Environmentalists in Uruguay Fight New Open-Pit Mining Law

Recent vote opens up South American country to large-scale mining

A new mining law in Uruguay has unleashed a debate in the South American country between those who say Uruguay could benefit economically from big mining projects and those who say the environmental and social costs are too high.

Lake formed by old open pit iron minePhoto by Mac ArmstrongA rainwater lake in a former open pit iron mine in Ontario. Pro-mining officials in Uruguay envision tourism to lakes like this, formed by abandoned mine pits, will bring in additional revenue as well as the return of the small-scale cattle ranchers who currently live in the country’s ore-rich Valentines region. Uruguayan environmentalists see the matter differently.

Zamin Ferrous, a British mining company, wants to tap Uruguay’s impressive iron reserves. The company estimates that Uruguay has 2.5 billion tons of iron, the eighth-largest reserves in the world. But, until this September, no one could mine those minerals, because doing so would require creating an open-pit mining zone of 55 square miles, and legislation had capped mining projects at four square miles. Then, on September 3, the Uruguayan legislature passed the “Large-scale Mining Law,” which removes size limits and thereby opens the country to large-scale mining projects.

According to its proposal, Zamin Ferrous hopes to invest $3 billion — the largest foreign investment in Uruguay’s history — in a project to extract 18 million tons of iron per year during the next 12 to 15 years.

Zamin Ferrous didn’t respond to requests for comment, citing a “lack of time resources,” but Alfredo Asti, a delegate to Uruguay’s General Assembly who helped draft the new mining legislation, says the project would be a source of tax revenue, employment, and a higher standard of living for the people in the iron-rich Valentines region. Zamin Ferrous’ taxes would depend on the international price of iron, and the government would invest 30 percent of that revenue in education and environmental programs and would set aside the remaining 70 percent as a special fund for future generations. “It’s an investment in the future,” Asti says.

Uruguayan environmentalists see the matter differently. They worry about the environmental and public health consequences of a project unprecedented in size in the tiny country.

Víctor Bacchetta, of the Movement for a Sustainable Uruguay, says Zamin Ferrous would dig five pits, four of them about 1,000 feet deep with a surface area of about 250 acres, and one larger pit with a surface area of 1,000 acres. Next to each pit, the company would leave a small mountain of dirt about 300 feet high. Since the iron is in low concentrations, the company would have to mix the dirt with water and use magnets to isolate the iron; the mixture of dirt and water, known as “mine tailings,” would be left in reservoirs designed to prevent the contamination of groundwater.

Similar mining processes have caused serious environmental harm in the past. “The effects of open-pit mining and mineral processing plants on the environment include land degradation, noise, dust, poisonous gases, [and] pollution of water,” write academics who studied four mines, including two iron mines, in Iran in 2007. Johnnie Moore, of the University of Montana, and Samuel Luoma, of the US Geological Survey, predict in a separate report that some of the environmental effects of open-pit mining may be so severe that no mitigation or restoration is possible.

Because of environmental concerns, Uruguay’s two principal opposition parties, Colorado and Nacional, voted against the legislation. In declarations to the press, Delegate Walter Verri of the Colorado Party said that Zamin Ferrous’ “plan to close its mines is to fill the pits with rainwater, which will take 70 years, according to the … Senate hearings.”

But Delegate Alfredo Asti estimates that the mining zone will be usable for other purposes within 15 to 20 years of the mine’s closure. Asti envisions tourism to the lakes formed by the former mine pits, as well as the return of the small-scale cattle ranchers who currently live in the region.

The Movement for a Sustainable Uruguay is concerned not only about lasting damage to the Valentines region, but also about the transportation of the iron from central Uruguay to ports on the Río de la Plata. Zamin Ferrous plans to transport the iron via a pipe conveyor, which Bacchetta says will pass through a protected Ramsar site (an important wetlands area) and through a sensitive zone intended to protect biodiversity.

The fate of the cattle ranchers of the Valentines region, who generally live on small, family-run farms, is another concern. Delegate Alfredo Asti says the Valentines region is one of the least productive in all of Uruguay and that the new mining law provides for the displaced families by offering them either financial compensation for their farms or a replacement farm in a nearby region. Furthermore, he says, everyone displaced by the mining project would receive a cut of the profits.

But Bacchetta says the families of Valentines don’t want the compensation offered by the government. “To many of them, how much money they could earn doesn’t matter,” he says, “because they simply don’t want to change their way of life. They don’t want to leave their home.”

To prevent the Zamin Ferrous project from going forward, four of Uruguay’s 19 departments have started signature-gathering campaigns to hold referenda that would ban large-scale, open-pit mining within their jurisdictions. But the national government says that even if those referenda are passed, national legislation has precedent over department-level laws. So the Movement for a Sustainable Uruguay is going even farther: It’s trying to gather enough signatures (ten percent of the Uruguayan electorate, or about 300,000 people) to hold a national referendum on a Constitutional amendment banning open-pit mining in the whole country.

How likely is that attempt to succeed? Bacchetta is hopeful. A poll done by the Radar Consultancy in June and July found that 46 percent of Uruguayans are against open-pit mining, and only 28 percent are in favor. “The fact is,” says Bacchetta, “as we’ve learned more and more about this project, the people of Uruguay have mobilized against it.”

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