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Australian-Canadian firm OceanaGold bails out Pacific Rim Mining

Deal means more punishment for El Salvador

Washington/Ottawa/San Salvador/Melbourne – On November 21, Pacific Rim Mining shareholders are poised to approve sale of the company to Melbourne-based OceanaGold in order to continue suing El Salvador in a World Bank tribunal. Pacific Rim has been suing the small Central American nation for not having granted it a mine permit ever since a presidential pronouncement to suspend all mining activity in the country. The last-minute deal rescues a sinking Pacific Rim Mining, while promising to cost Salvadorans millions more in an unjust arbitration process and raising fears of political interference.

The deal, valued at a mere $10.2 million for a swap of company shares, is a pittance compared to what the company hopes to extract from El Salvador, either through the $301 million arbitration suit or through reaching a deal with the Salvadoran government to advance a gold project in the northern department of Cabañas. In a press release, OceanaGold said it would try to negotiate a deal with Salvadoran authorities.

The National Roundtable on Metal Mining, a diverse coalition of civil society organizations in El Salvador, responded with concern to OceanaGold’s intentions, fearing undue pressure on legislators during electoral season. The coalition is already worried that legislators have stalled consideration of proposed legislation to ban metal mining in the densely populated country, which has widespread support across the country, including from the highest ranks of the Catholic Church.

“Salvadorans ask that this project be stopped. Canada has so many good people. Ask those transnational companies to stop committing terrible injustices and exploiting the people of El Salvador. We are not very happy about this judicial dispute, they are asking us to pay them millions. But if it comes down to it, I think it is better to pay the money, than to pay the consequences,” Archbishop José Luis Escobar Alas recently stated to a Canadian national radio reporter.

Pacific Rim Mining’s track record in El Salvador gave rise to broad opposition, starting when local communities saw the impacts of the company’s exploration work and as they learned about the dirty legacy of mining in neighboring countries.  

OceanaGold’s own track record is also disheartening. Despite Pacific Rim’s claims that OceanaGold is a good environmental and social steward, its gold and copper operation in the Philippines has been devastating for local communities. In 2011, the Philippine Human Rights Commission recommended the revocation of OceanaGold’s mining license, citing forcible and illegal demolitions, the harassment of residents, and the indigenous community’s right to culture.[1] Residents have complained of “dirty water” downstream from the open-pit mine operation and of dead fish washing up on the shore.

“The economic, social and environmental reality of OceanaGold’s Didipio mine confirms the worst fears of the Salvadoran people and government,” said Dr. Robin Broad of American University in Washington, D.C. after traveling to the Didipio mine in August 2013.

Concerned Australian citizens and social organizations have already started a public education campaign to denounce OceanaGold’s acquisition of Pacific Rim’s El Dorado project and to demand that Pacific Rim drop its suit against the government of El Salvador.

With headquarters in Melbourne, Australia, OceanaGold is owned by a holding company registered in British Colombia. It trades on the Australian, New Zealand and Toronto stock exchanges and has operations in the Philippines, New Zealand and Australia.

The National Roundtable against Metal Mining issued the following response to the announcement of OceanaGold's purchase in October: 

Translation to English from original in Spanish

Multimillion dollar company purchases Pacific Rim mining company, will seek agreements with political parties to proceed with mining in the country

On October 8, transnational mining company OceanaGold announced the acquisition of the shares and properties in El Salvador belonging to Pacific Rim Mining. With a value of $10,2 million USD, a company press release announced its intention to seek a negotiated solution to the impasse represented by the lack of approvals to date for an exploitation permit for the El Dorado mine in the department of Cabañas, in the north of El Salvador. This announcement represents a direct attack against the sovereignty and legitimate right of the Salvadoran population to reject an industry that is a threat to our lives.

In El Salvador, given the demonstrated relationship between political parties, national businesspeople and mining companies, it is not farfetched to suspect – and it merits further investigation – the closed door deals that could be taking place in the midst of the electoral campaign to put in place the conditions for metal mining to take place. Legislative Assembly representatives are particularly predisposed to such pressure to activate the exploitation of mining projects, which are a threat against the possibilities for life in this country, particularly given the way the debate over the Law to Prohibit Metal Mining has been held up.

The mining companies in question have also demonstrated their perverse way of operating. In the Philippines, New Zealand and El Salvador where they have operations, they have been called out for serious human rights violations and ecosystem damage. Pacific Rim and now OceanaGold have both reaffirmed their interest to continue extorting the country for $315 million USD before the International Center for the Settlement of Investment Disputes (ICSID). This is a case of the abuser seeking damages from the victim. 

Given the above, to the Legislative Assembly, we reiterate the urgent necessity in El Salvador to immediately put in place a definitive ban on metal mining. Our recent presentation of the new proposed Special Law for the Prohibition of Metal Mining is even more timely and constitutes an important opportunity to avoid the worst socio-environmental damage in our country. 

To the mining company OceanaGold, but principally to the Salvadoran population and national and international public opinion, we reaffirm our firm conviction to continue in the legitimate defense of our territory and to not rest until we acheive the definitive prohibition of mining exploration and exploitation in El Salvador. 

National Rountable on Metal Mining
October 17, 2013 

[1] Philippine Human Rights Commission calls for end to mining deal, Published by MAC on 2011-01-25. Source: Bulatlat, GMANews.TV, Reuters (2011-01-20).