The Peñasquito mine, owned by U.S. company Newmont Goldcorp and located in the state of Zacatecas in northern Mexico, produces gold, silver, lead and zinc, the latter two of which are essential for the energy transition. CREDIT: Courtesy of Lucía Vergara

By Emilio Godoy
MEXICO CITY, Feb 22 2022 (IPS)

The debate in Mexico and at an international level is focused on certain minerals that are fundamental to the energy transition, such as cobalt, lithium and nickel. But there are other indispensable minerals that remain in the background.

In addition to lithium deposits, Mexico has proven resources of bismuth, copper, fluorspar, graphite, molybdenum and zinc, involved in one way or another in the different processes of the transition to a low-carbon economy.

Beatriz Olivera, founder of the non-governmental organization Energy, Gender and Environment, stressed that Latin America’s second largest economy has the mining potential to make this transition possible.

“But we have an extractive model, the mineral is extracted and developed elsewhere,” she said, criticizing Mexico’s current mining policies, and in particular the elements that take on special value on the path towards energy decarbonization, a formula to contain global warming.

“If these minerals are extracted, where is the value chain, the benefit for countries like Mexico? We are only going to be left with the negative consequences and sacrifice zones are going to be created to satisfy technologies in other parts of the world,” she said in an interview with IPS.

Olivera is co-author of a forthcoming report on Mexico’s strategic transition metals that identifies 23 minerals for applications such as electrical installations, solar and wind power plants, as well as energy storage devices such as batteries.

The group identified 803 mining projects, of which 237 have a mineral granted in concession that is usable in the transition, most of them inactive, but still in force.

Almost half are in the initial stage, nearly a third in exploration, 13 percent in pre-production and the rest are in pre-feasibility, expansion or closed.

Meanwhile, 58 of the ventures belong to companies from Canada, 29 from Mexico, 26 from the U.S., seven from Australia, three from the United Kingdom, one from China, and in 113 cases the origin of the company is unknown.

Only 10 percent of Mexico’s territory has been granted in concession for mining activities, but these resources are present almost everywhere in the country. Several of these minerals play a vital role in the energy transition to a low-carbon economy. Map: Mexican Ministry of Economy

Mexico’s mining portfolio

Mexico is currently the world’s leading silver producer and is also a major player in the 12 minerals market.

In 2020, the country ranked second in world fluorspar production, fifth in bismuth, molybdenum and lead, sixth in zinc, ninth in copper and tenth in manganese.

In 2020, Mexican deposits produced 1.07 million tons of fluorspar, 732,863 tons of copper, 688,461 tons of zinc, 260,390 tons of lead, 198,448 tons of manganese, 18,562 tons of molybdenum and 1844 tons of graphite, according to the official Statistical Yearbook of Mexican Mining.

The country has 38 clay deposits containing lithium, potassium, magnesium and sodium, of which at least 10 contain five billion tons of these minerals, although their extractive and economic viability has yet to be analyzed, independent expert José Parga told IPS.

The U.S. Geological Survey (USGS) estimates that Mexico has lithium reserves of 1.7 million tons.

Part of the government’s electricity reform proposal for the public sector to regain control of this industry includes the nationalization of lithium and the creation of a state-owned company to mine it.

Mexico has reserves of 53,000 tons of copper, 68,000 tons of fluorspar, 5,000 tons of manganese, 5,600 tons of lead and 19,000 tons of zinc, according to the USGS.

The mining law in force in Mexico since 1992 prohibits state-owned entities from mining discovered minerals, which in practice means the privatization of the sector, since the activity remains in their hands and the State merely regulates it.

Although there is no exploitation of cerium, dysprosium, erbium, scandium, europium, gadolinium, holmium, ytterbium, yttrium, lanthanum, lutetium, neodymium, praseodymium, promethium, samarium, terbium and thulium – the so-called rare earths, the set of 17 elements that have become fundamental for the transition – exploration is advancing for a project in the northern state of Coahuila.

In addition, zinc deposits could provide indium, gallium and germanium – other important elements for the energy transition that Mexico does not currently produce.

Most of the veins are located in the northern part of the country.

The manufacture of electric vehicles requires the use of several minerals that are abundant in Mexico. In the photo, an electric cab recharges its battery at a public station in a neighborhood on the south side of Mexico City. CREDIT: Emilio Godoy/IPS

Partially harnessed potential

Parga underscored Mexico’s potential, which has been only partially tapped.

“There is certainty that the materials are there, but they have not actually been the subject of an evaluation that would allow us to really know their potential and the eventual technical-economic viability of their exploitation,” he stated in his dialogue with IPS.

The expert said, “the first step to take advantage of the country’s mineral resources is to investigate their existence, quantify and classify them to make the best possible use.”

For at least a decade, international organizations have been warning about the consumption of raw materials for the energy transition, which could lead to their depletion or “peak consumption”.

In addition, the mining industry has triggered protests and resistance in communities throughout the country where it operates, due to the environmental damage caused, the low number of local jobs generated and its small contribution to the Mexican economy.

In fact, there are currently more than 50 conflicts between local populations and mining companies in the country.

In Mexico, the energy transition has been at a standstill since 2019 due to the policies of President Andrés Manuel López Obrador, who favors support for fossil fuels and hydroelectric power plants, to the detriment of renewable sources such as wind and solar.

Furthermore, this Latin American country, with a territory of 1.96 million square kilometers, 10 percent of which has been granted in concession to mining companies, lacks a national industry linked to the transition or a strategy for its development.

