Mining’s old guard needs strong medicine
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 revival of legislation to protect glaciers by banning mining activities close to them has reached Chile, where the Congress is in the midst of a long-dragged debate about whether the definition of glacier should or not include the frozen areas around them.
In most places, glaciers are easy to spot: pristine bluish and white surfaces, such as the famous Patagonian ice caps. But in the high Andes Mountains of central and northern Chile and Argentina, many of the glaciers don’t fit such description.
The area is rich in so-called rock glaciers, quite scarce in other points of the globe, which have dusty and rock-like exteriors that contain a core of ice. Their main importance lays on being natural water reservoirs, an element Chile has been lacking of lately.
Almost 75% of the Chilean population relies on water supplied by melted ice. For the northern half of the country, glaciers are particularly vital — yet they are now retreating quicker than ever.
According to environmentalists, the unfortunate combination of climate change, drought and an expanding mining industry, have Chile’s northern icebergs in danger of disappearing completely.
One of the best-documented examples is the 18,000-year-old Chacaltaya glacier in the Bolivian Andes, which disappeared in 2009. Experts had forecasted it would survive until 2015, but it melted faster than expected, leaving what used to be the world’s highest ski run — 17,000 feet above sea level — as a boulder-strewn slope with a few patches of ice near the top.
Mining companies in the area regularly struggle with power supply issues. Although mostly in the form of electricity, it’s been estimated that major mining operations eat up as much as 80% of Chile’s energy.
According to AP, if the proposed law to protect Chile’s rapidly disappearing glaciers becomes a law, billion of dollars in mining projects will be force to leave the country and investment will slow down.
Local newspaper El Diario (in Spanish) reports that some sectors see the bill revival as an “open threat” to both mining operations and projects in areas surrounding glaciers. Among those that would be the most affected by the legislation are the Andina division of world’s No. 1 copper producer Codelco, Barrick Gold’s Pascua Lama (TSX, NYSE:ABX) and Anglo American’s (LON:AAL) Los Bronces.
Neighbour Argentina adopted a similar law in 2010 that has caused delays in a few projects, such as Canada’s Osisko (TSX:OSK) Famatina gold exploration and the Argentine side of Barrick’s Pascua Lama gold and silver project.
Chile’s Congress is expected to take on the glacier protection bill by the end of the month.
3 Comments
Carlos
Sometimes the mining must be leaved in second place, there are natural resourses to be preserved, Barrick in pascua lama Chile, had MANY irregularities, they were using the melted ice water, even with legal prohibitions. They did not know what kind of country is Chile, where the law is more important than any mining company. they had a really bad management, and finally they do not have the chance to operate pascualama in Chile.
I think the mining companies must evaluate better the stragies to be used with the enviromental matters if they would like to keep on bussines, times changing.
A.C
It’s about time to restrain the destruction of nature by mining companies.
Apple
Everywhere in the world is someone’s special place where no
mining should be done, whether it is a mountain glaciers in Chile, forests in Northern Canada, Heritage sites in Romania. Yet somehow there has to a place for man’s activities, including mines, roads and cities. No matter how we deal with this conflict of interest there will be cost. How much are you willing to pay or give up ?