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Martin M
Based on the price of oil and the U.S. dollar, gold is pretty much where it should be, said economist Martin Murenbeeld of Victoria-based M. Murenbeeld & Associates Inc., which consults on gold, currency and credit market trends.
"High oil prices tend to move the price of gold up, while a strong-U.S. dollar tends to move gold down," he said. Yesterday, the U.S. dollar declined against other currencies after the yuan revaluation.
If the price of gold was moving solely in response to changes in the U.S. dollar's exchange rate, the recent rally in the greenback could have pushed gold down to about $394 an ounce, according to the Gold Monitor report published by M. Murenbeeld.
But based on its sensitivity to oil, gold should be trading at about $416 an ounce, just below its current price. M. Murenbeeld estimates that every $1 rise in oil boosts gold by $2.30 an ounce, so a $10-drop in oil could take gold down by $23 an ounce. A drop in the price of oil and a rally in the greenback would be negative for gold, he said.
"For the time being, I think gold will be tied to currencies," Mr. Murenbeeld said. He expects the close correlation in the moves in the greenback and gold since 2002, which have broken down this year, could resume in 2006.
TD Sec to TD Sec as I recollect...
Nicaragua Politics
the Nicaragua political scene is looking more favorable...
Nicaragua: A Three-Way Political Battleground
by Frank J. Kendrick
www.dissidentvoice.org
July 20, 2005
In February, a new political group was formed in Managua called the Movement for Nicaragua. Some 500 irate citizens, calling themselves non-partisan, rallied under the banner “Tomorrow is too late,” and called upon the people to “rescue” their country that had been “hijacked” by the country’s leftist and rightist party bosses (“Caudillos”) former President Daniel Ortega, of the Sandinista National Liberation Front (FSLN), and former President Arnoldo Aleman, of the Liberal Constitutionalist Party (PLC).
By “hijacked,” the Movement’s leaders were referring to the infamous January, 2000, agreement between the Caudillos, popularly called the “Pacto”, that has dominated Nicaraguan politics since that time. Essentially, the Pacto established virtual two-party control of the country. It divided up key governmental offices, including the Comptroller General, the Supreme Electoral Council, and the Supreme Court of Justice, among the two dominant parties according to their political weights. The Pacto also awarded seats in the National Assembly (AN) to the most recent ex-President and the Presidential candidate who finished second in the election (Aleman and Ortega), and also provided immunity from legal action to all members of the AN. The immunity clause pointedly covered Aleman, who would be immune from prosecution for a variety of nefarious, personal enrichment schemes, and Ortega, who was accused of sexually abusing his stepdaughter for many years. Moreover, the Pacto changed the electoral laws to restrict party eligibility, with the result that the nine small parties that had won seats in 1996 were reduced to three that could register in 2001, of which only the Conservative Party won an AN seat.
Because the constitution prohibits an incumbent from serving two successive terms, the 2001 elections resulted in the election of a new PLC President, Aleman’s former Vice President, Enrique Bolanos, whom Aleman had selected as his successor pro tempore. Bolanos was once a prominent cotton-farmer whose large landholdings were expropriated by the Sandinistas in 1985. Soon after, he became head of the Higher Council of Private Enterprise (COSEP), a position from which he sallied forth to relentlessly attack the Sandinistas. Because Bolanos lacked his own power base in the PLC, Aleman regarded him as a manipulable successor to temporarily hold the Presidency until Aleman could run again, as permitted by the constitution. However, Bolanos turned out to be considerably stronger-willed than expected, and he soon became a formidable opponent of both Aleman and Ortega. In his inauguration address, Bolanos promised that Nicaragua would enter a “new era” that would not tolerate “Corruption, perversion in the use of power, and caudillismo.” So within months, a battle ensued based on his opposition to the Caudillos, a bare-fisted battle that continues to this day. Thus, Nicaragua now has three political leaders -- Bolanos, Aleman, and Ortega -- battling, and/or sometimes forming alliances, with each other to run the country. As one foreign newspaper recently put it, the battle “has taken on the characteristics of a game in which anyone can play and no one can win.”
Effectiveness in Several forms
Bolanos can definitely be credited with a number of important achievements during his administration. For one, he negotiated a nearly 80% reduction in Nicaragua’s $6.6 billion external debt under the International Monetary Fund’s (IMF) Heavily Indebted Poor Country Initiative. He also negotiated IMF support for a three-year Poverty Reduction and Growth Facility (PRGF). Moreover, he helped the economy achieve a 4.2% increase in the GDP during 2004. But most noticeably he can be credited with playing a major role in having Aleman prosecuted for corruption.
Within his first year, Bolanos and his supporters induced the AN to approve a resolution that suspended Aleman’s immunity. This was accomplished by a simple majority of 47 Deputies, including all 38 of Ortega’s FSLN Deputies, seven pro-Bolanos, PLC dissidents (who called themselves the Blue and White bench), the one Conservative, and an independent. Later, in 2003, Aleman was charged by the Attorney General on numerous counts including laundering some $100 million in state funds, fraud, misuse of public funds, embezzlement, illicit association, instigation to commit a crime, and electoral crimes, and was indicted, convicted, and sentenced in court to 20 years in prison. The judge in the case, Juana Mendez, is a long-time Sandinista which naturally led to speculation that her decision was politically biased. But whatever her reasons, the conviction and sentencing should end any hopes of Aleman’s running for President in 2006.
Coincidentally, Bolanos had his own problems with the law. Less than a year after taking office he and his Vice President were charged by the Attorney General’s office with his own electoral law violations. The Liberal Party Alliance, representing the PLC and two other conservative parties, had only reported a fraction of the money it spent on PLC campaigns in 2001, and had hidden some $32 million in such funds. Bolanos’ answer was to waive his immunity and boast that his life has “always been an open book.” Ultimately, the charges led to a request from the PLC-FSLN-dominated Comptroller General’s Office (GCO) in November, 2004, that the AN impeach Bolanos. Added to this was a GCO complaint questioning the legality of Bolanos’ receiving two salaries: $9,000 a month as President, and $8,620 a month from a life pension as the former Vice-President, adding up to an incredibly high total annual salary of $211,449.
Intent on Limiting Executive Power
The GCO’s impeachment request was only one early stage in a long, nasty, and very complicated governmental crisis marked also by the introduction in November of a package of constitutional “reforms,” authored by the Caudillos’ AN coalition, which were aimed at reducing the authority of the Executive. Their stated purpose was to impose the U.S. approach to the appointment of ministers, vice-ministers, ambassadors, and directors of governmental agencies -- to require legislative approval of presidential nominations. The AN would also have jurisdiction to confirm whether or not public officials were fulfilling their jobs.
