Political Matters: It takes a pillage
Monday, June 09 2014
Written by Mordecai Specktor,
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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.

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