New wrinkle in battle over mining in El Salvador?

El Salvador and Canadian mining firm Pacific Rim are in a high-profile arbitration over permitting. What does the company's sale to an Australian firm mean for the Salvadoran mining sector?

• A version of this post ran on the author's blog. The views expressed are the author's own.

The Canadian gold mining company Pacific Rim announced on Oct. 8 that it had signed an agreement to be acquired by OceanaGold Corp., an Australian mining firm. The acquisition price reflects a premium of approximately 50 percent above where Pacific Rim shares had been trading.
 
Pacific Rim currently has a high profile international arbitration pending against the government of El Salvador relating to the government's refusal to issue a permit to allow the mining company to begin operations.  Apparently OceanaGold feels that the arbitration case, or the possibility of a negotiated resolution, is strong enough to warrant the investment in Pacific Rim.

 According to the press release announcing the deal:

Mick Wilkes, Managing Director and CEO of OceanaGold commented, "We believe this transaction will provide OceanaGold shareholders with potential exposure to a high grade gold-silver resource located in a very prospective region. This project has the potential to be an economic engine for El Salvador much like how our recently commissioned world-class Didipio Mine has been for northern Luzon in the Philippines. This transaction aligns well with our strategy to create value through investment in high quality, low cost assets and utilising the OceanaGold's experience in building and operating gold mines in an environmentally and socially sustainable manner. El Dorado further complements our high grade gold-copper Didipio Mine in the Philippines and we will look to replicate the successes we've achieved in New Zealand and the Philippines in El Salvador. OceanaGold looks forward to working with our local community and government partners in establishing a roadmap to unlock the opportunity at El Dorado for El Salvador." 

The international arbitration likely won't conclude until the second half of 2014, after a new president takes office.  The current de facto ban on mining began under Tony Saca when he was president and has continued during the presidency of Mauricio Funes. [Mr. Saca is running for president in the February 2014 election with the newly created Unity party].

OceanaGold operates mines in Australia and New Zealand and has one mine in a developing country, its Didipio mine in the Philippines.  That mine has run into protests from groups claiming that OceanaGold has not respected the rights of local indigenous communities. An article titled Destroying Didipio, sets out the conflict between OceanaGold and local people affected by the mine.     

 Tim Muth covers the news and politics of El Salvador on his blog.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.