Canadian mining in Latin America and the Caribbean began in the late 20th century. Latin America and the Caribbean's vast resources give the region great geopolitical importance, attracting foreign interest for centuries. The Canadian mining industry is the largest in the world, operating as an important driver for global capital accumulation. Up to 70% of all mining in Latin America involves a Canadian transnational corporation. From the colonial race of European empires, to the multinationals of today's neoliberal capitalist world, this region continues to draw interest. Canada's involvement in Latin America increased dramatically since 1989 with several landmark negotiations and agreements. From 1989 to 2001, of the top 20 mineral exploration investors in Latin America, seven were Canadian companies. By 2009, the Canadian larger-company mineral exploration market in this region was valued at US$1.7 billion.
Currently, Latin America and the Caribbean are dominated by Canadian companies falling from a 49% to 32% held control over the larger-company mineral exploration market after the global recession of 2008. The Canadian share of the market is roughly US$59 million more than the amount domestic companies planned to spend in this region. Both Mexico and Chile have the most intense focus of Canadian mining companies; however, their interest and involvement in other Latin American countries is prevalent.
History of gold mining in Latin America Canadian mining began in the early 1960s. The establishment of the mine of El Indio in Chile in 1979 ushered a wave of mineral exploration in the Chilean high Andes led by Canadian mining companies in the early 1980s. From 1978 to 1987, the Vancouver exchanges capital trading increased over tenfold, from CAD 600 million to CAD 6.6 billion. Gold mining continued to explode through the 1990s, as Canadian capital industry exploration expenditures covered over 50% of all exploration in Latin America during the 1990s. Headed into the 2000s Canadian companies began to narrow in on precious metal mining, and 86 out of 92 mines in operation are gold, silver, or gold and silver. In pursuit of gold so disseminated that it is invisible, open pit cyanide heap-leach mining became standard practice. In the early 1980s Vancouver was named the heap-leaching capitol of the world. Due to the short life of an open pit mine, 8–15 years, once production began at one mine, another location and project had to already be in development.
Open pit cyanide heap-leach mining was developed in the late 19th century in Scotland. The Bureau of Mines proposed it in 1969 as a method to recover gold from low grade ore. Open pits are created through blasting and crane shovels, with some pit spanning across and over deep. Ore is piled into heaps and cyanide solution is sprayed over the heap, trickling down through the ore and bonding with precious metals. The solution is then stripped for the precious mineral, and the process repeats. Cyanide is a compound composed of carbon and nitrogen, and while extremely efficient, creates large quantities of waste and is extremely toxic. A teaspoon of a 2% cyanide solution can kill a human.
Negotiations and agreements in Latin America
Central America and the Caribbean
Free Trade Agreements (FTAs) Canada-Panama Free Trade Agreement Signed: 14 May 2010; In effect: 1 April 2013. This agreement eliminated 90% goods from Canada to be tariffed into Panama and ends the ban on beef from Canada, with the remaining 10% being phased out over ten years. Canada removes 99% of tariffs on goods from Panama, besides sugar, eggs, dairy, and poultry.Canada–Panama Free Trade Agreement Canada – Costa Rica Free Trade Agreement Signed: 23 April 2001. In effect: 1 November 2002. 87% of all tariffs on agricultural products (with the exception of dairy, poultry, beef, and eggs) removed over a 7-14 year period or immediately, as well as on automotive and some goods.Canada–Costa Rica Free Trade Agreement
Ongoing FTA negotiations Canada – Caribbean Community Free Trade Negotiations (CARICOM) Canada – Central America Four (CA4) Canada – Dominican Republic Free Trade Agreement Negotiations Canada – Honduras Free Trade Negotiations Free Trade Area of the Americas (FTAA) Negotiations to Modernize the Canada-Costa Rica Free Trade Agreement
Foreign Investment Promotion and Protection (FIPAs) Canada – Costa Rica Foreign Investment Promotion and Protection (FIPA) Date: 29 September 1999 Canada – El Salvador Foreign Investment Promotion and Protection (FIPA) Date: 31 May 1999 Canada – Panama Foreign Investment Promotion and Protection (FIPA) Date: 13 February 1998 Canada – Barbados Foreign Investment Promotion and Protection (FIPA) Date: 17 January 1997 Canada – Trinidad and Tobago Foreign Investment Promotion and Protection (FIPA) Date: 8 July 1996
Other types of agreements and initiatives Central America Memorandum of Understanding on Trade and Investment (MOUTI) Date: 18 March 1998
South America (with Andean Community)
Free Trade Agreements (FTAs) Canada – Colombia Free Trade Agreement Date: 15 August 2011 Canada – Peru Free Trade Agreement Date: 1 August 2009 Canada – Chile Free Trade Agreement Date: 5 July 1997
Ongoing FTA negotiations Canada – Andean Community Countries Free Trade Discussions Free Trade Area of the Americas (FTAA)
Foreign Investment Promotion and Protection (FIPAs) Canada – Peru Foreign Investment Promotion and Protection (FIPA) Date: 20 June 2007 Canada – Uruguay Foreign Investment Promotion and Protection (FIPA) Date: 2 June 1999 Canada – Venezuela Foreign Investment Promotion and Protection (FIPA) Date: 28 January 1998 Canada – Ecuador Foreign Investment Promotion and Protection (FIPA) Date: 6 June 1997 Canada – Argentina Foreign Investment Promotion and Protection (FIPA) Date: 29 April 1993
