OTTAWA, ONTARIO--(Marketwire - June 22, 2012) - Community leaders in Ecuador welcomed the announcement that Canadian mining company IAMGOLD is selling its Quimsacocha project, located near the city of Cuenca in south-central Ecuador.
Toronto-based junior mining company, INV Metals, announced Thursday that it has reached a deal to acquire IAMGOLD's Ecuadorian subsidiary. According to the company news release, IAMGOLD will become a 40 to 45% shareholder in INV Metals with the opportunity to increase its stake should INV obtain an exploitation contract with the Ecuadorian government.
The Northamerican financial press cited economic reasons for IAMGOLD's step back. They failed to mention another important reason why the company has not advanced the project - eight years of sustained opposition from local rural communities.
"Regardless of the economic terms that the Ecuadorian government proposed for large scale mining projects in our country, IAMGOLD's problems at the community level are much more serious," said Carlos Pérez, President of the Union of Community Water Systems of the province of Azuay.
"This company has not obtained the consent of affected communities to carry out this project, because we recognize that our sources of water are going to be irreparably affected if mining takes place in this area," said the indigenous leader. In October 2011, water users in the communities of Victoria del Portete and Tarqui participated in a local plebiscite in which 92% voted against mining in the area of Quimsacocha. Future plebiscites in nearby communities are anticipated.
The Quimsacocha project is located in a protected area and in high altitude wetlands, known as páramo, which is such a highly fragile ecosystem that should not be subjected to mining according to the Consortium for the Sustainable Development of the Andean Eco-region (CONDESAN).
"A week ago, during a rural parish assembly, the communities of Victoria del Portete voted unanimously against receiving future mining royalties because instead of fostering development in our communities we have determined that mining will undermine our agricultural activities and dairy production," commented the Rural Parish President of Victoria del Portete, Federico Guzmán.
"We cannot put at risk sources of water that can sustain us over the longterm in exchange for a few short term economic benefits. The costs and benefits just don't add up," concluded the engineer and elected representative.
In 2008, Ecuador's National Constituent Assembly passed a mining decree that suspended all large scale mining in the country. With the passing of the decree, the communities of Victoria del Portete and Tarqui anticipated that the national government would revoke the mining concessions belonging to IAMGOLD and other companies operating in the area of Quimsacocha for lack of prior consultation with the communities and overlap with protected areas and water supplies. Faced with a strong lobby from the Canadian Embassy that facilitated high level meetings for a group of Canadian mining companies, however, the Ecuadorian government backed down on its commitments under the decree.
"The fact that our national authorities have not fulfilled their promises to ensure the protection of our water supplies and our communities, does not mean that companies can do as they please," remarked Abel Arpi, representative of the Assembly of the Peoples of the South in Defense of Nature.
"This junior mining company, INV Metals, that is considering buying the Quimsacocha project would be better off saving its time and money because we are committed to protecting this entire area for future generations."
According to the announcement yesterday, IAMGOLD is selling its Ecuadorian subsidiary, IAMGOLD Ecuador S.A., for $30 million CDN worth of shares in INV Metals.
Another Canadian company, Cornerstone Capital Resources, has mining concessions next to IAMGOLD's project and was recently targeted in a series of local protests by communities of the county of Santa Isabel, immediately south of the rural parishes of Victoria del Portete and Tarqui.