The amendments were strongly opposed by Bolanos and his group of AN supporters who vowed publicly to fight them, and they retaliated with their own “reform” package of amendments. These would outlaw presidential re-election for life, and would implement a direct popular vote for AN Deputies to replace the current system by which voters simply vote for party-selected lists of candidates. Bolanos also became more confrontational, charging that a “constitutional coup d’etat was being planned, something that would mean the return of another collective dictatorship, a dictatorship with two heads but still a dictatorship.” His warning that he would stop the coup by “good means or by bad means,” prompted rumors that he might declare a state of national emergency.
Attempting to undermine his AN opponents, Bolanos sought the backing of other Central American Presidents, the Organization of American States, the Central American Court of Justice, and the U.S. But early in January, an unanticipated agreement, or “pacto,” as critics came to call it, was signed by Bolanos, Ortega, and Aleman, which stated that the controlling parties would not attempt to remove the President before the end of his term, and that the proposed amendments would not become law until a consensus could be reached between the legislative and executive branches. The very next day, however, saw the Assembly approve the Caudillos’ amendments, with PLC and FSLN Deputies supporting them. (For more details on these events, see Washington Report on the Hemisphere, Vol. 24.23 and Vol. 25.03.)
Reining in Corruption While Overlooking Poverty
In the midst of the developing crisis, Bolonas managed in January to deliver his annual report to a very unresponsive, and even hostile, AN audience. He claimed that “We are better off than in any moment in the past 25 years.” But he didn’t mention that poverty had grown 20% in three years, and that 30% of the population and 10% of children ages 1-5 now live with chronic malnutrition. Moreover, unemployment and underemployment currently are above 50%, and over a million people have no access to healthcare, education, or potable water. Although Bolanos doubtless deserves credit for his anti-corruption campaign, as well as other positive accomplishments, he has not done much to help the poor majority of Nicaraguans who live in the second poorest country in the Hemisphere. Even the much praised external debt cancellation has done little to help the poor because at least 60% of the available funds have gone to pay for an internal debt of $3.56 billion. To be candid, however, these failings must be more broadly blamed upon the current intra-governmental battle between Bolanos and the Caudillos, a battle that has nearly paralyzed the operations of all three branches.
The Crisis Worsens
Another, and even more serious, confrontation between the Caudillos and the President erupted in June. It was triggered initially by the legislative PLC-FSLN coalition over creating a new Superintendent of Public Services (SISEP) office, the members of which the AN would select without presidential concurrence. Control of this office would give the AN power to regulate all telecommunications, energy, and water. Bolonas reacted by having the police surround the building housing the SISEP offices and preventing their entry. Again, demands were made that Bolanos resign, and an anti-Pacto rally, this time attracting tens of thousands of ordinary citizens, was held to protest the entire situation. According to protesters, who were members of a group called Network for Nicaragua, “We are completely determined to…protest against the pact and against corruption which has the people drowning in poverty.”
Again, the President appealed to the OAS, which responded by sending a delegation to Managua for a week in mid-June to investigate and to try to bring the parties together. The delegation’s head, OAS Secretary-General Jose Miguel Insulza, recommended that a serious national dialogue between all parties should commence as soon as possible because the situation could deteriorate into a “profound crisis.” Although not as serious as crises in countries like Bolivia and Ecuador that threw out their Presidents, he warned that “we still have time to save Nicaragua from the current crisis.” But the dialogue that he proposed, modeled after one that had ended in April when Bolanos’ walked out, was rejected, this time by all three parties. Still optimistic, Insulza promised to return soon.
At the same time, the newspaper La Prensa released the results of a poll that showed that 74% of Nicaraguans now feel that their country is the “prisoner of the Pacto.” But it also showed that only 22.3% of the people approve of the way Bolanos is governing the country. In other words, the majority of people appear now to have very negative feelings toward almost everyone in government. A popular feminist cartoon figure, Mafalda, summed up these feelings very well on a poster held high at the Network for Nicaragua rally: “Ugh, I’m fed up with them all. Get rid of everybody.” Thus, it would be no exaggeration to say that the current battle has become one of the most dangerous crises facing the country since 1990, and the crux of it is the Pacto.
As for the U.S., it has repeatedly expressed its strong and continuing support for Bolanos and has sent Secretary of State Colin Powell, Deputy Secretary of State Dan Fisk, and other spokespersons, to meet with conservative leaders in the country to express support for Nicaraguan democracy, concern over Sandinista victories in local elections, and the need for uniting democratic forces in the country. But the U.S. now finds itself in a dilemma because it has also demonstrated its fervent opposition to both of the Caudillos and their followers. So, who might the U.S. support for President next year if future developments should determine that the choice is between Aleman and Ortega?
Retaining Overwhelming Influence and Weight
Concerning the Caudillos, the controversial Arnoldo Aleman is seen by most observers as a clever, if not crafty individual who seems able to survive most attempts to bring him to justice or to limit his political power. A lawyer and businessman, he became active with COSEP and the Liberal Party during the 1980’s and was eventually imprisoned for his political activities. Because of this he developed an intense, enduring hatred of the Sandinistas. He was elected Mayor of Managua in 1990 as a candidate of the United Nicaraguan Opposition (UNO), and during his term he conducted a vigorous campaign to renovate the city that had fallen into a state of extreme disrepair following the 1972 earthquake and during the austere Sandinista period. He also worked to rebuild the PLC, and with the help of cronies, hammered together a political machine that helped him score a resounding victory over Ortega in 1996.
Currently, the PLC center is dominated by Aleman and a group of his “Arnoldista” cronies whose fanatical hatred of the FSLN prompts them to support him no matter what kind of degraded officeholder he may be. Aleman has been accused of stealing more money for himself, his relatives, and friends while mayor and president, than did the Somozas in 20 years. In fact, Aleman was listed by Transparency International as the 9th most corrupt national leader in the world. Although a minority of PLC members, including Bolanos, have had enough self-respect to leave his party, Aleman remains the master politician who can build power and run a political machine even from prison where he has resided off and on for over two years.
