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Gold mining loses its luster

After a gold mining boom in Central America, activists push back.

The Marlin Mine located in western Guatemala opened in 2005 when the government was luring foreign investment in mining (this photo was taken Jan. 13, 2009). Years of controversy and demonstrations against mining have led the president to call for a moratorium while the government considers a new mining law. Across Central America, governments are rebuffing the industry, which just five years ago saw the region as a new frontier for mining. (Ezra Fieser/GlobalPost)

SANTA ANA, El Salvador — Crime is on the rise and the economy is tumbling in this small city. But when Antonio Rodriguez cast his ballot for a new president last month, the key issue was where the candidates stood on gold mining.

Rodriguez, 26, said he protested the El Dorado mine, even though it is proposed for a town that's a three-hour drive from Santa Ana. “I have cousins there and they will be the ones harmed,” he said. “Mining is about the people and the land. If you allow mining, you’re choosing corporations over the people and that’s what has caused other problems in El Salvador.”

In the end, leftist candidate Mauricio Funes — who says he opposes mining based on the damage it allegedly causes — won the election. El Salvador’s government has yet to issue permits for the El Dorado mine, more than two years after it was first proposed. The mine’s owner, Vancouver-based Pacific Rim Mining Corp., does not expect to receive them any time soon.

Across Central America, gold mining has become a divisive political issue. Drawing on environmental concerns, including the use of cyanide, anti-mining activists — led by outspoken Catholic bishops — have prodded governments to rebuff the industry.

In Guatemala, where a bishop received death threats and two anti-mining activists were killed in 2005, President Alvaro Colom has called for a six-month moratorium on mining permits while the congress considers a new law. The proposed law would tax as much as 4 percent of mine profits, up from 1 percent currently.

Costa Rica’s top environmental advisor, meanwhile, suggested a six-month stay on new permits. And in Honduras, where the archbishop accused a mine of destroying the local ecosystem, the government is not issuing new permits while it considers a new tax structure for gold mining.

The political changes — coupled with ongoing protests — are causing mining companies to pull out of the area, observers say.

“Concerns with the costs of mining have led to political barriers being created that have effectively slowed down the boom in gold mining that mining companies saw so palpably in front of them just a few years ago,” said Thomas Power, a University of Montana professor and author of a recent Oxfam report on gold mining in Central America.