Tag: solgold

Sanctuary for life in Ecuador

A Constitutional Protection Action could protect the Rights of Nature over the economic rights of transnational companies in Ecuador's Intag Valley.

Originally published in The Ecologist by Rebekah Hayden

The Intag valley in the Imbabura province, high up in north-west of Ecuador, should be a peaceful place. Forested mountains are blanketed so thickly in fog that the sub-tropical rainforests are known as cloud forests.

These forests shelter a biodiverse treasure in the plants and animals found here – many of which are critically endangered or at risk of extinction. Some are found nowhere else on earth. A study in 2018 found 287 endangered species in the Intag area alone. That number keeps going up as new species are discovered.

On the valley floor, farmers hold small plots of land, growing coffee, bananas and other subsistence crops. Yet beneath the subsoil lies bright seams of copper. To get to it, chunks of the valley and the mountains must be torn apart.

Mining

Atelopus longirostris. Image credit: Carlos Zorrilla

The Intag region has been a hotbed of conflict since the early 1990s, when miners exploring for copper discovered the valley’s mineral riches, and the community first voiced their opposition. Since then, communities in Intag have denounced mining companies for violations of permits and licenses. Two mining companies have since been forced out by peaceful, but determined community resistance.

Backed by local government, communities have presented evidence of serious human rights abuses, contamination of the Junín river, illegal logging, unauthorised land-use, and demanded the area be recognised as a mining-free zone, highlighting the region’s other sources of wealth, including its biological diversity and ecotourism potential.

A preliminary Environmental Impact Study conducted in 1996 found even a small copper mine in the Intag region would lead to massive deforestation and contamination of waterways with heavy metals. It predicted relocation of four communities, a reduction in rainfall and an increase in climate instability, a serious concern for a region already at grave risk of climate change.

Despite all this, the government continues to parcel up the land and sell it to transnational companies.

The Llurimagua copper mining project has a complicated history. Ecuadorian state miner ENAMI and Chile giant Codelco started exploring the site in 2015 – but only after it had been secured by hundreds of police. Conflict over how to split the profits, community resistance and a damning environmental impact study has stopped any exploration since 2018.

In 2019, the Comptroller General and the Ombudsman's report on the mining project found glaring violations to the law and strongly suggested the forest within the mining area should be given rights due to its biological significance. ENAMI is now planning to sell off its share.

Mining 

Also in Imbabura, but fifty kilometres north-east of Llurimagua, Australian miner SolGold holds the Cascabel mining concession, which could equal Chile’s Escondida copper mine in size if it is developed. In 2019, Ecuador's Comptroller General published the results of a special investigation revealing many irregularities linked to the project.

Just below Cascabel, operations are degenerating into fiasco at a concession held by Hanrine, a subsidiary of Hancock Prospecting, and owned by Australia’s richest person, Gina Rinehart.

In 2019, the military had to kick thousands of illegal miners off the concession, while in recent months Hanrine’s General Manager was arrested for possession of military-style weapons and its main mining camp was burnt down. Illegal mining has contributed to a range of social problems at nearby townships, and now locals are wary of large industrial mining as well.

BHP also has a concession close to SolGold’s Cascabel project. Like the others, it is an area lush with primary and secondary cloud forest. On August 27, local authorities called for a halt of all mining projects in the area for fear of stoking social conflicts and environmental contamination.

Impact

BHP is emerging as the mining company which might have the largest impact on the region. Not only does it hold five concessions in the Intag area, but as a majority shareholder in SolGold holding a 14.7 percent stake, it stands to benefit from their concessions as well. BHP have been under a standstill agreement with SolGold which expires in October, allowing it to make a bid on the company. BHP is also a major contender in the race to buy ENAMI’s share of Llurimagua, along with Hanrine.

If BHP wins its bids for both SolGold and ENAMI’s share of Llurimagua, not only would it have the largest number of concessions in the region, but its holdings across Ecuador would total over 300,000 hectares.

As the biggest mining company in the world, BHP likes to appear socially and environmentally responsible. That has not been the experience of people on the ground in the Intag.

BHP’s concessions in Intag cover thousands of hectares of the local governments’ watersheds, primary and secondary forest reserves, farmland and the water sources for several communities. They also cover farmland, and seven communities who view the sale of land for mining as illegal, as they were never consulted by the government or gave consent – in direct violation of the Ecuadorian Constitution.

BHP obtained permits and conducted its first explorations for copper without community consent, and has repeatedly tried to divide the community. In January 2020, the affected communities voted to declare the area a mining-free zone. It is nearly three years since BHP has been able to access the concession.

Protections

BHP has a clearly worded charter that states it will not explore or extract resources within or adjacent to the boundaries of International Union for Conservation of Nature (IUCN) Protected Areas, or operate where there is a risk of causing the extinction of an IUCN Red List Threatened Species.

Yet five of BHP’s concessions lie within the Cotacachi-Capayas Ecological Reserve Buffer Zone, the habitat of several IUCN-listed species; there are at least two IUCN-listed species at LLurimagua; and many more across the concessions it might inherit if it bids for SolGold as well.

