Rocks and Hard Places: The Globalization of Mining

by Roger Moody

Overview

The world of international mining is changing rapidly. Mining corporations are encroaching on more and more greenfield sites in Africa, the Asia-Pacific and Latin America, to serve ever-expanding global industries. Moody shows that large-scale mining imposes a heavy toll on local communities, on their fragile economies and ways of life, as well as the environment. He challenges the mining corporations' recent public relations offensive extolling the virtues of largescale mining and its alleged compatibility with sustainable development, and reveals the unprecedented wave of community and trade union opposition to projects in both the South and the North. This important book concludes with urgent proposals to check the role of multinationals in a sector that has always been at the core of resource exploitation.

Product Details

ISBN-13:	9781842771754
Publisher:	Zed Books
Publication date:	06/28/2007
Series:	Global Issues Series
Pages:	224
Product dimensions:	5.06(w) x 7.81(h) x 0.60(d)

About the Author

Roger Moody is an experienced international researcher and campaigner.

Read an Excerpt

Rocks and Hard Places

The Globalization of Mining

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By Roger Moody

Fernwood Publishing and Zed Books Ltd

Copyright © 2007 Roger Moody
All rights reserved.
ISBN: 978-1-84813-168-2

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CHAPTER 1

Through the minefield

Twenty years ago, when researching RTZ (then the world's biggest mining company), I was struck by a curious anomaly. All three chief architects of the company between 1954 and the late eighties had listed 'gardening' as a favoured pursuit in Who's Who, the UK dictionary of biographies. Here were these captains of a highly dangerous and destructive industry regularly retiring to their rose beds, even as (as I knew full well) their company was conniving with the apartheid and Pinochet regimes; violating a United Nations decree forbidding extraction of Namibia's natural resources; and turning an entire Australian Aboriginal home land into a 'moonscape'. How did they sleep at night? Would they one day be compelled to face their accusers and confess their sins, or simply take to their spades and forks, muttering (if pressed) that they 'didn't know' what was going on?

A lot of water has gone down many rivers since that research was completed in 1991. But so has an awful lot of toxic junk. More than 200,000 tonnes of it still plunge daily into the Ajkwa river system of West Papua from the Grasberg copper-gold mine, responsibility for which Rio Tinto (as RTZ is now known) shares with Freeport of the USA. Until the dawn of the new century, some 120 community, workers' and NGO representatives had turned up at various Rio Tinto annual shareholders' meetings, to recite a litany of its derelictions and deceit, usually backed by solid documentary evidence. All of them went away bitterly disappointed.

Now Rio Tinto presents a very different image to a significantly different audience. Several well-known environmental groups consider the company to lead the 'natural resources extraction' sector (an inadequate term that's none the less become synonymous with mining and mineral processing) by offering up 'multi-stakeholder partnerships' and an ever-rolling log of 'dialogues' with sceptics. Then United Nations Secretary-General Kofi Annan was certainly grateful for the support Rio Tinto gave him when he launched the Global Compact in 1999 to 'lead the world in promoting corporate social responsibility'. Three years later the British prime minister proffered Rio's chairman, Robert Wilson, a warm handshake for helping launch the Extractive Industries Transparency Initiative (EITI) at the second World Summit for Sustainable Development. All these, however, were outmatched by Rio Tinto's biggest public relations achievement, the establishment of the Global Mining Initiative (GMI) in 1999. This spawned the Mining, Minerals and Sustainable Development (MMSD) study project, which is probably the broadest-scoped critical examination of an industrial sector yet performed. When MMSD segued into the International Council on Mining and Metals (ICMM) in October 2001 it was a triumph for the company and Robert Wilson in particular. Almost inevitably he became first chair of this new vanguard for the minerals industry (see Chapter 7).