As a result, there is no production of wind turbines, solar cells or electric cars, as the raw material is exported and returns in the form of components to assemble solar panels or electric vehicles.

At a slow pace

However, there are already some attempts in the Mexican market, such as the assembly of electric units in the central state of Puebla, neighboring Mexico City.

In addition, the foreign ministry, with support from the University of California, launched on Feb. 8 the U.S.-Mexico Electrification Working Group, which seeks “to ensure a coordinated and strategic transition towards electromobility.”

In 2022, the parties will design a binational roadmap, which includes a diagnosis of the automotive sector in both countries and their opportunities in the electric transition. Electromobility refers to the introduction of vehicles that use electricity, instead of fossil fuels, and whose manufacture requires the so-called transition minerals.

But Mexico is undertaking this initiative without the National Electromobility Strategy, ready since 2018 but halted for “review” by the environment ministry under the López Obrador administration after it took office in December of that year.

Although some cities such as Mexico City have introduced electric urban transport vehicles, it is not yet a national trend. Moreover, the energy supply for these units still comes from fossil fuels.

Since 2016, the marketing of new hybrid and electric cars has increased fivefold in Mexico, according to the private consulting firm TResearch Mexico. In 2021, those sales exceeded 39,000 units, representing four percent of the total.

During the Glasgow Climate Summit in December, Mexico signed the Glasgow Agreement on Zero Emission Vehicles, signed by 37 countries, 46 metropolitan and regional governments, as well as 11 vehicle manufacturers, 28 fleet owners, 13 institutional investors in the automotive sector, two financial entities and 21 signatories from other segments, to eliminate the production of internal combustion vehicles between 2035 and 2040.

In January, fossil fuel-based generation in Mexico accounted for 76 percent of the total, followed by wind energy (seven percent), hydroelectric (6.67 percent), solar (4.4 percent), nuclear energy (3.87 percent), geothermal (1.55 percent) and biomass (0.07 percent), according to data from the non-governmental Observatory of the Energy Transition in Mexico.

Olivera and Parga highlighted the concerns about the role of minerals in the energy transition, both at the Mexican and global level.

“They are not necessarily going to be enough to make the transition to 100 percent renewable, we have to take it with a certain amount of moderation. But neither can we continue burning fossil fuels left and right,” said Olivera.

In her view, “there must be benefits for the people, with environmental and social controls, respect for the collective rights of peoples, mitigation measures for socio-environmental impacts and a fairer and more equitable distribution of benefits.”

For his part, Parga suggested building a value chain in Mexico that leads to the production of finished products, such as lithium batteries, and the participation of local communities in mining regions in the different stages of the production process.

“Apart from taking care of the ecological balance, preserving the environment and the cultural environment of the people and communities, it must also ensure that they obtain an economic benefit that allows them to raise their standard of living,” he argued.

The dilemma revolves around internal combustion vehicles, whose economic, environmental and health costs are high, and electric vehicles, whose footprint is also significant.

The South Atlantic Shipyard is the biggest in Suape Port, in the Northeast Brazilian state of Pernambuco, where oil tankers have been built after a slow start that threatened to put an end to the project. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Sep 4 2015 (IPS)

Besides suffering from macroeconomic imbalances, like a drop in GDP, a high inflation rate and a large public deficit, Brazil is experiencing heavy losses as many oil industry and logistical works grind to a halt.

Much of the infrastructure under construction is part of a cycle that is coming to an end, of rising demand for and prices of raw materials.

China’s economic slowdown has had an especially big impact on iron ore, the price of which has plunged more than 60 percent since 2013. This will hinder the viability of several iron deposits in Brazil, as well as two railways under construction in the Northeast, which now have an uncertain future.

The West-East Integration Railway (FIOL), designed to cross the state of Bahia, connecting soy-producing areas with the coast, depends on the start of operations in an iron mine in Caetité, 380 km as the crow flies from the port city of Ilheus.

A similar situation is now faced by the Transnordestina railway farther north, which is to link another mining and agricultural area to two ports. “But the mine doesn’t even exist there yet,” said Newton de Castro, a professor at the Federal University of Rio de Janeiro.

“Low-grade iron ore is pushed out of the market when demand goes down, affecting the railroads that transport it,” de Castro, an engineer with a PhD in transport systems, told IPS. He criticised “badly designed projects” that have mushroomed in Brazil in recent years to fill a gap in infrastructure.

Doubts about the viability of the Caetité mine have undermined the construction of Porto Sul, the port that is the endpoint of the Fiol railway. Construction of the megaport has not yet begun, and work on the railroad has stalled, and it was left out of the government plan for the expansion of transport routes.

More progress has been made on the Transnordestina line, which benefits from the existence of two port destinations that are also industrial complexes: Suape in the Northeast state of Pernambuco and Pecém in one of the country’s northernmost states, Ceará.

But the deposit of iron and other minerals that it was built to serve has been abandoned since its owner Eike Batista, once known as the richest person in Brazil, went bankrupt.

Another major infrastructure project, the expansion of the Carajás railroad by the country’s biggest mining company, Vale, is on a better footing. “It will transport excellent quality mineral and the cost will be low, because it involves expanding already-existing infrastructure,” Castro said.

The new reality of lower demand and prices “will push out of the market mines that are more costly to operate, and small mining companies,” favouring the predominance of big firms like Vale, the British-Australian Rio Tinto and the British Anglo American.

