the-malicious-illusion-of-mining/

An  incisive economic critique of mining by Ecuadorian economist, Alberto  Acosta is a  former Minister of Energy and Mines, former president of the Constituent Assembly and former candidate for the Presidency of the Republic of Ecuador. August 2018

 

 

The false hope of a broken pitcher

by Alberto Acosta [1] and John Cajas-Guijarro [2]

translated by Peter Shear

 

 

"Wealth is like salt water: the more you drink, the more thirsty you become. The same goes for glory " --Arthur Schopenhauer

 

 

Mining in Ecuador: the dream of a naive milkmaid

 

 

The fable tells the story of a milkmaid on her way to market carrying a pitcher full of milk on her head. On the way, she was thinking about what she would do with all the money she would receive from selling the milk: she would buy chickens that, when raised, would multiply and could be sold and, then, buy a pig, which after caring for it with great dedication, she could sell to buy a cow, and, in this way, continue to expand her business. But so distracted was the naive milkmaid thinking about her future that she stumbled on the road and her pitcher broke, along with all her ambitious hopes for progress.

 

Although this legend is only fiction, the milkmaid’s story seems a true economic- political projection of what awaits Ecuador if it continues to swallow the discourse that mega- mining will generate huge revenues, rescuing the country from "underdevelopment". In fact, mega-mining is for Ecuador the equivalent of a broken pitcher that offers hope that will never come, just like what happened with the naive milkmaid.

 

We say this because the discourse that mega-mining will generate large revenues for the country is more an illusion than a reality: beyond any propaganda, even official projections offer very poor revenue projections. Worse yet, such an illusion is perversely unrealistic in view of all the social and environmental costs that must be extracted through a surrender to transnational mining capital --capital that disguises its true intentions under the banners of "progress" and "development".

 

The lies behind progress

The political discourse of "development" has always been useful to cover up the most petty interests. Historically, blinded by the hopes of "development", impoverished societies have undertaken lugubrious projects, without measuring the material or human  environmental losses that these entail. Perhaps the very desperation that "underdevelopment" generates leads thousands to accept as valid, projects that, in the end, only benefit a few in exchange for the spilt blood of innocents.

 

One of these dismal projects is mega-mining exploitation, which is falsely sold as a ladder to reach "development" [3], but is only an instrument that enriches transnational capital: capitals that leaves a wake of environmental destruction and serious social conflicts. Examples of this situation are numerous. Perhaps one of the continents that has lived it the most is Africa [4]:      just think about the Marikana massacre in South Africa --provoked in 2012-- that involved the mining company Lonmin Platinum [5]; or the participation of the mining company Lundin Gold in the bloody civil war of the Democratic Republic of the Congo

in the late 1990s, as well as its collaboration in South African Apartheid and its complicity in crimes against humanity in Sudan. [6]

 

But mining devastation is not limited to Africa. Latin America has also suffered in the name of "development". Just one example: according to the Observatory of Mining Conflicts in Latin America, at the time of writing of this article, in the region there are some 246 mining conflicts, associated with 141 cases of criminalization of social protest. Among the countries with the greatest levels of conflict are Mexico, Chile and Peru (each with 40 or more), followed by Brazil and Argentina (with more than 25 cases each), then Colombia, Honduras and Bolivia (between 9 and 15). cases), later Ecuador, Nicaragua and Panama are located (with about 7 cases each) and the list goes on [7].

 

Added to these conflicts --distributed throughout Latin America-- are numerous environmental disasters, such as the tragedy caused by the rupture of the dam of the mining company Samarco, in Minas Gerais, Brazil, which caused the death of 19 people, the loss of hundreds of nearby houses, along with the spill of 32 million cubic meters of mining waste [8] (a situation for which BHP Billiton, the largest mining company in the world, was responsible). As in the example of Minas Gerais, or the case of the "mining arch" promoted to the south of the Orinoco, in Venezuela [9]), there are many other cases of environmental destruction caused by mining in Latin America [10], most of which are accompanied by a wild corruption, characteristic of extractivism [11] that, when combined with a dependent capitalism, has contributed to regions like Latin America and Africa "being poor because they are rich ... in natural resources".

 

The legacy that mining --and extractivism in general-- leaves in impoverished societies shows that the mega-mining incursion into Ecuador does not have an encouraging future. Not even in economic terms. Perhaps in other social and environmental dimensions mining is an alternative for Ecuador given the arguments -especially economic and political- which are injected into the debate. But in reality, and as this paper shows, the mining aspirations of the country are nothing but the ravings of an economic elite --that will never give benefits to the great majority-- instrumented by large transnational companies that will end up with their hands muddied with blood and crime.

 

The mining expansion between neoliberalism, Correísmo and Morenismo

The beginning of mega-mining in the Ecuador can be dated to between the 1990s and the beginning of the 2000s, driven by a strong neoliberal impulse both in legal terms and external financing, and an incursion of foreign capital (particularly capital focused on exploration activities ). As a result of neoliberal support for mining, in 2007 the

concessionary areas for this activity came to cover 20% of the national territory (approximately 5,626,751 hectares) [12].

 

With the arrival of Rafael Correa to the presidency in January 2007, along with the Constituent Assembly that began sessions in November of the same year, it seemed that the mega-mining advance in the country would come to an end, but it was not to be. An ephemeral possibility of stopping this mining advance was experienced with the issuance of Constituent Mandate no. 6 in April 2008 (known as the Mining Mandate). This mandate extinguished mining concessions that, for example, did not comply with obligations established in the law or affected water sources or protected areas. But within days of

 

issuing said mandate, as noted by Sacher (2017), Correa and several ministers met with representatives of Canadian transnational mining companies - and the Ambassador of Canada - to assure them that the Government would promote large-scale mining activity in the country. (Sacher, 2017, p.165).

