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.
A controversial law passed in early August to regulate large-scale mining in Uruguay, could open up the country’s 2,500 million tonnes of underground iron ore deposits to foreign exploitation, which has triggered increasing opposition from locals that threatens the development of this nation’s mining industry.
According to London-based Zamin Ferrous, through its subsidiary Minera Aratirí, Uruguay holds vast deposits of iron ore estimated in 2,500 million tons. If mined, they could put the South American country in the eighth position of the world’s largest iron producers list.
President Jose Mujica said Friday the country needs to make use of the potential wealth that lies in its iron deposits and promised opposition any mining venture would be subject of strict controls to protect the environment, reports Xinhua (in Spanish).
The new law states that large-scale mining should serve the “public interest,” but critics claim it was passed to serve the interests of Zamin Ferrous/Aratirí and its $3 billion Valentines project, which is expected to produce 18 million tons of iron ore a year.
Analysts such as Víctor Bacchetta, from the Movement for a Sustainable Uruguay (Movus), think that even if new rules are to benefit Uruguay, the country of only 176,000 km2 doesn’t have what it takes to become a “mega mining” nation.
“Uruguay is poor in mineral resources. It does not have the huge reserves of countries like Chile or Peru. Aratirí is proposing 12 years of extraction activities, according to what can be gathered from its Environmental and Social Impact Assessment, and after that it will all be over,” Bacchetta told Argentina Independent.
“This makes the project even more absurd for Uruguay, because it is a country with a privileged ecosystem in terms of its fertile land and water resources, which are not found in the (Andes) mountains, where nothing else can be done,” he added.
The Valentines is still awaiting environmental impact assessment approval. If it gets the green light it will become the largest foreign direct investment in the country’s history, generating $1.4 billion in exports annually over the 20 years of its life cycle.
All planned investments have been suspended until the law is finalized.
Image: Earth’s rights/anti-mining march in Uruguay. By Gonzalo G. Useta -Flickr
3 Comments
Djalma Bulcao Fonseca
I am the Brazilian Geologist responsable for bringing Zamin Ferrous to Uruguay in early 2007 , but so far didnt receive the money established by contract which Zamin is constantly forcing us to accept enlargement of the scheduled time for the paying and at the same time reducing the amount to be paid!
My nome is Djalma Bulcao Fonseca a Sênior Geologist associated wit two Uruguayan partners.
Then my question is : Will be Zamin able to honour all promised compromises?
Sincerely I deeply doubt the honestity and seriety of them!
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Agrarian and cattle production are highly damaging with the environment. The only difference is that we all are used to believe that this is the natural landscape in these countries. That´s not true.
As is was said during the Parliamentarian debate at the upper chamber, there are people who confuse Natural Uruguay with an agrarian country, a country of poverty and exploitation, and there is nothing that contaminates more than poverty. Either we diversify productive activities and pursue advances in sectors with higher technology and value added, or we will be a poor country forever.
Frank X. Delzer
Didn’t realize that Uruguay was so small – “176,000 square metres” – making it smaller than San Marino but down in the category of Monaca and Vatican City.
Does no one check any numbers anymore?