Brazil is the world’s second-largest producer and exporter of iron ore after Australia, and Vale is the world’s single largest producer of the mineral, the chief market for which is China.

The expansion in the size and number of ports along Brazil’s coastline will also be hampered by the drop in activity in the mining industry, as well as by the oil crisis caused by the drop in prices and especially the scandal that has hit the state-run oil company, Petrobras.

The drastic cutback in Petrobras’ investments has hurt the government’s strategy to develop a strong shipbuilding industry based on dozens of shipyards along the Brazilian coastline producing boats, offshore platforms and other oil exploration and drilling equipment for deepwater oil industry operations.

The Carajás railroad, which links the region where large new iron deposits belonging to Vale were found, with the port of Ponta Madeira in the Northeast city of São Luis, as it passes by a small town in the state of Maranhão. The railway network is going to be expanded and upgraded as part of a project that has not been hurt by the current crisis. Credit: Mario Osava/IPS

The crisis triggered the dismissal of tens of thousands of workers and the suspension of work in many shipyards and their port areas. One company alone, Enseada, hired to produce six drillships for Petrobras by 2020 for a cost of 4.8 billion dollars, has laid off nearly all of its 7,000 workers since 2014.

The company’s plant is only 82 percent complete. This and other white elephants represent an enormous waste of resources, which are not likely to be recovered.

“The programme was built on unrealistic foundations; the crisis has penalised investments that were misguided or badly designed,” said Adriano Pires, an economist who specialises in energy planning and is the director of the Brazilian Infrastructure Centre, a consultancy.

Most of the oil discovered in Brazil lies deep below the seabed off the Atlantic coast. The enthusiasm for creating a national industry for oil drilling equipment emerged after the 2006 discovery of large amounts of oil under a thick layer of salt, known as the pre-salt layer, more than 5,000 metres below the surface.

The difficulties of tapping into that newfound wealth make technology, ships, and large, complex equipment necessary. The administration of Luiz Inácio Lula da Silva (2003-2010) launched a strategy to develop the pre-salt reserves, in which Petrobras played a dominant role.

The government also set national content standards averaging 60 percent for the equipment used, to drive local production. And shipyards began to mushroom.

“It was an illusion. Reserving market encouraged waste not efficiency, besides favouring corruption,” Pires told IPS.

“Recovery will be slow and difficult; everything will have to be revised, and it will require a government with credibility, unlike the current one,” said the expert, an outspoken opponent of the centre-left government of President Dilma Rousseff, in power since Jan. 1, 2011. “It will require a regulatory framework that offers legal security, to attract investment.”

Oil and infrastructure are the sectors that can fuel recovery of economic growth, to overcome the recession that has hit Brazil since last year, he said.

Among analysts there are even doubts about the economic feasibility of exploiting the pre-salt oil reserves at the current prices, which stand below 50 dollars a barrel. “That is not evaluated on the basis of today’s prices, but looking at long-term prices, and I estimate that prices will go back up to 60 or 70 dollars a barrel within five years,” Pires said.

By contrast with the oil, mining and railway industries, the power industry has escaped the wave of frustrated infrastructure projects.

“In Brazil there is repressed demand, and that requires an expansion of the power grid in the long term – a need that doesn’t disappear because of recession or two years of economic slowdown. At the most, some goals could be postponed,” said André Lucena a professor of planning at the Federal University of Rio de Janeiro.

In this country of 202 million people, “per capita consumption of electricity is low in comparison to developed countries, which is why it tends to grow, for example with the incorporation of new electric and electronic equipment in homes,” he told IPS. For that reason, new hydroelectric and thermal plants will never be useless.

Moreover, a stable power supply requires a surplus: “some idle capacity forms part of the system’s operating mechanism, it’s beneficial,” he said.

On a daily basis there are “consumption peaks” that the system must deal with to avoid blackouts. The generation and distribution of electricity cannot be based on average usage.

In Brazil, hydropower plays a predominant role – it is inexpensive and operates as long as there is water. It represents nearly two-third of the country’s installed capacity.

Thermal plants, fired by oil, natural gas or coal, produce more expensive electricity, and are only used when there is not enough hydropower. “They are built to be idle most of the time, but they’re not useless,” said Lucena.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

View of the port of Ponta da Madeira, in northeast Brazil, where vessels - including Valemax megaships - dock to load iron ore mined in Carajás. Credit: Mario Osava/IPS

By Mario Osava
SÃO LUIS, Brazil, Mar 21 2014 (IPS)

“We are victims of progress,”complained Osmar Santos Coelho, known as Santico. His fishing community has disappeared, displaced to make way for a port complex on São Marcos bay, to the west of São Luis, the capital of the state of Maranhão in Brazil’s northeast.

The Ponta da Madeira maritime terminal, which has been in operation since 1986, has strengthened the influence of its owner, the giant mining company Vale, in São Luis. The terminal currently exports 110 million tonnes a year of iron ore, consolidating a logistical corridor of decisive importance for local economic development.

Company trains arrive at the port, transporting minerals from Carajás, a huge mining province in the eastern Amazon region that has made Vale the world leader in iron ore production. The port also exports a large proportion of the soya grown in the centre-north of Brazil.

Beside it, a Vale plant converts iron ore to spherical pellets.

These activities create thousands of jobs, especially in Vale’s area of direct influence, Itaqui-Bacanga, an area of 58 poor districts in the southwest of São Luis.

Young people aspire to work there because the pay is good, and Vale’s human resources policies, inherited from its long life as a state company (1942-1997), guarantee job stability. An employee “is only fired if he or she really messes around a lot,” an executive told IPS.