 

As a result, the Correa government made the respective legal modifications  (including the creation of a new Mining Law in 2009) to allow transnational mining activity to continue in the country [13]. Paradoxically, this legal, political - and even police-military [14] - support that the Government granted to mining was combined with an attempt to reposition the State in the sector through the reversion of mining concessions, which caused the concessionary areas to be reduced to 4.5% of the national territory in 2011 (approximately 1'210,000 hectares) [15].

 

Although the position of the Correa government was paradoxical, when it became Correísmo [16], its turn in favor of large transnational mining interests was completed. So much though, that mining became one of the axes of Ecuador’s so-called "productive transformation." In fact, when comparing targeted "priority" sectors for economic transformation, it is noted that mining was not in the initial plans of the government, and was only included in the 2013 National Plan for Buen Vivir, or Good Living [17]. That is to say, in the first seven years of Correa's government, mining was not presented as a priority sector; but after securing power --remember that in February 2013 Correa was re-elected-- the mining sector became an explicit priority (a similar reading could be made, for example, to the announcement of the Yasuní exploitation made by Correa a few months after being reelected. in 2013 [18]).

 

At the end of the Correísmo the mining expansion accelerated. In April 2016, the Correa government reopened the mining cadastre, that is, it reopened "the possibility for mining companies to claim new areas of the national territory for mining concessions" (Sacher, 2017, p.174). Thanks to this reopening, according to official information [19], 160 new mining concessions were delivered in 2016. But if the mining path of Correísmo was marked, the Government of Lenín Moreno has been even clearer in its efforts to deliver the country to mega-mining interests. Only between December 2016 and all of 2017, 275 additional new mining concessions were delivered [20]. Such has been the maelstrom of the 21st century mining feast that, despite the fact that on December 11, 2017 the Moreno government agreed with the indigenous movement to suspend the delivery of more concessions [21], between December 12 and 29, 69,856 new hectares were concessioned in the same year [22]. And in the midst of that Morenista mining expansion the participation of big transnational capital remains intact [23].

 

Between the Correa and Moreno expansions, we see that if we add all the mining concessions already delivered between 2016-2017 (around 435) with those concessions that at the time of writing this article would be in process (more than 430), the total area destined for mining would reach 15% of the national territory (approximately 3,901,956 hectares according to estimates by William Sacher in January, 2018). Faced with such expansion (laden with enormous illegalities), social movements (especially the indigenous movement) generated significant social pressure that led to the resignation of the Mining Minister (who was already a minister during Correísmo) [24], in addition to pushing he Comptroller to audit several mining projects [25]. In summary, beyond the speeches and the "dialogues", the

 

mega-mineral expansion continues either with Correísmo or Morenismo (and in a very dark way [26]).

 

Small profits, selling out, and unacceptable costs

According to information presented by William Sacher in November 2017, there are 27 main mining projects active in Ecuador (the majority initiated during the neoliberal period). Of these projects, five show a considerable advance that led them to be qualified by the Correa government as "strategic projects" (implying that the government would give them greater emphasis and support in comparison to other projects). The official information of these "strategic projects" -which we have collected from different press releases- is shown in Table 1. In the table it is observed that from the projects, Fruta del Norte, Mirador, Loma Larga (Quimsacocha) and Río Blanco, the State would expect to obtain -by taxes, royalties, etc.- about $2,856 billion, while the estimated investment would reach $2.793 billion. In the case of Panantza-San Carlos, according to statements made by the then Minister of Mining  in 2016, it would take four years to determine if the ore is economically viable.

 

It should be noted that there are multiple versions of how much revenue mining could generate the country, which really obscures the scenario. For example, according to  estimates presented by the Ministry of Mining in October 2017 [27], for the period 2017-2021, mining is expected to generate $ 4.599 billion of foreign investment -of which one billion

would supposedly be invested in 2018 [28], fiscal revenues that would reach 1.326 billion dollars, around 25 thousand jobs (4,100 direct and 19,600 indirect) and a share of GDP that would reach 4% by 2025 [29]. On the other hand, estimates made in 2012 indicated that when the five "strategic projects" are in the exploitation phase (including Panantza-San Carlos), they would generate $ 784 million of average annual state revenues from  royalties [30].

All these figures are crumbs compared to an official estimate of May 2011 according to which the country's mining reserves would represent 270 billion dollars [31] (a figure that, by the way, seems more like a "milkmaid's racket" aimed to cheer up international financial markets that speculate on the potential profits of transnational mining capital).

 

 

 

Table 1

Características y previsiones de proyectos mineros “estratégicos”

 

Project

Province

Area

Company

Lifespa

Probable

Estimated

State

 

 

(has)

 

n

Reserves

Investment

Revenue

 

 

 

 

(years)

 

(millons

(millons

 

 

 

 

 

 

USD)

USD)

 

 

 

Fruta del Norte

Zamora

4.661

Aurelian /

13

Gold (4,82

960

1.280 [1]

 

Chinchipe

 

Lundin Gold

 

m oz.)

 

 

 

 

 

(Canadá /

 

Silver (6,34

 

 

 

 

 

Suecia)

 

m oz.)

 

 

 

 

Mirador

Zamora

2.985

Ecuacorriente

27

Copper(2,9

1.500

1.200 [2]

 

Chinchipe

 

(China)

 

6 m. ton.)

 

 

 

Gold (3,22

 

 

m oz.)

 

 

Silver

 

 

(26,08 m

 

 

oz.)

 

 

 

 

 

 

 

 

 

 

Loma Larga

Azuay

7.960

INV Minerales

27

Gold

244

185 [3]

(Quimsacocha)

 

 

(Canadá)

 

(1,135 m

 

 

 

oz.)

 

 

Silver(5,68

 

 

m oz.)

 

 

Copper

 

 

(21,160 m

 

 

oz.)

 

 

 

 

 

 

 

 

 

 

Río Blanco

Azuay

5.708

Junefield

11

Gold

88,8

191,49 [4]

 

 

 

(China)

 

(0,605 m

 

 

 

oz.)

 

 

Silver (4,3

 

 

m oz.)

