U.S. Firm’s Gold Mine Plan Rattles Rural Spain

Mayor Roberto Perez, having considered how a U.S. company’s plan to mine gold will help his struggling region, retired to a bar for some hard cider.

Savoring the prospect of more jobs and tax revenue, Perez began pouring cider the traditional way--the bottle above his head and the glass below his waist. But while most of the liquid landed in the glass, some splattered onto the floor.

Like the cider, the plan by Denver-based Rio Narcea Gold Mines Ltd. to dig for gold in Asturias is already a bit messy. Company executives and environmentalists are bickering. And some local residents say Rio Narcea used heavy-handed tactics to separate them from their ancestral homes.

Nonetheless, the project has raised hopes in this depressed corner of Asturias, a rainy region in northwest Spain where the clock sometimes seems to have stopped in the Middle Ages.

Farmers still drive horse-drawn wagons on narrow roads past stone, slate-roofed houses. Every farm has a wooden grain shed, some with thatched roofs, built on stilts to keep out humidity and rodents.

Hotel and restaurant owners say they’re getting more business from mining employees and expect a bigger upturn in a region whose main industries, coal-mining and steel manufacturing, have largely collapsed.

The Romans came to Asturias 2,000 years ago to mine gold. Traces remain of their reservoirs and sluices, built by slaves and used to direct water at the topsoil and expose the gold.

But the Romans left a lot of gold undiscovered. Rio Narcea recently said it found reserves of 1.8 million ounces and plans to extract 100,000 ounces annually from open-pit mines.

Rio Narcea plans to go into production after a feasibility study is completed this summer. Company executives are already talking of pouring gold ingots on site and removing them by armored car.

Although small compared with South African and American gold mines, the Rio Narcea project would be one of the biggest producers in Europe, employing about 350 people directly. Another 700 support jobs are expected to be created in a region that has 25% unemployment.

Over the last three years, Rio Narcea has obtained mineral rights to more than 680 square miles of Asturias. It even bought out an entire village, El Valle, which sits on a projected mine site, turning it into a ghost town.

Rio Narcea paid big money to buy out the two dozen residents--up to $500,000 to one family. But it first threatened to temporarily expropriate the land for small change, creating resentment among people who had lived there for generations.

“No to the Mines,” says graffiti in Bable, the local dialect, on one of the abandoned buildings. Near a doorway lies an empty bottle of champagne, as if the inhabitants had made final toasts before leaving forever.

“I preferred to sell our land rather than have them occupy it and do what they want with it,” said former resident Manuel Suarez Garcia as he painted a bigger house he is moving into.

His family further resents Rio Narcea because they say careless handling of chemicals used in exploratory drilling in 1994 sickened Suarez’s father-in-law, Jose Manuel Llano.

Llano, 70, says he and other residents gathered crops in chemical buckets left behind by drillers. A label on one says in English, which Llano does not understand: “Wear chemical-resistant gloves, rubber boots, chemical goggles and face shield.”

A lawsuit against Rio Narcea alleging the chemicals made Llano sick--he has lung disease and joint pain--was dismissed for lack of evidence. Eugene Spiering, Rio Narcea’s head of exploration, denied the chemicals were dangerous.

Chemicals are a big issue with environmentalists. One substance that is poisonous, cyanide, will be used in large amounts once mining begins, to separate gold from surrounding rock.

Environmentalists and some local politicians fear some of the cyanide will leak into rivers, killing salmon and trout.

Alberto Lavandeira, a company vice president, said that cyanide will be handled with care and that, when mining is completed in about 15 years, the area will be re-vegetated and a lake created, leaving no trace of the mines’ existence.

Perez, while acknowledging environmental concerns, wants mining to expand.

“I have people who need to eat,” he said. “We have to strike the right balance between the demand for jobs and protection of the environment.”

But Carlos Lastra, head of the group Friends of Asturian Nature, doubts a balance is possible.

“Everyone gets excited at the word ‘gold,’ but we think we stand to lose a lot more than we gain by this project,” Lastra said. “The Romans came and got gold from here. Now a different empire is coming to take more riches at the expense of the local people.”