Facebook and other social networks are making it easier for anti-mining activists to derail projects, helping them get their message out and organize more quickly against an industry that is already struggling with high costs and volatile prices.
From Romania to Peru to Canada, protest movements have disrupted projects in recent years, in part because activists have harnessed the power of social media and mobile technology, parties on both sides of the disputes say. Civil unrest can spell disaster for mining projects at any stage, even after billions have been invested. That is not new. What has changed is activists' ability to mobilize, a trend that echoes political upheavals that social media have helped fuel across the Middle East and North Africa.
The saga of Rosia Montana, the Romanian region where Canada's Gabriel Resources Ltd wants to build Europe's biggest open-pit gold mine, offers a clear illustration of how social media has shifted the balance of power. Gabriel's push to get the project approved suffered a series of setbacks in the autumn after activists used Facebook to organize demonstrations across the country.
"Our experience in Romania is not unique, but certainly the take-away is that the best project in the world can be portrayed as the worst unless the host government stands up to the vocal minority," Chief Executive Jonathan Henry said of the impact of the Facebook campaigns against Rosia Montana.
The project has been in the works for nearly 15 years, and until Romania's government backed it in late August, years had passed without major protests. But activists mobilized quickly on Facebook after the government showed support for the mine, and within days thousands hit the streets.
In November a parliamentary commission rejected a draft bill that would have allowed the project to proceed. A second attempt to approve the project as part of a new mining law failed in December. With the support of many members of parliament from the governing coalition, Gabriel is still fighting for Rosia Montana, its only advanced project. But its shares have fallen by nearly half since large-scale protests started. Without social media the protests would not have been as well-organized, Henry said.
Gabriel's experience in Romania parallels what many other mining companies have encountered around the world. The industry is under pressure to meet stricter environmental standards and share more revenue with host countries and nearby communities. In a report on risks to the mining industry last month, accounting and consulting firm Deloitte flagged intensifying demands from local communities, which it said have been "elevated" by social media. It said the mining industry's access to new resources is "at risk like never before".
It is difficult to measure the impact of the new activism because comprehensive data on project costs and the reasons for delays is not readily available, but examples abound. In the past year, protests have hit Eldorado Gold Corp in Greece, Centerra Gold Inc in Kyrgyzstan, HudBay Minerals Inc in northern Manitoba, and De Beers' Victor mine in northern Canada, to name just a few.
The nature of the mining industry makes it vulnerable to protests. It takes years of work and millions of dollars to secure permits and begin construction, and legislators can stall approvals or impose new taxes before the investment pays off. Forging ahead with a troubled project is often much cheaper than starting from scratch somewhere else, so in many cases, companies bend to public pressure.
In December, Centerra reached a tentative deal that could give the government of Kyrgyzstan a much bigger stake in its Kumtor gold mine, following riots and calls for nationalization in the Central Asian county. In September, Anglo American pulled out of the Pebble copper-gold project in Alaska, which had been targeted by protesters and criticized by environmental regulators.
Newmont Mining Corp halted construction at its massive Conga copper-gold mine in Peru in 2011 after violent protests, and the company is still working to win the support of nearby communities. Jamie Sokalsky, chief executive of Barrick Gold Corp , said in an autumn interview that social networks can help stir up social unrest, and that, in turn, emboldens governments in their dealings with mining companies.
"We have to do a better job of not only describing the true costs, but also the benefits, than we have," he said. Barrick's recently mothballed Pascua-Lama project, on the border of Chile and Argentina, was unpopular with environmentalists from the start because of its proximity to glaciers. Nearby communities have staged street protests, and some activists have organized online.
Rosia Montana was first a mining district more than 2,000 years ago. An abandoned open cast mine sits at the center of Gabriel's site, but the company has proposed a much larger operation. It would dig four open pits and fill much of a nearby valley with tailings. Some local villagers would have to move; others already have.
Memories of a 2000 cyanide spill from a gold tailings pond in northern Romania are still fresh, and some want an outright ban on the toxic chemical, which Gabriel would use to process ore, a normal industry practise. For its part, Gabriel says it would abide by tough environmental standards, and tailings that contain small amounts of cyanide would be safely contained. All sides agree that social media has played a pivotal role in the conflict over the project.
"The protests and text messages and emails that my colleagues have received created a certain pressure on those who voted," said Florin Iordache, a lower house member of the governing Social Liberal Union, who was part of the commission that rejected in November a draft bill to allow the project to proceed.
Gabriel also uses Facebook: its Romanian-language page has been "liked" more than 700,000 times. The company says it has the support of many local people, and mine supporters have staged some of their own protests over the years, though nowhere near the scale of those of their opponents. Social media is becoming a more powerful tool because more people, even in the less developed economies where many mining projects are located, have access to the Internet.
Stephen Letwin, chief executive of Iamgold Corp , a mid-tier miner based in Canada, said he now gets "friend" requests from his workers in Suriname and Burkina Faso. "You go out to some of these villages ... and see people with iPhones, riding their camels," said Letwin, who believes social networks have helped Iamgold maintain good relationships with local communities and governments.
To be sure, social media is not an organizing tool in every conflict. Many who live in developing and emerging economies do not have reliable connections. And parallel trends, such as the spread of democracy, have likely played a role in heightening conflict over resource development. But even where access is spotty, a quick phone call to someone who is online can get protesters' messages to more political leaders, voters and investors than ever before.
Activists opposing Newmont's Conga project phone in reports for local websites, which then share them widely. They believe the publicity has helped them win crucial support in Lima, Peru's capital, and make demonstrations safer for protesters. Marco Arana, a former Catholic priest and founder of Peru's left-leaning Tierra y Dignidad party, said he was at a protest in March when several hundred armed police ordered activists to clear out.
He posted photos online and others called local radio stations, and the police backed off. He says that without the public scrutiny, "things could have gotten really ugly". "I joined Twitter because I'd been told it's a good tool for showing the world what is going on and could prevent dangerous situations," he said. "I never thought it would be so important."
Published Date: Jan 08, 2014 09:29 AM | Updated Date: Jan 08, 2014 09:29 AM