Advertisement
News

The battle over gold buried in a Colombian mountain

The town of Marmato is at the centre of an international legal battle with a Canadian-owned mining firm.

by Bram Ebus
Aug 13 2018, 4:41pm

Photo by Bram Ebus 

Some 1,300 metres above sea level, where millennia-long tectonic movements pushed golden veins to the upper crusts of the earth, sits an ancient town.

It’s mining that dictates the clock in Marmato, nestled in the Central Cordillera, the highest of three mountain ranges in the Colombian Andes. At night, lights appear on the hillside where processings mills are grinding stones that contain precious gold. At first daylight, vehicles start to climb the winding roads, up to the higher parts of the mountain where a new day of hacking away in the narrow tunnels begins.

About 80 percent of the village population depends on mining activities to survive, and it’s typically not on any sort of contract. Organized in cooperatives, independent miners say they can earn about US$300 a month. Since almost everybody relies on their luck in the mines, people help each other out when a mine does not produce.

The village now is at the centre of an international legal battle, because of a free trade agreement that enables multinational companies to claim high sums of money from the Colombian state at a World Bank tribunal if projects are perceived to be unrightfully halted or blocked.

**

Marmato is the product of a centuries-long symbiosis of mining and village life in central Colombia. Photo by Bram Ebus.

Mining is massive business in Colombia. The country is the world’s leading source of emeralds, its coal reserves are Latin America’s biggest, and illegal gold mining brings in $2.4 billion a year, generating more money than the cocaine business.

Mining and Marmato are inextricably linked.

Indigenous people first mined the mountainous region for cultural and spiritual purposes. Then Spanish colonizers arrived in the early 1500s, and turned the practice into a money making venture, working the Indigenous people to death and importing African slave labourers to replenish the ranks.

Simon Bolívar liberated Colombia from Spanish rule, but because he relied on help from the British army, Marmato was ‘leased’ to square the war debts of Bolívar’s campaign. Over the centuries, miners from Germany, France and Italy searched the mountain for gold, and now, after about 485 years of commercial mining history, it’s a Canadian corporation that is digging in.

Rúben Dairo Rotavista has a little laugh with one of his colleague miners, before they change shifts. Photo by Bram Ebus.

“There is no place in Colombia to experience mining culture as in Marmato,” says Rúben Dairo Rotavista. The 32-year- old son of an Indigenous mother and an Afro-descendent father represents the small-scale miners’ union ASOMITRAMA.

In recent decades, Marmato has been carved up and exploited by various larger mining companies, which changed names, abandoned operations, or sold rights along the way.

In 2010, the Canadian-owned Medoro Resources bought the Colombian mining company Mineros Nacionales for US$35 million, giving it ownership over most of the “historically prolific gold district” of Marmato, it announced at the time.

It subsequently changed its name to Gran Colombia Gold, currently the largest gold-extracting company in Colombia. Most of their revenues are made in Segovia, about 200 kilometers from Marmato, one of the country’s roughest mining areas with territory violently disputed by different paramilitary groups.

After the 2010 sale, local miners say they were prohibited from taking gold from parts of the Marmato site by Colombian security forces who backed the company’s claim. In 2011, Gran Colombia Gold started to close down artisanal mining shafts in Marmato.

Humberto Valencia Mina is one of Marmato’s Afro-Colombian miners. Photo by Bram Ebus
Humberto Valencia Mina is one of Marmato’s Afro-Colombian inhabitants and belongs to a family of miners. Photo by Bram Ebus.

But the company did not immediately start digging for gold. About six months after the closures, hundreds of locals that lost their jobs started to break the mines open again to get the minerals out. They claimed it as their legal right, arguing that Colombia’s mining legislation states that a mining title expires after six months of abandonment.

Humberto Valencia Mina is one of Marmato’s Afro-Colombian inhabitants and belongs to a family of miners. His former boss sold the mine he worked in to Gran Colombia Gold, which left dozens without a job.

He said the company needs to cultivate local support for the project by explaining what it is about, and how people would be affected. “But this never happened. They came, bought and closed mines and mills.” After a while, Valencia Mina, colleagues and 12 of his family members broke the tunnels of his old mine open again. “We depend on this, the daily subsistence of our families. This is our heritage,” grunts Valencia while adding that he barely can sustain his household of five. The Colombian miner shows his dry hands and muscular forearms. He never learned a different craft.

Many locals fear that they would be out of work if a modern company steps in as it would require specialized labor and generate fewer jobs. They’re also afraid their village will be displaced if the company is able to pursue its mine—a worry rooted in a previous setup that had proposed a relocation of a main part of the town.

Iron buckets whiz around transporting minerals. Ancient and semi-modern mining techniques are used in the historical mining village. Photo by Bram Ebus.

“There is a series of inconsistencies in all that the company has done in the municipality, amongst others, the direct infringement of the rights of Indigenous and Afro communities,” Rotavista told VICE News. “Why? Because we have not been consulted.” National and international law dictates that Indigenous and Afro-descendent communities should be consulted prior to a project

In February 2017, Colombia’s Constitutional Court stepped in. It put a halt to Gran Colombia Gold’s plan to mine roughly 14 million ounces of gold in Marmato on the grounds that it would push 6,000 artisanal and Indigenous miners and their families out of their livelihoods. It ordered the company to protect the rights of artisanal miners and suspend all activities in the area until it conducts proper consultation.

The mining firm subsequently filed a US$700 million lawsuit against Colombia under the Canada-Colombia Free Trade Agreement, arguing, according to the Financial Post, that it failed to evict illegal miners and problems with public order put a strain on their projects.

