Literature Review on "Colombia Gold Colombian Gold Mining: Economic Imperatives"

Literature Review 6 pages (1956 words) Sources: 20

[EXCERPT] . . . .

Colombia Gold

Colombian Gold Mining:

Economic Imperatives, Environmental Consequences and Human Rights Violations

Conceptual Discussion:

Environmental management

Harris (2006) reports that after decades of revolutionary instability, cartel wars and government tyranny, Colombia is reopening to the world economy. Harris notes that the country is distinguished by a relatively unrealized richness of gold that is seen as increasingly desirable to global mining operations. Harris indicates that "Colombia's three belts of Andean cordillera have not been tackled with modern technology, but they contain gold, silver, platinum, copper, tin and nickel." (p. 1) This condition drives the present research which concerns the struggle of Colombia's people and government to find a balance between the opportunities and dangers of proliferating its mining operations.

The most pressing question relating to the gold mining boom underway in Colombia concerns the vast environmental consequences of commercial mining. Increasingly, the Colombian government has shown a willingness to intervene on behalf of the environment where it views that abuses have occurred. So is this demonstrated in the article by the Associated Press (AP) (2010) which reports that the newly installed government of President Juan Manuel Santos has aggressively intervened with abuses committed by 'illegal mining operations.' AP reports that "Colombian security forces and other officials closed 18 more illegal gold mines in the government's campaign to regulate mining and environmental hazards to workers, the Environment Ministry said on Friday." (p. 1)

This would bring the total to 48 seized mines, with the government expressing a commitment to apply scrutiny to the

571 mining groups in operation throughout Colombia as well. (AP, p. 1) This denotes a newfound commitment on the part of the government to engage in strict and interventionist environmental management where gold minding operations are concerned. These interests are in direct contrast to the global thrust toward ever-higher levels of interest in Colombia's gold-mining potential. It remains unforeseen how these divergent priorities will balance out. But according to Delgado (2010), "Colombia attracted a record $3.24 billion in foreign direct investment (FDI) in mining last year, compared with $2.11 billion in 2008." (p. 1) This denotes that the economic priorities of mining remain a dominant force even as a new administration emerges to challenge a vastly unregulated industry.

Sustainable development

Indeed, Reuters (2010) reports that global investment in Colombian gold mining continues to climb even in a more restrictive atmosphere. Accordingly, Reuters reports that "gold mining companies invest as much as 4.5 billion U.S. dollars over the next ten years in Colombia, attracted by rich unexplored and soaring prices." (p. 1) Citing Canadian firms as taking a particularly active interest in these operations, the article indicates that the new influence of foreign companies is far outpacing the ability of the county to establish sustainable practices, regulations or oversights.

Indeed, efforts to create sustainability limitations to mining operations tend to invoke a strong reaction from mining industrialist as demonstrated by the conflict between the Environmental Ministry and Colombia's collective mining industry. Here, the article by Delgado1 (2010) describes the hostility engendered by mining investors and stakeholder when, in April of this year, "the environmental ministry ordered [Canadian gold-mining firm] Greystar to resubmit a new environmental assessment study following the approval of a new mining code which forbids mining in Paramo ecosystems high in the Andes between upper forest limits and the lower edges of the snow line." (Delgado1, p.1)

Sustainability and Business

One of the greatest points of contention in the continued mining and exploration of Colombian gold is the apparent disconnect between business gains and sustainability realities. This is because Colombia's gold output as a result of these mining efforts is comparatively modest as this relates to the consequences to the environment. As the source provided by MBendi Information Services (MBIS) (2001) indicates, "most of Colombia's gold production is produced from alluvial operations, mostly by local artisinal miners. Gold recoveries from these operations are poor, with recoveries of less than 60% being reported." (MBIS, 1) in spite of poor ratio, gold remains one of the most important short-term profit commodities yielded by the Colombian economy.

