OPEN LETTER TO INFINITO GOLD, MININGWATCH CANADA, COUNCIL OF CANADIANS,
AND THE GOVERNMENT OF COSTA RICA
REGARDING MINING DISPUTE
December 17, 2013
My views have not been solicited by any of you, but your dispute has spilled into the court of public opinion. The outcome may affect the future of gold mining companies like my own, so I am taking the liberty of entering the debate.
Appeal to Infinito Gold:
Like all gold mining companies, you are facing the challenge of a plunge in gold prices and are probably looking for ways to make up for losses. It is a tough environment for us all. You are seeking damages for lost investment in Costa Rica. It is your right to do so if you think the rules were arbitrarily changed. Your claim for $1 billion in damages based on lost potential profit– many times your actual investment – seems excessive, however. Profits depend on more than permission to mine. As you know, they depend on management of the mine, the high variation of the price of gold, availability of skilled workers and many other factors. While it is reasonable to seek recovery of lost investment if permission to mine was arbitrarily revoked, it seems unreasonable to seek compensation for lost future profits.
I agree with the assertion by environmentalists that the stance you are taking makes it harder for other companies to do business. Globally, gold mining is getting harder and harder in general. Unfortunately, most members of the public do not know that easily accessible gold has been mined. The average concentration of gold per ton keeps dropping and remaining large deposits increasingly are in remote and ecologically sensitive areas. Consequently, the interaction between miners and those who regulate mining is more complicated and requires diplomacy and negotiation more than a heavy hand.
Please moderate your claims by tying them to lost investment, not to lost potential profit.
Appeal to Environmentalists:
Your aims are noble, but the emphasis of your work needs to broaden if you are going to achieve your goals. You are fighting a mining company, but ultimately you are fighting demand for gold by individuals, almost assuredly including members of your organizations. Millions of wedding rings, necklaces, cell phones, and computers contain gold. Are you encouraging people to put as much gold back into the economy as they take out? In other words, to be net zero or better in their consumption by recycling electronics and selling jewelry they no longer use?
About 160,000 tons of gold have been mined through human history. Global demand is 4,000 tons per year but only about 1,400 tons are provided by recycling. If only 2.5% of gold above the ground was recycled, theoretically demand could be met without mining. At the very least, demand for mining would reduce and it could be met by mines operating with best practices.
Please ask signers of your petitions to also take responsibility for the pressure they create to mine sensitive areas.
It would also be good to call upon jewelry makers, electronics manufacturers and retailers to be aware of the sources of their gold much like efforts to improve sourcing of wood and diamonds.
Appeal to the Costa Rican Government:
The legal and political details of the disputed mine in Costa Rica are obviously complicated. In the interest of avoiding similar conflicts in the future, it would be helpful for you and all nations to apply policy consistently and clearly.
As a suggestion, many smart growth principles successfully applied to land development can be extended to gold mining. Establishing priority areas for mining, protected zones, fast track permitting for desirable projects, incentives for recovery of gold from previously mined areas, and tax relief on sales of gold mined with best practices are tools available to help you get the mining projects you want and to avoid the ones you don’t.
Please take steps to apply mining regulations consistently and proactively to avoid future conflicts.
As long as demand for gold exceeds the amount recycled, there will be gold mining. As a company active in this arena, we are striving to set a good example and we urge other companies to do the same. The goal is to meet demand with a minimum of conflict and impact.
We urge environmentalists to emphasize responsibility from mine to consumer. We also urge governments to consistently apply rules and to promote the kind of mining they want rather than just opposing the kind they do not want.
President, Green Leaf Gold, LLC