Vale also offers a lot of temporary work for the expansion of the port, and its railroad track, so far one-way, is in the process of being made two-way, with the aim of doubling mining exports from 2018.

Because of these and other local projects, the economy of the surrounding neighbourhoods is booming, said George Pereira, the secretary of the Itaqui-Bacanga Community Association (ACIB). Three plants are planned, for pulp and paper, cement and fertilisers, as well as a coal-fired thermoelectric station, among others.

Some 55 kilometres further south, in the municipality of Bacabeira, the state oil company Petrobras will build the Premium I refinery, which will be the largest in Brazil when it opens in 2018. The project will be put out to tender in April, and at its peak will employ 25,000 workers, the company says.

The employment boom boosts consumption, trade and services, “but this is not the development we want. We have more money in our pockets but no water to drink, because the rivers are polluted,” Pereira said.

Sanitation, drinking water, transport, teachers and doctors are scarce, while there is an excess of violence, drugs and prostitution in the poor districts, where the population is soaring, he said. Close to 200,000 people already live there, and two more housing estates are under construction, he said.

In this context, Vale “does good works, but in isolation, without transformative programmes to develop the entire area,” Pereira criticised. The priorities are education and sanitation, he said.

Ironically, the association that criticises and puts pressure on Vale is its own creature. It arose from the company’s social investment, required by the state National Economic and Social Development Bank (BNDES) as a condition for financing the iron ore pellet plant.

ACIB is governed by representatives of the five divisions that make up Itaqui-Bacanga and was created 10 years ago to mobilise the local population for an urban clean-up project. Its overheads and its headquarters, a two-story building, are funded by Vale, Pereira said.

Among the company’s numerous social action projects, some are outstanding for their effectiveness, such as extensions to the Itaqui-Bacanga Centre for Professional Education, an educational centre belonging to the National Industrial Apprenticeship Service (SENAI).

This year the centre is providing technical education for 10,000 students, twice the enrolment it had in 2013 and five times that of 2010, thanks to 14 new classrooms and five new laboratories.

Three other centres along the corridor between Carajás and São Luis are supported by similar partnerships between Vale and SENAI, Janaina Pinheiro, Vale’s human resources manager, told IPS.

In 2013, SENAI trained 65,000 students in Maranhão, compared to 10,000 a decade ago, state director Marco Moura told IPS.

Industrialisation in São Luis is concentrated around the ports on São Marcos bay. Near Ponta da Madeira is the state port of Itaqui, which has handled cargo of all kinds since the 1970s, and this year will see the addition of a grain terminal to export soya and maize from the new agricultural frontiers in the centre and north of the country.

Some of Brazil’s new ports were created with the goal of becoming industrial hubs, including Suape and Pecém, in the northeastern states of Pernambuco and Ceará. They were planned as industrial-port complexes and have been boosting the local economies for the past decade.

Both these ports have Petrobras refineries, and Suape has a petrochemical plant and eight shipyards, while Pecém has a steelworks and electricity generating plants. Many companies are locating in the enormous industrial zones on the landward side of the two ports.

The São Luis ports were unconnected to that wave of industrialisation because they belong to the poorest Brazilian region, which is backward and neglected compared to other hubs in the northeast.

The bay’s deep water, suitable for large-draught vessels, its location facing the North Atlantic, and the Carajás railway link, were advantages for the Ponta da Madeira terminal.

Osmar Santos Coelho, Santico, outside the shed where he keeps his nets and fishing gear, on a narrow beach that escaped takeover by the port terminal built by the Vale mining company in São Luis, in Brazil’s Northeast. Credit: Mario Osava/IPS

But there have been victims, the 73-year-old Santico reminded IPS, for instance “between 80 and 100” artisanal fisherfolk from Boqueirão, who were evicted from their fishing village on the beach and resettled in different districts.

A few years later, many of them have returned to fish in the São Marcos bay, in spite of this being banned, and they have settled on a small stretch of beach not occupied by the port, he said.

“We had no other trade, and we were hungry,” he said. They eventually built eight rough cabins from poles and palm leaves, some for living in and others just for fishing equipment.

Santico has a house in a nearby district and a cabin on the beach for the gear he uses for his sporadic night-time fishing expeditions. “There are hardly any fish left, and only a few prawns,” after new underwater concrete breakers were built to control tidal currents, he said.

As a result, fisherfolk negotiated with Vale and three years ago the company donated food baskets for 52 fisherfolk, worth between 308 and 725 dollars. “That’s how we survive,” Santico said.

Thousands of other families were evicted to make way for docks and port installations. Itaqui was, in fact, the name of a district that disappeared.

More city districts are now threatened by the industrial zone under construction next to the highway. Vila Maranhão fears extinction, squeezed between the railway and the new industrial hub, and only a few kilometres from a coal-fired thermoelectric plant, a large aluminium industry and stockpiled minerals.

“There is no official word yet, but it’s only a matter of time before we are evicted from here,” predicted Lamartine de Moura, a 71-year-old ACIB director who has lived in Vila Maranhão for 23 years. “If we’re not forced out by expropriation, we will be by the pollution,” she told IPS.

A university study found heavy metals in the local stream, and mineral dust in the air stains the houses and spreads respiratory diseases, she said.

