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Leak poisons Barrick Gold�s reputation

by Michael Lerner Blouin News Business
September 18th, 2015

An Argentine judge on Wednesday ordered a five-day suspension of the gold leaching process at Barrick Gold Corp.�s Veladero mine in San Juan province. The purpose is to check if there was any environmental damage from a 15,000 liter cyanide leak on Sunday caused by a faulty valve. Local residents of J�chal, outraged and fearful of their water supply being contaminated, began protesting as soon as they found out, and spurred the governments of the province and the nation to action.

On Monday, the Canadian firm released a statement saying �In light of a series of unfounded statements, Barrick would like to inform that there was no contamination of the rivers in the J�chal basin� We want to make absolutely clear that there was only material damage to a pipe that did not affect the health of workers.� The firm claimed it detected the leak almost immediately and halted production to prevent further outflow of the cyanide solution. It added that work at the mine �is continuing as normal and in strict accordance with security and environmental standards.�

There may not be any danger to J�chal�s water supply. The Blanco River, where cyanide was detected, doesn�t supply any drinking-water facility. And Marcelo Ghiglione, San Juan�s Environment and Mining Control Secretary, said on Monday that the spill �was quickly diluted in the natural run-off of the Potrerillos river,� and in the space of about 1 mile the cyanide �had gone from 150 parts per million (ppm) to 5 ppm.� He emphasized �There is no danger to the population, you can drink water anywhere. We are putting in the relevant controls so this will not happen again.� Likewise, Provincial Mining Minister Felipe Saavedra said, �An intensive monitoring of water to clear any doubts about contamination is being performed. Samples [of river water] up to 30 kilometers downstream are being taken every two hours.�

Following up, on Wednesday Barrick�s Argentine unit declared that it had not detected any contamination in surrounding rivers since Sunday�s leak. �Talking of between 0.03 and 0.07 ppm of cyanide is a minimum vestige,� Ghiglione said on Thursday, adding �We haven�t found specimens of dead fauna nor of flora that has suffered harm.�

However, not everyone is entirely convinced, even Barrick. It stated on Wednesday that, �As a precautionary measure, the company is providing drinking water to three small communities downstream from the mine.� Likewise, the San Juan provincial government recommendedinhabitants of those three towns to �reduce their use of water for consumption and bathing.� And Pablo Oritja, the Argentine judge who ordered a 5-day halt of operations (and personally went on inspections with independent specialists at the mine on Thursday), also ordered Barrick to distribute bottled water throughout all of the local departments of J�chal and Iglesia.

But Barrick�s troubles don�t end there. On Wednesday, the Argentine government announced it was launching a legal investigation of the firm to see if there had been any criminal wrongdoing. If so, there will be �sanctions� filed against it. The firm is already being sued in civil court over the leak, with plaintiffs demanding that it pay compensation for harm done to people, goods, and particularly the environment.

Veladero is hardly the only mine to leak toxic chemicals, nor was this spill the largest one. In the U.S., the August 3 rupture of a tailing pond at Colorado�s retired Gold King mine spilled a staggering 3 million gallons of toxic yellow sludge into the Animas River. (For reference, the Veladero spill was only about 3,960 gallons.) Contractors working for the Environmental Protection Agency (EPA) accidentally opened a passage that caused the blowout in the mine, which had collapsed in 1922.

�There are about 500,000 abandoned mines in the U.S., and only a fraction have been dealt with, despite decades of effort. EPA has estimated the cost of cleaning up abandoned mines nationwide, not including coal mines, at between $20 billion and $54 billion,� reported the Star Tribune. The only adequate solutions would entail the construction of many costly water treatment plants that would have to operate indefinitely at the leaking mine sites. And with the originally responsible parties now long gone (and whose actions usually occurred before environmental legislation was passed), cleanup and compensation have become the responsibilities of state and federal agencies.

But while there is no clear villain in the Gold King tragedy, there is in the Veladero spill. Barrick did not intentionally release cyanide into the water, but nevertheless it is fully responsible. And the firm�s unsavory reputation, in Argentina and elsewhere, does not help it in the court of public opinion. Barrick was listed as the 12th least ethical company in the world by Swiss Research firm Covalace due to its involvement in several high-profile cases regarding human rights abuses, including against indigenous protesters in Guatemala.

Likewise, the firm�s unfinished Pascua-Lama gold, silver, and copper mine on the Argentina-Chile border has been repeatedly hit by protests and environmental sanctions. In October 2013, Chile issued Barrick a $16 million fine over 23 environmental violations committed at the Pascua-Lama project, while also ordering the suspension of any mining. Another court later revoked the fine, but the firm plead guilty to 22 of the charges. And in April Chile�s environmental watchdogfiled 10 new charges, accusing Barrick of not following environmental requirements at the Pascua-Lama site. Last week the firm confirmed it was suspending the Pascua-Lama project to cut costs, although it might be re-opened in the future if prices of the precious metals bounce back. In any case, suspension does not excuse Barrick from maintaining environmental safeguards in the existing site.

Many residents of J�chal are calling for Veladero to be closed, but that is unlikely, particularly with tighter safeguards put in place. The bottom line is that it remains one of the largest gold mines in Argentina � producing 722,000 ounces of gold in 2014 � and it provides almost 2,000 jobs, as well as royalties to the province and the federal government.

In any case, the end goal should not be zero mining, but rather strictly-accountable mining in limited areas with high standards for safety, environmental protection, and respect for local communities.


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