Alvaro Ordonez, Denver Law LLM in Environmental and Natural Resources Law Graduate, Involved in Major Ecuadorian Mining Contract

Undersecretary of State for Ecuador Alvaro Ordonez was involved in negotiating the first large scale mining contract in Ecuador.

Mr. Ordonez, an Ecuadorian attorney, is a 2009 graduate from Denver Law's Environmental and Natural Resources Law LLM program.

Wilson Pastor, the Ecuadorian government's Nonrenewable Resources Minister, said, "With this project Ecuador will be the world leader in terms of how much revenue it will be obtaining," Mining.com reported.

The agreement was signed between Ecuacorriente, a Chinese-based firm, and Ecuador.

Don Smith, Director of the Denver Law program, said, "All of us in Denver were thrilled to learn about Alvaro's role in helping his native country establish its first major mining deal. This agreement seems likely to benefit Ecuador and enhance its status as a key location for the production of natural resources."

Lucy Daberkow, Administrative Director of the LLM program, said, "Everyone associated with Denver Law is proud of the accomplishments in which Alvaro is involved. When Alvaro studied in Denver he often talked about his love of his country. Now he is in a position to put what he learned here to work for the benefit of all Ecuadorians."

Bruce Kirchhoff, Vice President and General Counsel of Mining Royalties Firm Royal Gold, Inc., Speaks to DU Students

Bruce Kirchhoff, Vice President and General Counsel of Royal Gold, Inc., spoke recently to students at the University of Denver Sturm College of Law about the business of buying and managing mining royalties involving precious metals.

Royal Gold owns and manages nearly 200 producing, development, evaluation and exploration stage royalties. The royalties are located all around the globe including in Argentina, Canada, Chile, Mexico, Russia, and the U.S.

He explained how Royal Gold acquires royalties from a range of interests including prospectors, junior mining companies, and in some instances major mining firms. He also noted that in a growing number of situations mining companies are seeking financing from firms such as Royal Gold.

A key step before any royalty is acquired, he said, is to perform careful due diligence about the royalty including examining the royalty's title as well as whether the mine -- if the royalty is attached to a producing asset -- has the proper operating permits in place.

Since Royal Gold is a public company, Mr. Kirchhoff is also centrally involved in making sure the firm's public filings are in place. In this regard, he noted that much of time in recent months has been spent complying with the Dodd-Frank Act, a federal statute enacted last summer that is aimed at corporate governance.

Don Smith, Director of the Environmental and Natural Resources Law Program, said, "Bruce Kirchhoff's presentation reflected the observations of a widely respected practitioner who has enormous experience in this field. This event represented a wonderful way for students to learn about the professionalism of a general counsel who is intimately involved in the mining sector. The fact that Mr. Kirchhoff is a graduate from the College of Law made the day all the more meaningful."

Editor's note: In the picture, Mr. Kirchhoff is second from the left. Professor K.K. DuVivier, who teaching Mining Law, is second from the right. Don Smith is on the left.

Leonardo G. Rodríguez, Argentine Lawyer and 2008 LLM Graduate, Speaks About Argentine Mining Law to Gathering at China Mining Congress & Expo

Leonardo G. Rodríguez, an Argentine attorney who earned his LLM in Environmental and Natural Resources Law at the University of Denver Sturm College of Law, recently presented his latest book, entitled Argentine Law on Mining, at the "Third Seminar on Mining Investment Opportunities in Argentina," held in Tianjin, China.

Mr. Rodríguez, an associate attorney at the Buenos Aires-based firm of Marval O'Farrrell & Mairal, spoke at the 12th Annual China Mining Congress & Expo.

Mr. Rodríguez's book attracted the attention of many lawyers and investors who are considering investing in (or have already invested in) the Argentine mining sector.

He shared a panel with the Argentine Mining Secretary, Eng. Jorge Mayoral, the Governor of the Province of La Rioja, Luis Beder Herrera, and representatives of Chinese companies investing in Argentina, and the Argentine Chamber of Mining Companies.

According to Mr. Rodríguez, who was recognized as the "Outstanding LLM Student of the Year" in 2008 at the Sturm College of Law, "Over the years China Mining has evolved into one of the most influential mineral exploration/extraction trade events in the world, and has come to play a critical role in bringing together top policy makers and leading industry figures."

China Mining Congress & Expo attracted more than 3,500 delegates from 55 countries and featured over 420 booths.

Don C. Smith, Director of the Environmental and Natural Resources Law (ENRL) program at the Sturm College of Law, said, "Leonardo Rodríguez is expanding his reputation from his home country of Argentina to China, one of the most resources 'intensive' countries of the world. Congratulations to him on being asked to speak at this prestigious event with such an impressive panel."

Lucy Daberkow, Assistant Director for the ENRL Graduate Program, said, "Students often ask me how to become more involved in international work. I can point with considerable pride to what Leonardo is doing, and encourage potential graduate students to see what one of our most recognized alumni is doing in the international sphere."