But the disturbing fact remains that Rio Tinto has never apologized for a single one of its misdeeds stretching back 130 years and on which its prowess as the most diversified of global miners is based. The nearest it has come to contrition was an expression of vague regret for its stark neocolonial stripping of a huge copper-gold deposit on the Papua New Guinean island of Bougainville. Leased in 1966, when the territory was under Australian control, within six years the Panguna mine had become the most commercially successful of all the company's operations. Costs were savagely cut by dumping all the mine's wastes (tailings) into the nearby river. By 1988 a few of the Panguna indigenous landowners, led by a former Rio Tinto mineworker, Francis Ona, demanded US$10 billion compensation for the ruination of their gardens, forests and waterways. The company jeered at the claim and refused to negotiate. Ona set up a nucleonic 'Bougainville Revolutionary Army', declaring independence from Papua New Guinea. Backed by Australian helicopter gunships, troops from the mainland invaded the island. In the bloody civil war that ensued up to a fifth of the island's population (between 15,000 and 20,000 villagers, many of them women and children) were to die before peace was reached in early 1998. Rio Tinto belatedly confessed that it could have 'done things otherwise' regarding Bougainville and, over the succeeding eight years, broadly hinted that it would never resume mining on the island. Then, in 2006, as copper and gold prices reached a record high, rumours began spreading through the mining media that the company was planning a possible return.

Rio Tinto's self-promotion as the mining industry's 'bench-marker' for sustainable development has gained it entry to numerous, mainly European, conferences on 'ethical investment' that these days fall upon our heads like confetti. It is a very different story for scores of communities and many trade unionists – from Australia to Zimbabwe – who continue viewing the company with the deepest suspicion. But it isn't only Rio Tinto which faces such antagonism, although in recent years the company has attracted more grassroots opprobrium than any other. These days every big mining company vigorously pushes its own envelope on 'improved practices' and 'transparency' while having to face serious accusations that it fails to respect cultures, protect the environment and return fair shares of its profits to the countries where it operates. As I write this, my desk is cluttered with alerts and alarums. CVRD, the Brazil iron ore giant, is about to sue Xikrin tribespeople for 'invading' what is actually their own ancestral land, stolen from them twenty years before. The Canadian government is now permitting miners to use freshwater lakes on First Nation (native peoples') lands in which to dump toxic wastes. Inco, the world's second-biggest nickel producer, is building a smelter in New Caledonia, despite a court order obtained by local Kanaks prohibiting the company from doing so.

So is all this talk about industry reform, with which we're now regularly regaled, a sham? The answer is both 'yes' and 'no'. BHPBilliton has vowed never again to use rivers or oceans for disposal of its tailings, and the odds are that it will not. (The international outcry would be deafening, and local reaction verge towards sabotage.) But BHPBilliton, the world's leading 'diversified resources' resources corporation, has also said it will refrain from mining in 'protected areas', and that particular promise must be strongly doubted (see Chapter 8). Three years ago, in the wake of an international campaign by the Aboriginal Mirrar people of northern Australia which included sending a spokeswoman to the company's annual general meeting, Rio Tinto pledged not to enter their traditional territory without obtaining their consent. If the Mirrar remain strong and united then the company will hardly dare break the agreement. Several years ago, however, Rio Tinto also promised not to invest in Burma while the vicious regime was still in power. The US gold miner Newmont had just been forced to withdraw from the country under threat of US sanctions. But then, in October 2006, Rio pledged up to US$1.7 billion to a 'junior' miner, called Ivanhoe, in order to access a huge copper lode in Mongolia. Ivanhoe also mines Burmese copper in a fifty-fifty partnership with the military. The UK company had broken its word.

In the following pages I seek to separate out obfuscation from reality, primarily from the perspectives of those most affected by both big and small mining: those who have seen their own resources sequestered or tainted by a mine or processing plant and the workers hired to operate them. It has not been an easy task for vital data are often lacking. How many children, for example, are affected by the worst effects of quarrying – the most pervasive, but least publicized, of extractive endeavours (see Chapter 5)? Is it a few million or tens of millions? We do not know for certain. Nor can we be sure of the precise impacts of many recent tailings' dam bursts or cyanide 'spills' (see Chapter 6), though vigorously asserting that they should never have been allowed to happen. A gaggle of 'experts' will often be on hand offering up wildly conflicting versions of what a 'mine development plan' will mean in practice. Whom to believe? From long experience I know that, after metaphorically 'going down the mine' to seek out the truth, one often returns to the surface with more questions than answers.