 

 

 

 

 

 

Panantza-San

Morona

41.760

Explorcobres

25

Copper

3.000

Not known

Carlos

Santiago

 

Exsa (China)

 

(6,6 m

 

[5]

 

 

 

 

 

ton.)

 

 

 

 

 

 

 

 

Source: Ministerio de Minería (Proyectos Mineros Estratégicos, noviembre 2016. Ver: https://drive.google.com/file/d/0B9t02UvtK83SZG51Tk9yalAyTTQ/view ; Catálogo Minero. Ver: https://drive.google.com/file/d/0B9t02UvtK83SNmx0Q0NXQ3VDWXM/view

 

These figures leave much to be thought about regarding the true profitability of mining for the Ecuadorian State. Just to give an example, if you assume as real the estimate made in 2012 that, on average, each year the five major mining projects could generate

$784 million in state revenue, it turns out that this annual amount would not even cover the

cost of monthly salaries of the non-financial public sector, which between January and November of 2017 reached an average of $818 million per month (in this period, some $9

 

billion were spent on salaries).

 

 

Whether the estimate of the annual income that the State would obtain through royalties when all the "strategic projects" are in the exploitation phase (which would not cover even one month of salaries of the non-financial public sector), or weather these estimates of tax revenues to be obtained between 2017-2021 from, we reiterate, about

$1.326 billion (which would not represent or 25% of the collection of VAT made between January and November 2017, which totaled $5.464 billion), it turns out that the revenue offered by mining to the country is extremely small.

 

In fact, it would be much more profitable to increase income taxes for the primary economic sectors of the country: according to information from the Internal Revenue Service, in 2016 a mere 215 economic sectors obtained $57.993 billion in income, but only generated  a tax on the income of $1,325 billion, that is, 2.29% of total earned income. If the income tax on these economic groups is increased by 1.35%, the same annual amount of tax revenue would be obtained as the estimated revenue from mining royalties. Another idea: there are estimates [32] that show that if in 2015 a ceiling of $3000 had been placed on the 38,700 public employees who then earned a remuneration equal to or greater than that limit, it

would have saved $623 million per year, an amount that would cover almost 80% of the expected annual income from mining royalties. The list of examples that show how tiny the potential revenue that mining would generate are innumerable.

 

A wild surrender: the pitcher was always broken

When reviewing the myth of an extremely profitable mining industry in Ecuador, a mandatory question arises: Why such low profitability? Well, maybe the answer is that the mining pitcher has a structural break: a wild capitulation to transnational capital. As evidence of this surrender, we find several tax incentives for extractivist activities in general, and for mining in specific.

 

In effect, as Carlos Zorrilla points out, "during the last four years of Correísmo, several laws were modified and others were created with the aim of attracting transnational mining investment at all costs" [33]. Within these modifications, according to official information [34], the following is mentioned:

 

 

 

Benefits in income tax

 

 

-For all extractivism: A tax rate of 22% is proposed with an exoneration of its payment to any new investment during its first 5 years of operations, in addition to exempting companies from the advance of said tax (for the calculation of the advance, expenses for generation of new employment, improvement of productivity and technological innovation, among others). Deductions are also included to encourage productivity, innovation and eco-efficient production, in addition to a 100% deduction for depreciation and amortization of machinery, equipment and technologies aimed at these purposes. Likewise, the tax rate on the amount destined to reinvest in productive assets is reduced by 10 points and several benefits are included to open capital of companies in favor of their workers and deductions of 100% of the cost of hiring new workers for five years for new investments (assuming that this implies support for economically depressed areas).

 

 

  • For mining: In addition to the above benefits, an accelerated straight-line amortization -- between 5 and 10 years-- of costs incurred by mining concessionaires to access mineral reserves and to build or improve state infrastructure is proposed.

 

 

 

Benefits in value added tax

  • For all extractivism: Exoneration for exported goods and services.

 

 

  • For mining: In addition to the above, since 2018 a 0% tariff is proposed for gold acquired by holders with a marketing license. Likewise, in mining exports, the tax paid for the periods corresponding to January 1, 2018, will be reimbursed.

 

Benefits in tax stability

  • For all extractivism: Tax stability for the maximum time of any investment contract. The income tax, the exit tax, and the value added tax are frozen. This benefit applies for a minimum investment of more than $100 million and payments of 25% of the income tax.

 

  • For mining: A previous benefit is granted to any investment in medium and large-scale metal mining, regardless of the minimum investment or any other requirements [35].

 

Other benefits

  • For all extractivism: exoneration of the tax on the exit of foreign currency to companies that carry out external financing operations. Possibility of including in the investment contract the contractual commitments necessary for the development of the new investment.

 

In addition to these incentives, Ecuadorian mines will produce raw metal, that is, with impurities. For example, the copper concentrate produced at Mirador will have approximately 30% copper, 60% other minerals and 10% water [36]. Since Ecuador does not have metal refineries, refining will be done in China, Europe or North America, where most of the profits will remain. Likewise, the State grants mining companies large indirect subsidies: in construction and maintenance of roads, especially for transportation to and from mines, as well as construction of other public infrastructure for the benefit of private mining companies (for example, the construction of Puerto Cobre and of connection routes for Chinese mining company ECSA); in financing --with debt-- the construction of hydroelectric power plants to provide energy at low prices (note that the mines are large consumers of electricity that can be obtained directly with various state benefits or with preferential rates); and in not claiming compensation for the loss of existing productive activities. In addition, there are many cases where companies do not pay for water, even when they consume it in huge quantities [37].