Other types of agreements and initiatives Andean Community Trade and Investment Cooperation Arrangement (TICA) Date: 31 May 1999 Southern Cone Common Market (MERCOSUR) Trade and Investment Cooperation Arrangements (TICA) Date: 16 June 1998
Neo-liberal capitalism The Canadian governments involvement and the penetration of Canadian capital in the region reflected the neoliberal movement of the 1980s and 1990s. Much of the Latin American economy was dominated by World Bank and IMF forced policies during the debt crisis of the early 1980s. The late 1990s began a shift in political thought in the region moving towards support for more populist, left and centre-left governments, particularly by peasants. Mercosur, an economic agreement between Argentina, Brazil, Paraguay and Uruguay along with associate members Chile and Bolivia in 1994 want to improve development through protecting the free movement of goods between these countries. Socially, there was a demand to reclaim sovereignty over the natural resources privatized within Latin America. The goal became to restore the profitability of these natural resources by restructuring capital and trade relations.
Such policies as establishing a common external tariff and a common trade policy promote an infant industry argument. The relaunching of Mercosur in the mid-2000s can be seen as a new form of regionalist governance in the Southern Cone. Canada has become at the centre of this conflict and has received much criticism by anti-imperialist struggles protesting for local control over privatized natural resources.
Foreign aid policy shift Recently, with the Conservative government of Canada, a dramatic shift in foreign aid has occurred towards middle-income countries in Latin America, causing the abandonment of many projects in Africa. Once again, the Conservative government has come under scrutiny for its Foreign Aid Policy as the Canadian International Development Agency has established foreign-aid pilot projects in South America with large mining corporations, to foster economic growth and international trade in Canada. Since the Conservatives came to power in 2006, over $50 million in projects have been approved and many more are under way. NGOs and mining industry critics have been accusing the Conservative government for subsidizing phony "corporate social responsibility" projects that are led by profitable companies with bad intentions. Jamie Kneen of MiningWatch Canada said that "the government is helping the mining industry to put a positive spin on their operations, despite their negative environmental and human-rights records". In contrast, the president of the Canadian Mining Association Pierre Gratton believes "these projects help improve the image of the industry ... because they are meaningful and have value. This is not just PR."
Cultural, health and environmental concerns
Cultural concerns The expansion of Canadian mining companies in Latin America and the Caribbean during the 1990s was never paralleled with official Canadian legislation on standards abroad, which has caused much debate on socio-economic change and conflict to numerous rural and indigenous communities. Social conflict breeds the risk of violence, and over 40% of conflicts in Peru stem from environmental contentions, with the most violent being related to transnational extractive processes of resources like gold. Increased social disorganization with violent protests, criminal activities and even deaths and group rape have been suspected to be caused by the involvement of some Canadian mining companies. Increased assassinations of activists have shown the political conflicts and related corruption as divisions between anti and pro-mining groups escalate.
Violence is used by local communities as a way of protest against the actions of the mine. Once a mining project receives its licensure, they are able to explore remote areas and communities, and oftentimes authorities in the region and local communities are not giving the government support to negotiate with these corporations or preserve their own livelihoods. Foreign investment in mining is a continually increasing in form of conflict within indigenous and impoverished communities, who are often the groups affected by extractive processes.
Traditional production methods are often destroyed, and in regions such as Chile, areas with mining activities have the greatest unemployment and poverty rates in the country. Colombian gold mining trends show that when there is an increase in jobs available to the local community, there are higher rates of child labor and lower rates of school attendance. This is an example of an important concept of extractive industries; the curse of natural resources. This concept is an economic construct that postulates that countries rich in oil or minerals are doomed to poor economic environments. Some suggest that resources also innately hinder standards of living and economic performance. Resource extraction creates a trade balance incredibly dependent on the exportation of goods, so the entire economy and livelihood of the country is at the hands of international valuation of the resource. Oftentimes during resource booms, like in the case of Colombia, the economic gain is allocated to expand domestic consumption. Little of the financial gain is used for investment into public interest and infrastructures that prioritize social needs of the country.