Running out of water in Chile: Antofagasta sets its sights on Minnesota’s water wealth

Carla Arneson

Concerned Minnesotans are demanding protection of our wealth of water, asking for a moratorium on sulfide mining, pointing to the industry’s abysmal track record of water contamination. There is another reason for concern. Water consumption. Our wealth of water makes sulfide mining feasible for foreign companies that have depleted and contaminated their own water resources.

Sulfide mining is not about protecting our waters – it is about using them. And us.

Separation of rights synonymous with corporative power

In 2010 Canadian Duluth Metals and Chilean Antofagasta formed Twin Metals LLC for the development and operation of a sulfide mine in Minnesota. According to Duluth Metals, Antofagasta was chosen because of their “financial capability and proven expertise in building and operating large mining projects.” Proven expertise?  What about expertise in pollution, human rights abuse, and political control of Chile’s dwindling water resources? 

Antofagasta PLC is owned by the wealthy Luksic Group. The Luksic Group is composed of Antofagasta PLC (mining, railway, water) and Quinenco (financial and industrial). Its mining division is Antofagasta Minerals (Antofagasta).

In Chile, home base of Antofagasta, “land and water were separated in order to allow for the unconstrained purchase and sale of water.” Water was defined “as a market asset,” thereby “allowing the privatization of water through the granting of rights for free and in per-petuity to big corporate interests. … The mining industry is causing “critical deficits” of water in some regions of the country. In the water scarce Antofagasta Region for example, mining uses more than 1,000 litres of water a second, and mining companies hold almost 100 per cent of the groundwater rights. The Chilean Copper Corpora-tion [COCHILCO] itself admits in a report that this region will experience an “extreme deficit” in drinking water by 2025. The report ends with a series of case studies describing the growing conflict over water as the government is now allowing mining and drilling in national parks and issuing more water rights than there are actual water reserves, resulting in the drying up of areas of the country.” (Conflicts over water in Chile: between human rights and market rules)

“Antofagasta PLC has the concession to operate water rights and facilities in the Antofagasta region. In 2003 it was awarded a 30-year concession [US$185 million] consisting of two businesses. These are a regulated water supply to domestic customers in the region and an unregulated business supplying miners and industrial users.” (checkSURE)

Northern Chile’s waters define scarce

The arid northern regions of Chile, which also encompass the Atacama Desert, are home to multiple mining operations. The Atacama is often called “the driest place on earth.”

In 2005 it was reported in La Tercera, “The Chilean government’s water management unit … has ceased issuing authorizations for water aquifer development in the country’s Region II [Antofagasta].” That same year it was reported in Business News Americas, “Water scarcity particularly affects the area’s mining industry [in northern Chile]. In recent months, the country’s regional environment commission began investigating mines Collahuasi and El Tesoro for the ecological impact of their water extraction activities in the area.” El Tesoro is an Antofagasta copper mining operation; its general manager, Juan Andres Morel, is now the CEO of Twin Metals. In 2009 COCHILCO sounded the warning of insufficient water resources for all mining projects by 2020. In December 2011, a Business News Americas headline declared, “Govt. extends water scarcity emergency to Regions IV and V.”

Without a guaranteed supply of water – because of immense usage – it is often impossible for mining companies to secure financing. Antofagasta turned to using seawater for its latest Chilean project, Esperenza. The Esperanza mine began operating in 2011 after billions were spent financing the project, including millions for miles of pipeline to the ocean. Mining companies avoid using seawater because of the high cost involved – unless they are running out of options. Antofagasta’s prospective Chilean mine, Antucoya, will also use seawater.

Antofagasta’s Chief Executive Officer Jean Paul Luksic, according to Bloomberg, said Antofagasta would continue to invest in mines in Chile and abroad to meet the demands of the BRIC economies of Brazil, Russia, India and China. His statement negates the “U.S. national security” argument of sulfide mining proponents in Minnesota.