 

Regarding taxes, even if the government wishes to collect them, large mining companies manage to avoid them or evade their payment using several mechanisms well known by extractivism: several transnationals present in Ecuador use subsidiaries registered in tax havens, such as those of the Cayman Islands or the Virgin Islands [38]; transfers of prices, expenses and benefits; modification of balance sheets and account statements; etc. (See Sacher, 2017, pp.148-149). In short, mining companies are experts in hiding their real income to minimize taxes: "This has been shown, for the Chilean case, by Orlando Caputo, an expert on mining issues, who was Salvador Allende's representative on the Executive

 

Committee and General Manager of Codelco" (Acosta 2009, p.97). To make matters worse, in many cases the countries of origin of large mining companies offer them various benefits. For example, Chinese companies receive incentives from their government such as: advantages in fiscal and financial terms, subsidies, low interest loans from large state banks, and even diplomatic support (Sacher, 2017, p.85).

 

With such surrender against transnational capital, in addition to the tricks that it uses so much to evade the payment of taxes, it is clear why large-scale mining does not promise large revenues for Ecuador. Thus, returning to our analogy of the milkmaid who aspired to progress with her milk pitcher that ended up shattered, even though the mining pitcher promises great revenues with which the country could "develop", the reality is that this wild surrender to transnational capital assures that any mining revenue will be spilled without the need to --like the milkmaid-- stumble on the road.

 

But the problem of mega-mining is even more complex because, even if the income for Ecuador were really significant, such activity would still prolong the country's suffering from the multiple pathologies of the curse of extractive wealth [39]: vulnerability to external shocks; recurrent economic crises; deterioration of the terms of exchange; aggressive indebtedness; impoverishing growth; import consumerism; absence of productive transformations; submission of the state to transnational capital; a police state focused on criminalizing the anti-extractivist resistance; concentration of wealth; widespread poverty and inequality; structural heterogeneity; environmental deterioration; the proliferation of

corruption and rentier "mentalities"; weak governance and institutionality; widespread voracity in many important social actors that coexist with authoritarian governments; conflict that can happen even in civil wars or wars between neighboring countries (as seen repeatedly in Africa).

 

To these pathologies are added others specific to mega-mining like: waste and destruction of existent resources in affected zones (for example, affectation to rural agricultural activities, crafts and community tourism); deterioration of the environment with net loss of natural resources; impacts of the presence of powerful companies that even deterritorialize the State; among many other pathologies that affect both the life of the human beings and Nature and that are not substitutable by any sum of money (following the idea of       "super-strong sustainability" [40]).

 

Social and environmental costs of the false mining promise

Besides the fact that mega-mining is a broken pitcher that offers false promises of "progress", the social and environmental costs that it generates --beyond the mere economic dimension-

  • are very serious.

 

 

On one hand, the mine workers themselves continually denounce their precarious working conditions, the pollution of the environment, the hoarding of water, and the generation of housing shortages, among other complaints. Also, they receive low wages and many are disabled after repeated accidents, besides suffering from serious pathologies such as pneumoconiosis (mineral dust in the lungs) and hearing loss (deafness). To this is added untimely job dismissals, an aggressive and often violent stance with unions, and even harassment for union membership. As a result, the confrontations of workers with the police and security guards are frequent and violent, sometimes involving the deaths of workers.

 

 

On the other hand, there are recurrent conflicts between mining companies and communities located near the mines (which suffer permanent police and military aggression). Moreover, the inhabitants of such communities suffer from serious illnesses such as respiratory, skin and eye diseases: with health care costs of cure that are not paid

companies. We can also add the multiple displacements of entire communities in order to cede territories that allow mega-mining activity to be carried out.

 

For examples of the social and environmental costs described above, and that mega- mining has already generated in Ecuador, we can look to the cases associated with each of the five "strategic projects" already underway in Ecuador (which, unbelievably, were legally registered while already in their respective exploratory phases, a stage that supposedly -- according to the industry and the government-- does not generate major impacts).

 

  • Fruta del Norte: The project is located very close to the "La Zarza" wildlife reserve and is located on land used by mining companies without the consent of the local population, and has caused the displacement of communities and water pollution. [41] This project even allowed transnational investors to profit from stock market speculation during the sale of the project from Aurelian to the Canadian company Kinross, before Kinross sold its stake to Lundin Gold [42].

 

  • Mirador: Only with the execution of this project, 326 million tons of waste would be extracted, implying around 3,260 million dollars in estimated remediation costs (Sacher and Acosta, 2012, p.76). Besides that, it would generate 6 times more waste per day than the capital city of Quito and would contaminate, per day, the amount of water equivalent to Ibarra's consumption (the project is next to 227 water sources). In this project there are serious social problems such as the use of violence to evict populations [43], demolitions of homes, restricted access to the area, permanent surveillance, precarious working conditions [44], and even the assassination of anti-mining leaders like José Tendetza [45].

 

  • Quimsacocha: For each day of execution of this project, some 3,000 tons of materials will be moved, equivalent to "15 times the daily garbage collection of the city of Cuenca". Such removal of materials would seriously contaminate the water sources of that city (Acosta and Sacher, 2011) [46].

 

  • o Blanco: The project is within the Molleturo-Mollepongo Protected Forest, and forms part of the buffer area for Cajas National Park and the Biosphere Reserve of Macizo del Cajas. Apart from endangering these reserves, the project would affect several water sources that supply the provinces of Azuay, Guayas and El Oro [47].

 

  • Panantza-San Carlos: The violence deployed in this project includes the militarization of the territory, declarations of martial law, confrontations with Shuar communities (resulting in the death of a policeman), the persecution of community members, the violent displacement of populations such as Nankintz [48] (This conflict occurred in the midst of the violent evictions of the population), the potential deterioration of 414 water sources, and even greater environmental deterioration than in Mirador [49].

 

Along with these problems --and in addition to the assassination of José Tendetza-- clashes between communities (especially the Shuar community, one of the most affected by projects such as Mirador or Panantza-San Carlos) and State forces have recently led to the deaths of Bosco Wisuma and Freddy Taish [50] among other people. We are also seeing an increase in illegal detentions, like the case of Javier Ramírez in Intag (where the Llumiragua project is located). He was detained for 10 months accused of "rebellion" [51].

