Mountain of Gold
Trick question: With what country does France share its longest land border?
Answer: Brazil; 800 kilometers.
French Guiana (Guyane française) is one of the remnants of France’s first colonial empire (those territories acquired before the French Revolution), and it chose to remain with France after World War II; as of a referendum in 2011, it is the Collectivité Territoriale de Guyane, a status which provides more self-administration as well as a continued link to France (Théry, p. 249). It has four representatives in the National Assembly, and its inhabitants vote for the French president. It holds municipal elections in March every six years, along with the rest of France. It is the site of the Ariane space center. It has a relatively small though fast-growing and mixed population–descendents of the indigenous tribes, Europeans, marrons (descendants of the escaped slaves/African/Amerindien groups), and a small percentage of Asians, mostly from China and with a small population of Hmongs, from Laos and Vietnam. The total population is about 300,000, more or less. It is a part of the beautiful Amazon rainforest and is a biodiversity site, with more species of trees, plants, and animals than in Europe as a whole (European Commission).
It is also cursed, because it sits on top of a major unexploited gold field.
A consortium of two companies–Nordgold, a Russian company, and Columbus Gold (that’s what they call it), of Canada–wishes to harvest the goldfield, and has been exploring sites around the country for years. Columbus Gold is a small firm; Nordgold, on the other hand, is a very large and growing international firm with ten mines–one in Guinea and three in Burkina Faso, in the fast growing West African gold mining region; one in Kazakhstan; five in Russia, including the high-producing Gross mine; and what are described as “a diverse portfolio of early-stage exploration projects and licences in Burkina Faso, Russia, French Guiana, and Canada” (International Mining, February 25, 2020; see also Mining Journal, November 13, 2019). They provided in 2017 an overview of the project; take special note of the “tailings storage facility,” where the industrial sludge of production is kept, as well as the mention of the road and power line.
In February, 2019, Deputy Gabriel Serville, a member of the GDR group (Left alliance within the Assembly) and a representative from French Guiana, forced a discussion of the situation; it was sparsely attended though, to their credit, several of the prominent members of the left-wing La France Insoumise were there. (The session is here: https://youtu.be/McdEJCHAizc, published by outremernews on February 8, 2017.) Serville warned of the damage to the environment by the use of a cyanide mix to separate out the gold; he referred to the opinion poll taken recently by IFOP, which showed that 81% of the Guyanese had serious reservations about the safety of the project; and that 69% said outright that they did not wish it to go forward. He reminded them of the disasters that had occurred with mining in sensitive areas–for example, in Romania in 2000, sometimes described as the worst disaster since Chernobyl:
In addition, Serville could point to the disaster in Brumadinho, Brazil, just days before, where the dam holding the tailings storage facility collapsed, creating a human and environmental disaster:
Speaking in opposition to this view was one of the other representatives of Guyane, Lénaïck Adam, who represented the district of Saint-Laurent-du-Moroni, which included the planned site for the mine. A member of Macron’s LREM, and elected in 2017, Adam was very much in favor of mining. His people needed jobs; unemployment stood at 70% in his region. He was not necessarily, he said, in favor of la Montagne d’Or, because he had not yet seen the final project, but “I respect the right of each Guyanais to exploit the mineral wealth of his country, all the while respecting our environment.” And finally, he pointed to New Caledonia, a French territory in the South Pacific (much closer to Australia than to France) which had agreed to the exploitation of the nickel on their island, though they too, he added, are “respectful of their environment.” That decision had led to greater autonomy for the islanders; and that, in fact, seemed to be his primary motivation: a state that would have its own source of income, would no longer be an économie de comptoir, buying and selling goods made elsewhere, but an economy of production and prosperity (Assemblée nationale, session of February 7, 2019, p. 965). His view was shared (is shared) among a number of elected officials in Guyane française, who resented their constant need to come begging to France.
So how had this worked for New Caledonia? I am a fan of well-made corporate videos; this video of a nickel plant is one of them. But it is a video that also makes clear the environmental impact of extractive mining, even if the land is put back as it was before; and this is only one of the mines in the area.
New Caledonia Koniambo Nickel: https://youtu.be/8vI4b2pZEys
When Minister of Ecological Transition François de Rugy responded to the questions by various deputies, he began by noting that some wanted the mine, some did not, some were concerned with making a show (by which he probably meant La France Insoumise), some refused to understand the complexity of the situation; he acknowledged the importance of biodiversity, protected by a 2016 law, but also noted the fearful poverty of the region. Most importantly, he was able to say that the final reports from the consortium were not yet in, so no decision could be made (Assemblée nationale, session of February 7, 2019, pp. 969-970).
Near the end of the debate, LFI Deputy Danièle Obono accused de Rugy of trying to take refuge in “complexity,” noting that the situation was “black and white.” As she summed it up, the project is “a pit 2.5 kilometers in length, 500 meters in width, and 400 meters deep in the middle of an equatorial forest, in proximity to two biological reserves in the northwest of Guyane. It is also 420 million euros of public investment, the economic impact of which appears very uncertain and derisory–750 jobs in the course of 12 years, in a department where there are 19,000 unemployed . . . [with a projected] 47,000 tons of cyanide dumped, 57,000 tons of explosives used, and 2,000 hectares of tropical forest destroyed” (Assemblée nationale, February 7, 2019, pp. 974-975).