With BHP’s AGM coming up on October 14, there is a small hope that shareholder pressure may caution BHP to not invest further in these projects.

Ecuador is unique in the world for not only recognizing that nature has rights, but embedding these in its Constitution. DECOIN (Organizacion para la Defensa y Conservacion Ecologica de Intag), the team leading the Llurimagua Rights of Nature case, believes Rights of Nature are equivalent to the right to life, and that both of these rights are violated by the economic rights of transnational companies.

The Los Cedros Biological Reserve is also making a case with the Rights of Nature clause at the Constitutional Court, arguing that it should give Protected Forests greater protections from mining and other extractive industries.

Good living 

Carlos Zorilla, a founder of DECOIN, says a positive ruling for the Lluriamgua case would have a much wider impact than only safeguarding Protected Forests. It would prohibit extractive activities in all habitats where endemic species are found. All endemic species would be included – whether the species have protection or not. Given Ecuador’s high rate of endemism, it could stop a large part of the country from being mined.  

A public awareness campaign based around Buen Vivir or “good living”, a cornerstone concept of the Ecuadorian Constitution – Intag as a Sanctuary for Life – is strongly backed by the Cotacachi County Government, with the Mayor publicly expressing an interest in creating a local law to declare all of Intag and Manduriacos a Sanctuary for Life. This would put it at loggerheads with the national government, which has been threatening local governments with criminal proceedings if they pass anti-mining ordinances.

The first Constitutional Injunction (Medidas Cautelares) to immediately stop the Llurimagua mining project was heard by the Cotacachi court on 11 September.

The case hinges on two species of frogs threatened by the Llurimagua mining project: the Longnose Harlequin Frog and the Confusing Rocket Frog. The former was listed by the IUCN as extinct until its unexpected rediscovery last year; both are endemic to forests covered by the mining concession. Another two dozen species including the Andean Eagle, a species of spider monkey, and the spectacled bear are also in danger of extinction.

At the hearing, Ecuador's best-known herpetologist Juan Manuel Guayasamin gave a testimony on the endemic frogs, while mammal biologist Professor Diego Tirira, University of Sussex biologist Mika Peck, and Javier Morales from the Ombudsman’s office presented Amicus Curiae (Friends of the Court) on the importance of the region and the threats various species face.

Communities

By contrast, the government’s attorneys only brought forward a flawed Environmental Impact Study with 235 observations they were still “working to resolve”.

Carlos Zorilla said: “A problem facing all court cases based on the Rights of Nature is that it is rare to find a judge or lawyer who properly understands it. 

"If we lose, we will take the case all the way to the Supreme Court, as we feel there is indisputable evidence that mining in Intag’s forests will violate the Rights of Nature, causing the two endemic frogs to go extinct, and push others closer to extinction.”

Regardless of the outcome of the case, it should not be incumbent on communities or courts to ensure the good behaviour of mining companies or governments. They must come to recognise themselves that mineral rights do not give them the green light to commit gross environmental crimes or human rights abuses.

The world needs places that stay untouched; where the risk of what we might lose outweighs any potential economic benefit. Intag is one of these places.

Constitutional Court could save Australian Government funded Reserve in Ecuador from mining

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
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.

Full media release here.

Mining camps in Ecuador potential breeding ground for coronavirus

Despite mining companies saying they are suspending operations in Ecuador due to Covid-19, on the ground work continues to take place, angering at-risk local communities and indigenous groups.

Image credit: Acción Ecológica

“The Rainforest Action Group is concerned that miners moving through the region are putting locals at risk. Four miners located at Rocafuerte, the operational base for Solgold's Cascabel concession in northern Ecuador, have apparently tested positive for the virus.[1] On Monday 30th March, the entrance of a hostel in Ibarra was blocked with dump trucks out of fears authorities were transferring COVID-19 patients to the hostel,” says Ms Liz Downes, a member of the rainforest Action Group.

“Indigenous groups and local communities are furious that mining employees are continuing to enter their communities despite the risks of coronavirus. It also appears that mining companies are taking advantage of curfews to install machinery at controversial sites without resistance,” says Ms Rebekah Hayden, another member of the Rainforest Action Group.

On March 18, environmental group Acción Ecológica denounced Codelco and ENAMI for capitalising on the state of emergency to put in machinery at Cotapaxi, south of Quito.[2]

Chinese mining companies TerraEarth S,A., and Ecuacorriente have also been denounced for continuing operations despite the high risk to local Indigenous groups. A camp in the San Carlos Panantza mining complex was intentionally set on fire and destroyed.

“Many of the Indigenous tribes in Ecuador have already been devastated by epidemics, such as polio which wiped out around two-thirds of the Waorani in the 1950s. Another epidemic in the region would decimate these groups further,” says Liz Downes.

“The surge in mining activity is also putting water sources at risk. The residents of the northern area of the Esmeraldas province stated on April 4th that mining activities have intensified since the announcement of the state of emergency, contaminating the rivers that constitute their drinking and washing supply[3],” Liz Downes says.