 

If all these social and environmental impacts were not enough, it should be added that environmental remediation expenses are not assumed by the large mining companies, but end up becoming liabilities assumed by the communities; liabilities that, many times, are not even accounted for in an adequate manner (even though such expenses can amount to billions of dollars [52], which makes the economic viability of several mining projects questionable).

 

We see, in short, that behind the farce of "progress" that mega-mining offers, hides a whole history of "blood and fire."A history where, on the one hand, there are innocent people who are violated, trampled, and criminalized --with all the might of State power-- only because they struggle to survive. On the other hand, there are transnational investments -- particularly Chinese-- that, with the support of the State, continue to expand their search for power through the extraction of miserable bits of metal.

 

 

 

An anti-extractivist sentiment wasted (or betrayed?)

On February 4, 2018 the government of Lenin Moreno called a referendum. Question number 5 of this referendum asked he following:

 

"Do you agree to amend the Constitution of the Republic of Ecuador so that metallic mining in all its stages, in protected areas, intangible zones and urban centers, is prohibited without exception, in accordance with the provisions of Annex 5?"

 

Within Annex 5 it was basically proposed to modify article 407 of the Constitution to include the prohibition of "all types of metallic mining in any of its phases in protected areas, urban centers and intangible zones".

 

According to official results, the vote in favor of this question reached 68.62% of the total valid votes [53]. While both the approach to the question and the result obtained at the polls seem encouraging, in reality things are more complex. In fact, question 5 of the popular consultation of 2018 was just a warmed-over question that really does not strike any new ground [54]: it turns out that Article 407 of the Constitution already indicated that "the extractive activity of non-renewable resources is prohibited in protected areas and in areas declared as intangible zones." In turn, Article 28 of the mining law indicates that mining can not be carried out in urban areas.

 

Thus, question 5 of the consultation did not accomplish anything. If it really wanted to address the environmental risks posed by mega-mining, the Moreno government would have included the prohibition of metallic mining near water sources, headwaters of rivers , páramos, protective forests, wetlands and fragile areas, and especially biodiverse areas as proposed by several organizations of civil society and the indigenous movement [55]. In

 

addition, the consultation could have asked about the immediate prohibition of forced displacement of populations caused by mining, as well as demanding the application of Article 117 of the mining law, which imposes the expiration of mining concessions where there is evidence of violation of Human Rights (even the consultation could extend that article to also take into account the violation of the Rights of Nature). Also, why was non- metallic mining --the main problem in the case of urban areas-- neglected? And what should happen with rural population centers located within mining concessions?

 

Evidently, if the consultation had gone beyond the watered-down mining question of February 4 the Moreno government would have guaranteed itself a long battle with the large transnational mining companies operating in Ecuador. The Moreno administration never really wanted stronger mining regulation. Why? Well, remember that it was the government itself that accelerated the mining concessions despite agreeing to the contrary with the indigenous movements in December 2017 (which we mentioned earlier). In addition, note that on October 3, 2017, Ecuador was honored at the Annual Outstanding Achievement Awards of Mines and Money Americas 2017 in Toronto, Canada, as the Best Country of the Year in mining development "for being the most attractive nation for investors in the sector. mining "[56]. To that "victory" are added several announcements - with great fanfare - of new investments by transnational miners in 2018 [57].

 

If the consultation has practically no effect and Ecuador maintains its mining strategy, why was question 5 included on February 4? Because the purpose was purely electoral: it tried to add incentives to motivate a majority support for the whole referendum. In addition, it should be added that --paradoxically-- a bigger blow to mining interests was achieved through the repeal of the "law of surplus value" (question 6): it turns out that said law  included a reform provision in which mining companies benefited through the exoneration of the payment of taxes for extraordinary income for 48 months after recovering their investment. By repealing the "law of surplus value", this benefit in favor of mining companies was but at risk.

 

The Moreno government ended up demonstrating the level that it would capitulate to transnational mining interests: it proposed, as "compensation", to eliminate the tax on extraordinary income for mining companies, in addition to deeming "temporary" the suspension of concessions that Moreno negotiated with social movements in December of 2017. Such a position, together with the real effects of question 5 of the popular referendum on mining, show that a popular anti-extractivist sentiment was definitely wasted when it was used for the sole purpose of Morenismo gaining strength in its arm wrestling with Correismo, but without that popular feeling affecting the transnational mining interests.

 

To dispute an (anti) mining future

The idea that "the mining sector is the future of economic development for the country" [58] are nothing but a false promise that, in the name of "development", seeks to push us towards an activity that will only be profitable for transnational interests and not for the country. But the question does not stop there, because mega-mining has been imposed in our lands by "blood and fire", completely trampling human beings and Nature. Without doubt, mega-mining is a perverse chimera that still fools the masses even through popular consultations.

 

Understanding this, there is nothing left but to continue fighting for an anti-mining future. Although the task is very complex, there are rays of hope: the result of the February 2018 consultation may be an indication that there could be a popular anti-extractive sentiment in the country. Sadly such sentiment has been betrayed by Morenismo, which will continue to deliver the country to the big mining companies, just as Correismo did..

 

If the political power brokers have fractured anti-mining popular sentiment, it must be recovered and galvanized to publicly expose the real intentions of the perverse mining chimera, which is but one of the many extractive chimeras: those that offer "development" , but in essence are predators. And they have to be, because their father is a predator par excellence: capitalism, a system that survives by preying, through exploitation, on all forms of life, and while killing them slowly --without any remorse-- screams progress!

 

Thus, there is nothing left but to continue fighting for, from below and from the left, alongside the Pacha Mama, an anti-mining future for our country, unless we want it to end up being preyed upon again.

