Crucitas Mine: Golden Hot Potato
- Details
- Category: The Nation
- Published on Thursday, November 18 2010 10:38
- Written by Rod Hughes
- Hits: 752
When former President Oscar Arias (2006-10) declared the Las Crucitas gold mine "in the public interest," thereby circumventing a previous ban on open pit mining, he bequeathed his successor, President Laura Chinchilla, a political hot potato.
Now the mine owner, Infinito Gold Ltd., says court actions and appeals have delayed development 23 months and the first ounce of gold won't come out until early 2012 at least. The Canadian firm accuses the country of discouraging investment, reports the Reuters news agency.
Chinchilla has been touting her country as a great investment opportunity for foreign companies on one hand while also pursuing a green image. Environmentalists have frozen mine development with a series of lawsuits and appeals, the next one coming to hearing Dec. 6.
For the future, Chinchilla is off the hook because lawmakers passed a bill outlawing open pit mining for metals. But it is not retroactive and does not affect the Infinito project. Meanwhile Infinito already won one Supreme Court suit but the appeal frustrated continued development.
Environmentalists claim the mine will disturb the delicate ecosystem near the project. Infinito has already sunk some $127 million into infrastructure improvements like roads and electricity. Fortunately for the company, debt holders have been patient.
The stakes are high with gold edging up toward an incredible $1,500 per ounce and company spokesman Juan Carlos Obando fears further appeals might last for months. Estimates of total mine output are in the 1,2 million-ounce range.
Obando says that "in Canada (the debt holders) are convinced that the discussion about Las Crucitas will allow the company to develop a green model for mining." Certainly, the mine operators would be well advised to do so, because their every step will be closely watched.