“The government’s inability to act effectively should crisis hit is apparent at Ecuador’s main port, Guayaquil, where bodies were piling up in houses and apartments. At least 550 bodies were not collected for up to eight days. Inhabitants were forced to make posts of their plight on social media in an effort to draw the government’s attention to the situation,” Liz Downes says.[4]

Mining and petrochemical companies in Ecuador are deemed essential services and are exempt from the suspension of normal work. Fruta del Norte has reduced its workers from 1,080 to 400-500, and Mirador is working with 800 from a usual 2400.[5] At the Mirador mine in south-east Ecuador, Ecuacorriente is constructing their massive tailings dam rather than continuing with mining operations as local authorities have suspended general mining activities to avoid transportation of ore and movements on and offsite.

“Although SolGold and Lundin Gold have announced employees would be largely working from home, this appears to largely refer to professional-level employees. On the ground, it appears that many contractor companies are continuing with usual operations, while a reduced number of employees are working onsite,” Rebekah Hayden says.

“Soldiers have effectively trapped an undisclosed number of miners in the mining camp at Mirador. Whether they are able to isolate effectively is not clear. This was as a result of a move by local Emergency Operations Committee (COE) of the canton El Pangui on March 19 to restrict the movement of miners,” Rebekah Hayden says.

“As MiningWatch Canada has pointed out[6], mining camps are often congested and located far from adequate medical facilities and often have reduced access to clean water. Managing and containing coronavirus under these conditions is very unlikely. The risk to locals from soldiers who may have contracted the virus, or any employees entering or leaving is very high. Mining activities should not be allowed to continue at this time,” says Rebekah Hayden.

To download media release click here.

[1] https://www.eluniverso.com/noticias/2020/03/31/nota/7800594/comuneros-imbabura-carchi-rechazan-llegada-posibles-infectados?fbclid=IwAR0xRcvDrlEMszvg88LTE-E170WsrHRhWqgQdOAmT6csck08omoAZix6A-A

[2] https://twitter.com/AcEcologica/status/1241481792584105989

[3] https://ddhhecuador.org/2020/04/04/documento/denuncia-publica-01-poblaciones-de-san-lorenzo-denuncian-contaminacion-en-sus

[4] https://www.eluniverso.com/noticias/2020/03/31/nota/7800594/comuneros-imbabura-carchi-rechazan-llegada-posibles-infectados?fbclid=IwAR0xRcvDrlEMszvg88LTE-E170WsrHRhWqgQdOAmT6csck08omoAZix6A-A

[5] https://www.reuters.com/article/us-health-coronavirus-ecuador/ecuadors-largest-gold-and-copper-mines-scale-back-as-coronavirus-cases-rapidly-grow-idUSKBN21912K

[6] https://miningwatch.ca/blog/2020/3/31/covid-19-mining-companies-putting-workers-and-communities-greater-risk

SolGold pushes ahead in Awá territory despite opposition

Communities barricaded a bridge in Chical, close to the Colombian border, on January 17 to express their frustration with mining companies continuing to explore despite community opposition. The event took place around 5 kilometres from SolGold’s Chical concessions, where they announced significant deposits last year.

From a video still by Nelson Muepaz. Chical community members resist ENAMI exploration attempts.

“The blockade was the latest in a series of measures by El Pablo community members to protest ongoing exploration attempts by SolGold subsidiary Carnegie Ridge Resources and ENAMI (part-owned by Canadian company Cornerstone Resources). ENAMI’s Espejo concessions cover more than 90% of the Cerro Golondrinas Protective Forest which forms the headwaters of five rivers,” says Ms Rebekah Hayden, a member of the Rainforest Action Group – a group investigating the actions of Australian mining companies in Ecuador.

SolGold has a cluster of concessions in northern Ecuador that overlap or border on territory held by the Indigenous Awá Federation. Indigenous territories have added protections in Constitutional law to protect them from mineral and oil extraction.

The Awá community of El Tigre is on SolGold’s Chical 1 concession in Carchi, while Awá community El Baboso overlaps the border of the Blanca concession.

“The Awá Federation has consistently held a united front against mining since 2016, resolving to ban all mining on Awá lands, and demanding absolute transparency about the concessions. Despite 6% of their territory being covered with mining concessions (down from an initial 40% in 2017), they claim there has been a complete lack of consultation or information on the progress of the projects,” Ms Rebekah Hayden says.

Awa President Jairo Cantincus talking at the assembly on January 19-20

The Awá’s anti-mining stance was reiterated with a formal statement on mining at an assembly of 450 people on January 19-21, and president of the Federation of Awá Centros of Ecuador Jairo Cantincus was re-elected, a sure sign that the Federation will continue to fight against mining.

“SolGold started exploration on its Chical concession despite a lack of consultation with the community, and powerful community resistance. Exploring without their full and informed consent is against their Constitutional rights, and could be contested in court,” Ms Rebekah Hayden says.

When Roberto Taicús, president of the Awá community El Baboso went to speak to SolGold at a meeting in September 2019, they denied the community was affected by their concessions, despite maps showing it to be the case.

“On other SolGold concessions, El Cielito leaders have said that SolGold has divided its inhabitants and blocked the roads to their farms. The Santa Cecilia community in SolGold’s flagship Cascabel concession, is also under threat, with Solgold buying up land en masse, and forcing community members out,” Ms Rebekah Hayden says. [read more on this here]

Roberto Taicús was quoted by Ecuadorian journal PlanV saying community members, “have become stripped of their own territories”.

