One of the beneficiaries is Hemco Nicaragua, a private company employing 900 people at its gold mines in the nation’s so-called Golden Triangle, formed by the villages of Siuna, Bonanza and Rosita.
“We’re using traditional leaching methods,” said Randall Martin, a U.S. mining engineer who is chairman of the company. “Cyanide has a very short lifespan. Mercury is a heavy metal and stays around forever.”
Like many foreign-owned mining companies, Hemco has put emphasis on investing in the communities where it operates, eager to foster good relations.
“We built a kindergarten. We built a computer lab for the community,” Martin said. “It’s about the only place in Nicaragua where everybody that comes out of high school has taken a computer course.”
Relations between foreign mining companies and local communities have been far from smooth in El Salvador and Guatemala, where battles pitting villagers against companies are portrayed as David vs. Goliath struggles.
The most notorious case involved Pacific Rim, a Canadian firm that later incorporated in Nevada. The company began exploring for gold in 2002, eventually filing a $77 million lawsuit in 2008 charging that El Salvador’s failure to issue it an environmental permit violated its rights as a foreign investor.
An activist against the Pacific Rim project was found slain with two gunshot wounds to the head in June 2011. He was the fourth mining activist murdered in the previous two years in El Salvador.
Mam-speaking Mayans living near Guatemala’s giant Marlin gold mine, one of the most productive in the hemisphere, say the Goldcorp mine has brought health, environmental and human rights woes. Acting on behalf of 18 villages around the mine, the Inter-American Commission on Human Rights asked in 2010 for Guatemala to suspend mine operations. Neither the state nor Goldcorp complied.
The profits splashing out of such mines have spurred some nonprofit activist groups to demand tougher terms for gold companies on long-term liability for environmental cleanup, community improvements and royalty payments.
“It is more complicated to open a restaurant than it is to get a gold mining concession,” said Agustin Bravo Gaxiola, a mining specialist at the Mexican Center for Environmental Law, an advocacy group.
“Mexican mining legislation is such that it would have been the envy of Queen Victoria under the British Empire,” he added.
Under President Felipe Calderon, Mexico has more than doubled the area of mineral concessions, often granting rights prior to consulting with indigenous people dwelling on the lands. In February, federal courts suspended one concession granted in San Luis Potosi after lawyers for Huichol Indians said it would desecrate a sacred site.
Whether social problems erupt near gold mines often depends on where they are. In Mexico’s arid north, few problems have been reported.
“Miners only move a few cacti,” said Ecclestone, the mining consultant. “They are not ravaging jungles and killing monkeys.”
In contrast, mining companies going into countries that were once torn by civil war face different and more severe challenges.
“In Guatemala, you’re working in post-conflict areas with indigenous communities. There’s a strong suspicion of outsiders coming in,” said Keith Slack, an adviser on oil and mining for Oxfam America, a humanitarian relief and development agency.
Whittall, the Newstrike chief, said his exploration company fosters good relations in communities where it works, viewing it as economic common sense.
“If you’re trying to sell a company . . . one of the highest and most important assets to have is a tranquil community that is onside with potential development,” he said.
Mining companies, he said, should hold to the precept that “you’re a guest in the country. It is not rocket science. It’s just being respectful.”