Will the Mining Supercycle be Unbroken? Mineral Operations, Communities, and Environmental Change in Latin America

Transcription

1 Will the Mining Supercycle be Unbroken? Mineral Operations, Communities, and Environmental Change in Latin America Jeffrey Bury, Department of Environmental Studies UC-Santa Cruz

2 Summary The New Mining Supercycle? Global and regional economic shifts New technologies Environmental and Human Consequences? Ecology, Labor, Livelihoods Prospects for the Future?

3 A Historical Chain of Broken Mining Supercycles in Latin America Map purported to have been hand sketched by Columbus upon his arrival to the island of Hispaniola (currently the Dominican Republic and Haiti) two days after his discovery of the Americas. Quote from his journals.

4 Colonial Latin America Gold and Silver Production Sources: Bury, Forthcoming and Te Paske, 1982, The Royal Treasuries of the Spanish Empire in America: Peru

5 Mercury: 500 Years of Contamination Colonial Control and Management of Mercury used in Patio Process Sources: Bury, Forthcoming and TePaske, 1982

6 The Late 20 th Century Mining Supercycle in Latin America The evolution of oil, gas, and mineral concessions in the Northern Andes Sources: ANH, 2011; INGEMMET, 2010; MRNR, 2011; PeruPetro, 2011

7 The Late 20 th Century Mining Supercycle in Latin America Mining Concessions in Northern Peru Source: Bebbington and Bury, 2009, PNAS

8 Supercycle Growth of Latin American Mineral Production and Exports Mineral production (left) and mineral export growth (right) in Latin America Sources: USGS 2010 and UNCTADSTAT 2012

9 Regional Distribution of Production

10 Driving Factors? Population or Political Economy? Two Decades of Economic Restructuring (neoliberal reforms) Increasing Demand from BRIC countries Right: Annual shifts in global imports of goods and services. (Source: UNCTADSTAT 2011)

11 Driving Factors? Increasing Prices for Commodities Right: commodity price index for minerals, metals, and crude petroleum , where 2000=100. (Source: UNCTADSTAT, 2011)

12 Driving Factors? Global flows of surplus capital to Latin America FDI flows to Latin America (left and middle). Top five largest recipients of FDI by total amount (upper right) and by percentage change (lower right). Sources: UNECLAC 2011; UNCTADSTAT 201

13 Mining in the 21 st Century Most surface deposits with high concentrations are depleted

14 While Small Scale (Artesanal) Mining Persists With the Aid of New Machinery (e.g. gold mining Madre de Dios)

15 Most Mining Today is Large-Scale The Yanacocha Complex, Peru km

16 Limited to a Few Very Large Transnational Corporations

17 Operating in Remote Areas of the Planet

18 Using Sophisticated Technologies

19 And New Methods of Extraction

20 That Require Massive Environmental Transformations

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22 Video Interlude

23 Supersized Mining Example: The Golden Jewel of Peru? Minera Yanacocha Gold Mining Metrics ,061,024 Ounces of gold-48 cubic meters 1,132 Tons of Silver Six Pits 2,339,559,605 Metric Tons of Earth Excavated 1.06 Average gold grams per ton 71 metric tons of rock or 42 cubic meters/per ounce of gold Hydrocarbons dependency- Example- (photo right) Just 1 CAT 785D consumes approx 219,843 gallons of gas. Yanacocha uses an undisclosed amount, but many more. Photo: J. Bury, 2001

24 Impacts: Environmental Refugees? Toxic flight from extractive legacy, accidents or future problems Example La Oroya

25 Impacts: Water Resources Water Quality: Rio Santa Basin, Peru. Since 1990 more than 90 percent of all recorded mining claims were placed in the watershed. In 2010, there were three large mining operations in the watershed, 6 new planned projects, 12 mineral processing facilities, and 1848 active mining claims covering approximately 52% (6,111 km 2 ) of the drainage