Defining sustainability

Nevertheless, some basic realities cannot be disputed. All metals and minerals are finite, many created within the earth's crust by unrepeatable geophysical events of a billion or more years ago. Once they are uprooted then processed they cannot be returned to their original state. Nor can we exactly replace, or leave undisturbed, the earth, rocks, sands, rivers or oceans that hosted these deposits. It is true that metals may be recycled and often are – though rarely to their full potential. (Ironically more scrap aluminium is likely to be retrieved from the streets and waste dumps of Brazil than those of New York or Tokyo.) Many metallic objects common to everyday life could be passed between us almost indefinitely – but too few are. The World Gold Council, an industry body, is keen to tell us (through its new 'Trust Gold' campaign) that the metal is essential to electronics, computers, mobile phones, dentistry and certain alloys. The Council is less ready to point out that around 90 per cent of gold ever mined is theoretically available for reuse. In principle there is no reason to extract a single ounce more gold for utilitarian purposes. The metal is, however, stored in bank vaults and rests in (or literally on) private hands. Only a transformation of the global monetary system, and a puncturing of the mythologies woven around gold's virtues as a 'store of value' and a 'hedge against inflation', are likely to change that.

Nor should we chant 'Recycle and Reuse!' as if this were a hallowed mantra. Melting down scrap metals exerts its own ecological price in terms of further sulphur dioxide and carbon dioxide emissions and discharges of chemical wastes. Recycled goods rarely circulate back among those whose land has offered up the vital raw materials in the first place. When they do, the monetary gains from reprocessing tend (like those from primary extraction) to end up in foreign pockets. Savings in energy and labour made through secondary processing rarely get reflected in lower market prices to those South-based consumers.

Whatever the justifications for digging up more and more minerals, their stock is continually going down and the rate of depletion has been accelerating over many decades. Natural resource extraction per se cannot be reconciled with long-term sustainability. For industry spokespeople to claim (as they often do) that there is such a thing as 'sustainable mining' is a transparent oxymoron. Nevertheless, whether mining can contribute to 'sustainable development' through providing jobs, paying taxes, building infrastructure and funding ancillary social services is another question.

All of us depend on metals and minerals to varying extents for power, transport, infrastructure, housing, grey and white consumer goods. Recycling and reusing them will never match with needs so long as what we sometimes glibly call 'rising social expectations' fail to be satisfied. The rapid burgeoning of a middle class in China and India – fast approaching three-quarters of a billion people – makes increased demand for raw materials inevitable. It is a key factor contributing to recent industry plans to encroach upon, and under, the Arctic, dig into the deep sea bed, and even prospect for minerals on the moon and other planets. The pressing question is therefore not 'do we mine or not mine?' Some minerals, especially those used in construction, will always be needed and some types of extraction will continue indefinitely.

Rather we have to ask ourselves: what, how, when, where – and by whom – is it acceptable to do so?

What to mine?

