MANAGUA – While Nicaragua’s mining industry continues to expand and lead Central America in gold exports, Environment Minister Juana Argeñal is setting her sites on an open-pit gold mine across the border in Costa Rica which she says could leech cyanide into Nicaragua’s San Juan River.
“Las Crucitas will cause serious harm to our environment,” Argeñal told The Nica Times, adding that she sent a statement to Costa Rica’s Environment Minister Roberto Dobles in May to state her government’s official protest to the reopening of the mine.
Yet despite her staunch opposition to the Costa Rican mine, the minister has not raised similar concerns about the environmental impact of other gold mines in Nicaragua – Central America’s largest gold exporter with $64 million in exports last year, according to the Central American Customs Union statistics.
Last year’s controversial closing of a different mine in Costa Rica – Canadian company Glencairn’s Bellavista mine in Miramar – caused an uproar from environmentalists there as well. That mine was closed by Tico officials after a landslide destroyed part of its operations. Now the same company, which later changed its name to Central Sun, is trying to secure financing to expand an openpit gold mine in northern Nicaragua.
When The Nica Times recently asked Argeñal about Central Sun’s mining activity in Nicaragua – where they also operate the Limon mine in northern Nicaragua, the Orosi mine 110 kilometers east of Managua, and has an option to buy a third mine– Argeñal said she needed to find out more about it before commenting.
Central Sun is currently struggling to find funding amid the global financial crisis to convert the suspended heap leach operation at Orosi to a conventional milling system. An international bank recently rejected the company’s $22.5 million loan request.
But the company remains optimistic about its prospects here.
“We continue to work diligently to secure the required funding to restart and complete the Orosi mine expansion project,” said Central Sun CEO Peter Tagliamonte in a statement. He added that the mine is only about six months away from being brought back into production to extract 80,000 ounces of gold a year.
Argeñal, meanwhile, is reserving her concerns for the Costa Rican Crucitas mine, owned by Canadian company Infinito Gold.
She said cyanide used in open-pit gold mining could likely seep into the San Juan River watershed from the mine, which is about three kilometers from the river. The company has already begun cutting down trees, allegedly including the protected yellow almond tree that provides habitat for the endangered Great Green Macaw or Lapa Verde – which Nicaraguan authorities recently declared the official bird of the San Juan River.
“We’re demanding an environmental study,” Argeñal said. “They can’t start working on the mine until they complete the study.”
She said recent regional accords signed by Costa Rica call for bilateral cooperation in managing projects that could have crossborder environmental impacts. The minister says she’s tried bringing regional attention to the Costa Rican mine by raising the issue with leaders of the Central American Parlaiment (PARLACEN).
The Crucitas mine also faces its own problems in Costa Rica.
When Infinito Gold (formerly Vannessa Ventures) started felling trees along the picturesque San Juan River – which Nicaragua’s Tourism Institute is trying to promote as the country’s next eco-tourism destination – Costa Rican environmentalists posed fierce opposition.
“Mr. President and the rest of the puppets of destructive transnational interests: know that mines won’t happen and that Costa Rica’s environmental defenders are stronger than ever,” said Fabian Pacheco, a former president of Costa Rica’s Ecologist Federation.
Environmental groups filed a complaint alleging that President Oscar Arias overstepped his powers by issuing an Oct. 17 decree declaring the Crucitas mine to be “of national convenience and public interest.”
The decree gave the company the green light to clear 191 hectares of tropical forest.
On Oct. 21, Costa Rica’s Supreme Court suspended Infinito’s tree-cutting permits while state prosecutors investigating Arias for suspicion of prevaricato, when a public official dictates resolutions based on false facts or contrary to the law, punishable by up to 15 years in prison.
Infinito said in a statement that it would stop cutting trees until the issue was resolved in Costa Rican courts.
After the controversy broke out in Costa Rica, Nicaragua’s Foreign Ministry released a statement expressing its “concerns about the environmental viability” of the Tico project, adding any contamination would have effects on Nicaragua’s protected areas the San Juan River Wildlife Refuge and Indio Maiz Biosphere Reserve.
Despite all the environmental concerns, gold investment consultant Robert Moriarty claims the Crucitas mine isn’t a bad deal for Costa Rica.
Though environmentalists say the Crucitas area would make for a prime eco-tourism location if the government would build roads in the area, Moriarty has his doubts.
He said tourism will likely suffer from the looming financial crisis, during which investors will put their money into gold, which is a financial safe haven in times of crisis. This will increase the demand for gold and make the Crucitas mine more profitable, he said.
Plus, he said, the company had agreed to plant 50 trees for every one felled and to create a biological reserve on the mine property. Environmentalists are “foolish” for opposing the project, he said.
“The area needs the jobs, the electricity and the internet and would get 50 times as much forest,” Moriarty said.
Still, some evidence suggests mining isn’t necessarily a harbinger of sustainable development in the region. An Oxfam report published in July says most wealth produced by mining in Central America tends to traditionally flow abroad, leaving little for locals. And aside from mining’s social and environmental costs, many mines last only a few years, like the Bellavista mine in Costa Rica, which left hundreds jobless when it pulled out.
With perhaps the exception of Nicaragua, which has the region’s fastest-growing mining industry, mining is becoming an increasingly marginal industry in Central America.
Mining supporters, however, insist the activity is a boon to the economy and contributes to impoverished economies like Nicaragua by creating wealth.
“There are only three ways to create wealth. You can manufacture it, you can grow it or you can mine it. Everything else is a function of one of those three,” Moriarty said.