Editor's Note: In the first picture, Mr. Rodríguez in on the left; in the second picture, he is the second person from the right.

Leading Natural Resources Attorneys Steve Bain and Robert Bassett to Compare International Mining and Petroleum Law at Sturm College of Law Nov. 10

Two well-known attorney experts in international natural resources law, Steve Bain and Robert Bassett, will compare international mining law and international petroleum law on Nov. 10, 2010, from 12 noon to 1 p.m. in room 125 at the University of Denver Sturm College of Law.

Both Mr. Bassett and Mr. Bain teach as adjunct professors in the College of Law Environmental and Natural Resources Law (ENRL) program. Mr. Bassett teaches "International and Comparative Mining Law" while Mr. Bain co-teaches "International and Comparative Petroleum Law" with Carol Harmon. These courses, which have been very popular among DU law students, are part of a wide selection of natural resources-related courses offered at DU.

Mr. Bassett, a partner at Denver-based Holland & Hart, practices natural resources and international law with an emphasis on the mining industry. In recent years he has handled projects as diverse as: mining counsel in financing of a major coal company merger, a major copper company, and a major lead producer; development of mine methane capture and use programs; acquisition of major copper, gold, and uranium mines and royalty interests in the U.S., Latin America, and Africa.

Mr. Bain, a partner at Denver-based Welborn Sullivan Meck & Tooley, specializes in environmental and natural resources law and has significant experience with government negotiations. He has extensive experience in international law, especially in the former Soviet Union, and is past chair of the International Law Section of the Colorado Bar Association. Prior to joining his firm, he worked for two years in the Czech Republic as an advisor to the Czech Ministry of the Environment.

Don C. Smith, director of the ENRL program, said, "Students who have taken these courses from Adjunct Professors Bain and Bassett frequently say how valuable these courses are and point to the significant benefit from learning from industry leaders like Mr. Bain and Mr. Bassett. Their courses are clear examples of why many think at the ENRL program is the best of its kind in the U.S."

For more information about the event, please contact Carrie Golden at cgolden11@law.du.edu.

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

"Global Mining News" Publication Available for Free from Behre Dolbear

Those interested in the global mining sector should be sure and check out the freely available "Global Mining News" (GBN) from the consultancy Behre Dolbear, one of the world's oldest mining industry service firms.

The company specializes "in performing studies and consulting for a wide range of businesses with interests in the minerals industry including major and junior mining companies, banks and other lenders, venture capital syndications and private individuals, [and] government agencies..." Behre Dolbear is headquartered in downtown Denver, providing another reason why many call Denver the "mining services capital of the world."

The latest edition of the Global Mining News (March 15, 2010) includes stories from Reuters, Hong Kong Standard, Mining Technology.com, Bloomberg, and Economic Times India. The far-reaching coverage of the GMN makes it an invaluable resources for those in the mining sector.

You can subscribe to the GMN by writing to newsletter@dolbear.com.

"Community Expectations for Sustainable Development in Natural Resources Projects" Short Course Concludes

A thought-provoking and cutting-edge short course, "Community Expectations for Sustainable Development in Natural Resources Projects," came to a close last Friday with these conclusory comments by Luke Danielson: "One of our world's greatest needs is to integrate the idea that those who consume goods and materials need to also be concerned about the conditions under which these things are produced."

Mr. Danielson, a Gunnison attorney, principal in the Sustainable Development Strategies Group (SDSG), and widely-recognized international expert in addressing sustainable development matters in large natural resource development projects (for instance, mines, oil and gas projects, etc.) and his teaching partner Cecilia Dalupan, an attorney licensed in the Philippines and the U.S. and also a principal in SDSG, conducted the five day "short course" for a group of DU law and graduate students.

The course was organized in five components:

• Introduction: what is sustainable development in natural resources projects?
• Understanding each other: differences in culture, values, and ideas
• Sources of misunderstanding and conflict
• Incorporating communities in the decision process: managing conflict successfully
• Conclusion

Mr. Danielson and Ms. Dalupan presented a series of lectures, which provided the context for the major issues explored in the course. They also reflected on their own global experiences in dealing with the issues while encouraging students to reflect on the often vexing issues involved with natural resources development.

Among the course highlights included guest lectures from an outstanding array of leading figures such as:

• Robert Bassett, attorney with Holland & Hart (who also teaches International Mining Law in the DU graduate program)
• James F. Cress, attorney with Holme Roberts & Owen (who has also taught in the graduate program)
• Donald C. Ewigleben, executive officer of sustainability and legal affairs for mining firm AngloGold Ashanti, one of the world's leading gold producers
• Ralph Godell, attorney with Fognani & Faught
• George (Rock) Pring, DU law professor
• Don Proebstel, director of environmental affairs and sustainability for Natural Power Concepts
• Connie Rodgers, attorney with Davis Graham & Stubbs
• Jonathan Stacey, program manager for Rio-Tinto/Birdlife International Partnership
• Susan Waldau, partner with mediation firm CDR Associates

Another highlight involved student presentations that went on during the course of the week. Each student was assigned a topic to research, analyze, and then present to their colleagues. The presentations were provocative and often raised as many questions as they answered. For example, one of the presentations focused on the Chino mine closure in southwest New Mexico. Others dealt with projects that were located in Africa, South America, and elsewhere.