In his battle with Bolanos, Aleman has done about everything possible to win. One victory was to get out of prison, which he managed to do a year after his sentencing. The reason for being transferred to house arrest was reportedly ill health, although the Attorney General and the press later speculated that it was a “political arrangement.” Last January, rumors circulated that Aleman might be officially pardoned, either by a political amnesty or by having his sentence vacated. So far, Aleman has neither received amnesty nor been pardoned, although his PLC loyalists in the AN have attempted to pass legislation that would grant amnesty to all public officeholders, including both Aleman and Bolanos. But the PLC bloc now consists of only 43 Deputies, less than a majority, because several PLC Deputies left the party in May, 2004 to form a new Alliance for the Republic (APRE), and others are members of the dissident “Blue and White” group formed in 2001. So, Aleman obviously needs Ortega’s help to run for the presidency again.
A Fresh Contender
However, there is serious competition with Aleman in the PLC in the person of Eduardo Montealegre, the former Minister of the Presidency and Minister of Foreign Relations during Aleman’s presidency. A popular investment banker who received a 41% favorability rating in a CID-Gallup poll in March, Montealegre refers to the current PLC and FSLN leaders as “dinosaurs” who are out of touch with the people. Montealegre’s pro-U.S., free trade views led to the U.S. State Department’s Dan Fisk asking him to seek the PLC Presidential nomination. Montealegre is also U.S.-educated and has noticeably attended all important U.S. Embassy functions. But the PLC leadership insists that Montealegre “separated” himself from the party by disobeying Aleman. So, Montealegre will somehow have to go around Aleman for the nomination.
Unsuccessful at the Ballot Box, Yet Still Politically Powerful
The other Caudillo is Daniel Ortega, who is probably the strongest and most successful political leader today in Nicaragua. Although he loses Presidential elections with regularity, he manages to dominate the FSLN. He has been active with the FSLN since 1963, and after Somoza fled the country, he joined the governing Junta and in 1984 was elected President. During his term, Nicaragua drafted a constitution under which Ortega surprisingly was defeated in 1990 by Violeta Chamorro. Since then, in addition to leading the party, he has also managed to maintain very tight control of the FSLN in the AN, an ability that results from his close control of the selection of all FSLN legislative candidates.
The FSLN and Ortega received great encouragement from the results of the municipal elections in November, 2004. The party increased its control from 55 to 88 of Nicaragua’s 152 municipalities, including the capitol, while the PLC lost in 39 municipalities, the worst the party has suffered since 1994. As for percentages of votes cast, the FSLN received 46%, the PLC received 36%, and APRE, the new party, received only 12%. So, it was a good day for the FSLN and a bad day for the PLC which lost control of more than half the municipalities it had previously controlled.
Ortega believes ardently that he will one day win the Presidency, and 2006 is the year to do it. He still echoes some of the old socialist ideas, although much toned down, and evidently believes that a more compromising FSLN approach to political and economic issues could be successful, but only under his leadership. However, there is little doubt that his authoritarian-style party leadership and his negotiating the 2000 Pacto have lost him many followers, including numerous prominent Sandinistas who have left the party, such as Father Ernesto Cardenal, Carlos Mejia Godoy, Ortega’s brother, Humberto, etc., etc.
One particular issue that could make Ortega very unpopular with potential voters would be his possible support of legislation to grant amnesty to Aleman. This would give Aleman the opportunity to run for President in 2006 which he could no doubt do with the support of his most faithful PLC followers. But since Aleman is so unpopular with the general population, he would be more likely to lose to Ortega, a possibility of which the wily Ortega is well aware.
Former Mayor Emerges as a Formidable Threat
Currently, Ortega is being challenged by the former FSLN Mayor of Managua, Herty Lewites, a 65-year-old Jewish businessman who wants the FSLN’s nomination for President. He has a strong, although minority, following among the general party membership, as well as a solid revolutionary background that includes being jailed in 1960 during the insurgency against Somoza. He also served as an FSLN member of the AN for five years after Ortega’s defeat in 1990. His view is that the “radical group” of the party, headed by Ortega and Tomas Borge, is only “a small group of opportunists around Daniel.”
However, the FSLN Party Congress in March disagreed with Lewites and voted both to bypass its usual primary election, and to select Ortega as its candidate for President in 2006. The Congress also ratified the FSLN Assembly’s expulsion from the party of both Herty Lewites and his campaign manager. Lewites’ comments, that reflect a good deal of contemporary reality, were “There are two tendencies within the Sandinista party…The first tendency is for implementing a dictatorship. The second is for the democratization of the party and the country.” So he has vowed to continue fighting “the Danielista clan.” According to a March CID-Gallup Poll of Sandinista voters, support for Ortega had fallen by 16 points since October to only 31%, while 59% of Sandinistas said they supported Lewites, a 21% increase from October. In spite of this divisiveness, the poll also showed that the FSLN was still the most popular party in the country, while Lewites was the most popular political figure in Nicaragua, almost 20 points ahead of the PLC’s Montealegre.
An Uncertain Future Awaits
The coming year and a half will see numerous challenges for the Caudillos. Both are attempting to hold on to their powers within their respective parties, and of the two, Ortega has certainly been the most successful. But the futures of the Caudillos and the parties they control are by no means certain, because too many things can happen to undermine their respective political groups. One of those things could be an unpredictable, disastrous outcome of the current constitutional crisis, and another could be the development of an alternative, “Third Way,” between the two parties. APRE, which was formed in May, 2004, with Bolanos’ blessing, contains a significant number of PLC dissidents, and could offer that kind of alternative. Currently, a “dark-horse” candidate, Dr. Jose Antonio Alvarado, who was evicted from the PLC by Aleman, is seeking APRE’s nomination for President. He is making a special appeal to the middle class which he feels virtually disappeared because of the FMLN’s “socialist” policies. Despite its poor showing in last year’s municipal elections, APRE conceivably could provide that Third Way. Whatever happens, however, the majority of Nicaraguans now appear to share the belief that they deserve far more then they now receive from almost all of their current leaders.
Frank J. Kendrick is Senior Research Fellow at the Council on Hemispheric Affairs, an independent, non-profit, non-partisan, tax-exempt research and information organization based in Washington, DC: www.coha.org.
why those Indians like gold...
Gold has done well in local currency over last ten years...
up 50.9% over the 10 year period, 5% per year.
here's a new COT chart for you, you can click on the various categories on the left to display different graphs... still prefer your Louis charts the most...
http://www.sharelynx.com/chartstemp/cots/CotChartFeedsGC.php
those concentration charts are of interest...
Change it to what...?
Nicaragua Politics
Bolanos supporters this time...
__________________________
Nicaraguans protest ex-leaders' power play targeting president
By Hugh Dellios
Tribune foreign correspondent
Published July 18, 2005
GRANADA, Nicaragua -- Thousands of Nicaraguans marched through this colonial-era city Sunday, protesting a political pact between two former presidents that is blamed for paralyzing the impoverished country's government.
