Progressive article on gold mining
The Progressive magazine has a good article titled Is Free Trade a Gold Mine? which provides an overview of the gold mining controversy in El Salvador. It describes over Pacific Rim's plans to mine gold in El Salvador and that company's lawsuit over the government's refusal to give it the necessary permit to start mining. As the article notes, there's a lot of money at stake:
Read more here.
The company estimates that 1.4 million ounces of recoverable gold sit in the Cabañas area. With gold at about $1,200 per ounce, that means potential profits in the hundreds of millions.
Under Salvadoran law, Pacific Rim would pay 2 percent in royalties for every ounce of gold mined, and a 25 percent tax on profits. Shrake said the mine would mean economic turnaround for a country he describes as “in shambles, coming apart at the seams.” It would, he said, create 600 direct jobs and about 3,000 indirect jobs, and become the biggest taxpayer in the country. Shrake said that by embracing mining, El Salvador could be like Chile, which he says more than doubled its GDP in the 1990s thanks to foreign investment in copper mines.
But Pacific Rim opponents say the environmental and social consequences aren’t worth any amount of money. They fear contamination from the cyanide used in the mining process, and acid mine drainage—acid runoff created when compounds within the ore are disturbed and exposed to oxygen. Aside from contamination, mining also uses massive amounts of water—about 250,000 liters per hour for a medium-size operation. Though El Salvador is a rainy country, lack of infrastructure, deforestation, and other issues have caused a critical shortage of clean water for the dense population.
Read more here.