The week was a busy one to be sure. But from what I observed first-hand, the benefits were many both quantitatively and qualitatively.

In closing, Mr. Danielson said, "This has been just great. You as students have worked hard and really put your hearts into it." I could not have said it better.

Publication News: Two Members of Graduate Program "Community" Author Article in Argentine Mining Journal

Word comes from Buenos Aires that two members of the graduate program "community" have authored a new paper about mining in British Columbia.

Leonardo Rodriguez (spring 2008 LLM graduate) and Pedro Serrano Espelta (a long-time supporter of the graduate program) have published "British Columbia (Canada) Regulacion Legal en un Territorio Con Tradicion Minera" in Panorama Minero No. 353, March 2009 at page 25.

Both gentlemen work for highly-respected firm of Marval, O'Farrell & Mairal in Buenos Aires.

Rethinking The "Mining Model"

BUENOS AIRES -- As day two of the Rocky Mountain Mineral Law Foundation International Institute in Buenos Aires got underway it was even clearer that the issue of how the business of mining is conducted with respect to the local communities where it takes place is a huge challenge for the sector.

One of the highlights was a panel entitled, "Resource Development: The Key Role of Law and Institutions."  Adriano Trinidade of Pinheiro Neto Advogados of Brasilia, Brazil, presented a paper written by Elizabeth Bastida of the University of Dundee, describing the traditional assumption in this manner: "Mining per se contributes to development.  The overall development of mining is positive."

  

However, he pointed out that more recent developments -- including community opposition to some mining projects -- has caused many to rethink this assumption.  "Private markets require well-functioning legal systems that provide for stability and predictability.  In addition, the law should support institutions of well-functioning markets," he said.  But this has become more difficult to achieve as private investors have watched several mining projects encounter huge opposition, thus putting investors' money at risk.

Luis Carlos Rodrigo, an internationally recognized mining lawyer from the Lima firm of Estudio Rodrigo, Elias & Medrano, talked about Peru's experience with mining in general and the challenges the industry currently faces.  He began by noting that, "As of 1993 almost all state owned operations have been privitized with great success in terms of production." On the other hand, the success of how companies operate within communities is a more nuanced matter.

Many companies operating in Peru have become leaders in corporate social responsibility, one method of trying to address community relations challenges.  However, he identified some key problems to the long-term well-being of the mining industry in Peru:

• Mining companies are not doing enough to call attention to their community relations efforts; this is a result of many years of maintaining a "low profile" in terms of talking about the mining sector.
• The terrible past of the mining sector; "environmental legacies" in the form of badly polluted and managed sites continue to be "concrete evidence of previous contamination."
• The government has failed to regulate "informal miners," who operate without respect to environmental obligations or standards.  "The government has failed to act because it is a social problem," he said.
• NGOs and "political radicals" have taken advantage of the government's lack of action to oppose mining generally.
• There is an enormous amount of money (collected from the mining companies) waiting to be spent for projects to help the communities in which the mines operate, but the funds have not been spent; the government seems very reluctant to allocate these funds for fear of making one group or another unhappy, he said.

In order to deal with these challenges, the government needs to deal with informal miners while major mining companies need to understand that the media helps set local perceptions and expectations.  There also needs to be a commitment to making sure the benefits of mining are shared with society as a whole.

Finally, he spoke of a crucial element in mining companies' addressing the challenges ahead of them: "Today companies are structured to favor short term decisions and results.  This needs to be changed and bonuses and benefits cannot be based on short term results."  In this regard, companies must understand that it is in the long-term interest of the mining industry to avoid short-term decisions that only result in longer-term problems with the communities in which they operate.

Mining Law Short Course: A Great Way to Quickly Learn About Mining

Those individuals interested in a broader understanding of mining law should strongly consider attending the "Mining Law Short Course: Domestic and International Issues" that is being offered by the Rocky Mountain Mineral Law Foundation (RMMLF) May 11-15, 2009, in Boulder, Co.

The course program is being chaired by Paul Schlauch, an attorney with Holland & Hart in Denver and an adjunct professor of "International Mining Law & Policy" in the graduate program. Other mining leaders who will be speaking include James King, an adjunct at DU who teaches "Negotating Natural Resource Agreements," and James M. Otto, an attorney and founding director of the ENRLP.

Students can register for $95 before March 24 and $195 after March 25. This is a wonderful opportunity for those wanting to improve their knowledge in this important area.