The Gold Mine


San Felipe, Baja, Mexico

Minera San Felipe

While the method to extract gold in mines based on the use of cyanide has been banned in many countries, Minera San Felipe, the mine north of town, uses this dangerous substance to separate gold from low grade ore and then treat the waste using a process that can potentially pollute groundwater and the sea of Cortez. Given the far from stellar track record of the gold cyanidation process around the world, it would seem there is no 'if' in the prognostication of its effects but rather just a matter of 'when'.

In February, 2000 in Romania, there was a break in a cyanide saturated tailings dam, which is the most common source of these environmental disasters. Tonnes of water laced with cyanide and heavy metals spilled from the containment reservoir operated by the Aurul gold mine near Baia Mare, and entered a nearby creek spreading into the Tisza and Danube rivers. The spill was described by Hungarian officials as the worst environmental disaster to afflict the region since the leak from Ukraine's Chernobyl nuclear power station in 1986. An estimated 150 tonnes of fish died, drinking water has been affected and scientists fear the cyanide and heavy metal residue could remain for decades to come.

Esmerelda, the Australian gold mining company responsible for the Romanian operation, has admitted that 100 million liters of cyanide-contaminated water spilled into a cross-border river system in Romania but they continue to deny that the spill was linked to an environmental disaster 75 kilometers downstream in Hungary where cyanide levels were reported at more than 700 times acceptable levels, in what scientists are calling a "wave of death".

Fish, wildlife, micro-organisms and plants were killed the length of one of Central Europe's most important river systems. Hungary alone pulled 85 tonnes of dead fish from the Tisza. This amounts to an economic calamity for the thousands of fishermen and tourist operators who depend on these rivers.

More than half a dozen major spills have occurred outside the U.S., leading to international debate over the use of cyanide in mining and prompting the Czech Republic to ban cyanide leaching in 2000.

Courts in Greece and Turkey have ruled against cyanide leach gold mine proposals because of the potential risks to health and habitat.

In the last 25 years, the major causes of cyanide releases into the environment from mining have been tailings-dam mishaps (76%), pipeline failures (18%), and transportation accidents (6%). Spills have occurred in so many places, and for such a variety of reasons, that it seems obvious there is no way to ensure safe transport and use of cyanide in mining.

Given the scale of the gold cyanidation project north of San Felipe, along with its location just a few miles from the Biosphere Reserve, and add the very real possibility of a hurricane (Nora of '97 is a good example), then the recipe begins to look pretty grim.

What is the reason cyanidation is being used at the San Felipe Mine, rather than an environmentally safe, more efficient and cost equivalent process like the Haber Gold Process? Likely the cost of retooling for a different method of gold extraction was weighed against the initial loss of profit and/or Federal fines in the event of a spill. The risk of laying the local shrimp and fishing industry on a slab with scuppers is apparently a small price to pay in exchange for the extra paychecks that leach through the town's green grocers and beer stores.

Empresas Frisco began production of the 3,000 tons per day underground gold mine and cyanidation plant near San Felipe in 1994. The operation is within a 300,000 hectares concession, perhaps the largest concession since the 1930s. (Prior to the last change in Mining Law, concessions were limited to 5,000 hectares.)

The mine was a low-angle stockwork gold deposit worked in both open pit and underground fashion. By 1999 the forecasted reserves were nearly exhausted. Discovery of new resources and the rising price of gold enabled the mines to start up again several years later.

Empresas Frisco, SA de CV, is a subsidiary of Grupo Carso SA de CV, which is owned by Carlos Slim.

It's unfortunate the mine is not foreign-owned. On March 29th, 2007, Canadian mining representatives and advocacy groups, including Ottawa-based Mining Watch Canada, announced an accord that would create the first independent mining ombudsman as well as sketch out environmental and social standards for projects in the developing world. The report calls upon governments to withdraw diplomatic support and tax breaks to any company failing to uphold these standards. As 75% of the foreign companies currently invested in mining in Mexico are Canadian, this new accord promises significant environmental reforms.

Of course since Empresas Frisco is not eligible for these tax breaks, it need not concern itself with environmental and social standards. Ultimately the responsibility for such priorities rests with us. But it is not a task without hope. Witness the denial of permits to a Canadian mining company in Baja Sur last year.

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