SolGold's El Chical concessions (outlined in yellow). Note overlap with Awa territory (in green), and Los Gonlondrias Protected Forest (in purple). Image Credit: Rainforest Action Group and Forest Network

“The Awá Federation has repeatedly sought information on mining projects, but Solgold only refers them to the Government, who refuses to give them any details. The Awá are currently conducting baseline water studies to determine contamination from exploration and mining,” says Ms Rebekah Hayden.

“All this comes at a time when the homicide rate in Ecuador has soared, with InsightCrime stating it has grown by a faster rate than crime capitals such as El Salvador, Venezuela and Brazil. This is the case particularly near the border with Colombia, where criminal groups and ex-FARC rebels compete to move cocaine along Ecuador’s ‘cocaine superhighway’. This area is only 20 kms from Solgold’s Cascabel concession,” says Ms Rebekah Hayden.

“Illegal and legal miners have inundated the region, threatening townspeople and attempting to bribe leaders. The Ecuadorian army was sent in to the area to secure the area, after miners were moved on from their illegal occupation at Gina Rinehart’s Imba2 concession in July. The Awá have already seen how illegal mining has affected Awá tribes in Colombia, polluting rivers and destabilising social groups, and they do not want to see the same thing happening to their communities in Ecuador,” says Ms Rebekah Hayden.

“It seems unfathomable that SolGold is continuing to explore in a region so powerfully anti-mining, and against Ecuadorian law and OECD requirements that they conduct consultation with affected communities. Additionally, attempting to build a mine in a region where organised crime and homicide rates are soaring does not sound like good business practice,” Ms Rebekah Hayden says.

“With InsightCrime stating that this might be the early stages of a sustained increase to Ecuador’s murder rate, the Rainforest Action Group is concerned that SolGold’s efforts to establish a mine in the region will only amplify the unrest further,” Ms Rebekah Hayden says.

Investor risk alert for Cascabel

Cascabel is an investor nightmare. Located in close proximity to the Colombian/Ecuadorian border, in an area the Australia’s Department of Foreign Affairs and Trade (DFAT) advises not to travel

SOLGOLD CASCABEL CONCESSION

“This border is out of control. Its inhabitants are left to their fate.”

Colonel Mario Pazmiño, the country’s former director of military intelligence.
The Guardian, 24 October 2018

The location of SolGold’s Cascabel concession is an investor's nightmare. Cascabel is located in close proximity to the Colombian/Ecuadorian border, an area where Australia’s Department of Foreign Affairs and Trade (DFAT) advises DO NOT TRAVEL. “We advise against all travel here due to the very high risk. If you do travel, you should typically seek professional security advice. Be aware that regular travel insurance policies will be void and that the Australian Government is unlikely to be able to provide consular assistance.”

Around 26% of SolGold is owned by BHP and Newcrest Mining. SolGold have never built a mine and do not have the capacity to raise the billions of dollars to build a mine at Cascabel, so will most likely sell the concession. The buyers then will inherit all the risks associated with building and operating the mine. SolGold will effectively wash their hands of the operation.

SolGold are anticipating that the Alpala mine in the Cascabel concession will be active for 50-60 years. It will also produce copper, gold and silver from 2.4 billion tonnes of ore. It is the opinion of MRAG that not only will the mine be built in a politically unstable and dangerous region, but infrastructure required for the mine, could come under attack or even sabotage, as could the mine itself.

In their 2019 Preliminary Economic Assessment (PEA), SolGold suggested that mining material will be transported, via pipeline, 60 km north west towards San Lorenzo. San Lorenzo is a known organised crime hot spot, located near where 3 journalists were murdered in April 2018. The murders shocked Ecuador. The police station at San Lorenzo was also car bombed (the first car bombing in Ecuador) in January 2018 by Revolutionary Armed Forces of Colombia (FARC) dissidents. As a result, the President of Ecuador, Lenin Moreno, declared a limited State of Emergency in the cities of San Lorenzo and Eloy Alfaro to enhance police and military authority.

In August 2019 when the FARC guerrillas announced that the 2016 peace deal had failed and that the re-established armed revolution in Colombia. The Ecuadorian press reported widespread concern in Ecuador regarding the potential impact that the FARC could have in the north of the country. “Return to the FARC weapons causes alarm in Carchi…Tobar Donoso is one of the areas disputed by the FARC, because, according to residents, it is a corridor used by Mexican drug cartels and the front of the disappeared alias Guacho.”

Tobar Donoso is located 50km north-west of Cascabel.

From San Lorenzo, the pipeline will then continue 100km south west to the port of Esmeraldas. San Lorenzo has also been a hot bed of illegal mining activity for many years. Gold mining is now seen as being as lucrative as coca growing by organised crime syndicates in Colombia, with Ecuadorian paper El Comercio saying: “…But military information warns that Colombian criminal groups, linked to FARC dissidents or drug traffickers, are also behind the illegal mining that is registered in the two cantons, due to their proximity to the Nariño department."