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. While the continent is rich in mineral and oil wealth, Africa’s majority may have to wait a long time before they benefit from this. Credit: Tommy Trenchard/IPS

By Jeffrey Moyo and Miriam Gathigah
NAIROBI/HARARE, Jan 17 2014 (IPS)

With its two-trillion-dollar economy, recent discoveries of billions of dollars worth of minerals and oil, and the number of investment opportunities it has to offer global players, Africa is slowly shedding its image as a development burden. 

“While global direct investment has shown some decline, dropping by 18 percent in 2012, in Africa foreign direct investment rose by five percent,” Ken Ogwang, an economic expert affiliated with the Kenya Private Sector Alliance (KEPSA), which has a membership of over 60 businesses, told IPS.“Underhand dealings in the mining of diamonds and other rich minerals here have fuelled poverty.” -- economic analyst, Jameson Gatawa

Since 2012, Kenya has made a series of mineral discoveries, including unearthing 62.4 billion dollars worth of Niobium – a rare earth deposit. The discovery in Kenya’s Kwale County has made the area among the world’s top five rare earth deposits sites, and allows Kenya to enter a market that has long been dominated by China.

In 2012, Kenya discovered 600 million barrels of oil reserves in Turkana county, one of the country’s poorest regions. It was announced on Jan. 15 that two more wells struck oil, increasing estimate reserves to one billion barrels of oil.

But Kenya, East Africa’s economic powerhouse, is not the only African nation that has made fresh mineral discoveries.

“The recent boom in new mining discoveries in countries such as Niger, Sierra Leone and Zambia will attract billions in foreign direct investments. Other countries like Mozambique, Tanzania and Uganda will similarly attract billions due to petroleum discoveries there,” Antony Mokaya of the Kenya Land Alliance, a local umbrella network of NGOs and individuals working on land reforms, told IPS.

Last year, both Uganda and Mozambique discovered oil. In 2006, an estimated two billion barrels of oil reserves were discovered in western Uganda, but last year’s discovery brings Uganda’s total oil deposits to 3.5 billion barrels. Mozambique’s first oil discovery last year is estimated to be 200 million barrels.

Ogwang predicts that these discoveries will soon see African countries dominating the list of the 15 fastest-growing economies in the world.

“More African countries, Kenya being a model example in East Africa, now favour a market-based economy, which is highly competitive and the most liberal economic system.

“In this system, market trends are driven by supply and demand with very few restrictions on who the actors are. [It is] a favourable environment for foreign investors,” he said, referring to the local mobile phone industry, which has been dominated by foreign investors because of its favourable regulatory policies.

“As a result, growth in this sector is phenomenal. In the first 11 months of 2013, Kenya’s mobile phone money transactions were 19.5 billion dollars, which is more than the country’s current 18.4-billion-dollar national budget.”

Ogwang says that even more importantly, African countries are increasingly strengthening their partnerships with the East.

Statistics by the Africa Economic Outlook, which provides comprehensive data on Africa economies, show that China is the largest destination for African exports, accounting for a quarter of all exports.

Trade with Brazil, Russia, India and China – the economic bloc referred to as BRICs – now accounts for 36 percent or 144 billion dollars of Africa’s exports, up from only nine percent in 2002.

In comparison, Africa’s trade with the European Union and the United States combined totals 148 billion dollars.

But Terry Mutsvanga, director of the Coalition Against Corruption, an anti-corruption lobby group in Zimbabwe, cautioned that Africa will first have to rein in its corrupt politicians before its resources can enrich its own people.

According to the World Bank, some of the world’s poorest people live in Africa, with one out of two Africans living in extreme poverty.

“Without Africa dealing with the cancer of political corruption blighting the continent and robbing it of revenue from mineral resources through corrupt politicians receiving bribes from investors … the continent shall [continue to have] the worst poverty levels globally,” Mutsvanga told IPS.

Independent economic analyst Jameson Gatawa from Zimbabwe agreed.

“Underhanded dealings in the mining of diamonds and other rich minerals here have fuelled poverty. The rich are getting richer with the poor becoming poorer,” Gatawa told IPS.

For 54-year-old Sarudzai Mutavara, a widow who lives in the midst of Zimbabwe’s Marange diamond fields, poverty remains a daily reality.

Zimbabwe is one of the world’s top 10 diamond producers. But six out of every 10 households in Zimbabwe, a country of about 13 million people, are living in dire poverty. This is according to a 2013 poverty assessment report by the Zimbabwe National Statistics Agency.

“Here in Marange, the diamond wealth has not [helped] in any way to change our lives for the better, but rather for the worse as we have strayed further into poverty,” Mutavara told IPS.

The Democratic Republic of Congo (DRC) is another African country rich in diamonds, with its mineral wealth estimated in the trillions of dollars. But according to the United Nations, about 75 percent of its people live below the poverty line.

More than half of these have no access to drinking water or to basic healthcare. Three out of every 10 children are poorly nourished, with up to 20 percent of them predicted to die by the age of five.

While Ogwang says Africa’s best economic years are yet to come, it remains to be seen if the billions of dollars Africa has in natural resources will trickle down to people like Mutavara.

It remains unclear how much Kenya is worth in mineral deposits. However, 68 percent of Kenyan’s 41.6 million people are squatters and many live on mineral-rich land. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
NAIROBI, Sep 4 2013 (IPS)

Zeinab Mohamed is a 70-year-old squatter in Kwale County, in Kenya’s Coast Province. Like many other Coast Province residents, for decades, Mohamed has lived in what squatters call “floating houses”.

“We own the houses, but not the land. We have no land title deeds.”

Her husband died a squatter, at 86 years of age.

