Mining

Mining camp attacked in Ecuador's Amazon region

The Ecuadoran government called the armed forces and police units into action after an incident occurred on 15 December, when an illegal armed group unexpectedly attacked a mining camp located on the Amazon region, which is currently being explored by Chinese company ExplorCobres (El Universo, 16 December 2016). The attack left a policeman dead and several wounded. Chinese International Relations Ministry Spokesman Geng Shuang commented that the incident is being monitored, and China is willing to work with Ecuador to take necessary measures to create a good environment for bilateral cooperation (El Diario). 

Crystallex sues PDVSA in US court over bond swap

Canadian mining company Crystallex sued state oil company Petróleos de Venezuela (PDVSA) at a federal court in Delaware on 31 October 2016 over the alleged fraudulent use of Citgo shares in a PDVSA debt swap (Panorama, 2 November). On 24 October, PDVSA issued a partial debt swap of its 2017 bonds for new 2020 bonds, backed by a 50.1 percent of shares in PDVSA's U.S. subsidiary Citgo. Both Crystallex and U.S. oil company ConocoPhillips, which filed a similar lawsuit on 6 October, allege the Venezuelan Government is attempting to block payments to the companies by using Citgo shares as collateral (La Patilla). In April 2016, a World Bank tribunal ordered the Venezuelan Government to pay Crystallex US$1.4 billion for a mining expropriation, and ConocoPhillips is expecting the same tribunal to rule on an expropriation by the Venezuelan government (Panorama).

Gold Reserve amends settlement agreement with Venezuelan government

Canadian mining firm Gold Reserve on 4 November 2016 agreed to reschedule the Venezuelan government's payment of US$770 million to the firm for a 2008 expropriation of its copper and gold mines. Under the new settlement agreement, the Venezuelan government must pay Gold Reserve US$300 million by 30 November 2016, US$470 million by 3 January 2017, US$50 million by 31 January 2017, US$100 million by February 2017, and US$90 million by June 2017 (Panorama). The parties also signed an agreement to create a joint venture to develop the gold and copper mines Las Brisas and Las Cristinas in southeastern Venezuela. The Venezuelan government will own 55 percent and Gold Reserve will own 45 percent of the joint venture, known as Siembra Minera S.A. (La Patilla).

Codelco to invest US$ 371 million to reduce arsenic in Chilean copper

On 31 October 2016, Chilean state owned copper mining company (Codelco) announced a US$ 371 million investment on a processing plant to reduce the levels of arsenic detected in its copper. The project will be led by Codelco's sister company, EcoMetales, and entails the building of a processing facility in Calama (Northern Chile) by 2020, with the capacity to process up to 200k tons of copper per year. Given the size of the required investment, EcoMetales is considering incorporating partners to help finance the project (La Tercera). The level of arsenic present in Chilean copper has become a significant problem for the industry, given the increasingly stricter environmental requirements for transport and processing on a global level (Tele13).

Vale’s Samarco operation to reopen in 2017

Vale expects Samarco, its now-infamous joint venture with BHP Billiton, will obtain the appropriate licenses to renew operations by early 2017. Vale’s HR, Sustainability, and Corporate Integrity Executive Director Clóvio Torres divulged on 18 October 2016 Vale’s plan to use the exhausted pits of Samarco and Vale to deposit rejected iron ore, giving the Samarco operation at least fifteen more years of viability (Valor). Brazilian Mines and Energy Minister Fernando Bezerra confirmed the renewal of operations in a session with Nippon Export and Investment Insurance (Nexi) in Tokyo, Japan (Folha). The joint venture, located close to Mariana, Minas Gerias, closed in November 2015 after its Fundão dam burst, releasing tons of toxic sludge into a tributary of the Rio Doce, the river that serves as the miner’s namesake (Companhia Vale do Rio Doce). The incident killed nineteen people, polluted the river, and forced Samarco to lay off almost 1,500 workers.