Court deals a new setback to Crucitas open pit gold project

The Crucitas open pit gold mine project hit another barrier Wednesday. After more than a month of trial, the Tribunal Contencioso Administrativo ordered the central government to cancel the mineral concession held by Industrias Infinito S.A.

The mine site is about four hours north of San José. Graphic: ndustrias INfinito S.A./A.M. Costa Rica

The lower-level court did not go into detail, but a full, written decision is expected next week. The gist was that there were irregularities in the concession process.

The case most certainly will be appealed, first to the appellate level of the same court. The Sala IV constitutional court already has ruled the opposite of what the lower court said.

The decision electrified environmental activists who cheered and later danced in the streets. Most were university students who have been encouraged to protest the mining plan.

At stake is an estimated 1.2 million ounces of gold. The market price Wednesday was about $1.7 billion. The government was pushing the project as a way to bring economic growth into the area, which is the extreme northern sector of the province of Alajuela.

Casa Presidencial said it respected the judicial decision and was awaiting a copy of the full text. The project has been in the works in one form or another since 1993, and the estimated investment by the company, a subsidiary of a Canadian firm, is about $66 million.

Significant work already has been done on the site, which is some three kilometers from the country’s northern border. More than 400 persons are employed there, but the project has been frozen for two years due to environmental concerns.

As part of the decision Wednesday, the chief judge, Eduardo González Segura, encouraged prosecutors to examine the role former president Óscar Arias Sánchez had in the project. Arias issued a decree that said the mining project was in the national interest. This gave the company latitude to, among other things, cut endangered trees. The court also said the role of the Secretaría Técnica Nacional Ambiental should be examined, too.

The mine project has been attacked because in order to dig a pit to extract gold, workers have to cut down trees, including the protected mountain almond tree (almendro amarillo in Spanish with the Latin name Dipteryx panamensis). The Arias decree specifically permitted cutting such trees, but prosecutors had opened a criminal case to see if the president himself and other officials violated the law. The court suggested they do so again, saying there was no basis for the action Arias took.

In all, the court decision was exactly what environmental activists have been saying.

Some company representatives were jostled by mine opponents as they left the courtroom in Calle Blancos, They were under police protection.

The project also came under intense criticism because mine operators planned to use cyanide to leach the gold from rock. There is about 1.32 grams of gold per ton of rock, according to the company.

If the government does annul the concession, Infinto Gold Ltd., the parent firm, probably will seek international arbitration over the treatment it received. The company already is seeking $1 billion from Venezuela for the takeover of its Las Cristinas project there.

Casa Presidencial has estimated that the country might be on the hook for $700 million.

President Laura Chinchilla Miranda has expressed her opposition to open pit mines and promoted a change in the mining code to prevent future projects. But Infinito already had the permits.

During his first press conference in 2004 then-president Abel Pacheco said he was canceling both the Crucitas project and one in Miramar. Later he was advised of the legal implications and backed down. The Miramar project actually went into production but much of the facility slide downhill during a heavy rain and was destroyed.

Not only young activists were happy. Ignacio Santos, a news presenter on Channel 7 Teletica, launched into a laudatory editorial about the court decision. He congratulated the environmentalists on their fight. He also interviewed on the air one of the opponents who staged a hunger strike in front of Casa Presidencial seeking Ms. Chinchilla to retract the Arias decree. Opponents also staged marches and protests.

The fervor of the protests ratcheted up as the price of gold increased over the years.

The court also said it was ordering Infinito to pay damages for environmental damage. The company said later that it had planted 300 trees for each tree it had to cut. The great green macaw nests in the mountain almond trees. The bird is called lapa verde in Spanish, and they are endangered.

When the full text of the decision is made public, some pressing questions probably will be answered. Among these are jurisdictional issues, such as why the Tribunal Contencioso Administrativo can rehear a case that already was examined by the Sala IV constitutional court. Also uncertain is why the court can assess environmental damage against the company. That usually is the role of environmental tribunals.

The allegations against Arias were considered buried when Francisco Dall’Anese, the nation’s chief prosecutor, quit and took a U.N. job in Guatemala. And Arias was not a party to the case the court heard.

Also to be examined are the court’s reasons for saying Arias did not have a basis for declaring the mine to be in the public interest. Such decrees by their very nature are subjective.

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