Another active group in the region is Colombia’s National Liberation Army (ELN). Reports suggested in early 2019 that the ELN was targeting border areas inside Ecuador including “facilities and units in the municipalities of Mira in the province of Carchi and San Lorenzo in Esmeraldas as potential targets”.

Both the FARC and ELN have targeted energy infrastructure inside Colombia over the years. Up to April 2019 there have been around 20 attacks on Colombian pipelines in 2019. The 485-mile (780-km) Cano Limon pipeline was kept offline for most of 2018 because of more than 80 bombings. An attack in April 2019 occurred in the Province of Narino, just north of the Ecuadorian border. Narino is also a hotspot for illegal mines and coca growing where the ELN and another criminal group, the Urabeños have made millions of dollars in recent years. Reports suggest that the gold sourced from illegal mining from Narino is transported into Ecuador.

SolGold also state in the PEA that workers at Alpala will most likely be bussed in each day from Ibarra. This probably means that the Alpala mine site itself will have few people staying at the mine overnight, except security staff. Given the precarious location of the mine, it is apparent that the mine itself (and pipeline) could be a target for groups wanting to cause problems such as armed robbery. The mine will most likely be a magnet for many people throughout the region. Power for the mine is also suggested to partially come from Colombia.

The Cascabel mining site at Alpala is ~10km from the DO NOT TRAVEL zone, with entry into the proposed mining through Roca Fuerte almost located on the boundary of the DO NOT TRAVEL zone.  Illegal mining in close proximity to the Cascabel concession has occurred at El Cielito (approx. 5-10km north of Cascabel) between 2017 and 2019. SolGold has apparently employed the services of security firm G4S to look after its Cascabel security.

Military police entering Gina Rinehart's concession in Ecuador.

The largest illegal mining operation in Ecuador in almost 30 years, occurred north of the village of Buenos Aires, on a mining concession called Imba 2, owned by Australian mining magnate Gina Rinehart between November 2017 and July 2019. The main illegal mining area, at a place called El Triunfo, was located only 10km south of Alpala. At this location over 10,000 illegal miners operated. They miners were eventually evicted after the Moreno Government sent in 2000 troops and hundreds of police officers.

The mining operations inside Imba 2 were rife with organised crime and mafia influence. A number of brutal murders occurred near the mines. Drug trafficking, prostitution and other criminal acts undermined the security of the existing township of Buenos Aires, with organised criminals from Colombia and Venezuela being pinpointed as key organisers. In August 2018 12 hooded men stole 18 cubic metres of confiscated gold material that had been stored by the local police. Police officer and mining officials have also been implicated in corruption as have officials in the judicial system.

An illegal transport network was established which allowed for the transportation and storing of rock from the mine sites. Between $50,000 and $150,000 was required by truck drivers to “oil the road” and pay bribes on the way of moving illegally sourced materials to processing sites in the south of the country. Destinations of the illegally mined rock included: Azuay, El Oro, Camilo Ponce Enriquez, Zaruma and Portovelo. After processing, the gold was then illegally transported out of the country. It is clear then, that an organised crime syndicate associated with gold mining is operating inside Ecuador, with gold also being funneled in from Colombia. Developers of Alpala mine will have to build their mine on shaky grounds indeed. The following summary by Open Democracy accurately describes the powder keg.

“Under different names … the actors operating on the Ecuador- Colombia border remain the same:

  1. Paramilitary groups which continue to defend the interests of drug traffickers and landowners, even though the AUC no longer exists.
  2. Dissident groups of the FARC now turned criminal and related to drug trafficking.
  3. Colombian drug traffickers allied with Mexican cartels.
  4. The armed forces (the army and the police) of Ecuador and Colombia.
  5. State presence of both nations.

There is also a new actor: the illegal miners who operate in Imbabura, Carchi, Esmeraldas and Sucumbíos, who generate problems for the local populations.”

SolGold AGM 20 September

SOLGOLD AGM 20 SEPTEMBER 2019

Members of the Rainforest Action Group attempted to raise their concerns about investing in Ecuador at the SolGold AGM in September 2019 as we believe SolGold has not been transparent with shareholders as to the nature of their concessions. Below are our questions and concerns.

We are concerned that correct consultation processes have not taken place, especially given the Ecuadorian constitution which requires prior and informed consent by communities, and which enshrines the rights of nature and Indigenous people in the constitution. This is particularly important given recent legal wins, for example in April 2019 where the Waorani won a landmark case protecting their land from oil concessions, and in the case of Rio Blanco last year, where the Chinese-owned mine was forced to close over claims communities were not consulted about mining on their land. A case won in the Provincial Court of Imbabura in June barred BHP/Codelco from entering concessions at the Manduriacu Reserve without permission.

What does SolGold say about statements that say authorisation has been falsified and communities have not been consulted? What does SolGold say about territories that have been entered illegally, or explored without permission by SolGold employees? What does SolGold say about permissions being falsified or been obtained with force or coercion, or obtained from someone who does not live in the area? What does SolGold say about aerial magnetic explorations that took place without consent or authorisation of the community?

