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A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The world’s largest gold company, Barrick Gold (NYSE & TSX: ABX), suffered a major setback Tuesday as the Argentine National Supreme Court reversed preliminary injunctions that have blocked key parts of a glacier protection law, now back in full force for all mining companies.
The National Glacier Act requires a thorough national inventory of Argentina’s remaining glaciers as well as “periglacial” areas where the ice has recently retreated but water remains below the surface.
Terra.com reports that the Canadian company is evaluating the ruling and will not stop the work already in progress at its Pascua Lama gold and silver project, in San Juan Province, straddling the border between Chile and Argentina:
“We are legally entitled to continue our current activities on the basis of existing approvals,” said Rodrigo Jimenez, vice president of corporate affairs for Barrick South America in a statement.
Other companies operating in the country will also be affected by the Supreme Court’s decision, including Xstrata Copper, Anglo American, NGEx Resources and McEwen Mining. Most of them have projects in areas surrounded by hundreds, and in some cases thousands, of glaciers, according to Jorge Daniel Taillant, mining, environment and human rights coordinator with Argentina’s Centre for Human Rights and Environment (CEDHA).
“The Andes are full of ice and as the glacier inventory becomes official, the areas off-limits to mining operations will increase,” Taillant predicts. “It’s estimated that San Juan Province, the most mining-friendly province by far, has over 12,000 glaciers above 10,000 ft., where most of the exploratory mining operations are now underway. San Juan alone has over 100 mining projects in the pipeline that could potentially be permanently stalled by the reality that glaciers are ubiquitous in the area.”
Xstrata Copper, which has a project in San Juan, said in a statement provided to MINING.com that it “takes its environmental responsibilities seriously and adheres to the highest international standards of sustainable development.”
Regarding its El Pachón copper project in San Juan, it says it is located in a periglacial environment. As such, “feasibility update studies and an environmental impact assessment are currently underway and a glacier impact assessment is being undertaken as part of these specialist studies. Our El Pachón Project continues to operate in full compliance with all applicable Argentine laws.”
Meanwhile, McEwen Mining stated in a June 27, 2011 news release that, results from exploratory drilling and glaciology studies found “no ice glaciers are present in the project area” of its Los Azules copper project, also in San Juan.
First approved by the Argentine Congress in 2008, the glacier protection act was vetoed by President Cristina Fernandez a month later that year. However, in September of 2010, a new version of the act was ratified in the Argentine Senate in a 35 pro, 33 against vote. Barrick Gold is currently seeking to have the act declared unconstitutional and the case is before the Argentine Supreme Court.
Read more on the law that protects glaciers in Argentina >> >>
Learn about and see images of Pascua Lama >> >>
