In an exercise of democracy, last week the small Colombian town of Cajamarca picked a fight with a multi-billion dollar international mining corporation.

Democracy

In a landslide defeat, 6,165 townsmen voted against mining exploration and excavation, while only 76 voted in favor. The binding vote obligates the town council to ban mining activity in the municipality.

The target of the town’s opposition was AngloGold Ashanti, a South Africa-headquartered international mining corporation, which wants to operate near the traditionally agricultural-based municipality.

In a statement after the vote, AngloGold Ashanti was optimistic in the face of overwhelming opposition:

“We will evaluate the results of the Popular Consultation, while continuing the rigorous work required to build a consensus around the creation of a modern and environmentally responsible mining industry in Colombia.”*

AngloGold Ashanti’s conciliatory response was in line with a previous visit to the town in November. That visit included representatives from the Ministry of Mines and the Ministry of Agriculture.

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Viceminister of Mines Maria Isabel Ulloa Cruz during the November visit to Cajamarca. Source: AngloGold Ashanti

The November visit had two purposes. First, to reassure the people of Cajamarca that the mine would be beneficial to them and their country. Second, to say that government would not adhere to the results of a referendum in the town if the town voted not to allow mining in their municipality.

Property Rights

In a radio interview, Minister of Mines Germán Arce reiterated the ministry’s position vis-a-vis the vote and AngloGold Ashanti’s right to mine:

“We respect the decision of the citizens, but this has a legal procedure that should follow its course.”*

The minister may respect the people of Cajamarca’s decision, but he will not abide by it.

The BBC reported that the Minister also said the vote would not retroactively affect mining titles and that the opponents of the mine mischaracterized the type of mine and its potential environmental impact.

Contrary to Minister Arce’s statement, the concerns of the citizens of Cajamarca are well founded.  Recent environmental disasters — including an oil spill in Ecuador, a gold mine tailings dam spill in the Solomon Islands, and the Kingston coal ash spill in the United States — show some of the risks related to the extractive sector.

Opposition

As opposition to AngloGold Ashanti’s mine grows and other towns in Colombia hold similar votes, Santo’s government will find itself in a no-win situation in an election year.

To blatantly disregard the will of the people in favor of foreign mining interests opens the ruling party up to attack. Political opponents of President Santos have come out in support of Cajamarca, including Senator Jorge Robledo, a potential 2018 presidential candidate.

The opposition to AngloGold Ashanti also came in the form of demonstrations on the streets, which will no doubt be repeated in other towns and cities.

And flippant comments by Minister Arce open him and the government up to ridicule and spite.

On the other hand, if the national government were to side with the people of Cajamarca, it would undoubtedly exacerbate Colombia’s already weak economic recovery.

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GDP growth. Source: World Bank

Much of the growth in the early-2000s was based on high commodity prices, which fell precipitously in the late-2000s with the slowdown in Chinese manufacturing and global trade. According to the National Mining Agency of Colombia, the mining sector represented 2.1% of Colombia’s gross domestic product in 2014.

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Source: Indexmundi

Furthermore, Colombia is dealing with the fallout from the Odebrecht scandal which is negatively affecting its GDP forecasts for 2017.

Conclusion

Referendums like the one in Cajamarca will continue to occur in Colombia. Commodity prices will continue to grow and multinational corporations like AngloGold Ashanti will seek to exploit the minerals that they were given rights to. This will lead to further conflict between the people, the corporations, and the central government.

If the past conflicts between Latin Americans and large, multinational corporations are any indicator of the future, then the winners and losers in Cajamarca are obvious.

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*All translations are the author’s

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