“For 40 years, we [tried to get] a title deed for this land. I am old, I could die any day, and I worried that I would leave my children and grandchildren with no land,” Mohamed tells IPS.

According to local NGO Kenya Lands Alliance, 68 percent of Kenyan’s 41.6 million people are squatters, with the Coast Province having the largest number of undocumented land owners. However, there are no comprehensive statistics about the number of people who do not own land.

But in a few days, Mohamed’s tenancy in the “floating house” will come to an end. She is among thousands of Coast Province residents who will be issued with a land title deed by President Uhuru Kenyatta, giving them ownership of their land.

Kenyatta started issuing title deeds on Aug. 30, in an ongoing exercise that will in this first phase benefit 60,000 households from Coast Province. Over the next five years, the Ministry of Lands intends to issue three million land title deeds across this East African nation, changing lives significantly. These title deeds can be used to secure loans and improve livelihoods.

In Kwale County, where Mohamed lives, 14,381 title deeds will be issued to residents. But land ownership is a complex matter here as the area is rich in minerals. An existing titanium mining project is set to begin in the county this month. And in July, minerals explorer Cortec Corporation announced that they had found deposits of niobium, a ductile grey metal, estimated to be worth 62.4 billion dollars.

The discovery of niobium in the Mrima Hills of Kwale County has made the area among the world’s top five rare earth deposits sites, entering a market that has been dominated by China.

If minerals are discovered on the land of those yet to be issued with title deeds, they will not benefit from the discovery.

“Most residents have been missing out on compensation whenever minerals are discovered since they have no tangible documents to prove that they are the actual land owners,” Njuguna Mutonya, a land expert in the coastal region, tells IPS.

“Since all private land that has minerals belongs to the government, [the] land has to be repossessed by the government. These new title deed holders stand to be compensated before they are moved elsewhere,” he says.

Mutonya says, those without title deeds to prove ownership will be compensated for what is on the land and not the land itself “so if you had built a house and planted some trees, that is what you will be compensated for.”

Experts on land mining, like engineer Kimani Ngunjiri, claim that this explains why though rich in minerals, “Kwale County is among the 10-poorest counties in Kenya. Mining companies are making billions while the immediate communities continue to be poor.”

Ngunjiri tells IPS that issues of land ownership have serious implications on “who has access to the benefits that accrue from the land if it indeed harbors minerals.”

But land experts like Mutonya say that the government’s drive to issue title deeds will improve the prospects of locals and they could benefit from the revenue generated from mining projects in their areas.

But the exercise has sparked a bitter war of words between Kenyatta and his main political opponent Raila Odinga.

The president’s family owns large tracts of land across the country, particularly in the Coast Province, Rift Valley and Central Kenya. This became a major political issue in the run up to the general election.

Odinga has dismissed the exercise as politically motivated in order to win the loyalty of Coast Province residents who overwhelmingly shunned Kenyatta’s Jubilee Coalition in the run up to the Mar. 4 general election.

But for squatters who have faced a series of evictions in various parts of the Coast Province, this is a new dawn.

“Land ownership has been a persistent problem. The entire coastal region is owned by a few rich tycoons. If President Kenyatta is playing politics while improving our lives, let him,” Amina Juma, a squatter in Kilifi, Coast Province, tells IPS.

Mutonya says that people do not believe that Kenyatta could solve the land issue, particularly at the coast.

“The new turn of events has changed the political and socio-economic landscape of the coastal people. Land will gradually cease to become a campaign tool during general elections,” he says.

Ikal Ang’elei, from the Friends of Lake Turkana, a community environmental association, concurs.

“Mining rights, regulations and laws must protect those who have lived on that land, if there are no laws and land ownership documents in favour of the community and individuals who live on mineral rich regions, they stand to lose.”

“In addition to resolving the issue of privately owned land, the government needs to pass the Community Land Act to state clearly how this acquisition of mineral rich land is to take place while at the same time protecting the community,” she tells IPS.

Ang’elei says that the government must also ensure that land and mining laws are consistent to ensure that private land owners are fully protected whenever there is a mineral find.

May 2013 protest march in downtown Montevideo against large-scale mining. Credit: Inés Acosta/Tierramérica

By Inés Acosta
MONTEVIDEO, Aug 26 2013 (IPS)

A bill that would regulate large-scale mining operations is making its way through Uruguay’s two houses of parliament, despite a lack of political consensus and vocal opposition from environmental organisations and other sectors of civil society.

The proposed legislation, submitted by the executive branch and backed by the ruling Frente Amplio (FA) or Broad Front coalition, declares that large-scale mining would serve the “public interest”. But critics charge that the bill was drafted to serve the interests of the Aratirí project planned by the Indian mining group Zamin Ferrous, aimed at the production of 18 million tons of iron ore annually, with a promised investment of three billion dollars.

Opposition to these plans by environmentalists, farmers and other residents of the areas that would be affected by the mining operations is becoming increasingly louder. In the last demonstration against large-scale mining in Uruguay, held on May 10, more than 10,000 participants marched down 18 de Julio Avenue, the main thoroughfare in downtown Montevideo.

Meanwhile, in a survey conducted by the Radar consulting firm, which asked the question, “Are you in favour of open-pit mining activities in Uruguay, such as the Aratirí project?”, 46 percent of respondents said that they were opposed, 28 percent were in favour, 12 percent had no opinion on the matter, and 14 percent said they knew nothing about the subject.

