Illegal Canadian mine shut down
Mexican ruling on New Gold mine sets precedent
Last Wednesday the Mexican environmental enforcement agency closed the Canadian-owned New Gold mine in the town of Cerro de San Pedro. The government’s actions ratified decisions made last month by the Federal Tribunal of Fiscal Administration and Justice, as well as the Ninth Circuit Administrative Courts that deemed New Gold’s operating permits illegal.
The closure marks the end of a 10-year battle by the Frente Amplio Opositor (FAO), the international coalition that worked to close the mine on the basis of its environmental and social impacts on the nearby community of San Luis Potosi.
Cleve Higgins, of FAO Montreal, commented on the unprecedented importance of the closure. “It’s really significant for the people of Cerro de San Pedro, also for the people opposing mines in Latin America and all over the world…. This is the most high profile, widely known opposition to a mine of this kind.”
On November 14, the FAO filed complaints with the British Columbia Securities Commission and the Toronto Stock Exchange. The FAO accused these bodies of misrepresenting and withholding information that was of “central importance to shareholders.” Since the closure announcement, New Gold’s stock dropped by 18 per cent, though some analysts expect it to recover.
George Albino, an analyst with Macquarie Equities Research, expects the company’s shares to suffer, but only until the situation is resolved as he anticipates. “In our view, Mexico is a pro-mining country and will ultimately allow New Gold to resume mining operations at [Cerro de San Pedro] in spite of the current setback,” Albino said in a memo.
RBC Capital Markets analyst Michael Curran echoed the sentiment in a memo to clients. “We do not believe that the mine is an environmental liability that warrants permanent closure,” Curran wrote.
New Gold announced that it plans to appeal the decision, although it has made no mention of how it will conduct the appeal. The ruling that New Gold operated under null permits is unappealable under Mexico’s highest court.
According to a press release circulated by the FAO and Mining Watch Canada, FAO lawyers are currently pursuing charges against New Gold and its Mexican subsidiary. The coalition is also launching a “Mega-remediation project” to restore the mine’s detrimental effects on the historical and environmentally distinctive valley of Cerro de San Pedro.
“They are proactively taking steps to ensure mines of this kind don’t happen in the future,” Higgins elaborated.
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Courtland Acosta wrote:
Having been involved with the construction of this project and spending all most 2 years in San Luis Potosi the sad part of this whole situation is the 300 plus local workers who will be loosing their jobs. Nobody seems to be asking them how they feel. There is an excellent local work force at this project and they are the true victims. The few that are driving this protest are in it for their own financial gain. This opertion is run with the same rules and regulations as a heap leaching mine operation in the US. The leach pads were designed and constructed just as they are in Nevada or any other state. The mining compnay has replaced the old housing in Cerro de San Pedro with new modern housing for the locals and provided jobs. The only adverse effect this mine is having on this community is what the opposion has done to their own people. As I'm now working in the US and have been away from the project for for a few years I feel for the wonderful friends that I made during my short tenure in SLP.
Nov 23, 2009 at 04:39 PM
Abraham Lopez wrote:
To Courtland Acosta and everyone else opposing the decision: Yes, the impact closing the mine will have on Cerro de San Pedro especially concerning the local work force is big, and sad. However, we should be able to look at this situation from other perspectives: For once, the "remediation project" -if it does come to life- will mean the creation of new jobs. Secondly, I don't know what is the specific case for Cerro de San Pedro, but mining wages have been proven to be low when considering the conditions. And the point shouldn't be shutting the mine, rather find new ways of doing so, so that all mining activities have the least impact on the land.
Nov 23, 2009 at 08:11 PM
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