26 New Pressures on Water Impacts: Water Resources Resources (example Pierina, Peru) Transformation of groundwater ( de-watering of pits) Due to extraction technologies (e.g. open pit and cyanide heap leaching) Pierina-2008 extracted 29.7 million tons of rock and 400,000 ounces of gold Consumed 10 million cubic meters of freshwater Consumed 296 GW of energy (~18% of Huallanca production) Energy (hydro) + water at mine=1284m 3 per ounce of gold Barrick s Pierina mine above Huaraz

27 Impacts: Long-term Environmental Consequences Many ecological transformations have just begun and will take potentially centuries to remediate, if at all. The toxic legacy of mining should be considered using century or millenial temporal scales The distribution of impacts often reflect patterns of inequality

28 Economic Consequences? The Resource Curse? Macro-economic benefits? Foreign Exchange Economic Growth Enhanced Environmental Protection Either through increased wealth or Through new environmental policies

29 Source: ILO 2011 Social and Environmental Impacts Jobs? Mining Employment and Strikes

30 Livelihoods? Mixed Results (Bebbington and Bury 2009, PNAS) Short-term gains Long-term questions Institutional Importance Andean Regional Analysis 5 Countries 41 Communities Thousands of Interviews Mixed Quantitative and Qualitative Approaches

31 Social and Environmental Impacts Protests, Conflicts, and Violence Decline of Labor Strikes Sources: ILO, 2011; Defensoria del Pueblo, Peru 2011 Rise of Socio-Environmental Struggles

32 Effect 2: More Permanent Shifting Regional Migration Patterns Displacement Movement away and lower in elevation 44 communities- 11,000 hectares 75% moved lower 17% to Cajamarca Source: Bury, 2008, Professional Geographer

33 Cerro de Pasco

34 2008-Mine Devoured Town Plaza

35 Reactions to Mining Operations in Peru Households and Supra-communal Organizations Increases in linkages between households and transnational protest networks

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37 Other Examples Tambogrande ~20,000 people Ended in violent conflict, several deaths and wide-spread disturbances

38 Future Supercycle Prospects? Of TARPS and BRICS Global FDI Shifts Post-2008 Chinese FDI in Latin America

39 Global Price Recoveries

40 New Institutional Configurations At first glance: Chinese FDI to Latin America Source: MOFCOM 2011

41 New Institutional Configurations At second glance:? Source: MOFCOM 2011

42 New Institutions Social Licenses as Commodities? Corporate Social Responsibility Example: Cerro Colorado, Panama Juniors vs. Seniors (exploration vs exploitation)

43 New technologies: The Bio-extractive Frontier Photo: Newmont Mining Corporation s Bioreactor Test-bed Facilities (Nevada)

44 And Is The Future Fracked? New Shale Gas Reserve Growth Estimates Natural Gas 2009 and Shale Gas Reserve Changes Trillions of cubic feet (tcf) Production Consumption Imports Proved Reserves (tcf) Recoverable Shale Gas Resources (tcf) Years of Supply w/ new Shale Gas Reserves Estimates Venezuela % Colombia % Argentina % Brazil % Chile % Uruguay n/a 100% 21 Mexico % Paraguay Bolivia % Total (Latin America) World Total Source: IEIA, May 2011

45 The New Extractives Complex in Latin America Extractives Component Measure ( ) Description Refineries 35 Mining Facilities 466 Pipelines 153,785 Km operating LNG Terminals 340,000 Km proposed 8 Existing or Construction 20 Proposed Drilling Rigs 436 Operating Land 350 Offshore 86 Port Movement 8,376 Millions Metric Iron 987 Tons Coal 912 Ore 343 Bauxite 79 Phosphates 21 Petroleum 2659 Other 1930 Containers 1347

46 Lessons? The New Mining Supercycle Unprecendented Pace, Scale, Extent Vast Human and Environmental Consequences Potential for Continued Expansion Depends One key lesson from history All booms must bust Should Mining Be Stopped? If so, decisions should be made before operations are allowed to begin.