The marchers demanded the reversal of maneuvers in Congress directed by former President Daniel Ortega, leader of the left-wing Sandinista Front, and former President Arnoldo Aleman, the imprisoned leader of the right-wing Liberals, that have stripped powers from conservative President Enrique Bolanos and made it difficult for him to govern.
The protesters included Bolanos supporters, business leaders, activists and Sandinistas who support a party rival of Ortega's. They demanded election reforms that will allow candidates to run for president next year who are not handpicked by the two powerful party leaders.
"It's a consequence of these kinds of pacts that Nicaragua is so poor," said Victor Perez, 65, a businessman who was marching. "That's what's led us to the economic disaster we're in."
The Granada march was smaller than one held in June in the capital, Managua, that attracted as many as 50,000 people. Organizers plan to hold similar demonstrations across the country in the next few weeks.
"Democracy, yes! The pact, no!" the marchers chanted, a slogan that also was emblazoned on the T-shirts of the marching bands' drummers and pompom girls.
"People are in the streets, and I think that's an important step," said Sergio Ramirez, an author and former Sandinista vice president who split with the party in the mid-1990s. "We've got to change everything--the electoral law, the constitution--so the pactistas don't take over the country."
The marches were called as the country's political crisis continued to deterioriate. U.S. and Latin American officials fear it may threaten democratic institutions built up since the country's civil war ended in 1990 and hold back development efforts in the hemisphere's second poorest country after Haiti.
Congressional leaders loyal to Ortega and Aleman began impeachment proceedings against Bolanos this month. They are investigating what they say could be financing irregularities during his victorious 2000 election campaign.
Bolanos turned against ex-boss
The political crisis began after Bolanos, who was Aleman's vice president between 1996 and 2001 and was handpicked to be Aleman's successor, turned against his former boss after taking office and had him charged with corruption. Aleman is under house arrest, serving 20 years for the embezzlement of $100 million in office.
That cost Bolanos his support within the Liberal Party. His overall support is slim too, although he is backed by the Bush administration, which last week granted Nicaragua $175 million in aid.
At a ceremony to announce the aid package, Secretary of State Condoleezza Rice called Bolanos "courageous," while he warned that his country was threatened by a "legislative dictatorship."
Ortega and Aleman, whose parties together make up a majority in Congress, have orchestrated moves that stripped Bolanos of his ability to appoint officials, control public services, settle war-era land disputes and destroy old Russian-made missiles that the U.S. fears could fall into terrorists' hands.
The two former leaders say they have taken the steps to balance power in the country and make up for Bolanos' ineptness as a leader. But Bolanos supporters and others believe the two have banded together for narrow political purposes.
Aleman wants his freedom, which Ortega could grant because the Sandinistas control most of the country's judgeships. Ortega, who would like to win back the presidency he lost in 1990 elections, could benefit from election law changes that Aleman's loyalists have helped pass in Congress.
Bolanos has called for a national referendum on the congressional actions. He also traveled to Washington last week to ask the Organization of American States to send mediators, which it did.
Regional leader frustrated
OAS Secretary General Jose Miguel Insulza arrived in June to try to get the feuding parties to negotiate a settlement. He departed frustrated.
"The situation is much more difficult than I would have imagined," Insulza said before leaving. "Why go to the brink of the abyss before making an agreement?"
In opinion polls taken last month by the newspaper La Prensa, which has editorialized strongly against the pact, 83 percent of responding Nicaraguans said it was "destructive" to the country's institutions.
here's a daily Sirius broadcast featuring Armstrong...
http://feeds.feedburner.com/sirius_tdf_armstrong
Lance comments are of interest, and I am sure you will appreciate the Sirius Radio advertising remarks:
Lance in France...off the bike and on the mike...
Nicaragua Politics
Searching for a new combo
Jul 14th 2005 / MANAGUA
From The Economist print edition
Outsiders challenge a deadlock
ANY student of the mathematical discipline of combinatorics would do well to take a look at Nicaraguan politics. The past few years have seen every possible combination of alliances between the three main political factions: the left-wing Sandinists, the right-wing Liberals and a Liberal offshoot loyal to the president, Enrique Bolaños. Add in a few breakaway candidates for next year's presidential election, and the formula for Nicaragua's future becomes even more complicated.
If, that is, the election does indeed take place as scheduled in November 2006. An alliance of the Sandinists and Liberals, who together control 81 of the 90 seats in the legislature, is seeking to bring the ballot forward by a year. But there are both legal and practical difficulties. Whatever games they may play, all the parties know that the vote will probably be held in 2006, according to Rodolfo Delgado of Managua's Institute of Nicaraguan Studies.
The bizarre Liberal-Sandinist alliance dates to 2003, when Mr Bolaños set in motion the arrest for corruption of Arnoldo Alemán, his Liberal predecessor. Mr Alemán, who still controls the Liberals, had chosen Mr Bolaños to succeed him. In retaliation, Mr Alemán first ejected the president from the party and then joined with Daniel Ortega, Nicaragua's former president and still the Sandinists' leader, to pass constitutional changes limiting the president's powers. All appointments now require approval by the legislature—something which Mr Bolaños refuses to recognise. This might make sense in theory, but it is being used to hobble government.
The strife between the parties could open the door for rebels. Herty Lewites, a former Sandinist mayor of Managua, is denounced as a tool of capital by Mr Ortega's acolytes. Eduardo Montealegre, a former Liberal, is called a hypocrite and a liar by his old party. Each hopes to get on the presidential ballot as the candidate of one of a number of small parties which lack influence but which have all-important legal registration.
Many Nicaraguans would like to see an alliance between the two outsiders. According to a poll by Borge & Associates, a Costa Rican polling firm, a ticket of Mr Lewites with Mr Montealegre as his vice-president would win 68% of the vote. However, the two men might struggle to win a majority in Congress.
Carlos Wilfredo Navarro, a Liberal congressman, insists that his party's machine will prevail. The Sandinists, with an even stronger organisation, have similar hopes for Mr Ortega—a prospect that worries the United States, which fought his regime in the 1980s. But Nicaraguans may conclude that it is time for new political combinations.
