Mining TNCs wouldn’t succeed in plundering natural resources without support from national governments

Carol P Araullo delivering her speech

Excerpts from the keynote address at the International People’s Mining Conference by Dr Carol P Araullo, chairperson, New Patriotic Alliance or Bagong Alyansang Makabayan (BAYAN), Philippines, at Quezon City, on July 30, 2015:  

The Philippines serves as a microcosm of how globalization or neoliberal policies on mining lead to massive landgrabbing, rapid depletion of natural resources, devastation of the environment, wholesale displacement of communities, intensified militarization and grievous human rights violations.

Last July 17, the biggest coal mine in the Philippines had a mine accident killing 9 miners. In 2013, 5 mine workers  suffered the same fate in the same mine. The company is owned by DMConsunji Inc (DMCI) which also operates a nickel mine. Bothmines have a blackened record of serious violations of laws protecting the environment resulting in toxic contamination of water resources and degradation of marine ecosystems in their areas of operation.  Despite these violations and the “accidents” claiming miners’ lives, the PH government has allowed DMCI to continue its  operations except for short periods when perfunctory investigation into the cause of accidents are carried out.

These are the same violations and other worse crimes that mining communities in different countries have seen.  In South Africa, 34 striking mine workers were killed and 78 others were injured when they were fired upon by police and security forces of UK-owned Lonmin mining company in August 2012. A study published in the “Journal of Community Health” (July 2011) recorded 60,000 additional cases of cancer among the 1.2million people living in areas adjoining the sites of open pit mining in central Appalachian communities of the eastern United States.

In Papua New Guinea, BHP Billiton’s open-pit Ok Tedi Mine has caused massive environmental degradation and pollution of the Ok Tedi and Fly rivers and their adjacent ecosystems.  This wasdue to the irresponsible and deliberate discharge of two billion tons of mine wastes from 1984-2013. In West Papua, Indonesia, mining giants Rio Tinto and Freeport-McMoran are reported to have initially poured in $35 million for military infrastructure and vehicles and paid at least $20 million to state securityforces from 1998 to 2004 to quell opposition against its Grasberg Mine, the world’s largest gold mine.

In China, coal miners are one of the most exploited and have one of the worst working conditions. There wasa total of 589 accidents and 1,049 deaths in the coal mining industry in 2013 alone.  In 2011 and 2012, 3,357 mine workers were killed in mine accidents  according to the China Labour Bulletin (CLB).

Over the last decade, more than 560 million acres (227 million hectares) in Africa, Latin America and Southeast Asia, previously dedicated to food production, are now being used for biofuel production and mineral extraction. Whether you are from resource-rich but economically poor countries in Asia, Africa or Latin America, the stories are the same: large-scale mining projects of transnational mining companies or mining TNCs daily violate Mother Nature, plunder the country’s natural resources and cause untold human suffering.

Large-scale mining companies and their financiers’ thirst for more gargantuan profits is unquenchable. They need to grab more lands for extraction and they need to produce minerals in the cheapest way possible. They continue to search for places where they can wantonly deplete resources using cheap and docile labor.  Without this, the global mining industry, beset by chronic crisis, cannot sustain itself.

Neoliberalization of the mining industry

Their solution is the application of neoliberal policies to the mining industry. A liberalized industry ensures  that foreign corporations have the same rights as domestic ones in exploiting the natural resources in a specific country. Privatization ensures that the private sector (read: transnational corporations and local partners) controls the mining industry while deregulation eliminates state interventionor reduces it to the minimum.

In the 1990s, more than 80 countries changed their mining regimes upon the lobby of foreign giant mining corporations and the dictates of international financial institutions (IFIs) like the International Monetary Fund (IMF), World Bank (WB) and the World Trade Organizations (WTO). Neoliberal mining policies allowed the privatization of state-owned mining firms. These institutionalized the free flow of foreign investments to local mining allowing full foreign ownership of mining corporations and lands in the host country. Capital control and other forms of regulation were lifted; generous tax breaks, granted; andlegitimation and legalization of measures to quell local opposition to mining activities, provided.

Local mineral production was further oriented to and dictated by the international market and not by the particular needs of each country. This means being held hostage to the vagaries of international trading wherein metal prices rise and fall based on the dictates ofa few mining giants, their financiers and the IFIs.

