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Unpredictable: the politics of mining

Tuesday, February 14, 2012

As commodity prices rise, and mining becomes economically more important in the region, Central American attitudes to the industry are often unpredictable.

In Costa Rica, the government of President Laura Chinchilla has opposed the Crucitas mine, property of Canada-based Infinito Gold Limited, which her predecessor, Oscar Arias, had declared to be in the national interest.

To the extent that the Chinchilla administration is more socialist than that of Arias, its approach can be seen as ideologically consistent.

The same could be said of Panama, which has an open-door policy with regard to the industry, despite demonstrations earlier this month against the Cobre mine, which resulted in the death of a protester.

The Cobre project, owned mainly by Canada’s Inmet Mining Corporation, is worth around $4 billion, and is supported by Panamanian president Ricardo Martinelli, a free-market capitalist, who became rich as the owner of a chain of supermarkets.

In other cases, it is often hard to understand why a government decides to allow or restrict mining.

In El Salvador, the socialist government of Mauricio Funes has suspended all mining operations.

But Funes is merely expanding the policy of the previous administration, led by right-winger Antonio Saca, which ordered the shutdown of a major mining project, owned by Canada-based Pacific Rim.

In Nicaragua, the former revolutionary Daniel Ortega declares himself to the ally of leftist icons, including Hugo Chávez and Fidel Castro, but El Comandante has welcomed investment by foreign mining and other resource companies.

The companies may be capitalist hyenas.

On the other hand, they annually inject tens of millions of dollars in royalties into a poor economy.