  • Ecuadorian Ex-Minister of Mining and Energy. Ex-president of the Constituent Assembly. Ex-presidential candidate of the republic of Ecuador.
  • Ecuadorian Professor of the Central University of Ecuador and the National Polytechnic School.
  • Some data for the debate around the effect of “mining” on “development” which can be found in the article “Mining and its uncomfortable truth” by Carlos Zorrilla, La linea de fuego, january 9,
  • Regarding the situation in Africa, there appears to exist statistical evidence of a connection between mining and violence (ranging from protests to armed conflict). This is illustrated in the article by Berman et (2017) “This mine is mine! How minerals fuel conflicts in Africa” American Economic Review, 107(6)pp.1564-1610. In any case, within Africa there exist important patterns regarding the connection between Extraction-Violence, as can be observed in the case of Botswana, as is mentioned in the article “Botswana: African Miracle?” by Gemma Roquet, El Orden Mundial en el S XXI,january 25, 2018.
  • See article from South African history online “Marikana Massacre 16 august 2012”. 6-For some additional details of the role played by mining company Lundin, see the book “Ofensiva megaminera china en los Andes. Acumulacion por desposesion en el Ecuador de la “Revolution Ciudadana” by William Sacher Quito: Abya-Yala.
  • See the maps of mining conflicts of the Observatory of mining conflicts of Latin America, available at:

https://mapa.conflictosmineros.net/ocmal_db-v2/conflicto

  • See the article “Un año después de la tragedia minera mas grande en la historia de Brasil” Semana, August 23,
  • See the article “Los estragos del Arco Minero”, El Nacional, February 25, 10- Some brief examples can be found in the article “La devastation ambiental de la mineria en America Latina”, Contexto Latinoamericano, June 20, 2017.
  • Regarding the corruption associated with mining, see the article “Cruda Corruption, extractivismos, autoritarismo” by Alberto Acosta and John Cajas Guijarro. Rebelion.org, August 23, 2017.
  • For a brief revision regarding the initiation of mining in Ecuador, and the reaction of anti-mining social movements, I recommend the article “de la violation del Mandato Minero al festin minero del siglo XXI” by Alberto Acosta and Francisco Hurtado Rebelion.org, July 30, 2016. Also, the work of Sacher (2017). Also, the book “La Maldicion de la abundancia” by Alberto Acosta (2009). Quito: Abya- Yala.

 

  • We reiterate that more detailed information about these points can be obtained from the works already cited by Acosta and Hurtado Caicedo (2016) and Sacher (2017).
  • For graphic evidence of the police and military support that the Correa government gave to mining companies- particularly to displace entire populations-, see the video published by the Minka Urbana collective “Que harias tu si venden tu casa a empresas mineras?”, available at https://www.youtube.com/watch?

 

Notes:

 

 

[1] Economista ecuatoriano. Ex-ministro de Energía y Minas. Ex-presidente de la Asamblea Constituyente. Ex-candidato a la Presidencia de la República del Ecuador.

[2] Economista ecuatoriano. Profesor de la Universidad Central del Ecuador y de la Escuela Politécnica Nacional.

[3] Algunos datos para el debate sobre el efecto de la “minería” en el “desarrollo” se los puede encontrar en el artículo de Carlos Zorrilla: “La minería y su verdad incómoda”, La línea de fuego, enero 9 de 2018.

[4] Respecto al caso africano, parece existir evidencia estadística del vínculo entre actividades mineras y violencia (desde protestas hasta conflictos armados). Ver al respecto el artículo de Berman et al. (2017): “Thismineismine!HowmineralsfuelconflictsinAfrica ”, American          Economic Review, 107(6), pp.1564-1610. De todas formas, dentro de África existen importantes matices sobre el vínculo extractivismo-violencia, como parecería observarse en el caso de Botsuana, como se menciona en el artículo de Gemma Roquet: “ Botsuana:¿milagroafricano? ”, El Orden Mundial en el S. XXI, enero 25 de 2018.

[5] Ver el artículo de South African history Online: “Marikana Massacre 16 August 2012”.

[6] Para algunos detalles adicionales del papel de la minera Lundin se puede revisar el libro de William Sacher (2017): Ofensiva megaminera china en los Andes. Acumulación por desposesión en el Ecuador de la “Revolución Ciudadana”. Quito: Abya-Yala

[7] Ver el mapa de conflictos mineros del Observatorio de Conflictos Mineros de América Latina disponible en: https://mapa.conflictosmineros.net/ocmal_db-v2/conflicto

[8] Ver el artículo de Semana: “Un año después de la tragedia minera más grande en la historia de Brasil”, noviembre de 2016.

[9] Ver el artículo de El Nacional: “Los estragos del Arco Minero”, febrero 25 de 2018.

[10] Algunos breves ejemplos se pueden ubicar en el artículo de Contexto Latinoamericano: “La devastación ambiental de la minería en América Latina”, junio 20 de 2017.

 

[11] Sobre la corrupción asociada a los extractivismos se puede revisar el artículo de Alberto Acosta y John Cajas Guijarro: “Cruda realidad. Corrupción, extractivismos, autoritarismo”, Rebelion.org, agosto 23 de 2017.

[12] Para una breve reseña sobre los inicios de la minería en el Ecuador -y la reacción de los movimientos sociales anti-mineros- se recomienda el artículo de Alberto Acosta y Francisco Hurtado Caicedo: “ DelaviolacióndelMandatoMineroalfestínminerodelsigloXXI ”,         Rebelion.org, julio 30 de 2016. Asimismo, se puede revisar el trabajo de Sacher (2017). También se puede revisar el libro de Alberto Acosta (2009): La Maldición de la Abundancia . Quito: Abya- Yala.

[13] Reiteramos que mayores detalles en estos puntos se los puede obtener del trabajo ya citado de Acosta y Hurtado Caicedo (2016) así como el de Sacher (2017).

[14] Para una evidencia gráfica del apoyo policial-militar que el gobierno de Correa dio a la minería -en particular para desplazar a poblaciones enteras- se puede ver el video publicado por el colectivo Minka Urbana: “¿Qué harías tú si venden tu casa a empresas mineras?”, disponible en:     https://www.youtube.com/watch?v=U1mYLAc3wfI

[15] Al respecto se puede ver el trabajo de William Sacher y Alberto Acosta (2012): La minería a gran escala en Ecuador. Análisis y datos estadísticos sobre la minería industrial en el Ecuador . Quito: Abya-Yala.