One example is Peru. In Mining Mountains, Jeffrey Bury recounts that in 1991 the Peruvian government opened the mining industry to foreign investment along with lifting restrictions on land ownership, remittances of profits, dividends, and royalties, access to domestic credit, and capital importation. In addition the government offered foreign investors tax-stability packages for a ten to fifteen-yearduration and implemented wide-ranging privatization programs that eliminated competition from state-owned and domestic firms.

In a short period of time, Peru’s mining industry became dominated by foreign and private corporations and tied to the international market. Between 1992 and 2000 more than 200 state-owned mining operations were privatized. In 1999, private corporations accounted for 95% of mineral production, up from 55% in 1990, less than ten years previous.  Pedictably, 10 foreign mining corporations are among Peru’s Top 100 corporations.

Mining TNCs clearly cannot get away with their plundering ways if national governments do not follow neoliberal prescriptions and policies. In order to land grab millions of hectares of lands, extract millions of tons of minerals, destroy the natural landscape and further impoverish the people, mining TNCs need to be backed up by governments, and through armed means, if need be, via police and military forces.

In the Philippines, the ongoing liberalization of the mining industry has contributed to the worsening of the pre-industrial and backward economy of the country. The extraction of mineral resources for export has resulted not only to environmental devastation but greater poverty and inequality. From 1995-2014, 19 major mining disasters and contamination incidents were recorded.  From 2001-2015, 82 environmental activists mostly anti-mining activists were victims of extrajudicial killings.

Mining crisis

The global mining industry has been facing worsening crisis since the start of the decade. The oversupply of mineral products and decreasing prices has brought about a drastic drop in profits. Commodity prices continued to suffer hefty blows, with iron ore, coal, and copper prices falling 50%, 26% and 11%, respectively. This decline continued in the first four months of 2015, as the price of iron ore, coal, and copper fell even further.

How then can we explain why there is a crisis in the global mining industry when there is a surplus of mineral products that can be extracted at lower cost?It only means that when there is a production surplus versus lowered demand, the price of the mineral products become too cheap.  This then constitutes a serious problem for the capitalists, i.e. the mining TNCs.  They must continue to find ways tofurther lower production costs, increase the demand and raise the price of mineral products in order to sustain if not increase their profit.

To do so, the mining TNCs demand lower taxes and government royalty shares along withmore lax environmental laws and overall regulatory environment.  They insist on lower wages and benefits for mine workers, more job insecurity and lower occupational safety standards. To manipulate supply, they can even resort to delaying their projects or shuttingdown some of their mines.

Nonetheless, mining companies continue to develop their production technology and processes in order to remain competitive.  They even boast of utilizing such advances to paper over the constant threats to workers’ lives and health and to the environment inherent in the industry.

The massacre of mine workers’ jobs was intensely felt after the 2008 global financial crisis. Accordng tothe global mineworkers federation, ICEM, in 2010,”from Russia to Chile, at Europe’s largest zinc deposits in Ireland’s County Meath, where 670 were retrenched by Tara Mines, to the hundreds of thousands of migrant miners across the world who are out of work with no place to go, it is workers who are paying the unjust price of capital’s failure” [ICEM, Brussels, 12 January 2010].

As mining TNCs ramp up their production to increase their sales volumeand recover from the downturn in metal prices, mining TNCs become more reckless in their production processes often violating safety standards for  their workers, affected communities and the environment.

As to the demand for minerals in the global market, mining TNCs and their financiers are increasingly engaged in speculation in the commodity futures market.  According to IBON Foundation, “The global mining industry, just like the major drivers of monopoly capitalism, relies on fictitious capital to surmount the crisis…” It simply means that current demand and value of minerals are not based on actual products produced but on speculation and are thus fictitious and unreliable.

This month, The Guardian reported that in China,iron ore prices have plunged to a six-year low as the commodity gets caught up in the fallout from China’s massive sharemarket plunge, with steel now reportedly cheaper per tonne than cabbage. At this price level, mining companies in Australia will operate at a loss while some iron ores mines in China have already closed.

