The dam already holds a capacity of 1.7 billion tonnes of mine waste, making it the largest tailings dam in Latin America and the third largest in the world. It has already been linked to local water contamination.
The biggest mining waste tailings dam in Latin America is positioned along a major active seismic fault line and measures one hundred times larger than the Samarco dam in Brazil that breached in 2015, killing 20 people. And the mine that feeds it is set to expand further.
A scientific report on the local water supplies near the mine by a respected medical professional at the University of Chile declares the presence of mining pollutants, such as mercury and manganese, at levels between 26% and 1,000% above those permitted. The report (See page 14 of LMN report) is actively contested by the state and the company, who refuse to take action.
Meanwhile, public officials - including the Secretary of the Presidency Jorge Insunza - frequently become intimately involved in the company, inhabiting places on their board, or receiving business contracts from them, while holding relevant decision making powers in government. Yet the company or the individuals involved face no legal consequences under Chilean law.
These are the kinds of concerns that have surrounded the British-Chilean copper giant, Antofagasta, since 2004, yet which have not affected the company's ability to gain legitimacy, investment and finance via the London Stock Exchange in that time.
As their 2017 AGM was held in London on 24 May, the company continued to deflect the criticisms leveled by both visitors from Chile and from the solidarity activists in London, who attended the AGM to hold the company to account.
The 27th largest mining company in the world and 9th largest copper miner has been able to operate with impunity from London, in spite of its entanglement in a range of questionable political and environmental practices in Chile.
The new London Mining Network report, 'In the Valley of the Shadow of Death? A Report on Antofagasta Plc, Minera Los Pelambres and Los Caimanes', highlights the scandals and social and environmental costs associated with Antofagasta's operations in Chile, but at the company's highest decision making forum, scant progress was seen on any of the range of issues outlined in the report.
El Mauro: a ticking time bomb
Those living in the village of Caimanes would be expected to evacuate their homes within ten minutes of a breach at Antofagasta's El Mauro dam at their Los Pelambres copper mine (one of the largest copper reserves in the world).
The dam already holds a capacity of 1.7 billion tonnes of mine waste, making it the largest tailings dam in Latin America and the third largest in the world. It has already been linked to local water contamination.
The dam already holds a capacity of 1.7 billion tonnes of mine waste, making it the largest tailings dam in Latin America and the third largest in the world. It has already been linked to local water contamination.
A magnitude 8.8 earthquake in Chile in 2010 (the 6th largest earthquake in recorded history) caused five tailings dam failures and a loss of human life. In a paper published in 2010, engineer Michael Davies states that the failure rate for tailings dams is approximately 10 times that of water-retention dams, increasing fears of those living near El Mauro.
In short, the El Mauro tailings dam is a colossal ticking time bomb. Evidence is growing of the many problems caused by tailings dams internationally, and El Mauro is a particularly well-documented example.
There are serious issues involving water pollution, water supply and risk of dam collapse after an earthquake. Despite the fact that resistance to its construction has continued for well over a decade, Antofagasta are still planning to expand the dam.
With an investment of $1.1 billion, Minera Los Pelambres plans to expand the mine by building two new grinding mills and a desalination plant. Through this expansion the company hopes to maintain production levels of around 400,000 tonnes of copper and 8,000 tonnes of molybdenum per year, an increase of 15% on current outputs.
Although the works were scheduled for 2016, Minera Los Pelambres was forced to delay the expansion, which they have stated is due to conflict over El Mauro, where local residents in the village of Caimanes have actively opposed the dam. It is unclear what the total capacity of El Mauro is expected to reach based on the expansion plans.
The power family behind Antofagasta
Antofagasta is 65%-owned by the Luksic Group. The widow of the company's founder, Iris Fontbona, is the richest person in Chile and the owners, the Luksic brothers, have links with politicians across the Chilean political establishment, including Chilean president, Michelle Bachelet, with whom there is an ongoing investigation of potential criminality.
The Luksic Group continues to dominate the mining sector in Chile through Antofagasta Minerals and Minera Los Pelambres (60% owned by Antofagasta). The El Mauro tailings dam has been an important part of a broader appropriation of local water resources and supply for the company's mining operations.
Cheap disposal of mining waste has been an important way the group have reduced costs, which has recently caught up with Antofagasta in its conflict with Glencore over waste disposal at a site on the Chile-Argentina border, called Cerro Amarrillo.
In 2015, then Secretary of the President, Jorge Insunza, left his position after it emerged that a consulting company of which Insunza owns 40%, Virtus Consultores Ltda, undertook political analysis consulting work for Antofagasta Minerals between 2000 and 2014 (excluding 2009). From 1998 onwards the company also undertook consulting work for Banco de Chile, another Luksic Group holding.
Insunza was Secretary of the Presidency briefly in 2015, before the connections between Virtus Consultores and Antofagasta Minerals became public. Prior to this he was President of the Mining Commission in the Chamber of Deputies.
In 2015, as the incumbent Minister he also participated in negotiations which resulted in the initiation of a desalination plant by Minera Los Pelambres, ahead of the expansion of their mine. Negotiations were attended by Minera Los Pelambres, the Provincial Governor of Choapa, Patricio Trigo, representatives from the municipality of Salamanca, and representatives from residents of Los Caimanes and Salamanca.
At the time of writing Insunza is the subject of ongoing investigations by the General Prosecutor's office of Complex Crime (Fiscalia de Alta Complejidad Oriente) for bribery and tax offences.
Legitimised by London listing?
The London Stock Exchange has long prided itself a benchmark for quality assurance amongst investors. A London listing is seen by many as an indication that a company has passed a range of practical tests and represents a sound investment. Yet after countless court rulings against Antofagasta, their London listing remains.
Lucio Cuenca Berger, an engineer from the University of Santiago, Chile, director of the Latin American Observatory of Environmental Conflicts (OLCA), and member of the Board of Directors of the Latin American Observatory of Mining Conflicts (OCMAL), came to London to take the company to task at their 2017 AGM last week.
Lucio stated, "Antofagasta is a major player in the aggressive expansion of large-scale mining in Chile. It makes use of the London Stock Exchange to reap the benefits of being a global company but also so that its owners, the shareholders, are far from the scrutiny of the local communities affected by its operations.
"For this reason, it is very important to attend the company's AGM to hold it to account, and to call on the relevant British institutions to take responsibility for sheltering companies which violate the rights of individuals and communities."
The report: 'In the Valley of the Shadow of Death? A Report on Antofagasta plc, Minera Los Pelambres and Caimanes'.