MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Molejón

Key Data

Company:Petaquilla Gold (Subsidiary of Vancouver-based Petaquilla Minerals) Operational status:Abandoned Materials extracted:gold Type of mine:open pit Main issues:indigenous rights, land rights, human rights, public health, biodiversity

Description

 

Synopsis: The Molejon Mine, owned by Petaquilla Gold, has come under fire for its poor environmental and social track records and has been at the center of protests by local campesino and indigenous Ngobe communities. The Molejon mine was abandoned in 2013, leaving many potential environmental hazards.

 

Petaquilla Gold’s Molejon mine, located within the MesoAmerican biological corridor, was once the only industrial-scale mine operating in Panama. This open-pit mine started operations in 2009 and achieved commercial production in January 2010.[i]

Petaquilla Gold has been widely criticized by members of surrounding communities for its failure to consult local community-members, water contamination, property destruction without compensation, and unfulfilled development projects. Community organizations have coordinated several protests over the last years, coming together with NGOs to form the Panamanian Network Against Mining (REDAP) on September 6, 2008.[ii] Environmental contamination and weak environmental regulation have been associated with the Molejon gold mine since its inception. In 2008, the National Environment Authority (ANAM) fined Petaquilla nearly $2 million for starting operations without an Environmental Impact Assessment (EIA), and for failing to comply with environmental regulations.[iii] ANAM found that environmental quality was severely degraded in the 169 ha mine site: 50 ha of trees had been clear-cut, with subsequent soil erosion, water contamination, and biodiversity loss. It is estimated that 100ha of rainforest have been destroyed by the Molejon project, undermining the integrity of the MesoAmerican Biological Cooridor.[iv] In 2008, the International Union for the Conservation of Nature called for a moratorium on open-pit mining projects in the MBC; this appeal has gone unheeded by the current Panamanian government.[v]

The risk of impoundment failure is high in the Donoso region, which lies in the Atlantic zone that can receives anywhere between 4500 and 8000 mm of rain per year. In 2010, the area experienced higher-than-average rainfall, and three communities reported sudden and massive fish and animal kills in local rivers[vi], suggesting that the walls holding mine tailings and cyanide solutions had been breached or over-topped.  Although Petaquilla denied the spill[vii], the ANAM investigated the incident and found that tailings impoundment walls were eroding and that there was evidence of sedimentation from the mine in the Molejon river. The ANAM also determined that the tailings vats contained levels of cyanide, mercury and other heavy metals above acceptable operating limits.[viii]

Local campesino and Indigenous Ngobe residents attribute a number of problems to the operation of the Molejon mine. Water contamination is a central concern: residents report an increase skin rash & lesions from consuming or coming into contact with contaminated river water.[ix] They also state that the mine has been responsible for destruction of personal property, forced eviction, an increase in local alcohol/drug consumption.[x] Observers have expressed concern over the growing social rifts created between community members who support and oppose the mine and the debates over whether the mine is more beneficial or more damaging to community well-being.[xi] Over the last decade, local campesino and indigenous communities have arranged protests and roadblocks to express their opposition to the project, with some protests occurring in the town of Penomone, some 40 kilometers away from the mine.[xii] There have been instances of violent police repression in response to the protests.[xiii]

The Molejon Gold mine has been abandoned by Petaquilla Gold since December 2013 when the company dissolved its Panamanian operations. The company faced local opposition to the project and had breached 28 provisions of its environmental impact study. Regulators in Canada also suspended the trading of shares in Petaquilla Gold, as it failed to release its financial report for 2013-2014.[xiv] In 2014, shortly after the mine had been abandoned, workers blockaded an intersection leading to the Molejon site. They demanded back-payment of social security transfers, which Petaquilla Gold had not provided for the past 24 months, and protested the impending loss of 600 jobs.[xv]

Behind them, Petaquilla left unattended barrels containing toxic materials such as cyanide, the pits opened to mine gold and the tailings ponds used to collect toxic waste both of which are subject to erosion and leaching, a degraded environment and corroded infrastructure, over one hundred Panamanian employees with unpaid back wages, as well as shareholders claiming unpaid dividends.[xvi] In the absence of a closing plan, Petaquilla also left no funds left to the state for the clean-up of the mining site.[xvii] According to estimates by the Panamanian state, at least $30
million is needed to conduct adequate clean-up.

