Political Matters: It takes a pillage

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The global conglomerate Glencore

Xstrata operates a copper mine in Mufulira, Zambia, which allegedly

is poisoning nearby residents with extremely high sulfur dioxide

emissions. The Facing Finance website (facing-finance.org) relayed a

recent SRF (Swiss Radio and Television) Rundschau report from Zambia,

where “the mine’s activities have had a negative impact on local

communities, causing breathing difficulties, asthma, and even

deaths.”

Normally, a report from remote Africa

about environmental pollution wouldn’t be fodder for a “Political

Matters” column; however, the company involved now owns a 29

percent stake in Canadian-based PolyMet Mining, which is seeking

government approval for its NorthMet copper-nickel-precious metals

mine near Babbit, in northeastern Minnesota. The proposed mine and

mill are within the 1854 Treaty Ceded Territory; and the Ojibwe bands

in the region – Fond du Lac, Bois Forte and Grand Portage – are

“cooperating agencies” in the environmental review process.

In this month’s column, I will look

a little more closely at the role of Glencore Xstrata in the sulfide

mining play Up North. State and congressional elected officials

mainly seem to be on board for the NorthMet project; but the

involvement of a transnational firm with a record of environmental

and labor transgressions should give Minnesotans pause.

I took another look at Glencore

Xstrata PLC – formed in the May 2013 acquisition of mining giant

Xstrata by Swiss-based Glencore, for $30 billion – after reading a

story in Bloomberg Businessweek. The May 1 article, by Bryan Gruley,

is titled “For a Minnesota Mine, It’s Jobs vs. the Environment.”

The issue of PolyMet’s financial

assurances, vis-à-vis a pollution cleanup bill down the road, has

been an issue in the environmental review process for the proposed

mine. I wrote about this in my December 2013 column: that the mine

site might have to be monitored for 500 years.

This is from the Businessweek story:

“Opponents [of the NorthMet project] say PolyMet has proposed

unproven methods for ensuring that toxic materials don’t leach into

a watershed that feeds Lake Superior [and wild rice waters]. They

also worry that PolyMet’s deep-pocketed partner … Glencore

Xstrata … would be shielded from cleanup liability.”

Aaron Klemz, communications director

for Friends of the Boundary Waters Wilderness is quoted in the

Businessweek story, regarding the environmental threat from polluted

water that “could be leaching out of the mine area long after the

mine is closed.” I called him to discuss the role of Glencore

Xstrata.

First, Klemz told me that Glencore

Xstrata could take a 36 percent share of PolyMet, if its loans to the

company were “converted into equity in the company,” i.e., stock.

And the Swiss-based multinational would be insulated from financial

liability for pollution cleanup, because “they’re not a majority

owner of the company, they’re just a large investor.”

Further, Glencore Xstrata has an

agreement to buy all of the NorthMet products for five years after

the mine opens (if it opens). “That way they’re preserving their

access to minerals from PolyMet, while not having to do the actual

work of owning the company or taking on the liability that would be

associated with it,” says Klemz.

But Glencore Xstrata adheres to

“Values” and a “Code of Conduct” that prioritizes

sustainability and ethical dealings in the 50 countries in which it

operates, according to its website. So, the mining giant is a good

global citizen?

“Well, they’re not,” replies

Klemz, who mentions reports of pollution, labor and human rights

violations associatedwith Glencore operations.

In fact, Facing Finance’s “Dirty

Profits” report on Glencore Xstrata operations around the world

found that the firms, prior to the 2013 acquisition, “have

well-established reputations for human rights, environmental, and

trade violations.”

A subsidiary of Xstrata Copper in the

Philippines is pursuing a project that would resettle 5,000

indigenous people and put “vital water sources” at risk. In

Espinar, Peru, an ongoing dispute pits Xstrata’s Tintaya copper

mine against locals who allege that the mine has contaminated water

and soil with heavy metals. The list of depredations goes on and on.

Further, news reports have tied

Glencore to providing alumina to Iran’s nuclear program, after the

U.S., European Union and the United Nations imposed trade sanctions

on Tehran.

Klemz also mentions that Glencore

Xstrata is about to elect Tony Hayward, formerly CEO of BP, as board

chairman. “They’d hired him as their vice president of

environmental compliance. We’re dealing with a company that thinks

Tony Hayward is a good environmental steward,” he says, about the

man who brought us the 2010 Deepwater Horizon oil spill in the Gulf

of Mexico.

“It’s a very concerning thing that

this is a company that wants to move into Minnesota,” Klemz

concludes.