The Aratirí project would occupy 4,300 hectares and encompass five open-pit mines on 500 hectares, associated logistics facilities, a processing and beneficiation plant, and a 212-km concentrate slurry pipeline to transport the ore to a deepwater export terminal that the company plans to build on the Atlantic coast, in an area where tourism plays a major role in the local economy.

But the entire undertaking, including the “buffer zones”, will take up 14,505 hectares in three departments in central and eastern Uruguay: Durazno, Florida and Treinta y Tres. The project also includes the installation of five new high-voltage power lines to supply power to the mining facilities and the port.

Opposition has also taken the form of proposals and local campaigns to declare the departments of Treinta y Tres and Lavalleja, in eastern Uruguay, and Rivera and Tacuarembó, in the northeast, as “mega mining-free” territories. In Tacuarembó, where there are requests for prospecting permits involving 300,000 hectares of land, activists say they have collected the number of signatures necessary to demand the calling of a referendum, under Uruguayan law.

“Tacuarembó has no tradition of mining. It is a region of very fertile land, with tremendous capacity for producing living things, and it lies over the Guaraní Aquifer. Its natural conditions are much better suited to producing biodiversity,” farmer Daniela Pírez of the Tacuarembó for Life and Water committee, which headed up the collection of signatures, told Tierramérica*.

The new bill, which would modify the current Mining Code, contains “provisions and exceptional benefits that are aimed at enabling the (Aratirí) project,” according to the Movement for a Sustainable Uruguay (Movus).

“This law has a first name and a last name: Aratirí. That’s where the whole thing started, regardless of whether there may be other mining projects,” Senator Sergio Abreu of the opposition National Party told Tierramérica.

Frente Amplio senator and former minister of industry Daniel Martínez denied the accusation. The proposed law “was conceived in the framework of large-scale mining in general, because there are many projects coming into Uruguay, and the idea was to have a special law that would demand greater environmental protection measures and ensure more resources for the state,” he told Tierramérica.

For the moment, however, the other mining projects in the country are one tenth the size of Aratirí, according to the Uruguayan Chamber of the Mining Industry.

The Aratirí project will represent the biggest foreign direct investment in the country’s history. According to the company, its implementation will generate gross value added of around 1.5% of GDP throughout the 20 years of its life cycle and 1.4 billion dollars in exports annually.

The company also claims that it will create 1,500 direct jobs, 10,500 indirect jobs and between 3,000 and 4,000 jobs during construction.

With regard to taxation, the bill expressly establishes that mining and related activities will not be eligible for the application of promotional tax regimes that grant corporate income tax (IRAE) exemptions.

But it does allow the application of exemptions for various other taxes, as established in the law on investments, which could add up to between 700 million and one billion dollars for the Aratirí project.

The bill also stipulates that prospecting, exploration and environmental assessment costs incurred prior to the concession, which are directly linked to the large-scale mining project covered by the respective contract, can be shown as losses in the first business year in which production begins or amortised on a fixed instalment basis over a five-year period.

Martínez believes that the new bill establishes “a very significant increase in the tax burden,” although “this project has exemptions which may or may not be debatable. Any investment in the country has exemptions for the value-added tax on imports and the IRAE.”

Another controversial aspect is the plan for the closure of the mines. As far as Movus is concerned, no precise limits have been set. Moreover, “Aratirí told the Senate committee that its plan is for these enormous craters to be filled with rainwater over a period of 80 years.”

“Uruguay Natural” or Natural Uruguay, the “brand” used to promote the country abroad as a tourism destination, does not seem compatible with large-scale mining activity.

Martínez, however, stressed that “there are people who confuse Natural Uruguay with an agrarian country, a country of poverty and exploitation, and there is nothing that contaminates more than poverty. Either we diversify productive activities and pursue advances in sectors with higher technology and value added, or we will be a poor country forever.”

Journalist Víctor Bacchetta, of Movus, does not believe that this small South American country has the potential to be a “mega mining” nation.

“Uruguay is poor in mineral resources. It does not have the huge reserves of countries like Chile or Peru. Aratirí is proposing 12 years of extraction activities, according to what can be gathered from its Environmental and Social Impact Assessment, and after that it will all be over,” Bacchetta told Tierramérica.

“This makes the project even more absurd for Uruguay, because it is a country with a privileged ecosystem in terms of its fertile land and water resources, which are not found in the (Andes) mountains, where nothing else can be done,” he added.

The government has still not approved the environmental impact assessment for the project. The company has also said that it will wait for the final outcome of the legal text before signing a contract with the government to initiate operations.

* This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Excerpt:

An agreement signed by the government of Venezuela and the Chinese state-owned company Citic Group for prospecting and mapping the country’s mining reserves is being challenged by both the opposition and experts who argue that it will leave valuable natural resources dangerously exposed.

Oil and Mining Minister Rafael Ramírez said “the mining map will be used to explore, confirm and quantify the country’s mineral resources” and, over the five years in which the agreement will be implemented, some 400 Venezuelan engineers will be trained “to serve as custodians” of the data compiled by the Chinese consortium.

So far the Venezuelan government has said nothing about how the knowledge gathered by China –the world’s largest consumer of raw materials– will influence future mining decisions and whether it will entail benefits or advantages for the Citic Group.

But simultaneously with the prospecting agreement, Citic Group was awarded a concession to operate the group of gold mines Las Cristinas, which has already seen several operators since Hugo Chávez took office in 1999, including the Canadian companies Placer Dome, Vanessa Ventures and Crystallex, and the Russian company Rusoro.

