MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

El Salvador

Key Data

Population:6,090,646 people Area:20,721 km2 Density:293 people / km2 Demographics:90% Mestizo
9% White
1% Amerindian
Mineral Resources: GDP:$0.0 billion GDP per capita:$0 GINI:46.9
http://upsidedownworld.org/main/content/view/2116/74http://upsidedownworld.org/main/content/view/2116/74

History

El Salvador is the most densely populated country in Central America, exacerbating problems of access to clean water. Given these circumstances, the opposition to mining in the country is mostly based around concerns about the effect of mineral mining on water, especially the country’s principal river, the Río Lempa. Grassroots organizing in communities affected by mining has led to a national conversation about the possibility of banning mineral mining in the country; however, no law has been passed. Anti-mining activists and organizations have faced a wave of violence and intimidation in the past few years, yet El Salvador’s judicial system has done little to prosecute offenders or investigate the connection between the violence and mining companies operating in the vicinity. Currently, El Salvador is being sued by Pacific Rim, a Canadian mining company, for allegedly violating the terms of CAFTA. The case is being heard by a court under the jurisdiction of the World Bank.

Mining Characteristics

There is a very limited place for mining within El Salvador’s history. There was minimal mining during the colonial era, but it paled in comparison with agricultural activities. More broadly, however, natural resource exploitation has been incredibly influential in shaping El Salvador’s history. Excepting produce for local consumption, El Salvador’s history is characterized by the production of four main cash crops: Cacao, indigo, cotton and coffee. Cacao was the primary export during Spanish colonial rule, followed by indigo in the eighteenth century and coffee from the late nineteenth century to the present. The transition to a coffee economy was accompanied by the introduction of new agricultural technologies and far-reaching distribution systems. Land scarcity became a problem in the 1880s as population density increased and land became increasingly concentrated in the hands of a few powerful families. To some extent, the same circumstances continue to plague the agriculture sector today (Lindo-Fuentes, 1990).

Economic Context

Mining is not important to the nation economy of El Salvador; as of 2006 is provided only .4% of the GDP (Scheffey, 2010). However, given the size of gold deposits in the country, there is the potential for gold extraction to provide the government with significant revenue from taxes. Currently, the government is refusing to grant Pacific Rim with an exploitation permit for the company’s El Dorado project. In response, the company is suing El Salvador for 77 million USD in lost profits.

Political Context

The government owns the subsoil and has the right to award concessions to exploit minerals. Mauricio Funes, first president elected from FMLN, has expressed opposition to mineral mining, but has not moved to ban it, despite strong pressure from civil society groups. Legislators from the FMLN have indicated that if they have enough support in the National Assembly they will ban mineral mining in the country in the 2012 legislative session (La Prensa Gráfica, 02/02/2012). Lourdes Palacios, a FMLN congresswoman and member of the Assembly’s Environmental Commission, explained that El Salvador is too small a country to sustain mining projects, and the number of people affected would be very large if mineral exploitation projects were to be approved by the government (La Página, 06/02/2012).

Social Context

There is a very active Salvadoran civil society working in opposition to mineral mining, both within local contexts and at the national level.

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Timeline of Key Events