kimsakocha
The women of Kimsakocha have been the backbone of the defence of the water. Photo credit: Yasunidos Cuenca
Blog Entry

INV Metals’ Loma Larga Project Acquired by Canadian Company with Toxic Environmental Record in Eastern Europe and Africa

Viviana Herrera

Interim Latin America Program Coordinator

On the evening of May 31, 2021, communities in Cuenca, Ecuador were hit with shocking news when it was announced that Vancouver-based mining company INV Metals had been acquired by Toronto-based Dundee Precious Metals. No one saw this coming. INV Metals had been (and still is) running ads promoting its Loma Larga project, in a desperate effort to achieve social licence for the project. Earlier this year, Cuencanos voted overwhelmingly (80%) in favour of water protection and against the mining project.

Dundee, which has a toxic environmental record in eastern Europe and Africa, now plans to settle in Latin America and this has communities in Cuenca, Ecuador, extremely worried.

So, who is Dundee Precious Metals (DPM)?

DPM is a Toronto-based gold mining company with operations and projects in Bulgaria, Namibia, Serbia, and now Ecuador. In the highland páramo wetland ecosystem in southern Ecuador, the Loma Larga project represents the firm’s first mining project in Latin America.

This is a significant purchase, as DPM is a larger company with operations in many countries, compared to INV Metals, whose sole project was Loma Larga. While the announcement may have come as a surprise for many, Dundee was very familiar with INV Metals. In fact, DPM was one of INV Metals’ strategic shareholders (23.5%) alongside IAMGOLD (35.5%). Similarly, Dundee’s current President and Chief Executive Officer, David Rae, is also a director of INV Metals.

Since the announcement, DPM has repeatedly said that Loma Larga “is well-aligned with its proven strengths as an environmentally and socially responsible mining company in Bulgaria and Namibia.” Despite such claims, communities in those countries have denounced the company many times in recent years for environmental and social damages.

Dundee’s health hazard record in Bulgaria, Namibia, and Armenia

Dundee’s Ada Tepe open-pit gold mine in Southern Bulgaria, near the town of Krimovgrad, faced many obstacles before it started operations in 2019. The mine is located in an area designated by the European Union as part of Natura 2000, an ecological network of protected biodiverse areas. In 2007, MiningWatch Canada’s Catherine Coumans wrote in A sample of Canadian mining companies operating in developing countries accused of human rights and environmental abuses that “the Municipal Council of Krumovgrad passed a resolution in 2005 rejecting the project on environmental grounds given that the companyplanned to extract gold using a cyanide-based method”. Communities mobilized, and “nearly 10,000 people, representing close to 90% of eligible voters, endorsed the resolution by signing the document.” The project was stalled for several years until 2016 when it received its construction permit. Despite this, local residents remain concerned about the mine’s land and water pollution and the impact on agriculture, cattle farming and tourism.

The Chelopech underground copper and gold mine near Sofia, Bulgaria, contains a high concentration of arsenic and sulphur, which pose serious environmental and health hazards. Local environmental regulations prohibit such concentrate from being treated in Bulgaria. Thus, Dundee transfers the hazardous concentrates to its Tsumeb smelter in Namibia for processing. As the Central and Eastern European Bankwatch Network puts it, this has created a situation where the treatment of toxic and hazardous materials is transferred from a community in Europe to another one in Africa, a business strategy that has been denounced for violating the international convention on waste disposal. Local communities in Tsumeb report polluted air due to the smelter emissions, which doctors link to a spike in lung problems among locals. 

Likewise, many workers at the Tsumeb smelter have shown high levels of arsenic in their blood and urine and suffered from skin rashes, cancer, blindness, and burned faces. Dundee has been accused of refusing to recognize its responsibility and failing to compensate workers so they can access medication to treat their illnesses.

Another project that Dundee does not name in its press releases but has nevertheless left a damaging socio-environmental impact is its Geghanush tailings dump in southern Armenia. The tailings facility suffered “a series of tailing leaks resulting from poorly constructed pipes” in 2012. From 2008 to 2016, communities demanded compensation and accused the firm of jeopardizing their means of subsistence, agriculture and livestock, by contaminating soil and water sources and exposing animals, flora and communities to health ailments such as allergies, osteoporosis, birth defects, and tumours through letters to the company and meetings with company's representatives. In January 2016,  a few months before the company sold the project to a Russian mining company, affected community members voiced their concerns again during a town hall with one of the company’s managers. However, the communities quickly became convinced “that the company had no intention to provide any compensation.”

Dundee attempts to draw parallels between its operations and Loma Larga

Despite this deplorable and systematic track record of health hazards and lack of accountability in its projects in eastern Europe and Africa, Dundee promotes them as success stories and even compares them to Loma Larga. In a local newspaper in Cuenca, Dundee recently stated that Loma Larga “has similar geology and is expected to have a similar mining method and processing flowsheet to the Chelopech mine.” In the same vein, it says that it “intends to further engage with all stakeholders, as it did prior to the development of its Ada Tepe mine, which is now a highly successful DPM operation that enjoys strong support from both local communities and the national government in Bulgaria.”

Similarly, INV Metals, former owner of Loma Larga, said in 2019 that “DPM's Tsumeb smelter could potentially be used to process the complex copper/gold concentrate from Loma Larga.” Now that DPM is the direct owner of Loma Larga this is even more clearly a worrying possibility.

“DPM's ominous record is a path that we do not accept for our páramos.”

For more than 10 years, Canadian mining companies including IAMGOLD, INV Metals, and now Dundee Precious Metals, have been attempting to develop the Loma Larga mining project against the will of the local population. The resistance against the project has led to significant victories, such as the 2021 referendum. Local communities won’t be fooled by DPM’s attempt to whitewash its current operations. Dundee must know that this opposition to the project won’t change and investors must understand that this project doesn’t, and won’t, have social licence.

Loma Larga is a mining project which will dramatically impact the high-altitude wetlands and water sources of the Kimsakocha páramo. This fragile ecosystem supplies water for domestic use and irrigation to numerous Indigenous communities, whose livelihoods depend on agriculture and livestock. Rural and urban communities alike fear that this mining project will violate their right to water and pollute their land and ecosystems. Paola Granizo, a biologist and member of Yasunidxs Guapondelig and the Cuenca Water Chapter, bluntly puts it: “DPM's ominous record is a path that we do not accept for our páramos, territories, and water. We envision a mega-diverse Ecuador, not a mega-mining one.”