Mexican town curbs mine giant

A Canadian company wants to begin extracting gold and silver from a mountain in Cerro de San Pedro.

Marco Rangel hopes the blasts won't come. But he vows to stay put if they do.

Mr. Rangel was born in this semi-abandoned historic mining town located in the center of Mexico. Now he is joining environmentalists in a long battle against a Canadian company that plans to build an open-pit silver and gold mine that would decapitate the mountain that looms behind the town.

"I believe in development, but not in the name of complete environmental destruction," says Rangel, who runs a shop that sells crafts made by Huichol Indians.

Cerro de San Pedro has seen this all before. Five hundred years ago, Spanish conquistadors carved up the earth as they plundered the town's riches, sending most of the treasure back to Europe. Now Minera San Xavier (MSX), a subsidiary of Canada's Metallica Resources, wants to dig a crater 1,150 ft. deep and a half-mile wide to gain access to the 90,500 oz. of gold and 2.1 million oz. of silver the mountain could yield each year for the next decade. But this time the locals appear to be taming the outsiders, thanks to a savvy legal campaign and a new-found independence by the Mexican courts that was unheard of until recently.

"We're now seeing judges act independently, and this is a sign of democracy," says Alejandro Calvillo, director of Greenpeace Mexico, an environmental organization. Until Vicente Fox was elected president in 2000, one party ruled Mexico for 71 years. Authorities had a penchant for ramming through such projects without proper scrutiny or the consent of local populations, say environmentalists here.

Rare court victories

Earlier this year a group of nearly 20 environmental and civic groups charged Mexico's Ministry for Environment and Natural Resources, the country's equivalent of the Environmental Protection Agency, of illegally rubberstamping in 1999 MSX's environmental-impact report. They say MSX only vaguely outlined how it would restore the mountaintop, clean up the massive piles of bulldozed waste, protect rare plants and wildlife like the biznaga cactus and the desert tortoise, and safeguard the town's 16th-century structures.

Most troubling, say critics, was the company's unclear plan for the management and disposal of the toxins, including cyanide, that are used in gold mining. The ore-processing plant, where the toxins would be used, sits just 20 minutes from San Luis Potosí, the capital of the state and home to 670,000 people.

So far, the antimine coalition, known as Pro San Luis Ecológico, has scored rare wins in Mexico's top courts. In June a federal court sided with environmentalists in effectively nullifying MSX's environmental permit, which halted the company's work. MSX appealed the ruling and, in September, lost again. On Dec. 1, Pro San Luis Ecológico claimed its latest victory when an agrarian court defended its claim that MSX's lease excludes a group of landowners. The ruling freezes MSX's land rights.

MSX says that it has clarified its plans and is implementing the 100 changes suggested by a group of Mexican academics who studied the environmental-impact report. "We want to be a good corporation," says Richard Hall, president of Metallica Resources. "We are following the letter of the law and are committed to the highest levels of safety. We don't have any intent to hurt or destroy anything."

The coalition's court victories are rare in a country where nonprofit environmental lawyers are scarce and typically outmuscled by wealthy foreign companies able to round up large legal teams. Political pressure to push through such projects can also be intense. Officials say Mexico can't afford to turn off foreign companies and the taxes they pay, especially as competition grows with China and Central America. Many business leaders and officials, including the state governor and members of President Fox's cabinet say that MSX has cleared up any questions over how it would operate the mine and should go to work.

With a surge in gold prices - the metal currently trades for $440 an ounce, up about 40 percent since early 2002 - Mr. Hall and MSX executives want to move forward and are searching for a legal breakthrough that will allow MSX to begin excavation. Donald Hulse, head of MSX, expects the company to resume operations by mid-2005.

"Whatever we do, the activists still paint us as people who destroy towns and kick puppies. That's not true," says Mr. Hulse from inside his office trailer here. "Look around you. What would we do without metals and minerals?" he asks, noting the necessity for such things in most people's daily lives.

New housing or monthly stipend

If the project goes forward, some qualified residents would receive temporary housing a few miles from town. Other villagers could choose to stay here and receive a monthly payment ranging from about $220 to $350, the typical wage here, from MSX that could be used to strengthen their houses to protect them from the blasts.

MSX would add about 170 jobs to its existing staff of 34 to work on the mine. Hulse says that MSX will give hiring preference to people living near the mine, but it is not legally bound to do so. Most of the new jobs will require education and training that people from Cerro de San Pedro, population 150, often lack. Most of the local employees will probably come from San Luis Potosí.

Despite the campaign by the antimine coalition, some people here favor the project, like Antonia Alvarez, 72, who voluntarily hands out MSX company literature to weekend tourists. "Mining is part of this town's history, it's our economic legacy," she says.

Meanwhile, tourists strolling down Cerro de San Pedro's narrow cobblestone streets are baffled by the idea of mine. "We live downtown," said Lourdes Sánchez, who drove in from San Luis Potosí with her family. "It's chaotic there. This is where we can come for peace. I can't believe they'd allow for this mine. They'll take everything and leave nothing behind, just like the Spaniards."

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