Despite the company’s claims that there is no real threat of contamination posed by the Petaquilla mine, the Panamanian government has made pumping the toxified water out of the tailings ponds its main focus.[xviii] Allowing this water to remain could lead to widespread pollution throughout this ecologically significant and socioeconomically vulnerable region. The humid and rainy climate of this region adds to the need for rapid action amid the possibility of further infrastructure and equipment corrosion as well as the leaching and flooding of toxic materials.

Panama’s Minister of the Environment, Mirei Endara filed a complaint against Petaquilla Gold and Richard Fifer for environmental crimes on June 29, 2015.[xix] The outcome of this suit and of the pursuit of funds for Petaquilla’s clean-up is not currently known, but MICLA researchers are currently investigating further. In the absence of Petaquilla Gold employees, security guards paid by First Quantum Minerals (who operates the neighboring Cobre Panama mine) and by the Panamanian government have come to stand watch.[xx]

On February 3, 2016, Canadian-based Diamente Minerals announced a gold stream agreement for the Molejon Mine, whereby it provided a $250,000 loan to restart operations. As of January 26, 2017, Diamente was attempting to purchase the mine, which had not resumed production.[xxi]

Images: (Taken by MICLA researchers in April, 2015)

abandoned tanks from outside

Abandoned tanks, as seen from outside.

abandoned tanks from inside

Abandoned tanks, as seen from inside.

abandoned tailings ponds

Abandoned tailings ponds. Flooding is a real possibility in this rainy region.

abandoned open pits

Abandoned open pits. Evidence for length of abandonment can be seen in the reappearing shrubbery.

Last updated April 9, 2016.

Bibliography

[i] Mining-Atlas, “Molejon Gold Mine”, accessed April 9, 2017. https://mining-atlas.com/operation/Molejon-Gold-Mine.php.

[ii] Miningwatch Canada, “Important Information about the Petaquilla Mining Project in Panama”, report published November 18, 2008, miningwatch.ca/sites/default/files/Petaquilla_background.pdf.

[iii]Newsroom Panama, “The tainted history of ‘The Father of Panama Mining’”, last modified February 28, 2016, accessed April 7, 2017. http://www.newsroompanama.com/news/panama/tainted-history-father-panama-mining; Eric Jackson, “Petaquilla hit with Maximum Fine, Partial Restitution, Market Rejection”, last modified November 25, 2008, accessed April 7, 2017. https://burica.wordpress.com/tag/mining/.

[iv]William Sala José Arcia, “Minera Panama, solidaria en millonaria multa ambiental”, last modified December 15, 2009, accessed April 7, 2017. http://www.prensa.com/politica/Minera-Panama-solidaria-millonaria-ambiental_0_2726727452.html.

[v]Miningwatch Canada, “Petaquilla: Panamanian Rainforest, Communities Threatened by Mining”, last modified January 4, 2009, accessed April 7, 2009. http://miningwatch.ca/news/2009/1/4/petaquilla-panamanian-rainforest-communities-threatened-mining.

[vi]Julio Yao, “Mortandad en Petaquilla”, last updated March 15, 2009, accessed April 8, 2017.  http://laestrella.com.pa/opinion/columnistas/mortandad-petaquilla/23733747.

[vii]RAMOS Torrera Lineth, “Petaquilla Employees Drink Water from Rivers Nearby the Mine to show there is no Contamination”, last updated November 19, 2010, accessed April 8, 2017. https://web.archive.org/web/20110606185314/http://petaquilla-gold.com/petaquilla-news-environmentalist-challenged/.

[viii] Golder Associates Panama, “Estudio de Impacto Ambiental y Social Proyecto de Mina Cobre Panama”, published September 2010, accessed April 8, 2017. http://webcache.googleusercontent.com/search?q=cache:L02nn0mkDKQJ:www.miambiente.gob.pa/images/stories/documentos_eval/EsIA_Cobre_Panama.pdf+&cd=1&hl=en&ct=clnk&gl=ca.