In determining what the heck GC means, found this site which is most helpful in explaining what the heck is going on...
http://www.dailypeloton.com/default.asp
http://www.dailypeloton.com/displayarticle.asp?pk=8300
ok, thanks...
think this answers my question:
"The main group elected to take the day-off because of the level of difficulty rises as dramatically as the peaks of the Pyrenees for this weekend."
main group took the day off today, they are wisely resting for the mountains this weekend...
ok, I am just a stoopid TdF follower but it appeared to me that today was unusual with all the French bikers wanting to win on Bastille day no matter what... i.e. assume these French break out guys are now worn out to the detriment of their performance over the next few days...
is this accurate?
Nicaragua Politics
Nicaraguans Reject Impeachment for Bolaños
Angus Reid Global Scan) – Many adults in Nicaragua continue to support their president, according to a poll by M&R published in La Prensa. 74.8 per cent of respondents are opposed to the impeachment of Enrique Bolaños.
Nicaragua’s political scene has been unstable since Bolaños lost the support of the Constitutionalist Liberal Party (PLC) in January 2002, when his government decided to take legal action against former president Arnoldo Alemán. Last year, Alemán—who governed the country from 1997 to 2002—was sentenced to 20 years in prison for fraud, money laundering and embezzlement.
In November, PLC and Sandinista National Liberation Front (FSLN) lawmakers at the National Assembly introduced a series of constitutional reforms that restrict presidential powers, by allowing the legislative branch to ratify, summon and dismiss government ministers. In January, the Central American Court of Justice (CCJ) unanimously ruled that the Nicaraguan legislative branch must not go ahead with the proposed reforms. Bolaños has so far refused to sanction the amendments.
On Jul. 4, Nicaragua’s Supreme Court of Justice declared that a presidential decree issued by Bolaños—where he ignored the reforms proposed by the National Assembly—was in fact unconstitutional.
On Jul. 11, PLC and FSLN lawmakers initiated impeachment proceedings. The lawmakers accuse Bolaños of "electoral crimes," claiming he is implicated in the embezzlement of $100 million U.S. that led to Alemán’s prosecution. The current president dismissed the allegations as "dirty politics."
Former president and current FSLN leader Daniel Ortega has proposed holding the presidential election in November 2005, in order to find an exit to the political crisis. 82.2 per cent of respondents disagree with this idea.
Ortega governed from 1985 to 1990, but was a losing candidate in the 1990, 1996 and 2001 ballots. The next election is scheduled for November 2006.
Polling Data
Do you support or oppose impeachment for president Enrique Bolaños?
Support
22.4%
Oppose
74.8%
Not sure
2.8%
Daniel Ortega has proposed holding the presidential election in November 2005, as opposed to November 2006. Do you agree or disagree with this proposal?
Agree
16.6%
Disagree
82.2%
Not sure
1.3%
First leg of auctions
But price gains were elusive as the bond market also prepared to take on $22 billion in new government notes this week.
The Treasury Department is scheduled to auction $13 billion of 5- year notes Wednesday and $9 billion of 10- year Treasury Inflation-Protected Securities, or TIPS, on Thursday.
The previous 5-year note auction was well bid, as both indirect bidding and bid-to-cover ratios rose above their recent averages, said Joe LaVorgna, chief U.S. fixed-income economist with Deutsche Bank.
The bid-to-cover ratio tracks how much in bids are received for each dollar of securities sold. Indirect bidding is a category that includes foreign central banks. They've been aggressive buyers of U.S. debt, also accounting for relatively low bond yields even as the Fed raises rates.
According to LaVorgna's record-keeping, the two-year average for indirect bidding is 39.3% after the 5-year auction saw 49.9% of bids in June. The average bid-to-cover ratio is 2.28, meaning $2.28 in bids have been received for every $1 of securities sold. The ratio was 2.6 in June.
But the new 5-year notes yielded 3.97% in "when-issued" trading, a market that allows bond investors to guess what the new notes might be auctioned at.
This yield suggests the 5-year issue will carry the highest yield at auction since April.
The size of these auctions was trimmed from those held in recent months and budget figures released Wednesday may be signaling smaller auctions to come.
President Bush released on Wednesday Office of Management and Budget projections for a fiscal 2005 shortfall of $333 billion, down from last year's record $412 billion and the $427 billion hole projected for this year in February's outlook.
any way to get video via internet...?
I can get eurosport audio but no video...
"it promotes a faster spin but it sacrifices torque"
now we know where your fascination with torque comes from...
Nicaragua Politics
A somewhat dated March 2005 article but interesting comments on Herty Lewites
________
Nicaragua's choices
March 13, 2005
First in a series
MANAGUA,Nicaragua
IN NICARAGUA today, 15 years after the fall of the Sandinistas, remnants of the revolution coexist uneasily with attempts to modernize and democratize the country. One impediment to change is the wily Daniel Ortega, former president and longtime Sandinista leader, who is fending off a dynamic challenger to his domination of the party.
I was in Nicaragua late last month, 19 years after my last visit, to see how the country was doing under its 15-year-old, partially realized democracy. The statue of Augusto Sandino, namesake of the Sandinistas, still gazes over Managua, the capital. The tomb of Carlos Fonseca, a Sandinista founder martyred by the Somoza dictatorship in 1976, remains in a place of honor on the Plaza of the Republic, once the Plaza of the Revolution. But the plaza, where thousands regularly cheered the Sandinistas, has been partially replaced by a huge fountain to discourage similar displays today. The eternal flame in front of Fonseca's tomb has burned out.
Similarly, the idealism that fueled much of the Sandinista revolution has been replaced by cynicism and careerism fostered by Ortega and his followers. This decline manifested itself just a few weeks after Ortega was defeated by Violetta Chamorro in 1990, when the Sandinista-dominated Assembly passed the ''piñata" laws that legalized property expropriation. The party leadership got to keep the houses they had commandeered when they took power. Ortega now lives in a two-block walled compound carved out of the center of Managua that also houses party headquarters.
Ortega has survived allegations of sexual abuse by his stepdaughter in 1998, defeats for the presidency in 1996 and 2001, and the notorious ''el pacto" he reached in 2001 with the corrupt Arnoldo Aleman, who succeeded Chamorro as president and dominates the majority Liberal party. This bargain divvied up power between the Liberals and the Sandinistas in advance of Aleman's exit from office. Ortega has endured despite continuing hostility from the US government, which he reciprocates.
A rival candidate
Now Ortega faces his most formidable challenger, Herty Lewites, former mayor of Managua, who is far ahead in early opinion polls for Nicaragua's next presidential election in 2006. Lewites wants the Sandinistas to hold a primary to determine their candidate, as they have done in the past. The Sandinistas, supposedly representing the mass of the people, ought to be eager for the kind of voter enthusiasm that this contest would generate. But Ortega had Lewites expelled from the party on Feb. 26, and on March 5 at a routine meeting of the Sandinista Congress, he had himself nominated for president. Ortega fears democracy when it might diminish his power as the chieftain of the Sandinistas.