Very few metals have a unique application. Gold is so ductile that a gram of it can be stretched more than 3 kilometres, but the need to do so rarely arises. Uranium is the predominant raw source for manufacturing nuclear fuel but not the only one: thorium dug up from mineral (beach) sands may be used as well. Platinum is the commonest metal employed in catalytic converters, designed to limit noxious exhaust fumes from internal combustion engines. Manganese, nickel and iron can, however, be incorporated too. Even more important, there are potential substitutes for metals and other extracted materials available for a whole host of human endeavours, with the major exceptions of waging modern warfare and travelling long distances at great speed. 'Advances' made by our forebears may have seemed inevitable at the time (for example, changing from iron to copper, then copper to aluminium, in fashioning cooking pots). But they were determined by factors – availability of the raw material, technology to process it – which do not necessarily prevail today. We are now beginning – if far too slowly – to understand that there have been huge socio-economic and environmental penalties attached to making those earlier choices, in particular from burning coal and smelting heavy metals. Calculating the 'life-cycle costs' (energy consumed, wastes produced, pollution delivered) of transmuting a raw mined substance into a finished product is finally being recognized as a serious and necessary science. It is no longer just the preserve of isolated bands of hopeless idealists. There is a growing consensus that some mined substances are so dangerous they should never be taken from the ground. Asbestos in all its forms is banned in the USA and throughout the European Union. But, inexcusably, Canada and Russia continue selling stockpiles of the carcinogenic mineral across the world. Some South-based states (notably India) are now increasing their consumption of asbestos, predominantly for cement (see Chapter 5). Mercury, banned in 2006 by the European Union for use in thermometers, is still being dumped by European states in Africa and Asia in the form of 'e-wastes' (mostly discarded computers and mobile phones). Cement kilns and power utilities also put significant quantities of mercury into the air, not least in the USA. Clearly global trade in both these substances should be banned. But how do we evaluate the consequences of using (or misusing) other potentially deadly toxic heavy metals, notably lead, cadmium and nickel? Although it has long been discontinued in the manufacture of paint and piping, market demand for lead last year increased rather than diminished. Nickel, one of the most toxic of heavy metals, is being incorporated into batteries for hybrid cars claimed to be 'green'. Aluminium is promoted as a substitute for steel in automobiles, so as to reduce fuel consumption and thereby global greenhouse gas emissions (GGE). But aluminium refining and smelting itself gives rise to significant quantities of carbon dioxide and, tonne for tonne, is the largest industrial consumer of electricity. Should our taxes be directed only at promoting and exporting 'renewable' energy? Or does coal currently bulwark so many fragile developing economies that we would do better funding 'clean coal mechanisms' – even though the efficiency of these is questionable? As pointed out by the Mining Journal last year: 'Thus far none of these [technologies] provides the "quick fix" solution that some parties to the Kyoto Protocol are hoping for.' China's own emissions of GGE and sulphur not only threaten millions of inhabitants of the mainland, but the whole of East Asia and those living as far afield as the west coast of North America.

The how of it

Choosing the best method of extraction first of all requires distinguishing between dirty technologies and potentially less damaging ones. You may well come to share the opinions of many, reflected in this book, that it can never be justified to throw toxic mine wastes into rivers and seas, or spray cyanide on to ore to separate out gold (see Chapter 8). But an equally important question for many mining-impacted communities and workers is whether raw materials are excavated from underground shafts, open pits or 'stripped' from the earth's surface.

The first employs substantially more workers, but wreaks a higher toll in fatalities and occupational disease (see Chapter 4). On the other hand, open pit and strip mining take over much larger acreages of fertile land. Cement manufacturers are burning almost every conceivable type of industrial, chemical and agricultural waste in their kilns, to convert lime and gypsum into the 'glue' that holds together our buildings and infrastructure. Is this, as claimed, reducing the toll from GGE? Or does it pose new dangers? (see Chapter 5).

When to mine?

For some years the evidence has been growing that, if a 'lesser-developing' state relies heavily on income from mineral sales, it will add to, rather than subtract from, the continuing impoverishment of many of its citizens. What are the root causes of this so-called 'minerals curse': institutional failures (nepotism, corruption and inequitable distribution of internal revenues) which may be redressed by better governance? Or the savage emasculation of royalty and taxation regimes, largely imposed by the World Bank/IMF (see Chapter 2) and the intrinsic nature of a global commodities system where mineral exports are prized too highly above alternative items of production? The fundamental challenge, I believe, is to devise a truly humanist methodology which values mineral deposits before they get turned over by the drills and bulldozers then sent offshore. We have to set the long-term sociocultural and ecological consequences of mining against what might be gained from rents and other minerals-derived incomes in the present. Leaving the raw materials in the ground may prove the only way that many lesser-developing states can retain their diversities of real wealth, while there remains the option to resume mining at a later stage (see Chapter 3).

(Continues...)

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Excerpted from Rocks and Hard Places by Roger Moody. Copyright © 2007 Roger Moody. Excerpted by permission of Fernwood Publishing and Zed Books Ltd.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

1. Through the minefield
2. How the World Bank backs bad miners
3. Cursed by resources
4. Blood, toil and tears
5. The destruction of construction
6. Sacrifice areas
7. Winning hearts and mines
8. No means no