When Obono mentioned the cost of the project, she was taking her information from a very important environmental study that had seemed to guide many of those opponents of the mine. In 2017, the World Wildlife Foundation of France (WWF) issued a report titled “Montagne d’Or, un mirage économique?” that examined the project from the economic standpoint, and at the same time provided a rather stunning look at the cost–to the taxpayers–of globalized multinationals. They used two intensive financial feasibility studies from SRK Consulting (a firm that specializes in resource industries and mining, hired by the consortium to draft a project that could be presented to future investors), from 2015 and 2017; WWF believed (as of 2017) that they had been published only in English, so WWF’s report was meant to make the data and their analysis of it available in French (WWF, p. 4). WWF’s overall conclusion was that the likely profitability of the mining project was “fragile,” in the sense that everything had to go right, including the fluctuations in the price of gold and the exchange rate between the euro and the US dollar. If these and other factors did not play out in the most favorable way, then (and this was also the analysis of WWF) the project managers would start looking for cost-cutting methods, most likely in terms of the cost of labor and environmental mitigation (pp.4-5, pp. 8-12)
More astonishing, however, was their analysis of the cost of subventions, from both the national and local governments, which WWF considered to be “astronomical” for a project of limited duration–12 years was the estimate–and “major environmental risks.” (p. 5) They noted, in addition, that the expected subventions from the state and locality were included in the “architecture” of the plan; they were a part of the projections of the profitability.
There were four major subventions expected of both France and Guyane: tax exemptions [défiscalisation]; the price of electricity; the cost of the power line to the site; and finally, the cost of building the road to the site (and the two latter would also have clear effects on the environment, p. 14).
The tax breaks were estimated by SRK Consulting as worth 227 million euros in total. As for the electricity, the firms had estimated their need as roughly equal to that of Cayenne, the capital and a city of about 57,000. The consortium would pay for electricity, but French law, in view of the much higher power costs of the Outre-mer (and of Corsica), subsidizes this higher cost among all French consumers including those in France. Because of that, the firm’s cost of electricity would be artificially lower than it costs to produce electricity in Guyane (though they would be paying for it) and would thus receive an indirect benefit of 129 million euros (pp. 14-15). The cost of the power line from the mine to Saint-Laurent de Maroni, the nearest town, would be 70 million, of which 30 million would be borne by the French government (p. 16). And finally, the road from Saint-Laurent-du-Maroni to the mine, a total of 120 miles in length, would have to be built and/or expanded and upgraded to take heavy and more regular traffic. The consortium said it would take responsibility for 54 km, leaving 65 km to the collectivité of Guyane, for a total cost estimated by SRK Consulting to be 34 million euros (p. 16).
By the estimation of the WWF, then, the total subventions would be 420 million euros; or, figuring the number of jobs, which had been estimated at 750 when the project was underway, about 560,000 euros per job created (p. 16)–an extraordinary amount of state money to go to a short-term project that would vanish after the mine was exhausted. Why not invest instead in local small businesses that would stay?
It is a controversial project, a collision between global capitalism and environmental protection, with a dash of old-style colonialism thrown in: it is the French Assembly in Paris that will make the decision about whether the project should stop or go forward. And the project has been around for nearly a decade: François Hollande’s government successfully kicked the can down the road into the Macron administration, but it is likely that Macron will feel some pressure to bring the preliminary process to an end. A new mining code was to be discussed by the Assembly early in 2020, but that deadline will be missed.
Given the environmental damage, given changed and unpredictable circumstances in the post-COVID-19 world, it would seem that the project might be dead. On the other hand, there may, perhaps, be even stronger pressures for going forward: a demand for gold as an investment; and a need, on the part of the French government, to relieve the extreme poverty of Guyane, even as France, has suffered economically as a result of the disease, as have all nations.
And one can even see the likely path. Originally, Nordgold was planning to produce their own electricity on site, by means of carbon-fueled generators, as they do elsewhere. But in October 2019, Nordgold announced that they would build solar-powered plants for two of their mines in Burkina Faso (Nordgold announcement). Indeed, Columbus Gold issued an update in August, 2019, suggesting that solar power was under consideration for Montagne d’Or, and that they were also redesigning the tailings storage facility to be more secure (Columbus Gold announcement).
One can easily see that those who want to promote this project might seize on the large-scale solar-powered aspect to justify the venture as a modern, future-forward venture for Guyane. Taking this solar approach would perhaps offset the cost of electricity and the power line, but not entirely. The Burkina Faso plant, it is reported, will “reduce” the use of carbon-based fuel in their generator but not–or at least not yet–entirely eliminate its use. It is also likely that the consortium would get a subvention for the solar power plant, and a subvention for whatever backup/supplemental system they use.
So what’s happening now? I don’t know.
The general population of Guyane is against the project, but there is one group that has been particularly opposed: the six indigenous nations. I’ll turn to them in the next post.
===================================================
Works Cited
World Wildlife Foundation, France, “Montagne d’Or: un mirage économique,” 2017. https://www.wwf.fr/sites/default/files/doc-2017-09/1709_rapport_montage_d%27or_mirage_economique.pdf.
Théry, Hervé, “La Guyane, communauté territoriale française en Amérique du Sud.” L’Esprit du temps, 2017, No. 51: 249-266.
