El Salvador faces challenges to extract gold and silver after rulings against mining companies, according to expert

Lawyer expert in international arbitrations Luis Parada warns about the “risks” of reactivating extractive mining in El Salvador after the new law is approved which reverses the existing prohibition and with which the government seeks to attract investments with the gold and silver that would exist in the central area of ​​the Central American country.

Luis Parada knows inside out an issue that is so sensitive for a large part of the Salvadoran population, having led the team of lawyers in a private law firm in Washington that defended El Salvador against the lawsuits filed by two mining companies last decade before the International Center for Settlement of Disputes Relating to Investments (ICSID), part of the World Bank. The Salvadoran State won the processes after years of litigation.

In interview with the Voice of AmericaParada stated that among the lessons left after the long battle at the ICSID is that “mining companies are liars,” as are their “green mining campaigns,” which “only talk about the good part, they minimize the bad part.” and the disastrous part is never mentioned.”

He explained that in the new Salvadoran context, the country would be exposed to million-dollar demands, apart from the environmental dangers that come with restarting mining, which is why he sees them as challenges and “risks” for the country.

Lawsuits filed by Commerce Group and Pacific Rim highlighted the risks of mining and pushed El Salvador authorities in 2017 to ban metal miningParada recalled, when weighing the high risks compared to the supposed benefits.

The expert also mentioned some of the documents that were discussed during the stages of the case in Washington, where the Canadian company Pacific Rim, – sold at the end of the process to the Australian Oceana Gold – offered calculations of how much gold and silver it had discovered, but also the volume of extraction needed to obtain a few grams of gold in the mountains of northern El Salvador.

What lies deep

Parada emphasized that it must be clarified to the population so that “they are not going to believe that they are gold nuggets or the veins where the gold is seen as if it were a vein. No, we are talking about grains like sand in rocks,” hundreds of meters deep, he insisted.

During the case, Pacific Rim brought to the table documents about its findings in exploration studies, which revealed how much gold and silver there was under the mountains, figures very distant from what President Nayib Bukele predicted before repealing the ban, the lawyer warned.

“To say that in the eight deposits that constituted the claim where they had the concession application and exploration licenses (in Cabañas), the deposit with the highest concentration they had was nine grams of gold for every ton of rock, to extract a ounce, about 7,000 pounds of rock need to be exploited,” he added, while recalling that an ounce has 28.34 grams.

Parada extrapolated the data and explained how during the arguments comparisons were also made for aspects of environmental impact with which it could be exemplified that to make a gold coin the size of a 25 cent coin “it was necessary to crush about two tons of rock”.

The deposits according to the government

When President Bukele opened the door to the reactivation of mining in El Salvador in November, he justified it through the social network X, with a suggestive phrase to attract the audience. “God placed a gigantic treasure under our feet,” he said.

To later say that this treasure is due to the geographical location of El Salvador “in the Pacific Ring of Fire, one of the richest areas in mineral resources thanks to its volcanic activity” and that El Salvador potentially has the gold deposits with the greatest density per km² in the world”.

And he then added that the “studies carried out in only 4% of the potential area identified 50 million ounces of gold, valued today at 131,565 million (…) This is equivalent to 380% of the GDP”, but he has not explained the origin of the studies. and no risk associated with mining exploitation.

For lawyer Luis Parada, Bukele’s estimates “are pure lies” since Pacific Rim’s findings, after quantifying the initial deposits that he claimed to have discovered, concluded that he quantified them at 250 million dollars, the value of the compensation that he demanded from the Salvadoran State for not giving it exploitation permits, without quantifying the expenses it would incur to extract the metals.

The company also did not explain the environmental impact that the exploitation of an open pit mine would have and the contamination of the aquifers with the rivers in the area that flow down to the tributaries of the center of the country, including the Lempa River, the largest that supplies of drinking water to a large part of the Salvadoran capital.

Bukele’s Executive celebrated the approval of the law on Monday by the Legislative Assembly – controlled by the ruling Nuevas Ideas party – by defending that mining activity will transform El Salvador and create “thousands of quality jobs.”

Forces against

Before the Salvadoran legislature eliminated the mining ban, Social and environmental organizations, especially from the area of ​​San Isidro and Santa Marta in Cabañas, regrouped to revive a fight that unified them for more than a decade until 2017.

Activist and vice president of the Santa Marta Cooperative Peter Natarén describes the situation as “complex,” but does not rule out that resistance will persist in the affected communities.

The plenary session of the Salvadoran Catholic Church, through the Episcopal Conference, also opposed and this week asked the government to reverse the measure and to “reconsider” the step taken given the impacts it would have on the lives of the population. .

“We ask the authorities to reconsider their decision and repeal this new Mining Law, which will produce many victims (due to eventual contamination),” the Catholic hierarchy said in a statement.

Likewise, universities and non-governmental organizations have set off the alarm right in the middle of the Christmas holidays, which others see as a government strategy of approving it just before leaving for vacation, so that the issue would be forgotten when returning to work the first week of January.

The details not explained

Lawyer Luis Parada explained to the VOA that both in ICSID litigation and in the lobbying campaigns that mining companies carry out with governments, little or nothing is said about environmental impacts. Currently in El Salvador answers to many questions are also evaded.

He reiterates that the extraction of thousands of tons of rock from the depths would require millions of gallons of water, plus the chemicals used such as cyanide and other toxic materials that can last for decades in the earth and turn tributaries “into dead, red rivers.” due to toxicity.

That was one of the points that in the seven years of litigation at ICSID, the plaintiff company could not demonstrate that it would not contaminate tributaries with its waste piles.

So “do not believe that it is as Bukele paints it in Cabañas and Chalatenango that the gold is there and that you can go down as with elevators to some large vaults where the gold ingots are”, it is much more complicated and with “very expensive” impacts. , he predicted.

The Pacific Rim lawsuit concluded in October 2016, after seven years of litigation and activating a robust movement against metal mining in El Salador, which has been reactivated since November when President Nayib Bukele announced that the ban should be abolished against mining, calling it “absurd” that El Salvador had banned gold extraction and giving the green light to the new law.

The other lawsuit filed by the American Commerce Group was also won by El Salvador in the initial stage in 2009, when the company’s allegations seeking a concession in the eastern department of Morazán were unsuccessful.

Parada temporarily moved to El Salvador at the beginning of this year to participate unsuccessfully in the presidential race in which Nayib Bukele achieved his re-election, despite the constitutional impediment that prohibits presidential re-election.

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