Will the Mining Supercycle be Unbroken? Mineral Operations, Communities, and Environmental Change in Latin America Jeffrey Bury, Department of Environmental Studies UC-Santa Cruz
Summary The New Mining Supercycle? Global and regional economic shifts New technologies Environmental and Human Consequences? Ecology, Labor, Livelihoods Prospects for the Future?
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.
Colonial Latin America Gold and Silver Production Sources: Bury, Forthcoming and Te Paske, 1982, The Royal Treasuries of the Spanish Empire in America: Peru
Mercury: 500 Years of Contamination Colonial Control and Management of Mercury used in Patio Process Sources: Bury, Forthcoming and TePaske, 1982
The Late 20 th Century Mining Supercycle in Latin America The evolution of oil, gas, and mineral concessions in the Northern Andes1955-2011. Sources: ANH, 2011; INGEMMET, 2010; MRNR, 2011; PeruPetro, 2011
The Late 20 th Century Mining Supercycle in Latin America Mining Concessions in Northern Peru 1990-2008 Source: Bebbington and Bury, 2009, PNAS
Supercycle Growth of Latin American Mineral Production and Exports Mineral production (left) and mineral export growth (right) in Latin America 1995-2008. Sources: USGS 2010 and UNCTADSTAT 2012
Regional Distribution of Production
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)
Driving Factors? Increasing Prices for Commodities Right: commodity price index for minerals, metals, and crude petroleum 1960-2007, where 2000=100. (Source: UNCTADSTAT, 2011)
Driving Factors? Global flows of surplus capital to Latin America FDI flows to Latin America 1990-2007 (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
Mining in the 21 st Century Most surface deposits with high concentrations are depleted
While Small Scale (Artesanal) Mining Persists With the Aid of New Machinery (e.g. gold mining Madre de Dios)
Most Mining Today is Large-Scale The Yanacocha Complex, Peru-2009 5 km
Limited to a Few Very Large Transnational Corporations
Operating in Remote Areas of the Planet
Using Sophisticated Technologies
And New Methods of Extraction
That Require Massive Environmental Transformations
Video Interlude
Supersized Mining Example: The Golden Jewel of Peru? Minera Yanacocha Gold Mining Metrics 1994-2012 33,061,024 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
Impacts: Environmental Refugees? Toxic flight from extractive legacy, accidents or future problems Example La Oroya
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
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
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
Economic Consequences? The Resource Curse? Macro-economic benefits? Foreign Exchange Economic Growth Enhanced Environmental Protection Either through increased wealth or Through new environmental policies
Source: ILO 2011 Social and Environmental Impacts Jobs? Mining Employment and Strikes 1960-2008
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
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
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
Cerro de Pasco
2008-Mine Devoured Town Plaza
Reactions to Mining Operations in Peru Households and Supra-communal Organizations Increases in linkages between households and transnational protest networks
Other Examples Tambogrande ~20,000 people Ended in violent conflict, several deaths and wide-spread disturbances
Future Supercycle Prospects? Of TARPS and BRICS Global FDI Shifts Post-2008 Chinese FDI in Latin America
Global Price Recoveries
New Institutional Configurations At first glance: Chinese FDI to Latin America 2004-2011 Source: MOFCOM 2011
New Institutional Configurations At second glance:? Source: MOFCOM 2011
New Institutions Social Licenses as Commodities? Corporate Social Responsibility Example: Cerro Colorado, Panama Juniors vs. Seniors (exploration vs exploitation)
New technologies: The Bio-extractive Frontier Photo: Newmont Mining Corporation s Bioreactor Test-bed Facilities (Nevada)
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 0.65 0.71 9% 178.9 11 15 Colombia 0.37 0.31-21% 4 19 61 Argentina 1.46 1.52 4% 13.4 774 509 Brazil 0.36 0.66 45% 12.9 226 342 Chile 0.05 0.1 52% 3.5 64 640 Uruguay n/a 100% 21 Mexico 1.77 2.15 18% 12 681 317 Paraguay 1.41 62 44 Bolivia 0.45 0.1-346% 26.5 48 480 Total (Latin America) 5.11 6.96 251.2 1906 World Total 6609 6622 Source: IEIA, May 2011
The New Extractives Complex in Latin America Extractives Component Measure (2009-11) 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
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.