Re-making Pascua Lama: corporate financialisation and the production of extractive space

ABSTRACT

In the context of the rising incidence of displacement and land use conflicts over resource extraction, this article draws attention to changes in the extractive practices of the gold mining industry as a consequence of financialisation. Through a close study of the Pascua Lama gold project in Chile and Argentina, I examine how the industry's adoption of shareholder value maximisation has mobilised alternative forms of rural arrangements between land, resources, labour, and capital conducive to the extraction of financial value. Such strategy, I find, has altered the scale and pace of mineral development and heightened the disruptions conventionally associated with commodity price cycles. The paper contributes to advancing existing understandings of financialisation as a key driver of agrarian and rural transformations within critical agrarian studies.

KEYWORDS:

• Financialisation
• mining
• shareholder value
• gold
• Chile

Acknowledgments

The author thanks the guest editors of this special issue, Anja Nygren, Barry Gills, and Markus Kröger, and two anonymous reviewers for their valuable feedback and comments. Research for this paper benefitted from the support of former colleagues at the University of Manchester, Martín Arboleda, Melania Garcia, and Daniel Banoub. The author is also grateful to Professor Noboru Ishikawa, Xiaobo Hua, Cypri Dale, and Iqra Anugrah for their suggestions on relevant literature, and Felipe Erias for assistance with the Chile-Argentina map. Any errors are of course my own.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In 1999, the UK’s decision to sell nearly half of its reserves triggered a price fall to the lowest price in two decades. Gold slid to a low of $250 per ounce as concerns grew that other European central banks would follow suit.

2 Gold mining analyst. Author’s interview and notes. London, UK, July 2015.

3 Mining contractor. Author’s interview and translation. Audio recording. Santiago de Chile, Chile, October 2014.

4 Pascua Lama’s construction did not officially commence until 2009, but Barrick restarted work on the project as gold prices started to rise.

5 Stockpiles refer to additional mineral supply extracted but held in storage with the intention of processing it at a future time. Mining companies hold stockpiles typically of low-grade material for a variety of reasons: in order to ensure continuity of operations in case of mine closure, to supplement the grades of ores being processed, or to wait for higher prices supportive of processing low-grade ores.

6 ESIA refers to the Environmental Social Impact Assessment, a permitting process for identified environmentally sensitive activities.

7 Remarks at the Prospectors and Developers Association of Canada Conference in Toronto, Canada, March 2015. Audio recording.

8 Mineral operators are given maritime access to Chilean ports, which is a much shorter distance than the Argentinian sea in the Southern Atlantic and opens up access to the Pacific Ocean, a gateway to Asian markets. It also permits companies to access land and water on the Argentinian side.

9 Representative of an engineering association. Author’s interview. Audio recording. Santiago de Chile, Chile, November 2014.

10 Local activist. Author’s interview and translation. Audio recording. Vallenar, Atacama, Chile, December 2013.

11 Local activist. Author’s interview and translation. Audio recording. Vallenar, Atacama, Chile, December 2013.

12 Quote from a statement submitted to the Parliament of Canada in May 2009.

13 Fernando González and Victor Gonzalez Aravena, President and Technical Manager of Junta de Vigilancia del Rio Huasco. Author’s interview and translation. Audio recording. Vallenar, Atacama, Chile, December 2013.

14 While mining operations in Northern Chile have been operating at high altitudes, Pascua Lama was an ‘extreme’ case as it was to be conducted in an environment considered hostile to even flora and fauna (local activist, author’s interview, Vallenar, Atacama, Chile, December 2013).

15 Natural resource lawyer. Author’s interview. Audio recording. Santiago de Chile, January 2014.

Additional information

Funding

This work was supported by Kyoto University: [Grant Number CSEAS Next Generation Academic Subsidy Program]; Seventh Framework Programme: [Grant Number Marie Curie ITN grant PITN-GA-2011-289374-ENTITLE].

Notes on contributors

Julie Ann de los Reyes

Julie Ann de los Reyes is a geographer and assistant professor at the Centre for Southeast Asian Studies, Kyoto University, Japan. Her research looks at processes of socio-environmental change in the mining and energy sectors. She is currently doing research on the political ecology of energy transitions in East and Southeast Asia.