The prospect of sulfide mining in Minnesota

The more disseminated the mineral deposit, the larger the size of the mine. The larger the mine, the greater the amounts of toxic tailings waste and waste rock left on the surface – miles of it. 99% waste. Waste put underground, or under water, is already leaching and would continue to leach, spreading heavy metals, chemicals, and acid insidiously through faults and fractured bedrock into our aquifers; as well as through exploratory boreholes (116 miles of holes since 2000 alone). Millions of gallons of water per day are used for processing ore. The lower the grade of ore the more water is required. Numerous chemicals are added whose decomposition and combined effects are unknown. Massive volumes of toxic wastewater and tailings are pumped to basins that are designed to leak for stability. “De-watering,” the continual pumping to remove water seepage in underground and open pit mines, further increases water contamination, destroys wetlands and lowers surrounding water levels. In NorthMet’s [PolyMet’s] case, when the mining and pumping ends we would be left with a pit full of toxic water.

By definition “mitigation” only means, “reducing the severity of” – mitigation has nothing to do with meeting water standards. Limestone treatment of waste allows the release of arsenic (indicated at PolyMet), hardly a viable choice. The solution? Perpetual treatment – the same strategy used at sulfide mines nationwide – with perpetual failure. Perpetual treatment on such a scale is beyond improbable; it is delusional.

Minnesota’s waters hang in the balance

Minnesota decision makers need to research. They need to understand the implications and repercussions of sulfide mining on our waters. They need to recognize that, with dwindling supplies worldwide, clean water will be priceless to those who protect their resources. Crucially, they need to be able to visualize the cumulative, obliterating scope of all potential Duluth Complex sulfide-mining operations and their toxic wastes on the landscape of St. Louis, Lake and Cook counties.

Antofagasta is known as one of the “world’s lowest-cost copper producers.” No surprise then that Twin Metals is touting its proposed Minnesota project as one of the world’s “lowest-cost sources of copper, nickel and platinum group metals.” Low-cost copper production equals high-cost environmental and social destruction.

Mining companies with the advertised goal of high returns on investment are now looking at mineral deposits in Minnesota that are economically marginal – big, but low-grade and disseminated; not rich in percentages, or on company balance sheets. When corners need cutting, what goes first? Profits? In 2010 Antofagasta nearly doubled its profits, after polluting and exploiting water resources for years in Chile.

Red flags blowing in the Chilean wind

Minnesota is considering sulfide mining of our lake country; at the same time the people in Chile are battling to preserve their water resources in mining’s wake –including damage left by Antofagasta.

“In the Choapa River Basin, in the Coquimbo Region [Region IV], there are a number of environmental conflicts between local communities and mining companies; the main cause is water. Miner Los Pelambres, owned by Antofagasta … is the company that has the biggest amount of toxic spills into the waters in the Region of Coquimbo. From August 2008 until now [2010] many incidents and toxic spills have been recorded, one of the most devastating ones being the 2009 spill, when 13,000 litres of copper concentrate spilled directly into the Choapa river.”…“Additionally, between 1998 and 2008, the miner [Los Pelambres] has destroyed several rock glaciers in the same river basin of Choapa, equivalent to 3 million cubic meters of fossil water, according to a glaciologist research done by the University of Waterloo (Canada).” (Conflicts over water in Chile)

Antofagasta’s Los Pelambres project included one of the largest tailings dams in the world – El Mauro – creating a David and Goliath battle between Antofagasta and the community; a battle over clean water.

“Organizers explained that the primary danger to their community is water contamination resulting from the El Mauro tailings dam constructed by the wealthy Luksic Group [Antofagasta] … The mining waste stored in the dam is reportedly seeping out and contaminating the ground water … rendering it unsafe for both drinking water and irrigation purposes.” … “Although the tailings dam meets Chile’s standards for construction, it falls far short of meeting internationally accepted environmental protections … The dam was not properly sealed … was constructed of sand instead of hard concrete, thus making it a major accident and flood risk in the event of an earthquake” (Santiago Times)

Community organizers also felt media silence spoke volumes. The Luksic Group wields enormous power with controlling interest in Channel 13 (arguably Chile’s most influential television station), control of area news outlets, and ownership of Chile’s largest bank.

“Having exhausted all administrative options, the community and farm owners were forced to start the “judicialization” of the conflict, which after almost 10 years was won by the farmers, whose rights were recognized by the Courts and the company [Antofagasta] was ordered to demolish the structures and return the water. But … the dam was already built and the company had destroyed and closed down the spring which fed the Caimanes village and the Pupio Valley … “(Conflicts over water in Chile) The decision had come too late. Antofagasta got its way – and its dam.