Las Cristinas, in the southeast region of Guayana, has some 20 million ounces in confirmed and potential reserves, valued at about 32 billion dollars, according to current New York market gold prices.

The location of Las Cristinas, situated near a town that bears the name of the legendary lost city of gold used by indigenous peoples of South America to lure European conquistadors away in the sixteenth century, puts China almost literally at the gateway of a modern El Dorado that is no myth.

Legislator Américo de Grazia, who represents the opposition Radical Cause party in the National Assembly’s Energy and Mining Committee, spoke with IPS about the agreement signed on Sep. 21, 2012 between Chávez and Citic Group President Chang Zhenming, questioning the government for not making the terms of the deal public.

“Parliament should oversee this operation — which it was not consulted about — because of the magnitude of what it involves and because it poses a threat to our sovereign rights over underground resources that are protected under the constitution,” said de Grazia, who represents mining districts bordering with Brazil and Guyana in southeast Venezuela.

The prospecting agreement is part of a growing alliance between the two countries, which has turned Venezuela into a major source of petroleum for China, while the Asian giant is meeting the South American country’s growing need for credit to finance its constant outflow of public funds.

Venezuela exports over 600,000 barrels of crude oil a day to China, according to Ramírez, although other sources put the figure at half that much. Beijing, in turn, has granted Caracas more than 38 billions dollars in credits, and at the same time it participates in energy and construction projects.

Mapping out mining resources in South America and other such activities, “are very valuable to China, which has an increasingly greater need to access dependable and lasting supply sources for all kinds of raw materials, to guarantee that it will have the basic elements necessary to implement its long-term National Development Plan,” Chilean expert Chihon Ley told IPS.

With this plan, China hopes to become the world’s leading economic power by 2048, or earlier, said Ley, Asia Programme director at Chile’s private Adolfo Ibáñez University.

Although globally Venezuela is known primarily for its great oil production, it also has massive mineral reserves. It has enough iron reserves, for example, to supply China, the world’s leading consumer of that metal. Other reserves with export potential include bauxite (the main source of aluminium), phosphates, gold, diamonds, copper, uranium and even coltan and thorium, two rising stars of technology industries.

The Democratic Republic of Congo and Brazil currently export most of the world’s coltan, used in many electronic devices manufactured primarily in Asia, but reports in the Venezuelan press have revealed that unauthorised operators are already mining the ore in the southern state of Amazonas.

While thorium is presently only used in experimental reactors and not commercially, it is considered to be the energy source of the future.

It is a radioactive metal that is not fissionable like uranium, but is three times more common and can generate 40 times more energy than uranium. The United States Geological Survey estimates global reserves of thorium at 1.2 million tonnes.

According to a study by Eduardo Greaves and Haydn Barros, professors at the Simón Bolívar University in Caracas, the Impacto hill, an area six kilometres long by two kilometres wide located some 500 kilometres south of Caracas, could contain enough thorium to produce more energy than the Orinoco Belt, which is thought to be the largest petroleum reserve in the planet.

What does Venezuela get out of granting prospecting rights over all of its mineral wealth to a Chinese consortium? For Fernando Soto, a legislator of the governing United Socialist Party of Venezuela who heads the Energy and Mining Commission, the Chinese survey “would allow us to locate and quantify mineral deposits occurring at great depth,” in contrast to available studies, which are relatively superficial.

But de Grazia questions the decision arguing that if that is indeed the case then the government “should have awarded this prospecting contract to the highest bidder through an international competitive bidding process.”

Citic Group lacks the necessary credentials in the field, de Grazia said, and as for training, “China has five universities with geologist training programmes, while in Venezuela we have six, which were ignored, as was the experience of the public bodies operating in the sector.”

Venezuela has a state mining institute, which has not commented on the agreement with China, and “there is a census of more than 1,500 geologists and post-graduate studies on the subject that was prepared two decades ago,” Jean Pasquali, emeritus professor at the Geology School of the Central University of Venezuela, told IPS.

Pasquali said “it is unusual for countries to hire foreign or private companies to assess their mining potential.”

In the first place “because that knowledge has many applications, in terms of selecting areas that are appropriate for deposit exploration and for detecting natural risks and planning programmes for risk minimisation and land management,” Pasquali said.

In addition, research in the earth sciences “is a ongoing process that is highly dependant on scientific developments, much like population and ecological studies, which is why they are entrusted to official institutes,” he argued.

Small-scale gold prospectors in southeast Venezuela, many of them members of the Pemon indigenous people, have also voiced their objection to the agreement.

In contrast, Ley said he thinks “a prospecting agreement with a Chinese company, which has the approval and support of both governments, was the best option.”

“Venezuela’s strategy so far has not generated a scenario in which it can negotiate and access the prospecting technologies and financial resources available to the large multinational mining companies. Enormous human, economic, financial and technological resources are needed” for such operations, he said.

For that reason, Ley believes the agreement and its implementation will be beneficial for the country, provided it meets certain conditions.

The first is that “all the data gathered through prospecting, and not just the general data, remain with the Venezuelan government for future management.”

Another condition is “that the agreement must not establish any prior obligation of the state to grant the (mapped) resources to any Chinese company in particular, and that once prospecting operations are completed the state will be free to grant mining rights over those resources to the highest bidder, through a bidding process or otherwise.”

Lastly, “the data gathering work and subsequent mapping must be done by a binational team of professionals, so that the technical know-how will remain in Venezuela to further (the country’s) human and technological development,” Ley concluded.