Final judgment on mine rests with policy makers

Your Crucitas editorial is interesting on several levels.  First, you reflexively supported the project because approval had been granted but then rescinded. You find this a breach of fair contract, but that’s flawed policy making.  Public officials have an interest in safeguarding the public interest.  If those officials decide that the public’s desires or needs have changed, then they have a right to change prior decisions – with proper compensation for lost opportunity for the company. That last qualifier is necessary for any functioning business environment.

Second, you can’t compare open pit gold mining and underground gold mining. They’re after two different kinds of gold and have vastly different environmental impacts. Underground gold mining is going after veins of gold that are easily exploitable. The reason you can’t do that in the Crucitas or Buena Vista case is because the gold is microscopic in size. You need to gather tons of rock, crush it, and dissolve the gold using chemicals like cyanide and then reprocess the chemical liquid to remove the gold.  That’s why there’s a huge physical footprint, chemical footprint, and greater environmental disruption.  You treat underground gold as well, but not on the same scale.

The question is whether it’s in the interest of Costa Rica to allow open pit gold mines, given the climate, mountainous terrain, demands on water use, and impact on sensitive environments and waterways.  I toured Buena Vista a few years ago, after the landslide destroyed their million dollar gold processing facility and shut down the mine, and a careful examination of the slide’s cause showed that building a mine on the side of a mountain in rainy Costa Rica is a very poor idea.

There are too many unknowables and potential risks.  With that mine, the engineers really thought that they knew everything about the location beforehand. But it turned out that a very old and undetected land fault was just waiting for the right rainy season disturbance to slide – and it did.  Luckily, the company took the right steps to leach out the cyanide from the leaching pad before the main slide happened, when they detected minor ground movement. But that was really luck, because the major slide didn’t happen right away, but was preceded by slight ground movement.

There was a possibility that the hillside could have given way quickly, without the minor movement to give warning to the engineers that something was happening.  The point is that there are risks that sometimes can’t be foreseen by engineers in such an environment.  Prudent policy making might question allowing an open pit mine in such surroundings.

Crucitas is not as hilly, and it’s much more remote from population areas. However, it’s very close to the Rio San Juan, which could have major national and international implications if there’s an accident. Given the chemicals needed for processing the gold there and the potential for a spill, it’s reasonable for Costa Rican policy makers to be very careful about agreeing to a mine there.  That’s not to pre-judge whether it should or shouldn’t happen. That’s for Costa Rican’s and their politicians to decide.  However, at a minimum, any such operation should only go ahead with a full understanding of the worst-case scenario risks and a large company bond in place in order to deal with any potential disasters.

All of this has little to do with the current controversy, and that’s the way it should be. We shouldn’t let the actions of the judge and any company officials confuse the issues at hand when deciding whether to allow open-pit mining in Costa Rica’s sensitive habitats.  Those criminal acts can be handled with the laws and procedures already on the books.

Finally, there’s another reason to fully investigate and prosecute this current breach of law – it could have potentially led to serious stock fraud.  A decision to postpone or allow the mine would have had important share price implications for Infinito Gold (which is listed in Toronto on the TSX: IG), allowing those with advance knowledge of the court decision to profit in the stock market. Serious money is at play here, and serious money could have been made illegally with advance knowledge of this decision.  Stock market regulators in Canada should also begin an investigation here to see if anyone was preparing to profit by the impending court case.

Tom Deligiannis
University of Western Ontario

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