[16] Para una conceptualización del correísmo se puede revisar el artículo de Alberto Acosta y John Cajas Guijarro (2016): “Dialéctica de una década desperdiciada. Estridencias, orígenes y contradicciones del correísmo”, en el libro Rescatar la esperanza. Más allá del neoliberalismo y del progresismo, Barcelona: Entrepueblos.

[17] Para una comparación de los sectores incluidos en las diferentes propuestas de “transformación productiva” correístas y la inclusión -a última hora- de la minería, se puede revisar el artículo de Pablo Ospina: “Ecuador: el nuevo período de gobierno y el cambio de la matriz productiva”, Informe de Coyuntura, Comité Ecuménico de Proyectos, julio de 2013.

[18] Ver el artículo de El Ciudadano: “‘El mundo nos ha fallado’, dice presidente Correa al anunciar el fin de la Iniciativa Yasuní-ITT”, agosto 14 de 2013.

[19] Ver página 7 de la presentación del Ministerio de Minería titulada: “Ecuador… From Promise to Reality” disponible en: http://www.mineria.gob.ec/pdac-information/

[20] Ver artículo de El Universo: “Las concesiones mineras ocupan 15% del territorio indígena, según dirigentes”, enero 9 de 2018.

[21] Ver artículo de El Universo: “Tras cita con Conaie, Lenín Moreno detiene concesiones mineras”, diciembre 11 de 2017.

[22] Ver artículo de El Universo: “Inscripciones mineras continuaron”, febrero 2 de 2018.

[23] Apenas como ejemplo se puede citar la adquisición hecha por la canadiense Lucky Minerals de casi 55 mil hectáreas conteniendo unas 12 concesiones mineras, tal como señaló el artículo de Yahoo Finance: “Lucky Minerals Establishes a Strategic Foothold in the Heart of Ecuador’s Prolific Mineral District”, febrero 20 de 2018, disponible en:

https://finance.yahoo.com/news/lucky-minerals-establishes-strategic-foothold-120000105.html

[24] Ver artículo de El Universo: “Aceptan renuncia del Ministro de Minería Javier Córdova Unda”, enero 30 de 2018.

[25] Ver artículo de El Universo: “Ecuarunari pide extinguir concesiones mineras tras ganar el Sí en la consulta”, febrero 6 de 2018.

[26] Algunos ejemplos de cuán oscura ha sido la expansión megaminera, que van desde atropellos a pequeños mineros informales hasta entregas irregulares de concesiones, se recomienda el artículo de Plan V: “La bomba de tiempo minera”, febrero 20 de 2018.

 

[27] Ver la presentación del Ministerio de Minería: “ Ecuador… From Promise to Reality ” de octubre de 2017.

[28] Ver artículo de El Universo: “Inversión minera sería de $ 1.000 millones en 2018”, diciembre 16 de 2017.

[29] Ver el artículo de El Telégrafo: “Minería generará $ 8 mil millones en 2025”, septiembre 20 de 2016.

[30] Ver el documento de la Corporación para la Promoción Proactiva de Inversiones INVEC

(2012): “ OportunidadesenelSectorMineroaGranEscaladelEcuador ”.

[31] Ver el artículo de La Hora: “Plantean más críticas a la minería”, noviembre 13 de 2011.

[32] Ver el artículo de Pablo Dávalos en Plan V: “Una élite de 38.700 funcionarios gana más de USD 3000 al mes”, abril 27 de 2016. Dicho sea de paso, en 2015 los autores de este artículo propusimos, entre otras cosas, que para enfrentar la crisis que aqueja a la economía ecuatoriana se podría hacer que “ningún empleado público obtenga un salario mayor a un límite acorde a la realidad nacional de, por ejemplo, 3 mil dólares mensuales; nada descabellado si consideramos que el PIB por persona empleada del Ecuador para 2014 bordea los 1.200 dólares mensuales”; al respecto recomendamos ver el artículo de Alberto Acosta y John Cajas Guijarro: “ Unplananticrisisdesdelaizquierda.Elementosparaladiscusión ”, Montecristi Vive, octubre de 2015.

[33] Ver el artículo de Carlos Zorrilla: “El ABC de la problemática minera en el Ecuador”, La línea de fuego, enero 9 de 2018.

[34] Ver el documento del Ministerio Coordinador de Sectores Estratégicos: “Incentivos tributarios”, disponible en: https://issuu.com/sectoresestrategicos/docs/incentivos_tributarios

[35] Para visualizar cuán graves son los contratos de estabilidad fiscal se puede mencionar un ejemplo: según un informe de prefactibilidad de Aurania Resources, la minera Lundin pagaría impuestos sobre las ganancias extraordinarias solo si elpreciodelaonzadeorosobrepasalos 2.200dólares , monto ridículo si se observa que ni siquiera en el mejor momento del boom de los commodities la onza de oro llegó a los 2 mil dólares. Ver el reporte técnico de Aurania Resources disponible en: http://www.aurania.com/wp-content/uploads/2017/05/Aurania-

Resources-Technical-Report-2017.pdf

[36] Ver el artículo de Zorrilla, Sacher y Acosta: “21 preguntas para entender la minería del siglo XXI”, Observatorio Latinoamericano de Conflictos Ambientales, octubre 18 de 2011.

[37] Respecto al consumo de agua, solo como ejemplo, se puede mencionar el caso del proyecto Mirador. Según Sacher (2017, p.245), dicho proyecto consumiría 250 litros de agua por segundo, consumo equivalente al consumo residencial de Ibarra.

[38] A manera de ejemplo de tal práctica, se puede revisar el accionar de la transnacional Glencore en Burkina Fasso, recogida en el artículo de Will Fitzgibbon traducido por El Universo: “Los juegos offshore de Glencore en un país minero y pobre”, noviembre 9 de 2017.