“The Chilean miner [Antofagasta] has said on numerous occasions that it is the victim of judicial harassment on the El Mauro issue.” (Business News Americas)

A community demonstrator referring to El Mauro said, “Since then we have to endure the intrusion of a company [Antofagasta] that has been looking to divide us in order to silence our voices and not be responsible for the loss of our quality of life, our environment, our resources.” (Mines and Communities)  

Antofagasta is responsible for the Los Pelambres mine. Antofagasta has long had the financial means and access to any mining methods it chose. If Antofagasta did not care in Chile, what would make it care in Minnesota? Our regulations?

Regulations protect us only if strong, adhered to, and enforced

Minnesotans recently saw our regulations emasculated by lawmakers and agencies. The Department of Natural Resources allowed the Lutsen Ski Resort water usage from the Poplar River, despite the fact that additional mega-million-gallon water withdrawals were illegal for years. In 2011, the Minnesota Legislature passed a law essentially making it legal for the resort to continue breaking the law.  

In 2011: The Minnesota Pollution Control Agency (MPCA) allowed MinnTac to increase its illegal toxic emissions, despite the fact that the taconite plant could not even meet existing air quality regulations. The Minnesota Legislature, aiding and abetting industry unable to meet our sulfate water standard (notably mining), passed legislation designed to weaken the standard; despite the fact that our waters already have severe mercury impairment in which sulfates play a major role. Legislation was passed into law to “streamline” environmental review; despite the fact that the more ability there is to research and review, the less ability corporations have to mislead the public with false rhetoric and our agencies with skewed or incorrect information. “Streamlining environmental review” is the sanitized version of “greasing the wheels for industry.”

Nationally in 2011, Minnesota’s representatives passed legislation designed to curtail the Environmental Protection Agency’s ability to protect the public from air and water contaminants – carried out in the name of corporative avarice disguised by the “jobs, jobs, jobs” propaganda mantra. Why do our legislators demand we pay for jobs with our health?

In 2003, National Geographic published a piece highlighting northern Chile, in which mining union president Mirta Moreno was interviewed. The writer’s question to Moreno, ”But I’ve heard that the wages are the highest in Chile,” triggered this response: “They may pay us with cash, but we pay with our lives. Practically none of our retirees have reached retirement age. They all leave after an accident or because of poor health. They don’t get old, they go home to die.”

Minnesotans still do not have answers to mesothelioma, after disclosure of a cover-up or “mistake” by the Minnesota Health Department (under then Governor Pawlenty) in 2007 finally led to studies of the taconite industry in 2008. Headline in 2011 read: Mesothelioma Death Toll Rising from Minnesota’s Taconite Mining Area

Chile or Minnesota, abuse of political power prevails

In 2010, the MPCA had the opportunity to allow a lawsuit to proceed with documented millions in fines for years of mining violations by Cliffs Erie. Those fines could have been used in an attempt to clean up decades of contamination at the LTV/PolyMet and Dunka mine sites. Instead the MPCA wrote a consent decree for $58,000 that protected the mining industry from the lawsuit – and essentially killed meaningful remediation.

In Chile, the situation sounds eerily like Minnesota. Concerning the Choapa River Basin: “These toxic spills legally contravene various existing health and environmental regulations in Chile. However, Chilean State´s actions against pollution in more than 140 kilometers of the Choapa River (from the mine site to the ocean) has generally been weak and favouring the mining sector.” (Conflicts over water in Chile)

Next door to the Antofagasta region in Chile’s Atacama region, where agriculture and mining vie for water, the situation is equally severe. Three years ago a Santiago News headline read, “Chile’s Region III May Be Waterless By 2012,” the article stated “… the real power lies in the hands of the mining companies, which are able to dominate water rights issues because of the financial clout they have.” Again eerily similar to Minnesota where corporations are calling the shots.

Minnesota’s waters are more precious than our metals

If Antofagasta and other mining corporations polluted waters in one of the driest areas on earth, what would sulfide mining do in our water rich lake country?

“For the sake of current and future generations we need to safeguard the purity and quantity of our water against irresponsible mineral development. We need to ensure the best pollution prevention strategies are employed in cases where the risks can be managed. We also need to recognize that in some places mining should not be allowed to proceed because the identified risks to other resources, such as water, are too great.” (Safe Drinking Water Foundation)

Minnesota is one of those “some places.” We just need to recognize it.