Lewites, in an interview before the unexpected nomination of Ortega, was looking forward to forcing a primary contest. ''The Nicaraguan people don't want to have a dictatorship in the party," he said. He declined to go into his platform in detail but suggested that as president he would try to help the poor without threatening rights to private property. Sandinista confiscations have raised questions about 30 percent of the property titles in the country, and these doubts have impeded economic growth.
Lewites also wants good relations with the United States. Ortega, in his speech accepting the nomination, asked his supporters in the party, which is known by its Spanish initials, FSLN: ''Would you accept that the FSLN presidential candidate stop criticizing the Yankees in order to win their blessing and that these good imperialistic people therefore be welcomed?" The crowd roared back 'No." If Ortega ever became president again, Nicaragua and the United States would become estranged.
A visitor to Managua today is constantly reminded of American influence. Stores no longer feature Bulgarian tableware and little else, as they did in the 1980s, when the Sandinista government tried to distance itself from the United States. At the Metrocentro shopping center, Radio Shack, Payless shoes, McDonald's, Pizza Hut, and Subway compete for business with Latin American shops. US textile companies have built factories in special export zones.
Anti-American attitude
It's true that United States fought Sandino in the 1920s, propped up the Somozas from the 1930s to the '70s, and waged a covert war against the Sandinistas in the 1980s, but that does not change the realities of geography and economics. Nicaragua is a little over two hours by air from Miami, and the United States is by far Nicaragua's biggest trading partner. Ortega is so blinkered by anti-American attitudes that he refuses to accept this.
Nicaragua is drawing closer to the United States under the leadership of President Enrique Bolanos, Aleman's successor and fellow Liberal. Originally considered an Aleman crony, Bolanos has proven to be independent and honest. Foreign nations have rewarded him with $4 billion worth of debt forgiveness and annual aid totaling 30 percent of the $954 million national budget. The United States is considering new aid to Nicaragua -- $127 million in special economic development grants under the Millennium Challenge program.
Bolanos cannot succeed himself, and Aleman, who is under house arrest for corruption, nonetheless remains the dominant influence in the Liberal party. Eduardo Montealegre, an independent businessman in the Bolanos mold, says he wants to run, but Aleman may well rule him out in favor of a more compliant candidate.
In the 2006 election, Nicaraguans need an untainted alternative to the probusiness Liberals. The Sandinistas, with their popular tradition, ought to be the party that opens up its nominating process to allow the rank and file to decide the future. Lewites has scheduled a rally today in Masaya, 15 miles from Managua, hoping to stir public sentiment. Nicaraguans still have an opportunity to show that the Sandinista party stands for more than power grabs, property holdings, and anti-American screeds.
India: Gold In The Sink
The latest views of Morgan Stanley Economists
Chetan Ahya (Mumbai)
"India, as we all know, already wastes far too high a proportion of her resources in the needless accumulation of the precious metals. It is interesting to reflect that India’s love of the precious metals, ruinous though it has been to her own economic development, has flourished in the past to the great advantage of Western nations. Every one knows (William Stanley) Jevons’s description of India as the sink of the precious metals, always ready to absorb the redundant bullion of the West".
John Maynard Keynes in his book titled "Indian Currency and Finance" published in 1913.
The recent sharp rise in India’s gold purchases reminds us of the above passage from Keynes on India’s love of precious metals during the 19th century and early 1900s. After rising by 63% in F2004, India’s gold consumption (excluding gold used for jewelry exports) rose by 57% in F2005. Indeed, during the quarter ended March 2005, gold consumption shot up 88%. Cumulatively, India now holds gold stock of about US$200 billion (29% of GDP), according to World Gold Council (WGC) estimates.
Old Tradition and Complex Set of Drivers Supporting Gold Demand
Hoarding of gold is an old tradition deeply embedded in the culture of the Indian society. Traditionally, apart from being an item of consumption in the form of jewelry, high gold demand was due to low penetration of banking facilities, restricted laws of inheritance, as a hedge against inflation, and as a medium of hiding unaccounted income. Gold has also served as a hedge against rupee depreciation, as laws prevented Indian households from investing in foreign assets or holding of foreign currency. However, the sharp rise in gold imports over the last three years is surprising, as the rupee has started appreciating, inflation is relatively low, banking facilities are improving and economic confidence has picked up.
Gold Is One of the Largest Assets of Indian Households
As per WGC estimates, Indian households own about 15,000 tones of gold, accounting for about 10% of the worldwide stock. At current market values, we estimate that gold accounts for about 10–15% of the Indian household balance sheet. Gold holdings among Indian households at current market value is about 2.5 times the current equity stock holding of US$80 billion. While the share of gold in household savings declined during 2001–03 to 5%, we estimate that this has risen again back to 6.5% during the quarter ended March 2005. With its high rate of gold consumption, India accounts for 18% of the annual global gold demand, while its share of global GDP on nominal dollar GDP is only 1.6%. India’s share of global gold demand is about one and a half times that of the US, though its GDP is only one twentieth that of the US.
Opportunity Cost of Gold Investments Is High
Instead of investing its annual savings in gold, if India were to invest this in more productive business assets, its annual GDP growth would be higher by about 0.3–0.4%. The cumulative GDP value lost by parking US$200 billion worth of savings over the years in this not so productive asset would be huge. With no domestic gold mining, the purchase of gold is also resulting in an inappropriate use of foreign exchange earnings. During the quarter ended March 2005, gold consumption (excluding gold used for jewelry exports) was 1.8% (annualized) of GDP and about 21% of the total non-oil imports.
Share of Financial Savings Has Declined Recently
Over the last 20 years, the share of financial savings has remained stagnant at an average of 50%. Indeed, the recent decline in real interest rates has only encouraged households to increase the allocation to physical savings (which includes gold, property and households investments in small businesses). The share of financial savings in the total has decreased to 47% in F2004 from 61% in F1997 as real deposit rates have fallen to -1.9% from 6.9% over the same period. Although, the official statistics for F2005 are not available, from preliminary figures for financial savings we believe that the share of financial savings is unlikely to have increased significantly. Over the last two years, the share of gold in household savings also appears to have risen again. Indeed, over the same period our approximate analysis based on the stake holdings trend for the top 200 companies (which account for 84% of the total market capitalization) and purchase of mutual funds indicate that over the last 24 months while Indian households’ investments in gold is rising, their allocation to equities has fallen, reflecting their risk aversion.