[39] A más del libro ya citado de Alberto Acosta (2009), también se puede revisar sobre las posibles patologías causadas por la maldición de la abundancia en el extractivismo ecuatoriano el artículo de Alberto Acosta y John Cajas Guijarro (2016): “Patologías de la abundancia. Una lectura desde el extractivismo”, en el libro de varios autores, Nada dura para siempre. Neo- extractivismo tras el boom de las materias primas. Universidad Andina Simón Bolívar y Universidad de Kassel.

[40] Sobre los diferentes niveles de sustentabilidad, especialmente la “sustentabilidad súper- fuerte”, se puede revisar el artículo de Eduardo Gudynas (2011): “Desarrollo y sustentabilidad ambiental: diversidad de posturas, tensiones persistentes”, en el libro La Tierra no es muda: diálogos entre el desarrollo sostenible y el postdesarrollo. Granada: Universidad de Granada.

 

[41] Ver al respecto el análisis sobre Fruta del Norte hecho por el Observatorio de conflictos mineros de América Latina disponible en: http://mapa.conflictosmineros.net/ocmal_db/?page=conflicto&id=229

[42] Para más detalles de los estragos sociales-ambientales causados por el proyecto Fruta del Norte se recomienda revisar el libro de María Fernanda Soliz (2018): Fruta del Norte: la manzana de la discordia. Quito: Universidad Andina Simón Bolívar.

[43] Sobre los atropellos que el avance del proyecto Mirador ha provocado a poblaciones locales se recomienda ver el reportaje de Visión 360: “A punto de estallar”, disponible en:https://www.youtube.com/watch?v=7JBbVkVubqY

[44] Sobre todos estos problemas en el proyecto Mirador recomendamos el trabajo de William Sacher, Michelle Báez, Manuel Bayón, Fred Larreátegui, Melissa Moreano (2016): Entretelones de la megaminería en el Ecuador: http://www.accionecologica.org/images/2005/mineria/documentos/entretelones_megamineri%CC

%81a_2ed.pdf

[45] Para más detalles sobre el asesinato de José Tendetza y el vínculo con la empresa minera ECSA ver el artículo de PlanV: “¿Quién mató a José Tendetza?”, diciembre 04 de 2014.

[46] Ver el artículo de Sacher, William y Acosta, Alberto (2011): “El agua de Quimsacocha, entre la codicia y la vida”, Rebelion.org, noviembre 3 de 2011.

[47] Para más detalles ver artículo en Observatorio de conflictos mineros de América Latina: “ Defensoras de la Pachamama rechazan licencia ambiental del proyecto minero Río Blanco ”,  febrero 29 de 2016.

[48] Sobre los atropellos que el avance del proyecto Panantza-San Carlos ha provocado a poblaciones shuar se recomienda ver el reportaje de Visión 360: “Expulsados de su territorio”, disponible     en:https://www.youtube.com/watch?v=EmKEQcxBzNU

[49] Para mayores detalles de este y los demás conflictos provocados por la megaminería, ver el video publicado por el colectivo Minka Urbana: “¿Sabes cómo surgió el conflicto megaminero en Nankints?”, disponible en: https://www.youtube.com/watch?v=v2D99YHGuRU

[50] Para más detalles sobre estos casos ver, por ejemplo, el artículo de Fundación 1000 hojas: “La muerte de Freddy Taish sigue en la impunidad”, junio 15 de 2015.

[51] Más detalles de las condiciones irregulares de detención de Javier Ramírez ver el artículo de El Comercio: “El dirigente antiminero, Javier Ramírez, acusado de rebelión fue sentenciado a 10 meses de privación de libertad”, febrero 10 de 2015.

[52] El caso de Vale y BHP Billiton en el desastre de Minas Gerais es clarísimo respecto a cuán costosa resulta la remediación: a las mineras se les ha planteado juicios por remediación ambiental, donde la suma exigida llega a los 44 mil millones de dólares. Al respecto ver el artículo de CNN Money: “Brazil slaps miners with $ 44 billion lawsuit over dam collapse”, mayo 4 de 2016.

[53] Ver artículo de El Comercio: “CNE difunde datos finales de la consulta”, febrero 8 de 2018. [54] Esta posición ya la habíamos planteado antes de los resultados de la consulta, como se

muestra en el artículo de Alberto Acosta y John Cajas Guijarro (2018): “La reelección indefinida,

una traición a la democracia”, enero 20 de 2018.

[55] Para un análisis de los límites de la pregunta sobre minería en la consulta popular se puede ver el artículo de Jackeline Beltrán: “ Elpaíspremiadoporsudesarrollominerobuscalimitarla  mineríaconunaconsultapopular ”, GK city, diciembre 21 de 2017. Igualmente se recomienda el análisis planteado por el Colectivo Geografía Crítica: “ Análisisdelalcancedelapreguntasobre mineríaenelreferéndum,Ecuador2018 ”, enero 19 de 2018. Por su parte, para un análisis

 

post-consulta puede revisarse el artículo de Belén Páez: “ Mineríaencentrosurbanos:todolo quelapregunta5notomóencuenta ”, GK city, febrero 4 de 2018.

[56] Ver el boletín de prensa de la Agencia de Regulación y Control Minero: “Ecuador ganó como Mejor País en desarrollo minero en los Annual Outstanding Achievement Awards”, disponible        en:http://www.controlminero.gob.ec/ecuador-gano-como-mejor-pais-en-desarrollo- minero-en-los-annual-outstanding-achievement-awards/

[57] Ver artículo de El Universo: “Mineras ofrecen $ 1.299 millones de inversión”, enero 8 de 2018.

[58] Ver el boletín de prensa de la Agencia de Regulación y Control Minero: “El sector minero es el futuro del desarrollo económico para el país”, disponible en: http://www.controlminero.gob.ec/el-sector-minero-es-el-futuro-del-desarrollo-economico-para-el- pais/

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