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.