers have caused serious problems for the residents of Buenos Aires, with reports of violence, drugs and prostitution in the town. In May, local residents blockaded the main road into the mine after locals were threatened by armed men.
The illegal operation and resulting violence are damaging the hopes of Australian companies that Ecuador would prove to be a safe mining haven. Solgold, operating in the country since 2011, is hoping to construct Cascabel, one of the largest copper mines in the world, only 15km north of the recent violence. Australian miners Newcrest and BHP have a 25% share of Solgold.
Local newspapers have reported that local mafia are using the mining base near Buenos Aires as a launching place to establish new illegal mines in the region. Two such illegal operations with hundreds of miners, have been shut down in the past few months by Ecuadorian authorities. One of these was on another Solgold concession.
The Ecuadorian Government has effectively lost control of the Imba 2 concession. This loss represents a major embarrassment to the Government who are trying to attract mining investment into the country. If this dispute remains unresolved it could mean that mining concession owners such as Hanrine may have to take legal action against the Ecuadorian Government, or leave the country entirely. It would appear that the north of the country is too volatile to establish mining operations.
The Rainforest Action Group has been monitoring and researching miners in Ecuador for over a year, and we know that this news is frightening investors. We need to keep the pressure on these companies and remind investors that there is no way to regulate their activities in such fragile, socially disadvantaged and mega-biodiverse areas. Where there is mining, there will be violence, human rights atrocities and ecocide.
The illegal operation and resulting violence are damaging the hopes of Australian companies that Ecuador would prove to be a safe mining haven. Solgold, operating in the country since 2011, is hoping to construct Cascabel, one of the largest copper mines in the world, only 15km north of the recent violence. Australian miners Newcrest and BHP have a 25% share of Solgold.