Marmato lies in the Central Andes of Colombia. The mountain corridor rich in minerals has been visited by many foreign entrepreneurs and adventurers who were looking for gold. Photo by Bram Ebus

Gran Colombia Gold declined to comment to VICE News about the ongoing legal case.

In a statement to VICE News, a company spokesperson said that “there is a misconception in the media about the nature of our discussions with the Colombian government.”

It said it remained “committed to the eventual development of expanded mining operations at the Marmato Project” and that it has shifted its focus from an open pit to an underground operation, although locals are skeptical that is the case. “In 2018, we plan to continue our studies and further drilling on the underground area of the Marmato Project to evaluate this opportunity,” the company said.

On its website, the company says it is helping local residents around the Marmato and Segovia projects with corporate social responsibility projects but it did not respond to a request for further information about what that means in Marmato. It also did not address what, if any, consultations it embarked on with local residents nor if it has committed to hiring a certain number of local miners.

Last month, it’s official demand for arbitration appeared on the World Bank’s International Centre for Settlement of Investment Disputes website.

**

Humberto Valencia Mina and two Marmato miners hang around. More than half the population of Marmato is Afro-Colombian and about 17 percent are of Indigenous origin. Photo by Bram Ebus.

The case of Marmato is part of what legal experts say is a growing trend: companies suing governments, sometimes for billions of dollars, in closed-door trade tribunals or through investor-state dispute settlements (ISDS). Supporters of these kinds of arbitrations say they make foreign investments safer for companies by stopping governments from taking politicized or punitive actions against foreign firms. Critics, including many Marmato residents, say the tribunals stop governments from acting in the public interest, putting corporate bottom lines ahead of social and environmental protections in developing nations.

Santiago Ángel Urdinola, president of the Colombian Mining Association (ACM), says it’s important that Colombia has “internationally recognized investment protection instruments” such as the ISDS clauses, when it comes to mining projects.

“The countries that source these investments have their rights, as investor, guaranteed by having a contract signed with the Colombian State—such as a mining title,” he said in a statement to VICE News. “Under this understanding, stable legislation is required, with greater coordination in decision-making by competent authorities and quality in the administration of justice, allowing the fulfilling of these mining projects in an environment of respect for the investor and its socio-economic contribution to country.”

While mining is big money, arbitration cases have become a business on their own, says Gus Van Harten, an associate professor at York University's Osgoode Hall Law School and an expert in international investment law and arbitration. He says ISDS claims can provide a company with “privileged access to public money.” Arbitration is unilateral, and can only be presented by a company against the state, not the other way around. It means mining companies in Latin America can earn hundreds of millions of dollars without having mined a single gram of gold.

“It’s a total abuse of the treaties,” says Van Harten.

Another example is the US$16.5 billion dollar arbitration case brought forward by US companies Cosigo Resources and Tobie Mining & Energy, which want a refund for the value of the gold they cannot mine since Colombia’s Constitutional Court blocked their project in a national park, close to Indigenous communities.

Clauses that enable companies to start ISDS cases are contained within broader trade agreements. In 2010, Colombia had signed free trade deals with 26 countries. Eight years later, that number has nearly tripled, to 66.

According to research by the National Observer, Canadian mining companies are responsible for almost 60 percent of new ISDS cases since 2009. The National Observer calculated that ISDS cases brought forward by Canadian companies earned them at least US$2 billion since 2009, while an additional US$10.5 billion is being sought in damages. Nearly all the projects in question are in developing countries.

The case of Toronto-based mining company, Eco Oro, shows how other players move in on the arbitration bonanza. Eco Oro is a junior Canadian mining company, owning one project: the proposed Angostura mine, located in a protected Colombian ecosystem that supplies water to 2.2 million people. But it was blocked from proceeding by the Colombian constitutional court, which cited environmental concerns. Eco Oro moved to sue the government, with the help of a $14-million cash injection from Tenor Capital, a Wall Street hedge fund.

“They just get a share of the award,” says Van Harten about Tenor Capital’s investment.

**

A mural dedicated to Marmato's mining culture. Photo by Bram Ebus.

These battles over resource extraction are playing out against a backdrop of tenuous peace building. In 2016, the Colombian government signed a peace deal with the country’s largest guerrilla group, the FARC, but it has since struggled to implement its post-conflict agenda, with reports of kickbacks and the disappearance of funds earmarked for that project.

In the meantime, different illegal armed groups have filled the void the guerrillas left behind in parts of rural Colombia, straining the advancement of commercial projects that include mining.

In 2017, there were close to 9,000 mining titles spread across Colombia. Those areas often overlap with protected national parks, Indigenous communities, or territories claimed by armed groups. “You can predict it’s going to lead to conflicts between local communities, others who are trying to turn to their lands on one hand and mining companies on the others,” adds Van Harten. “[The country] is just ripe for claims at that point.”

He also warns of a regulatory chill, “situations where the government changes its decisions to the benefit of a foreign investor at someone else’s expense. And the risk of ISDS is a contributing factor.”

According to Carlos Lozano, attorney of the Inter American Association for Environmental Defence, the vulnerability of a state to corporate pressures means that foreign investments become more important than decisions of public interest.

In Marmato, the locals keep digging for gold, but the arbitration case has made the future uncertain. Surrounded by fellow miners and family members, the union leader prepares himself for a new shift in one of the ancient dark tunnels. “The Canadian government should revise the behavior of its companies abroad,” says Rotavista. “They should respect fundamental rights of the communities in countries where they go.”

Cover image by Bram Ebus