Security issues

Car bomb in San lorenzo. Image credit: Sputnik news

In August 2019, guerrillas from the Revolutionary Armed Forces of Colombia (FARC) announced that the 2016 peace deal had failed and armed revolution was re-established in Colombia. The criminal group has been spreading its actions down into Ecuador ever since the deal was established in 2016.

Cascabel is located in close proximity to the Colombian/Ecuadorian border, an area the Australian Department of Foreign Affairs and Trade (DFAT) advises as a DO NOT TRAVEL area, where regular travel insurance policies are void and the Australian Government says it is unlikely to be able to provide consular assistance. The Cascabel mining site at Alpala is ~10km from this zone, with entry into proposed mining through Roca Fuerte almost on the boundary of the DO NOT TRAVEL zone.

In its 2019 Preliminary Economic Assessment, SolGold suggested that mining material will be transported via pipeline, 60 km north-west towards San Lorenzo. This route goes through an area of significant risk where organised militia with links to FARC conducted a number of bombings in 2018. The police station at San Lorenzo was car bombed in January 2018. A trap bomb loaded with shrapnel killed three and wounded eleven Ecuadorian marines on 19 March 2018. A few weeks later, a second car bomb exploded under a police car.

In April, three journalists were found murdered by dissidents, a bridge was bombed near Viche, and several bombs were placed in transmission towers. As a result, the President of Ecuador, Lenin Moreno, declared a limited State of Emergency in the cities of San Lorenzo and Eloy Alfaro to enhance police and military authority. There were also attacks on civilians and military patrols at the border town of Mataje – now a ghost town with civilians fleeing the embattled area.

This is the area that SolGold have proposed as a route for the pipeline. How will SolGold protect 60 kilometres of pipeline carrying valuable mineralised ore in such dangerous terrain?

SolGold has suggested power for the mine will partially come from Colombia. Both FARC and Colombia’s National Liberation Army (ELN) have targeted energy infrastructure inside Colombia over the years. Up to April 2019 there were about 20 attacks on Colombian pipelines in 2019. The 485-mile (780-km) Cano Limon pipeline was offline for most of 2018 because of more than 80 bombings. How will SolGold safeguard electricity coming from Colombia?

SolGold states in the PEA that workers at Alpala will be bussed in each day from Ibarra. This means that the Alpala mine site itself will have few people staying at the mine overnight except security staff. Given the precarious location of the mine, it is apparent that the mine could become a magnet for criminal groups and armed militia in the region.

We are concerned that not only will the mine be built in a politically unstable and dangerous region, but the pipeline and mining infrastructure, could come under attack or be sabotaged, as could the mine itself. How does SolGold plan to protect such a risky investment?

SolGold has employed the services of security firm G4S to look after its Cascabel security.[1] G4S is facing a raft of lawsuits from staff who have alleged they were forced to work in unsafe conditions on Manus Island, among other places, with security guard Gregory Wisely alleging that after suffering a head injury during a riot, G4S did not allow him to stop work, and that he was not provided with any equipment to radio for help. Documents from a separate legal case allege G4S employed “incompetent and malicious security staff, who escalated the violence at the premises during the riots and contributed to the death of one transferee and the injury to other transferees”. The killed man was asylum seeker Reza Barati.

Can SolGold assure us that G4S will not put staff in similar danger at Cascabel if there is to be an altercation with illegal miners, criminal gangs or armed militia? Can SolGold ensure that G4S will not employ ex-FARC militia, individuals or groups with links to cartels, or guards with military training who might exacerbate the situation at Cascabel? Are G4S responsible for SolGold’s security across Ecuador, or will military or police be used at other concessions? What will the security costs be for all 72 concessions?

[1] Anna Legge, Public Relations for Solgold told us that SolGold was using G4S at Cascabel at the 2019 Prospectors & Developers Association of Canada (PDAC) 3 March 2019.

Illegal mining

Illegal mining in close proximity to the Cascabel concession has occurred at El Cielito (approx. 5-10km north of Cascabel) between 2017 and 2019; and the largest illegal mining operation in Ecuador in almost 30 years, occurred on a mining concession called Imba 2, owned by Australian mining magnate Gina Rinehart. The illegal mine, called El Triunfo, is only 10km south of Alpala. At this location over 10,000 illegal miners operated between November 2017 and July 2019. The miners were eventually evicted after the Moreno Government sent in 2000 troops and hundreds of police officers, however miners are starting to return to the area. Gina Rinehart and the Ecuadorian government are now purportedly in negotiations over who pays for the involvement of the military, with the Government saying it is the responsibility of mining companies to pay for security on their concessions.

How is SolGold safeguarding its concessions from illegal miners? What do you plan to do if a gold rush occurs at Alpala or its other concessions? How will SolGold afford to evict thousands of miners off its concessions in these instances, when there is already so many other factors that are delaying mining at the site?

SolGold’s links to Ecuadorian Military Pension Funds through BHP

In March 2019, BHP signed a US$82M Non-Binding LOI with Luminex Resources for the Condor Project in the south-west of Ecuador, located 55 km south of Ecuacorriente’s Mirador mine and 31 km south of Lundin Gold-Newcrest’s Fruta del Norte mine. Key elements of the deal give BHP the right to earn up to 70% ownership interest by investing an aggregate amount up to US$75M, with BHP making cash payments to Luminex up to US$7M.