[ix] Rosie Simms and Salma Moolji, “In the Belly of the Machine: Indigenous Mining Experiences in Panama”, ENVR 451 Final Report, prepared for McGill University, Centro de Incidencia Ambiental (CIAM), The Smithsonian Institute and the Comarca Ngöbe-Buglé. 2011; Melissa Fung, “Panama: Campesinos Try to Block Canadian Mining Goliaths”, last updated June 14, 2012, accessed April 8, 2017. http://pulitzercenter.org/reporting/panama-campesinos-try-block-canadian-mining-goliaths.

[x] Fung, 2012.

[xi] Simms and Moolji 2011.

[xii] La Estrella de Panama, “Empresa Minera en Problemas”, last updated March 5, 2011, accessed April 9, 2017. http://laestrella.com.pa/panama/politica/empresa-minera-problemas/23562591; Fung, 2012.

[xiii] Lineth Torrero, “Campesinos chocan con la Policía “, last updated May 27, 2009, accessed April 8, 2017. https://web.archive.org/web/20090529112247/http://www.laestrella.com.pa/mensual/2009/05/27/contenido/103732.asp.

[xiv] Newsroom Panama, “Anam Seeks State of Emergency at Abandoned Petaquilla Mine”, last updated January 12, 2015, accessed April 9, 2017. http://www.newsroompanama.com/environment/panama-3/anam-seeks-state-of-emergency-at-abandoned-petaquilla-mine.

[xv] Newsroom Panama, “Shine goes off Petaquilla Gold”, last updated April 3, 2014, accessed April 9, 2017. http://www.newsroompanama.com/news/panama/shine-goes-off-petaquilla-gold.

[xvi] Observed by MICLA researchers in April, 2015.

[xvii] This, despite processing around $500 million in gold between 2012-2014. See, Alex E. Hernández, “Concerns raised over site of Petaquilla Gold mine,” La Prensa, last modified September 9, 2015, accessed January 22, 2017, http://www.prensa.com/in_english/Petaquilla_21_4297280235.html.

[xviii] Juan Manuel Díaz and Cinthia Almanza, “Ministerio de Ambiente presenta denuncia contra Petaquilla Gold,” La Prensa, last modified June 29, 2015, accessed January 22, 2017, http://www.prensa.com/judiciales/Ministerio-Ambiente-presenta-Petaquilla-Gold_0_4243075807.html

[xix] Ibid

[xx] Observed by MICLA researchers in April, 2015.

[xxi] Central America Data, “Molejon Gold Mine Resurrected”, last modified February 12, 2016, accessed April 7, 2017. http://en.centralamericadata.com/en/article/home/Molejn_Gold_Mine_Resurrected. ; 4-Traders, “Diamante Minerals Amends Mineracao Batovi Agreement in Brazil”, last modified January 26, 2017, accessed April 7, 2017. http://www.4-traders.com/DIAMANTE-MINERALS-INC-16313693/news/Diamante-Minerals-Amends-Mineracao-Batovi-Agreement-in-Brazil-23763234/.

[i] Miningwatch Canada, “Important Information about the Petaquilla Mining Project in Panama”, report published November 18, 2008, miningwatch.ca/sites/default/files/Petaquilla_background.pdf.

[ii]Newsroom Panama, “The tainted history of ‘The Father of Panama Mining’”, last modified February 28, 2016, accessed April 7, 2017. http://www.newsroompanama.com/news/panama/tainted-history-father-panama-mining; Eric Jackson, “Petaquilla hit with Maximum Fine, Partial Restitution, Market Rejection”, last modified November 25, 2008, accessed April 7, 2017. https://burica.wordpress.com/tag/mining/.

[iii]William Sala José Arcia, “Minera Panama, solidaria en millonaria multa ambiental”, last modified December 15, 2009, accessed April 7, 2017. http://www.prensa.com/politica/Minera-Panama-solidaria-millonaria-ambiental_0_2726727452.html.

[iv]Miningwatch Canada, “Petaquilla: Panamanian Rainforest, Communities Threatened by Mining”, last modified January 4, 2009, accessed April 7, 2009. http://miningwatch.ca/news/2009/1/4/petaquilla-panamanian-rainforest-communities-threatened-mining.

