Science Faculty researchers carrying out a paleomagnetic study in Valentines, Uruguay in 2008. Credit: Courtesy Leda Sánchez

By Pablo Tosquellas
MONTEVIDEO, Dec 3 2013 (IPS)

The Uruguayan government, which recently passed a law on large-scale mining, does not actually have a clear idea of the country’s mineral wealth and has only just now proposed a geological study to find out.

For decades, geological studies have been low priority in this farming country of gently rolling hills, where there are neither mountains, volcanoes nor geological faults.

That was until the appearance of plans by Aratirí, a subsidiary of the Indian mining company Zamin Ferrous, to extract some 18 million tonnes of iron ore a year from a huge open-pit mine in the central Uruguayan district of Valentines, on the border between the provinces of Treinta y Tres and Florida, 234 km north of Montevideo.

The plans unleashed a heated debate in this small country wedged between Argentina and Brazil.

And when the controversial new set of mining rules that regulate large-scale mining projects was passed in early September, many claimed they were tailor-made for Aratirí.

Only in late October did the left-wing Broad Front government decide to hold an international tender for a geological survey of the country, for which seven companies submitted bids.

Pier Rossi, the head of the national mining and geology office, Dinamige, told Tierramérica* that up to now, the state had left the exploration of possible mineral resources up to private companies.

The aim of this study is “to detect magnetic anomalies to define the areas of interest, without waiting for private firms to do the work,” Rossi said.

The information from the magnetic and radiometric aerial survey will indicate “the ages of evolution of the minerals in the rocks” in order to assess their value, added Rossi, a geologist by profession.

“Once all of the information is in, the state will be in a position to negotiate on an equal footing with the companies,” he said. “Then I will be able to decide when and how the work will be carried out.”

But even with a geological survey, the state is unlikely to have the capacity to oversee what the companies do, said Leda Sánchez, a professor in the geology department of the Science Faculty at the University of the Republic.

“The state is responsible for ensuring that things are done properly, but it is a vicious circle of problems. Without good geology, there is no good mining,” Sánchez said.

Among the shortcomings pointed out by the professor is the impossibility of establishing clean-up plans that mining companies must comply with after they are done working in a given area.

Rossi said “we’re not going to fix what hasn’t been done in 60 years. We have to redefine everything.”

Even without the new data, Sánchez disputed the “extraordinary volumes” claimed for the Aratirí iron deposit, which she told Tierramérica is “actually small.”

“The dimensions seem big to us because we’re a small country. We aren’t a mining country per se. Uruguay will continue to be a livestock-producing country,” she said.

There are 12 million head of cattle and 7.8 million sheep in this country of 3.3 million people.

The mining industry chamber is also opposed to the term “large-scale”.

It is not possible to have a “mega” project in Uruguay given the size of the territory, one of the heads of the chamber, who asked not to be identified, told Tierramérica.

The law applies to any mining projects of over 400 hectares. “If you think of it in terms of cattle, only 200 calves can be raised on that much land, and no one refers to ‘large-scale’ livestock production,” the businessman commented.

One of the aspects of the law that the mining chamber has the most problems with is that the mining permit and contract with the government are only granted once the companies have invested in exploration.

In the past, the permits were issued prior to the exploration work. The chamber says that only one out of 1,000 exploration efforts are successful.

The source with the chamber said the state “has no idea” about the country’s mineral resources. “They only have hypotheses,” he said, pointing out that Uruguay doesn’t even have a mining engineering degree programme.

Professor Sánchez said the companies that mine for gold, limestone, iron ore, semi-precious stones and other mineral products should make a contribution to the University of the Republic, “because they are the ones who take” the country’s geology students.

“As an academic institution we are not prepared for the influx of students we are receiving,” she said. According to Sánchez, what is needed is not only economic support from the private sector, but also academic interaction.

The professor also complained that the government had put into effect a law on large-scale mining without increasing the budget of the Science Faculty.

When Congress discussed “taxes on mining companies, no one remembered that the geologists receive their training at the University of the Republic, which is under-funded,” she said.

The University of the Republic, the oldest and most prestigious higher education institution in the country, is tuition-free.

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

Location of the projected terminal (in pink) on the coast of Rocha, between La Paloma (bottom left) and Cabo Polonio (upper right). Credit: Comisión Interministerial del Puerto de Aguas Profundas

By Pablo Tosquellas
MONTEVIDEO, Nov 6 2013 (IPS)

The small South American country of Uruguay could become a major logistics hub in the Southern Cone due to the deepwater port that the government is planning to build in a tourist area on the Atlantic ocean.