The Condor Project is 10%[2] owned by the Instituto de Seguridad Social de las Fuerzas Armadas ("ISSFA"), which is the pension fund for Ecuador's armed forces personnel.

On 5th August 2019, the local Shuar community held a non-violent protest against the Luminex/BHP Tarqui project. The military coincidentally turned up at the same time to conduct a “gun control operation”.

"First the police came. They left after talking to people and seeing that it was peaceful action. Now the army arrives saying they want to do a gun control. #noalamineria #fueradelostitulosglobales #consultaprevia " Tarimiat on Twitter.

What does SolGold think about the ethics of one of their key investors being involved with the Ecuadorian military? Seeing as BHP is a major investor in SolGold can we expect the military to coincidentally turn up when communities protest against other SolGold, BHP and Liminex projects? Or does the military only protect Luminex projects?

[2] Luminex’s level of ownership on the Condor concessions varies between 90% and 100%; 6,900 ha of the 10,101 ha are 90% owned by Luminex.

Environmental impact

In Pallatango, Chimborazo, the Chillanes concession is on top of the biggest geological faultline in Ecuador. The Pallatanga fault (PF) is a prominent NNE-SSW strike-slip fault crossing Central Ecuador. This structure is suspected to have hosted large earthquakes, including the 1797 Riobamba event which caused severe destructions to buildings and a heavy death toll of more than 12,000 people, as well as widespread secondary effects like landsliding, liquefaction and surface cracking.

A mine in the region would be extremely unsafe and a tailings dams in the area at risk of collapse were an earthquake to occur. What will SolGold do to ensure the safety of mines and tailings facilities in this area, and how will SolGold protect local communities from harm if earthquake damage to a mine impacts water sources or causes a threat to life?

Most of southern Ecuador’s cities and towns are already experiencing growing water shortages due to rapid population growth. In Gualel, where there are major water sources, locals are concerned about water contamination by mining activity. These sources not only provide water for the region but are considered sacred. Mining in this area could endanger both their livelihood and their way of life. What is SolGold planning to do to combat any risk to water? What will SolGold do in Bolívar to safeguard both communities access to water, and contamination of these sources? How will SolGold protect against the impact on forest and wildlife in the region?

Cascabel

How deep are the ore deposits at Cascabel? Previous studies indicate they are located at around 2000 metres but this is not being reported to shareholders. A mine 2 kilometres deep in an area of high rainfall and earthquake risk is likely to have significant impact and risk. The depth would also complicate extraction of the ore, and the cost of mining in the area. We are concerned that SolGold does not have the capital to build such a mine, particularly when it has so many other priority projects on the go. Will SolGold sell off Cascabel to another company? What will the impact be on SolGold shareholders if this is the case?

The Cascabel concession is part of the Mira River basin, and is surrounded by mature primary and secondary forests that house endangered species, and protect pristine microbasins. The entire Cascabel concession is part of the catchment for the Mira River which then runs through Colombia. Any contaminants that put this river system at risk could cause an international incident.

We are concerned about the impacts of the mine and related infrastructure on the local ecosystem, as well as the toxic waste generated by mining activities.

SolGold itself has said that it will extract 2.4 billion tonnes of ore from the mine. Based on that figure, we estimate the tailings generated by this mine would amount to at least 1km3 (1,000,000,000 m3), and could possibly exceed 2km3 over the life of the mine. To put these figures in perspective, the capacity of the largest lake in Ecuador – Lake Quilotoa is 0.35km3, making tailings produced enough to fill the lake three times over, at a conservative estimate.

In their preliminary reports, SolGold states that decisions regarding the management of tailings are still in preparation. Can SolGold guarantee that the mined rocks do not contain pyrites or monosulphides, and can you guarantee that SolGold/ENSA will maintain tailings dams in the Cascabel concession for hundreds of years to ensure the toxicity of this waste is safely contained?

Given that the mine is in an area of high rainfall and earthquake risk, can SolGold guarantee that the structure of tailings dams built on the Cascabel concession will be sound and will not be vulnerable to earthquakes, overflow from heavy rain or increased waste volumes, as occurred with the Vale/BHP disaster in Bento Rodrigues in November 2015, or that of Brumadihno, where 300 Brazilians died when the tailings pool collapsed in January 2019? We understand that SolGold have very limited experience in mine construction. The approval of a record-height tailings dam at Mirador leaves us highly concerned that similar foolhardy constructions will be approved at Cascabel.

We are concerned that Alpala will not be the only mine constructed in the Cascabel concession. From SolGold’s reports, we are given to understand that there are several other ore bodies that ENSA/SolGold are exploring within the concession. Can SolGold disclose if this is the case, and if these ore bodies will be block cave mined individually, or absorbed into one large supermine several kilometres in size?

MRAG gathered testimonials from Indigenous and campesino communities in Ecuador who claim that SolGold are exploring illegally on protected forests or indigenous lands, and have falsified authorisations. They say that SolGold has “no social license, have done almost no socialisation, and have done no consultation whatsoever”.