Need to Increase the Share of Financial Savings
We believe the preference of Indian households for gold specifically and physical savings in particular points towards gaps in the broader policy framework including the government’s expenditure mix. The government’s bias towards less efficient revenue expenditure has resulted in the inefficient allocation of resources. This is reflected in the fact that over the last five years, while the government debt increased by 16% points of GDP (65% of it being for funding revenue deficit), the corporate sector’s debt declined by 5.4% of GDP. High level pre-emption of savings for funding the government’s revenue expenditure has caused greater risk aversion amongst the corporate sector as well as households, in turn influencing their savings preferences.
As the government chooses to increase infrastructure spend resulting in a matching rise in corporate capex demand over the next few years, the country would need to not only increase aggregate savings and but also ensure a rise in the share of financial savings. To increase the share of financial savings, deepening the financial sector reforms would be the key. Apart from increased easy access to banking and financial services facilities, one of the most important areas that needs attention in this context is reforms related to long-term savings schemes. Although the government has initiated some reforms recently, the desired results are still not reflected in the share of long-term savings. Currently, only about 10% of the workforce is covered by some form of pension scheme, including government-sponsored social security schemes. These schemes have also failed to be fully effective as contributors tend to withdraw a significant sum before retirement. About 90% of the work force depends on family transfers and other informal systems for old-age security.
Nicaragua Politics
Nicaragua's Bolanos Dismisses Impeachment Bid as Dirty Politics
Onetime rivals unite in an attempt to prosecute the president, who has refused to pardon his predecessor, convicted of corruption in 2003.
By Chris Kraul
LA Times Staff Writer
July 10, 2005
MANAGUA, Nicaragua — The opposition-led congress initiated impeachment proceedings this week against President Enrique Bolanos, intensifying a political crisis in this impoverished country.
An alliance of two former rivals — the Sandinista National Liberation Front and the Constitutionalist Liberal Party, or PLC — is demanding that Bolanos appear before a congressional committee as part of an effort to strip him of presidential immunity and prosecute him for "electoral crimes."
Bolanos sent his attorney to the hearing while he addressed the nation to say that the proposed impeachment was merely dirty politics, an assertion several political analysts supported.
The president accused Sandinista leader Daniel Ortega of pushing for his impeachment to repay a debt to former President Arnoldo Aleman, who was convicted on corruption charges in 2003 and whose pardon is being sought by the alliance.
Bolanos has refused to consider pardoning Aleman, who is the PLC leader and his former patron. Sandinista leaders were not available for comment but have said Bolanos was implicated in the misuse of $100 million for which Aleman was convicted.
The impeachment controversy is the latest in a political impasse gripping the nation. Although the Nicaraguan army and the National Police have so far not become involved, investors are said to be increasingly nervous.
During four days here last month, Organization of American States Secretary-General Jose Miguel Insulza was unsuccessful in what one observer called "pingpong mediation." Insulza went back and forth to the opposing parties, who refused to sit at the same table.
In Insulza's final attempt, Ortega, Roman Catholic Cardinal Miguel Obando and Christian Liberal Party leader Noel Ramirez were prepared to sit down with Bolanos, but the president refused to meet with those who, in the words of his secretary, Ariel Montoya, had "stabbed him in the back."
The crisis was sparked mainly by laws passed late last year and early this year that stripped Bolanos of various powers, including naming ministerial officials and responsibility for destroying the army's 1,150 surface-to-air missiles as requested by the United States.
Bolanos refuses to recognize the laws, saying they were political maneuvers and should be put to a national referendum. He has also ignored rulings by the Supreme Court and other judges, most of whom were appointed by the Sandinistas.
Analysts trace the dispute to Bolanos' decision in 2002 to prosecute Aleman, who is serving a 20-year sentence under house arrest. That move led 43 of 49 PLC deputies to drop their support for the president.
Bolanos then formed an alliance with the Sandinistas to get enough votes in congress to strip Aleman of his immunity and prosecute him. But in 2003, the president broke with the Sandinistas, reportedly at the urging of the U.S. State Department, which was worried that Ortega was gaining too much power through his relationship with Bolanos, said Elvira Cuadra, a sociologist at Communication Research Center, a local think tank.
Bolanos still counts on strong support from the United States, the OAS and other Central American leaders, but he enjoys little backing at home.
Although he portrays himself as an anti-corruption crusader, he has also been criticized by some analysts as an inept politician.
There are signs that Nicaraguans are increasingly disenchanted with their politicians. The Sandinistas, for example, have lost support for entering into the alliance with the PLC.
History of San Andres Honduras Mine according to NGO's
Here is a recent NGO article on Central America mining: http://www.maxwell.syr.edu/moynihan/programs/placa/Conference2005/Conference%202005%20papers/Slack-P...
but the article below dated 2001, is more relevant.
_________________________________
Tue, 26 Jun 2001
FROM QUEBEC TO COPAN Globalization and the Case of San Andrés Minas
By Michael Marsh
Economic Theory Ends Where Economic Reality Begins
No one was thinking about the small Mayan community of San Andrés Minas, in Honduras, when political and business "leaders" met in Quebec city, April 2001, to discuss the FTAA - "Free" Trade Agreement of the Americas. No one considered the community devastation wrought by Greenstone, a Canadian gold mining company, when it forcibly relocated the community of San Andrés. No one gave second thought to the destruction of San Andres' one hundred year old church. Not one "elected" leader protested the deforestation of surrounding mountainsides. No one cared that Greenstone illegally discharged pollutants into the Lara River. Not a single business leader spoke up to denounce increasing respiratory and other illnesses.
Four years have passed, since the uprooting of San Andrés, and not one "leader" has spoken up to demand that the company hand over land titles plus other compensation promised to the displaced campesino families!
No, not one "leader" was thinking about San Andrés Minas when they met in April to push forward their plans to further entrench the "free" trade economic model. Intent on strengthening "free" market conditions, destined primarily to benefit global corporations and mainly northern consumers, small economically disadvantaged countries like Honduras were offered hollow promises of increased trade and employment.
This article focuses not so much on "development" philosophy, but on reality, specifically that of the town of San Andrés Minas, completely destroyed by a North American gold mining company in search of profits, in a "free" trade globalized economy.