In 2000, the global mining industry had identified China as the world’s most vital single market for its ferrous and nonferrous metals  and fossil fuels. This remains to be the case as China accounts for 40%-50% of global commodity demand. More recently, China has itself become the leading producer and consumer of gold, copper, iron, and coal.

According to PwC, prices decreased by 6% in 2014 due to the combination of additional supply and weaker demand growth, primarily from China. The impact on the sector has led to a drop in revenues for the Top 40, from $728 billion in 2013 to $690 billion in 2014.

People’s resistance and the anti-mining movement

As the crisis of the global mining industry intensifies, how will the social movements for workers’ rights, environmental protection, indigenous people’s rights to their land,for asserting the rights and welfare of mining communities and for upholding human rights in general confront the situation and struggle to prevail against the odds? How will people’s movements for economic sovereignty, food security and development justice square with the plunderers, despoilers and their powerful protectors in the international, national and local levels?

We can look to our own experiences and derive lessons from our struggles, both our victories and defeats.  For despite the increasingly exploitative and ever more repressive thrust of the global mining industry, people’s resistance  continues to gather strength particularly among indigenous peoples and among the peasantry and other rural poor communities.

In the Philippines, the 4th biggest global mining company Anglo-Swiss Glencore has started to pull out from the long-delayed $5.6 billion Tampakan Gold Mining project. (Tampakan in South Cotobato is the largest undeveloped copper and gold deposit in South East Asia.) This decision was primarily drivenby the strong resistance of the affected communities that employedvarious means including armed defense to protect their lands and the surrounding environment. In 2010 the South Cotabato local government enacted a Provincial Environmental Code which banned open pit mining in the Province.

In India, British resource giant Vedanta and its partner Orissa Mining failed to convince tribal people of the Dongria Kondh villages in the state of Odisha to allow their bauxite mining. Though the government gave the go signal to South Korean-owned POSCO’s USD $12 billion coal mine project in Odisha, it has been delayed for the past eight years because of strong community resistance.

Prafulla  Samantra, a prominent social activist in Odisha, shared an inspiring account. He said that from 2006-2009 environmental clearance was given to 120 mining projects in Jharkhand and Odisha, India. These mineral-rich areas are home to the poorest of the poor, mostly Adivasis and Dalits. The state has launched a brutal campaign of repression against all the democratic movements that oppose handing over the land, water and forests to profit-hungry corporations. But the peasants, workers and Adivasis of Odisha have refused to buckle under state pressure; they have put up stiff resistance to corporate plunder and forcible eviction all over the state. Niyamgiri, Jagatsinghpur and Kalinga Nagar have become advanced outposts of anti-imperialist resistance, which inspire all the progressive and democratic forces fighting neoliberalism in India.

In West Papua, Indonesia, Papuans continue to oppose the mining operations of Freeport Macmoran, for decades. The mining concession is the most militarized area in Indonesia, causing human rights violations and environmental destruction in one of the most biodiverse places on earth. Their struggle against the landgrabbing and plunder of Freeport Macmoran is interlinked with their struggle for national liberation.

China Labor Bulletin  has documented 235 incidents of strikes or worker protests in the second quarter of 2014. This represents a 49% hike over the same period last year. In the first half of 2014, CLB monitored 7 big strikes and actions which were participated in by thousands of coal mine workers in different regions across China.

In 2010, the Costa Rica Congress legislated the banning of all future open-pit metal mining in their country and in 2013, Costa Rica’s highest court upheld the ban. It makes Costa Rica the first country in Latin America to say no to future open pit mines.

In El Salvador, the government stopped granting gold mining permits since 2008 to preserve its water resources. It revoked the mining permit of Australian- Canadian owned mining company OceanaGold-Pacific Rim. In 2009 the mining company filed a lawsuitwith the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) against the El Salvador government asking US$301 million damages. But this did not deter the national government and the El Savador people as they standfirm in their opposition to gold mining in their country.Still, thepending case in El Salvador provides a previewas to what can be expected if controversial trade deals like the Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) go through.

There are so many more heroic struggles of indigenous peoples, peasants, mine workers, environmentalists, human rights advocates and church people in Africa, America, Asia and Europe but their message is the same: Mining TNCs cannot plunder the common resources as before;  the people are rising, steadfast intheir struggles and fast gaining ground.

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