In this town in resource-rich Patagonia, the government passed a law in 2006 that would impose a three-year moratorium on mining activity in the region, forcing Meridian Gold Inc., headquartered in Reno, NV, to halt a proposed open-pit gold mine 7 kilometers upstream from Esquel (population approximately 30,000) Today, the natural beauty of the Esquel region attracts tourists, fishermen, and biologists from around the world.

Residents of Esquel protest against Meridian's mine proposal.  Credit: Juan Miguel Santino

The moratorium was passed in the face of overwhelming opposition to the mine. In a March 23, 2003 referendum, residents of Esquel region declared a resounding "no" to gold mining. Around 80 percent of the citizens of Esquel voted against Meridian Gold's proposal to dig an open-pit gold mine less than 7 kilometers from their town.

To mark the anniversary of their historic 2003 referendum, citizens of the Patagonian town of Esquel, Argentina held a four day event on March 23, 2004. Several thousand people participated in a rally in Esquel to voice their opposition to the proposed mine.

The alerce tree, a relative of the giant sequoia, grows near the proposed mine.  Credit: Diego Guidice

Though Meridian devalued the project, it still holds land titles to the area, and has continued to explore in the area despite widespread protest.¹ Its pursuit to develop depends on what happens once the moratorium ends.

The proposed open-pit mine would use cyanide to extract the gold. The company proposed to bury solid waste from the mine in pits. Lake Esquel will most likely be used as a tailings dam for liquid wastes flowing downstream from the mine site. In addition, the Esquel mountain range is covered with faults and fissures that could cause toxic waste from the mine to seep into the groundwater. "

Merdian has tried to soft pedal the environmental impacts of the proposal with a flawed Environmental Impact Assessment. A March 2003 independent evaluation of that assessment reveals the inadequacies of the EIA. Written by Dr. Robert Moran, the report Esquel, Argentina: Predictions and Promises of a Flawed Environmental Impact Assessment demonstrates that Meridian's proposal "[...] is the classic example, which is all too common in Latin America, where an EIA describes short-term benefits and solutions, but fails to even begin to consider long-term consequences."

It has also attempted to clamp down on activists, suing the residents of Esquel in 2005 for publicizing a tape from a meeting in Buenos Aires in which executives and public relations consultants discussed methods such as hiring community leaders to be "opinion leaders, capable of persuading hardliners."²

The city of Esquel is the most important tourist center in the Chubut mountain range and it is considered a world-renowned fishing destination. Other tourist attractions include the ski area of La Hoya and the Los Alerces National Park. The park, located just 28 kilometers west of Esquel, is home to the patagonic larch or alerce, a relative of the giant sequoia that can live as long as 3,000 years.

Though the temporary moratorium has halted the project, Meridian's land titles ensure their continued presence in the region, with multiple exploration sites found, including Willimanco I, another gold deposit site even closer to Esquel.

Meanwhile, Meridian's share price has dropped 22 percent -- even while the price of gold has rocketed above US$900/oz. Investors may believe that a project that disregards the will of the local community and threatens environmental devastation is ill-advised. Many Esquel residents believe that the only way for Meridian to avoid further deterioration of its reputation is to withdraw from the Esquel area completely.

For more information:

Asamblea De Vecinos Autoconvocados Por El No A La Mina
(Spanish Only)
http://www.noalamina.i8.com

Esquel, Argentina: Predictions and Promises of a Flawed Environmental Impact Assessment
by Dr. Robert Moran
English:
http://www.earthworksaction.org/ewa/pubs/PredictionsPromisesFINAL.pdf
Spanish:
http://www.earthworksaction.org/ewa/pubs/PrediccionesPromesas.PDF

Minera El Desquite Report, Esquel, Argentina
by Business for Social Responsibility
(Meridian's consultant report detailing the company's disregard for the community of Esquel)
English: http://www.meridiangold.com/BSR_Report_Esquel.pdf
Spanish: http://www.shareholder.com/meridian-gold/downloads/Informe_Esquel.pdf

Oro Sucio : a website on gold mining in Argentina (Spanish Only)
http://www.orosucio.madryn.com/