The project is controversial, because it would convert an undeveloped natural tourism zone in the department (province) of Rocha in the southeast of the country. And it would also compete with terminals in the country’s two giant neighbours: Brazil and Argentina.

There is already ongoing tension over trade issues between Uruguay and Argentina, and the ports of Buenos Aires and Montevideo have been rivals since Spanish colonial times.

According to government sources consulted by IPS, the terminal will be built in stages, and because of its geographic location and its natural depth of 20 metres, it is being offered as a lower-cost shipment point for minerals and grains from neighbouring countries.

Enrique Pintado, Uruguay’s minister of transport and public works, told IPS that the project should be a kind of “cooperative” effort among all countries in the region, to save on shipping costs so that products reach their destination, mainly China and Southeast Asia, “with less distorted prices.”

According to a document from the Inter-ministerial Commission on the Deepwater Port, the terminal could generate 50 percent savings in logistics costs for certain trade flows from the region to Asia, and could eventually handle 50 million tons a year of cargo.

The minister said the capacity of other ports in the region is “saturated”, like Santos in the southeast of Brazil, which is Latin America’s biggest container port, which means “the waiting time for loading and unloading merchandise is excessive.”

The key to the success of the new port is its natural depth, according to Pablo Genta, under-secretary of transport and a member of the Inter-ministerial Commission.

Today, ports on the Atlantic that are about 12 metres deep can handle 60,000 tons of cargo per vessel. The port in Rocha could more than double that capacity, by serving ships carrying up to 160,000 tons, Genta told IPS.

The port of Santos handles more than 100 million tons of cargo annually.

“The port of Montevideo, in the best years, handles 12 million tons,” Genta said. “And the Buenos Aires terminal just barely reached 11 million tons last year.”

The port of Montevideo as seen from the Cerro neighbourhood. Credit: Daniel Stonek/CC BY 3.0

Uruguay wants to attract a significant portion of the grain and mineral cargo that Argentina, Bolivia, Brazil and Paraguay ship to China and Southeast Asia.

But the under-secretary stressed that Uruguay’s own future production justifies the plans for the port. He was referring to the Aratirí mining project in the centre of the country, where the Indian company Zamin Ferrous hopes to extract 18 million tons of iron ore a year which would be transported to the coast through a slurry pipeline.

Economic, topographical and marine hydrology studies are currently being carried out, as well as physical-chemical studies to establish an environmental baseline, with the aim of putting it out to tender in 2014.

A law passed in January approved construction of the port in the department of Rocha, in an area that contains the beach resort towns of Mar del Plata, El Palenque and San Francisco.

The port is to cover an area of 3,027 hectares, for which land will have to be expropriated. In July, the government called for expressions of interest from potential users of the terminal.

The coastline of Mar del Plata, El Palenque and San Francisco is sparsely inhabited. The white sands and waves and natural vegetation form part of a 46-km stretch of beach between La Paloma, Rocha’s main resort town, and Cabo Polonio, a remote beach village that is inaccessible by road, has no electricity or running water, and is home to a colony of southern sea lions and South America’s most important mobile sand dune area.

Opponents of the port, especially the Movement for a Sustainable Uruguay (MOVUS), argue that there is no clear evidence that neighbouring countries will be interested in using the port.

The only obvious freight use, they say, is by the planned Aratirí open-pit mine, which does not yet have all the permits it needs, and has run up against strong social and environmental opposition.

Legal action has been taken to challenge the approval of construction of the port.

Minister Pintado argued, however, that Uruguay cannot fail to take advantage of the fact that Asia “has been shifting its interest in investment and business westward and is breaking down the North-South economic logic.”

In the mid term, he said, the port would handle shipments of grains and bulk liquids, especially oil and its by-products.

The authorities estimate the cost at one billion dollars – an investment that will be made in stages, “like the layers of an onion,” Pintado said. Different terminals will be built as neighbouring countries and the private sector express interest.

Corporación Navíos SA, a shipping company that operates under the free-zone procedure in the port of Nueva Palmira at the confluence of the Uruguay and Paraná rivers, has closely followed the process and hopes to invest in the Rocha terminal, perhaps by means of a public-private contract.

The firm stores and transports freight that arrives in river barges from Argentina, Bolivia, Brazil, Paraguay and Uruguay.

Ruben Martínez, general manager of Corporación Navíos, told IPS that many of the company’s ocean-going ships set out with “incomplete” loads.

“There is merchandise, like iron ore, that requires larger vessels, which need a stop off at another port to complete their load,” he said. For that reason, he added, the activities in the ports of Nueva Palmira and Rocha could complement each other.