With the boom times for iron ore supposedly waning, Australia's billionaire miners are using the capital raised from iron ore to eye-off key areas around the world in order to increase their empires. They are also after new commodities.
According to Solgold/DGR Global's Nick Mather, both Gina Rinehart and Twiggy Forrest are now claiming that copper is the new iron ore. Both Rinehart and Forrest have embarked on their new international copper quest by hunting for minerals in South America. Twiggy is targeting Colombia, Ecuador and Argentina whilst Gina is having a number of migraines over her newly-established mining concessions in Ecuador.
Twiggy first set up a subsidiary, the Singapore based FMG South America in 2016 and also registered another company, FMG Ecuador Tenements. Twiggy himself visited Ecuador in July 2016 and FMG set up an office in Ecuador in early 2018. By late 2018, FMG was the second most prominent Australian miner in Ecuador, after Solgold, holding 62 mining concessions throughout the country including a myriad of unique and precious ecosystems on the lands of indigenous people. FMG's plans have however been held up by the slow process of gaining access to drilling permits in the country.
In 2017, FMG engaged Colombian legal firm Brigard Urrutia to provide legal advice before embarking on exploration activities in Colombia. The mining sector in Colombia had received renewed international interest due to a peace deal made between the Colombian government and the left-wing insurgent group FARC (Revolutionary Armed Forces of Colombia) in June 2016, supposedly ending a 50-year civil war.
In early 2017, FMG had expressed interest in repairing and resuming operation of the 500 km Pacific Coast Railway, but lost the bid later in 2017. In January 2018, FMG announced its exploration activities for copper in Colombia, making applications to explore over 64 concessions. Concerns over FMG in Colombia have already been raised in the Vegalarga township in central-south Colombia in late 2018.
Twiggy may also be getting some heartburn after recent car bombings and assorted violence in Colombia associated with the ELN (National Liberation Army). To what extent the ELN will impact on mining operations in the country is at this time unknown, although three geologists from Canada's Toronto Gold were murdered in September 2018 by FARC dissidents.
In early 2018, FMG also stated that it was embarking on exploring for minerals in Argentina. Targeting copper, gold and lithium. To smooth relations with Argentinian officials, FMG employed the services of former captain of the Argentinian Pumas Rugby Team Agustin Pichot to be president and director of Argentina Fortescue. FMG concentrated its exploration activities in the San Juan Province in the west of the country, where it was interested in 3‒5 mega-projects.
Protests and concerns regarding mining in the San Juan Province are not new. Barrick Gold's Veladero Mine, for example, has had three cyanide spills in recent years with criminal charges laid against eight Barrick Gold employees in 2017.
If Twiggy's adventures in South America seem mildly interesting, they are quite tame in regards to the what has been happening on one of Gina's mining concessions in Ecuador.
Representatives of Gina Rinehart's company, Hancock Prospecting, first visited Ecuador in 2016. A subsidiary of Hancock Prospecting, Hanrine Ecuadorian Exploration and Mining (HEEM) SA, opened offices in the country in July 2017.
Initially Hancock was interested in a mining concession to the west of the capital Quito, in the Pacto region, but instead 'parked' themselves in four concessions covering several thousand hectares in the Province of Imbabura in the north of the country. These concessions were a few kilometres south from one of the largest recent finds of copper in the world ‒ the Cascabel concession owned by Solgold (with BHP and Newcrest Mining owning about 25%).
Unbeknownst to Gina, about one month after the Ecuadorian administration process began considering HEEM's new concession, some road workmen digging with a backhoe hit a vein of gold, now reported to be one of the most significant gold finds in Ecuador.
Within 24 hours of the gold being discovered, 700 people descended on the area, which lay almost in the middle of one of Gina's concessions. Within a month an estimated 12,000 people had arrived and a new mining area known as El Triunfo was established. This was the biggest gold rush to occur in Ecuador in 25 years. Since the initial influx of people, about 3,000 people have settled in this previously sparsely-populated area.
As a response, the Ecuadorian government created a council headed by the Ecuadorian Ministry of the Interior with representatives of the defense, mining and environment portfolios, as well as the Prosecutor's Office, the Mining Regulation and Control Agency, and the police, to deal with problem.
Venezuelans, Peruvians, Colombians and Ecuadorians were reported to have come to mine at El Triunfo. Local media suggest that organised crime is rumoured to be involved in the mining.
By February 2018, hundreds of tonnes of mining material had been confiscated by police and many people arrested. In early March 2018, about 500 gold prospectors arrived in Imbabura to demand the legalisation of their activity and the release of their co-workers. This was followed by a demonstration in the nation's capital, Quito, later in the month to demand the release of 100 miners who had been detained for illegal mining.
In April, the first death of a miner was reported and five police officers arrested for taking bribes. By June 2018, residents of the nearby community of Buenos Aires demanded the eviction of the miners. The local community was concerned about micro-trafficking of narcotics, illegal prostitution and other crimes. The death of a 14-year-old resulted in the burning down of an illegal brothel in the town. The town's population has increased from 1500 people to 4000 people in the space of six months, causing a range of social problems.
In August, workers proposed to join the nascent National Union of Miners, with workers wanting HEEM to consider a distribution of 300 hectares in each of the five mining blocks, including El Triunfo, and that their activities would be recognised as small mining. However, by September 2018, 300 people from the Buenos Aires area had been arrested for illegal mining.
The local congressman for Imbabura formalised a complaint to the state suggesting irregularities in the granting of the original 2017 HEEM concession. A new company, Imbabura Carchi Esmeraldas (ICE), then proposed that illegal miners sign contracts to allow them to mine. ICE claimed that only they were in consultation with HEEM, suggesting that HEEM was not happy that the proposed union Ecuamineros was also attempting to organise workers.
In December, the body of a Colombian mine worker was found dumped in a mine shaft and the Ecuadorian Government sent 200 troops into the area to deal with the illegal mining problem. Arrests continued over January and February 2019, with recent reports suggesting that profits of up to $500,000 per month are generated illegally from the mining at El Triunfo.
The reports also suggest that organised crime and former FARC members from Colombia are involved. Minerals from El Trinufo are apparently being transported 800 km to the Southern Province of El Oro to be processed.
The military involvement in December failed to bring the area under control, because the miners are well armed and control a large amount of territory. Reports published in the Australian press in February also suggest that HEEM contracted the military and the police to evict the illegal miners as recently as December, with no success.
Problems associated with exploration and mining for gold, copper and other minerals are not new. However, copper appears now to be the new mineral that corporations are using to greenwash their new mining operations.
Notorious miner BHP has recently been running advertisements claiming that the demand for copper is helping to save the planet, because it will be used primarily for electric cars. However, the majority of copper is used in buildings and power infrastructure. Electric cars will only contribute about 2% of global copper demand. The new push to mine copper will continue to have profound impacts on local communities and the environment where the supposed minerals for new green technology are sourced.
For more information on Australian companies operating in Ecuador: Melbourne Rainforest Action Group: https://rainforestactiongroup.org/
Published in Chain Reaction #135, April 2019. National magazine of Friends of the Earth Australia. www.foe.org.au/chain_reaction
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