Friday, June 25, 2010

European Parliament Calls for "Complete Ban on Use of Cyanide Mining Technologies" in European Union and for EU States to Oppose Cyanide Use Elsewhere

The European Parliament's (EP) call to ban the use of cyanide mining technologies throughout the European Union's 27 member states by the end of 2011 and to not support cyanide's use in mining outside the EU has drawn the ire of Mercosur ministers just days ahead of EU-Mercosur meetings on establishing a free trade zone.

Mercosur is a trading bloc that includes Argentina, Brazil, Paraguay, and Uruguay, as well as several associate member countries.

The EP, the "greenest" of all EU institutions, laid the foundation for the dispute when on May 5 it adopted a Resolution of a General Ban of the Use of Cyanide Mining Technologies by a vote of 488 in favor to 48 opposed, which asked the European Commission to propose legislation aimed at banning the use of cyanide in mining in the EU by the end of next year. It also requested the Commission and EU member states to withhold "support for any...projects [that involve cyanide technology] in third countries." The resolution was important since in the EU institutional structure, the Commission has the primary power to propose legislation while the EP generally does not. Thus, without the Commission's action nothing will happen.

The resolution said banning cyanide mining technologies "is the only safe way to protect our water resources and ecosystems against cyanide pollution from mining activities." The preamble to the resolution noted that in the past 25 years "more than 30 major accidents involving cyanide spills have occurred worldwide, the worst taking place 10 years ago when more than 100,000 cubic meters of cyanide-contaminated water were released from a gold mine reservoir into the Tisza-Danube River system..."

The resolution's claim that "alternatives to cyanide mining which could replace cyanide-based technologies do exist" was immediately disputed by the European Association of Mining Industries, which told the BNA International Environment Reporter that gold recovery would be significantly reduced without the use of cyanide ("EU Parliament Wants Cyanide Banned, Alternatives Used for Gold Processing," May 12, 2010).

Mercosur representatives said that approval of legislation along the lines proposed by the EP would have a significant adverse impact on mining in South America. As reported by UPI Energy ("Mercosur Unhappy With EU Mining Rules," June 17, 2010), "Given the latest restrictions sponsored by the EU Parliament which propose impediments to the industrialization and commercialization of products from productive sectors, such as the mining industry of our continent, countries of the region reject such measures which are considered restrictive and harmful for the development of our productive activities."

Concern about this type of legislation also was voiced by two key South American mining law experts, Leonardo G. Rodríguez and Francisco A. Macías of the Buenos Aries-based law firm Marval, O'Farrell & Mairal. In a recent newsletter Mr. Rodríguez, a May 2008 LLM graduate of the Sturm College of Law Environmental and Natural Resources Law & Policy Graduate Program, and Mr. Macía wrote, "The fact that the resolution requests the European Commission and [EU] member states not to 'endorse projects of such nature in third countries' is troublesome." The writers noted that while mining is not a substantial component of the EU economy it is a "pillar" in some other countries. Moreover, they wrote,
"[T]he non-endorsement of projects upheld by the Resolution...affects European mining companies carrying out activities in countries in which cyanide lixiviation technology is applied, this would damage mining development severely in said countries...On-going projects would be destined to fail once left unsupported. Even worse, if the non-endorsement being promoted were to reach financial institutions, it would be practically impossible to obtain European financing for new projects."
Several thoughts are worth bearing in mind about the EP's actions:
  • As mentioned above, only the Commission can propose this type of legislation (although the EP can try to "persuade" the Commission to follow its recommendations).
  • The EU has a long history of trying to regulate environmental-related matters outside of its boundaries; U.S. firms, in particular, have often chafed at what they claim are the EU's aggressive environmental policies that negatively impact foreign firms. The EU's response is firms are not required to do business in the EU and thus be subject to EU legislation.
  • While environmental issues are at the top of the list for European voters, the upper-most environmental issue in the EU is without question climate change, not the regulation of cyanide in mining activities.
  • The EP frequently passes resolutions or makes pronouncements that the Commission simply ignores.
The mining industry will no doubt pay close attention to what happens in Brussels, the EU's capital city. But any quick action by the Commission seems unlikely. For the time being, the Eurocrats have plenty on their plates with the not so small matter of the health of the common currency, the Euro, on their minds.

--Don Smith

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