This has produced an ongoing tug-of-war between Colombia's environmental interests and its economic priorities. As the article by Paul (2009) indicates, even as the government has intervened on behalf of environmental interests on occasion, the priorities of maintaining a profitable output of this crucial global commodity tend ultimately to trump any such restrictions. So demonstrates the interaction between the government and a leading global mining firm in AngloGold Ashanti. Here, Paul reports, "environmental officials had stopped exploration work on the large mine prospect in Colombia a year ago, saying drilling threatened forest reserves. The project in Colombia has estimated reserves of more than 12 million ounces. Production could start within five years once given the go-ahead and La Colosa's future output is estimated at 700,000 ounces of gold a year. This will give a significant boost to the country's economy now. With La Colosa reopening, mining companies from across the world may throng Columbia for more projects." (p. 1) This denotes the complexity of the issue as sustainability and business interests intercede. The strategy to this juncture has largely pitted one against the other.

Corporate social responsibility

With respect to the issue of Corporate Social Responsibility, the mining industry as a whole has long struggled with proclivities toward racial exploitation, labor rights violations and even the use of violence to quell local resistance. So denotes the article by the Colombian Solidarity Campaign (2007), which reported that gold-mining companies such as AngloGold Ashanti are "implicated in grave human rights violations across Colombia. In turn, Anglo Gold Ashanti is 42% owned by the former apartheid Anglo-American (the London stock exchange listed giant that declared an operating profit of U.S. $9.8 billon for 2006)." (CSR, 1)

This denotes that the goals of precious metal extraction and global trade are often treated as contrary to the interests of human rights. In the present research, we do encounter some examples where are contrary to this approach, though these are largely small-scale, independent and localized mining operations. Such is the case with the operations described by Angenent (2010), who describes a visit to a mining community called Choco. Here, Angenent indicates that "Choco is one of the most bio-diverse regions on the planet with a very delicate eco system. And while it may be more efficient to harvest gold in mines using chemicals and heavy machinery, this place isn't a mine. it's a home to thousands. Every day, the gold from Choco is hand-collected by families who have owned the land for generations." (p. 1) the article goes on to describe communities which mine on small plots of land and subsequently replant them in order to maintain the biodiversity of the region and the viability of the mining operation across multiple generations. This describes a type of responsible sustainability that the subsequent section will show is becoming scarcer all the time.

Competitiveness

The relative consolidation of the gold mining industry during the boom of the last decade has stifled competition and produced what many view as a monolithic industry dominated both by foreign mining operations and massive domestic commodity firms. As the article by Tuathall (2008) indicates, this has been devastating to the local mining communities that have unearthed gold for hundreds of years as a means of subsistence. Tuathall describes such Andes mountainside towns as Marmato as historically depending on the sustainable mining of local gold deposits. In Tuathall's report on Marmato, "five years ago, its roots were shaken, however, when the Compania Mineras de Caldas, a subsidiary of Toronto-based Colombia Goldfields Limited, began its project of consolidating ownership of the mountain, leading to what many call the "economic forced displacement" of Marmato and the social eradication of a working community." (p. 1)

This is indicative of a gold-mining pattern that has come to define the nature of 'competition' in the Colombian market. Indeed, the elimination of competition through monopolistic consolidation of the industry has come to represent one of the numerous human right issues relating to the industry.

Worldwide Gold Industry:

Ultimately, Colombia remains highly vulnerable to the power and influence of global firms. So is this demonstrated by the ample environmental blight and degradation already stimulated there. According to Hance (2009), "Serrania de San Luca is a rainforest-covered massif rising to 2,300 meters (7,500 feet) in northern Colombia. Despite being little-explored and containing several endangered species, the forest is threatened by industrial gold mining operations, according to the local conservation group ProAves. Already the forest has been reduced to 10% of its original 2.5 million acres." (Hance, p. 1)

This stands as one of countless examples of the implications of a tug-of-war between mining operations and environmental interests. The imperatives of the former are dominant while the consequences for the latter are irreparable. The result is a losing battle for the Colombian people, who are like so many inhabitants of the developing sphere, fodder for a global commodity marketplace. On the global scale, the conditions in… READ MORE

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