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9/19/16

Argentina: The Veladero mine causes political pain (from IKN384)

This isn't just Barrick's problem any longer, the mess they're making at Veladero is causing headwinds that will see all mining companies that want to work in Argentina suffer. This from IKN384 this weekend.

The funniest bit: The way the North ignores the problems and then how it will throw its arms up in despair and blame commie-level NGOs when they suffer massed protests and get their permits refused later. 


Argentina: The Veladero mine causes political pain
On Thursday September 15th Barrick (ABX) announced (8) that operations at its Veladero mine in San Juan province Argentina had been suspended due to an incident on September 8th, namely a block of ice which damaged one of the pipes at its tailings facilities which caused “a small quantity of solution” to be spilled. All well and good, now for news that matters:

  • ABX took six days to report the incident to authorities and only did so because they’d heard one of their employees was going to blow the whistle. In fact they informed authorities via a Whatsapp message at 10pm September 14th. Crazy.
  • ABX did not suspend operations, a local judge suspended them with immediate effect on hearing the news. And it’s noticeable how ABX only said “solution” in its NR, no mention of the real problem word “cyanide”.
  • The ensuing uproar from the local town of Jachal was only to be expected, as this is the same mine which had a far more serious spillage last year. On that occasion ABX tried to keep it quiet, then underplayed the severity of the incident and only weeks later was it confirmed that the spill had indeed reached the local water supply. Veladero is hated in the town and the calls for it to be permanently closed are now very loud.
  • San Juan Governor Sergio Uñac and his provincial mining minister Alberto Hensel were due to travel to China for the China Mining conference, but on hearing the news they cancelled the trip and Uñac travelled instead to Jachal. In Jachal he gave a town hall meeting and news conference, but he was also treated to a rough reception (9) that included being spat upon and getting eggs thrown at him (an Argentine standard response in these circumstances, for what it’s worth).
  • On Friday evening mining minister Hensel held a press conference (10) to state that no cyanide contamination had been found by first inspection (which we note happened a full week after the incident). He also stated that the mine would remain closed until ABX came up with a plan to improve its working practices that would have to be signed off by both local judges and Governor Uñac. That same day Uñac said that operations at Veladero would not renew until he was “...certain that Barrick Gold went about its business with absolute respect for the environment and for the mining code”. Translation: He is livid that Barrick waited a week before telling anyone.
As this well-written op-ed (11) in San Juan newspaper “Tiempo de San Juan” noted, the presser was held at midnight on Friday and the only reason politicos do that kind of thing at that time of night is as a damage limitation exercise. The op-ed is entitled (translated) “Mining: And now who could defend it?”, a fair pulse-take of the mining sector’s image in both San Juan and the wider Argentina this weekend and notably, written by a famously pro-mining journalist in San Juan who is now reconsidering his own position. Once again a pollution incident in Argentina that’s brushed off in the Northern hemisphere and English language press as no big deal has been taken far more seriously in country (I’m told that “Veladero” was the number one trending topic on Twitter the next day and even made the world top ten for a while). All this at the same time as Barrick hiring George Bee to start up the Lama side of Pascua Lama, which just so happens to be in San Juan province too. Be in no doubt, no matter whether the spillage was ultimately small or large the optics of this event are terrible for mining in Argentina and Veladero is turning into a gift from the heavens for anti-mining activists up and down the country.