Panel rejects plan for Costa Rican gold mine

Costa Rica

After nearly a year of review, a Costa Rican panel has rejected the environmental-impact study presented on behalf of Canada’s Vannessa Ventures for a proposed open-pit gold mine at Las Crucitas, near the country’s northern border.

The March 11 decision by the Costa Rican Environment and Energy Ministry’s Technical Committee (Setena) does not amount to a final blow for the controversial mining plan, but analysts say the project may be on its last legs.

According to a spokesman for Vannessa Ventures’ Costa Rican subsidiary, Industrias Infinitos, the company will ask Setena to review its decision. If Setena rejects the appeal, Environment Minister Carlos Manuel Rodríguez will make a final ruling.

Rodríguez and President Abel Pacheco have been outspoken critics of the project and have banned new open-pit mining concessions.

"I’m happy to at least have a ruling after one year of waiting," Industrias Infinitos says General Manager Jesús Carvajal. "But the resolution doesn’t surprise me, considering the enormous political pressure against this project."

On Jan. 30 of last year, days ahead of presidential elections, the administration of then- President Miguel Angel Rodríguez awarded the Vannessa Ventures a concession to mine some 600,000 ounces of gold on its 3,000-acre (1,200-hectare) property near the San Juan River, which forms a natural border between Costa Rica and Nicaragua.

But a month after taking office, President Pacheco and Environment Minister Rodríguez announced a moratorium on open-pit mining. The executive order said existing mining concessions would be respected, but both Rodríguez and Pacheco vowed the Crucitas project would not be allowed.

After last month’s Setena ruling, Rodríguez and Setena chief Eduardo Madrigal denied that political pressure played a role in the decision. "That accusation is false," Madrigal says. "This was an independent, technical analysis. Simply stated, the impact study was a bad document, full of information gaps."

Setena’s ruling drew on five independent studies conducted by university biologists and sociologists and by the Environment Ministry’s Conservation Department in the northern San Carlos area, where the proposed mine site is located. All five reports concluded the impact study is deficient.

Although the site is located near a small river basin and a few kilometers from the environmentally sensitive San Juan River, the impact study made no mention of the basin. Setena also ruled that the cutting of some 340 trees on the project site would violate land-use provisions of Costa Rica’s Forestry Law, despite company promises to reforest in other areas.

The company in the past has conducted local and international media campaigns to portray the project as safe. One publicity bulletin called Las Crucitas the country’s first "Eco-mine," pointing out significant areas of local pastureland would be reforested.

However, Setena was critical of the company’s proposed use of cyanide in the mining process. "The impact study ignored exactly how [the company] would manage the cyanide, obviously a serious concern," Madrigal says. "It is impossible to continue with this project based on the impact study."

Sociology experts warned the project could lead to migration of local residents and boost alcoholism, drug use and prostitution in a rural area already struggling with poverty and unemployment.

Company officials object to Setena’s use of outside consultants to evaluate the project, claiming their reports were kept secret until Setena’s resolution was announced. On March 10, the company presented an appeal to the Constitutional Chamber of the Costa Rican Supreme Court, objecting to the reports. The court is expected to rule in the coming weeks.

Under normal circumstances, companies would be able to review Setena’s findings and submit a revised impact study. But last year’s moratorium may prevent that from happening in this case. Most likely, company officials will seek a court ruling on the matter.

Depending on that ruling, the company may seek compensation from the government to offset the loss of the concession.

Environment Minister Rodríguez, for his part, applauds Setena’s stance. "I am satisfied with the decision, because it helps us avoid a potential political problem," he says. "[But] I want to reiterate that there was no political pressure in this case. I completely respect Setena’s legal and technical autonomy."

- David Boddiger

Jesús Carvajal
General Manager
Industrias Infinitos
San José, Costa Rica
Tel: +(506) 290-2055
Fax: +(506) 231-7548
Roberto Dobles Mora
Environment and Energy Ministry
San José, Costa Rica
Tel: +(506) 2233-4533
Fax: +(506) 2256-3859
Eduardo Madrigal
Secretary General
Technical Secretariat
Ministry of Energy and Environment (Setena)
San José, Costa Rica
Tel: +(506) 225-6627