TESTIMONIES FROM COMMUNITIES IMPACTED BY SOLGOLD OPERATIONS

Australian mining companies complicit in unrest

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.

Contacts and full media release here.

Environmental concerns at Cascabel

ENSA CEO Jason Ward. Image credit- El Norte

The Cascabel concession is part of the Mira River basin, and is surrounded by mature primary and secondary forests that house endangered species, and protect pristine microbasins. Our primary concerns with mining in Cascabel hinge on the ecosystem impacts of the mine itself and related infrastructure, as well as the toxic waste generated by mining activities.

SolGold itself says says that it will extract 2.4 billion tonnes of ore from the mine. Based on that figure, MRAG estimates the tailings generated by this mine would amount to at least 1km3 (1,000,000,000 m3). To put these figures in perspective, the capacity of Laguna Quilotoa is 0.35km3, making a conservative estimate of tailings produced enough to fill Laguna Quilotoa three times over.

This is a phenomenal amount of toxic waste to dispose of that no amount of “green talk” by Mr Ward can hide away.

Copper spill. Image credit: The Conversation

Tailings vary but may contain or produce cyanide, radiation, alkalinity (high pH) or acidity (low pH), arsenic, high salinity in pore water (pore water is in the spaces between particles of sand, rock or tailings). They can also produce sulphides which creates acid that dissolves any heavy metals in the tailings, like mercury, lead or arsenic into a liquid can be washed away into rivers or streams. Toxic gases may be released due to chemicals within the tailings. Some tailings remain highly contaminated for at least 1000 years. Some facilities may need a longer time to be considered safe.

In their preliminary reports, SolGold states that decisions regarding the management of tailings are still in preparation. Can Jason Ward guarantee that the mined rocks do not contain pyrites or monosulphides, and can he guarantee that SolGold/ENSA will maintain tailings dams in the Cascabel concession for hundreds of years to ensure the toxicity of this waste is safely contained?

Given that the mine is in an area of high rainfall and earthquake risk, can Mr Ward guarantee that the structure of tailings dams built on the Cascabel concession will be sound and will not be vulnerable to earthquakes, overflow from heavy rain or increased waste volumes, as occurred with the Vale/BHP disaster in Bento Rodrigues in November 2015, or that of Brumadihno, where 300 Brazilians died when the tailings pool collapsed in January 2019? We understand that SolGold has a limited experience in the construction of mines - to date it has not built a single mine.  The approval of a record-height tailings dam at Mirador leaves us highly concerned that similar foolhardy constructions will be approved at Cascabel.

Bridge over Rio Mira. Image credit- Andreas Kay

Given the entire Cascabel concession is part of the catchment for the Mira River which then runs through Colombia, contaminants that put this river system at risk could cause an international incident. Additionally, it is probable that contaminants would affect the thousands of users who live downstream of the mine, including municipalities that depend on the river to provide drinking water to their  citizens, farmers, ranchers, aquaculturists, among others. Will all downstream communities and users who rely on the Mira River be consulted and compensated in the event of a disaster?

If tailings dams are not built, the other recourse for waste disposal is to dump mine waste into waterways. This is the case at the Ok Tedi mine in Papua New Guinea where 80 million tons of contaminated tailings and materials from mine-related erosion are dumped each year into the Ok Tedi river system after the tailings dam collapsed in 1984. Established by Australian mining company BHP Billiton, the terrain of the Ok Tedi mine is similar to that of Cascabel.

The river is now effectively unable to sustain life, affecting the lives of 50,000 people who relied on the river for fishing and drinking water. They have experienced numerous health issues, including high rates of cancer and birth defects. More than 1,588 square kilometres of forest died as a result of the disaster. Given Solgold's limited experience with mining in places with such high rainfall, can Mr. Ward ensure that this will not happen in Cascabel?

Can the Ecuadorian state even guarantee that it will have the economic resources and human capital – and political will – to regulate and control the mining of this magnitude, in view of the numerous and proven irregularities reported by the Comptroller General of the State in this same project, as in the case of the Llurimagua mining project?

Our organisation is concerned that Alpala – ENSA/SolGold’s main area of interest – will not be the only mine constructed in the Cascabel concession. From SolGold’s reports, we are given to understand that there are several other ore bodies that ENSA/SolGold are exploring within the concession. Is Mr Ward able to disclose if this is the case, and if these ore bodies will be block cave mined individually, or absorbed into one large supermine several kilometres in size?

SolGold touts block cave mining as a more environmentally friendly option. However, it could be argued that block caving is virtually no different from an open cut mine as the mine falls in on itself after resources are extracted. Block sinking mines are also notoriously complex to build.

As Australians, we can see the incredible beauty of Ecuador’s natural resources, and we feel ashamed that Australian mining companies are exploiting local people’s needs for jobs, health and education, in an exchange that will leave Ecuadorians dealing with the environmental consequences of mining for hundreds of years to come.

El Norte published our concerns in an article here.

SolGold joins Rinehart with trouble in Ecuador

SolGold joins Rinehart with trouble in Ecuador

August 6, 2019

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 gunfight over Rinehart concession

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.