News  Mexico rules Canadian mine illegal

Contentious pit mine company’s permits found fraudulent

September 24 marked an historic victory against environmentally and socially damaging mining practices by Canadian companies. The Mexican Federal Tribunal of Fiscal and Administrative Justice ruled that the Canadian-owned mine occupying the valley of San Luis Potosi, Mexico, has been operating on an illegal permit. The open-pit gold and silver mine, near the community of Cerro de San Pedro, is operated by New Gold, a British Columbia-based company that has faced opposition to its operations in the area ever since beginning its project there in 1998.

Enrique Rivera – a lawyer, activist, and political refugee who sought asylum in Montreal after he faced violent attacks for his involvement in the legal conflict – spoke about the mine Tuesday in a discussion on Canadian mining practices in a panel discussion as part of McGill’s 2009 Culture Shock event. According to Rivera, at the time of New Gold’s arrival at the site, a decree had been passed by the state government declaring the area around Cerro de San Pedro and the mountain where the mine is located as an environmentally protected area. The government, he said, hoped to protect the numerous forms of wildlife that can only be found in the region.

“Part of the decree stipulates that no form of industrial development can take place in that zone,” said Rivera through a translator.

There is also concern that New Gold’s leach pad – the construct where gold is separated from other materials using chemicals such as cyanide – is inhibiting the replenishment of the aquifer within the valley, which is home to 1.3-million people. Rivera said that the membrane stopping the seepage of chemical and gold into the earth is also stopping fresh water from reaching the aquifer.

Rick Killam, Director Environment and Social Impact of New Gold, asserted that the company carefully regulates the quality of water in the area. “There was extensive investigation done on the aquifer since 1990…. There’s no change in the quality of water in any of those wells,” claimed Killam.

The decision made at the end of September not only declared the operation of the mine to be in violation of Mexican law, but also made clear the illegality of the current permit under which New Gold is operating.

In 2005, the Mexican courts declared the land-use permit originally issued to the company in 1999 to be illegal. But following management changes within the company, the mine continued operation under a new permit, which has now been deemed illegal.

Professor Daviken Studnicki-Gizbert, who has been working on this issue since 2001, said that the struggle against this mine project should have ended years ago. “There was a final decision,” said Studnicki-Gizbert in reference to the 2005 decision, which, he said, stated that “under no conditions can a permit be admitted for this project. There are too many violations.”

The history of this mine at San Luis Potosi dates back to its discovery by Spain in the 16th century. After passing from Spanish to Mexican control in the early 1800s, the mines at Potosi changed hands between multiple companies, both foreign and domestic, before coming under the full control of New Gold in 1997.

The first appearance of a formal resistance movement came in 1996 with the formation of a group now known as the Frente Amplio Opositor, or the Broad Coalition against the Minera San Xavier. However, the former mayor of Cerro de San Pedro was assassinated two days after proposing opposition to the project in 1998.

New Gold declined to comment on the Tribunal ruling of September 24, citing that the information of the event came from a non-governmental organization, and the company is unaware of any recent legal decisions involving their operations at Cerro de San Pedro.

Comments of Vice President Investor Relations Melanie Hennessey echoed the sentiments of the company’s press release, addressing what she saw as recent misinformation about the company.

“All permits, licenses, concessions, or authorizations that are required to operate its Cerro San Pedro Mine are valid and in force,” said Hennessey.

A petition encouraging the Mexican government to follow through on the ruling is currently circulating. To sign it, send an email saying “ok” or “sign me up” to