[v]Julio Yao, “Mortandad en Petaquilla”, last updated March 15, 2009, accessed April 8, 2017.  http://laestrella.com.pa/opinion/columnistas/mortandad-petaquilla/23733747.

[vi]RAMOS Torrera Lineth, “Petaquilla Employees Drink Water from Rivers Nearby the Mine to show there is no Contamination”, last updated November 19, 2010, accessed April 8, 2017. https://web.archive.org/web/20110606185314/http://petaquilla-gold.com/petaquilla-news-environmentalist-challenged/.

[vii] Golder Associates Panama, “Estudio de Impacto Ambiental y Social Proyecto de Mina Cobre Panama”, published September 2010, accessed April 8, 2017. http://webcache.googleusercontent.com/search?q=cache:L02nn0mkDKQJ:www.miambiente.gob.pa/images/stories/documentos_eval/EsIA_Cobre_Panama.pdf+&cd=1&hl=en&ct=clnk&gl=ca.

[viii] Rosie Simms and Salma Moolji, “In the Belly of the Machine: Indigenous Mining Experiences in Panama”, ENVR 451 Final Report, prepared for McGill University, Centro de Incidencia Ambiental (CIAM), The Smithsonian Institute and the Comarca Ngöbe-Buglé. 2011; Melissa Fung, “Panama: Campesinos Try to Block Canadian Mining Goliaths”, last updated June 14, 2012, accessed April 8, 2017. http://pulitzercenter.org/reporting/panama-campesinos-try-block-canadian-mining-goliaths.

[ix] Fung, 2012.

[x] Simms and Moolji 2011.

[xi] La Estrella de Panama, “Empresa Minera en Problemas”, last updated March 5, 2011, accessed April 9, 2017. http://laestrella.com.pa/panama/politica/empresa-minera-problemas/23562591; Fung, 2012.

[xii] Lineth Torrero, “Campesinos chocan con la Policía “, last updated May 27, 2009, accessed April 8, 2017. https://web.archive.org/web/20090529112247/http://www.laestrella.com.pa/mensual/2009/05/27/contenido/103732.asp.

[xiii] Newsroom Panama, “Anam Seeks State of Emergency at Abandoned Petaquilla Mine”, last updated January 12, 2015, accessed April 9, 2017. http://www.newsroompanama.com/environment/panama-3/anam-seeks-state-of-emergency-at-abandoned-petaquilla-mine.

[xiv] Newsroom Panama, “Shine goes off Petaquilla Gold”, last updated April 3, 2014, accessed April 9, 2017. http://www.newsroompanama.com/news/panama/shine-goes-off-petaquilla-gold.

[xv] Observed by MICLA researchers in April, 2015.

[xvi] This, despite processing around $500 million in gold between 2012-2014. See, Alex E. Hernández, “Concerns raised over site of Petaquilla Gold mine,” La Prensa, last modified September 9, 2015, accessed January 22, 2017, http://www.prensa.com/in_english/Petaquilla_21_4297280235.html.

[xvii] Juan Manuel Díaz and Cinthia Almanza, “Ministerio de Ambiente presenta denuncia contra Petaquilla Gold,” La Prensa, last modified June 29, 2015, accessed January 22, 2017, http://www.prensa.com/judiciales/Ministerio-Ambiente-presenta-Petaquilla-Gold_0_4243075807.html

[xviii] Ibid.

[xix] Observed by MICLA researchers in April, 2015.

[xx] Central America Data, “Molejon Gold Mine Resurrected”, last modified February 12, 2016, accessed April 7, 2017. http://en.centralamericadata.com/en/article/home/Molejn_Gold_Mine_Resurrected. ; 4-Traders, “Diamante Minerals Amends Mineracao Batovi Agreement in Brazil”, last modified January 26, 2017, accessed April 7, 2017. http://www.4-traders.com/DIAMANTE-MINERALS-INC-16313693/news/Diamante-Minerals-Amends-Mineracao-Batovi-Agreement-in-Brazil-23763234/.