San Andrés Minas: From Quiet Pueblo to Open Pit
It is tempting but wrong to idealize San Andrés Minas as a quaint rural pueblo without problems before the arrival of Greenstone Resources Limited. According to local lore, and the Honduran Executive Department for the Promotion of Mining (DEFOMIN by its Spanish acronym), the gold deposit at San Andrés was "discovered" by Spanish conquistadors nearly five hundred years ago. This mine quickly became the Spanish Crown's largest source of gold in Central America, and over the next hundred years, thousands of Maya Chortis and Lenca people were enslaved to work the deposit. The gold stripped from the earth became property of the Crown, and -- as was the case in nearly all of Latin America – profits were used to enrich the European elite, not reinvested on native soil. Thus began a cycle that Honduras has not been able to escape.
Long after the gold was discovered and carried away, people of mixed indigenous and Spanish blood continued to live in and farm the surrounding mountains. While artisans, both Honduran and foreign, continued to work the depleted mine over the decades, small orchards, cattle grazing and corn farming increasingly provided subsistence and employment to the slowly growing population.
Eventually three communities developed: San Andrés Minas (displaced by the latest mine), Azaculapa, (located on the mountainside above the current open pit mine), and San Miguel (located adjacent to the cyanide leach pads). Each pueblo had its cemetery, communal house and church. According to local lore, San Andrés's first church was constructed of animal hides strung over cut tree saplings, but was later reconstructed from adobe.
During the 1970s, 80s and 90s, San Andrés Minas faced the same problems as other rural Honduran communities - endemic violations of basic rights to employment, education and health; deforestation. Poverty was widespread. In addition, local waters were already devoid of fish due to years of mining activities; some of its lands were scarred by tons of mine tailings cast about.
Still, at its best, San Andrés was a pueblo with a heart, an established community among pine covered mountains, not far from the famous Mayan ruins at Copán. Its inhabitants were secure on their lands. Many possessed legal titles going back decades. Subsistence farming did not make anyone rich, but neither did anyone starve. The inhabitants were united, and regularly elected a local community board to plan for the development of the community. Before Greenstone's arrival, life was quiet and predictable in San Andrés. … All that has since changed.
'Globalization' Settles Upon San Andrés Minas
When Mirna Doris Hernández signed her contract with Greenstone Resources Limited in 1998 she was not happy. Clearly, she and all of theinhabitants of the small village of San Andrés Minas were going to lose their adobe homes and traditional lands, but in return they had been promised new, large homes made out of cement blocks and mortar. And although Greenstone was going to destroy the town where her family had resided for more than six generations, in order to cut a giant pit mine, the company had promised to rebuild the school, the two churches, the community center and the cemetery. Additionally, it had promised them 162 acres of new land. With foreign capital, Greenstone was going to expand the mine and increase gold production, meaning more employment. Among the over 300 promised employment was Mirna's brother.
Today, only three years later, Greenstone no longer exists. Treacherously, before going bankrupt, Greenstone mortgaged the lands promised to the inhabitants of San Andrés to a bank in Canada. Their previous homes destroyed, the inhabitants continue to fight to gain legal title to their new homes and land. Over ninety percent still do not have legal title, which makes life in San Andrés insecure and prevents families from seeking collateral-based loans, or selling.
Greenstone, when it went bankrupt, owed more than two million lempiras (over US$100,000), to the municipality of La Union, Copan, where San Andrés is located. Greenstone left unfulfilled at least thirty-four promises contained in twelve contracts signed with the local government. Finally, in June 2000, Greenstone was auctioned by the largest bank in Honduras, Banco Atlántida, and purchased by a subsidiary of the same bank. The attitude of bank representatives, at the first meetings with employees and community members, was so oppressive and omnipotent that this set off a series of work stoppages and community protests that lasted several months. Dozens of miners were fired or laid off and not hired back. Relations between the communities and company have been sour ever since.
An Inconvenient Village
The pueblo of San Andrés Minas was always considered an obstacle to Greenstone because it was located over the rock that the company wished to mine. In order to relocate the inhabitants and open the pit, Greenstone used time honored divide and conquer strategies. It played upon people's fears and created great divisions in the community. According to one of the teachers at the local school, "Greenstone came in and promised some families one thing and then promised other families something else. ... They said that the new San Andrés would be much better and modern, ... but they always reminded us that they were going to take out the gold whether we agreed or not because the gold, they said, was theirs."
And Greenstone used Honduras' weak or lack of mining laws to threaten the inhabitants. And when these tactics didn't work, Greenstone shut off water to the community and, in a struggle over the community's water tank, the mine's Canadian manager bulldozed the tank knowing that at least one community member was on top; that young man suffered a broken leg. The mine's manager, Gerald Phillips, was quickly whisked out of Honduras in then ensuing community activism related to the deliberate injury.
[Phillips, who Greenstone hired to promote its interests, has an infamous record as a mining engineer and would have had an extremely difficult time finding employment in his naturalized country of Canada at the time he took charge of the San Andrés mine. In 1979, Phillips was in charge of a mine that suffered an accident resulting in the deaths of four miners. In 1992, Phillips was a manager of the Westray Mine in Nova Scotia, Canada. An explosion caused by the criminal negligence of Phillips and others in management cost the lives of 26 miners. Phillips was charged with manslaughter but a botched investigation and prosecution spared him imprisonment. But with his reputation in Canada destroyed, Mr. Philips went to work with Greenstone in Honduras, where mining officials were unaware of or less caring about his history. ]
After being victimized by months of repression and dirty tactics, the inhabitants of San Andrés Minas acceded to the company's pressures and demands, but not before achieving a compromise agreement. San Andres' population agreed to leave their houses, and the company promised to relocate the community, its homes, its public buildings and churches, and its cemetery, and to develop a serious of projects aimed at improving the standard of living.
One of Many Deceptions
The 123 families of San Andrés Minas signed 'exchange of property' contracts with the company, giving Greenstone their old homes, lands and legal titles, and accepting promises of new homes and lands, with legal titles. With the relocation slowly advancing, the Canadians of Greenstone, like the Spanish during the colonial days, began to sack the mine of it's gold, achieving a production of more than 40,000 ounces in 1999.
Unfortunately, the profits did not satisfy its Canadian business partners and when the company was short of capital, it mortgaged itself and its lands, including the lands of the newly relocated Nuevo (New) San Andrés Minas, to Montreal Trust Company and Banco Atlántida for $35 million. The company claimed that the mortgaging of lands promised to the poor inhabitants of the now destroyed San Andrés was an accident!
Then last year, Banco Atlántida, without warning and without consulting the community or the workers, auctioned the properties of Greenstone. This occurred after months of guarantees by representatives of Greenstone and the bank that the problem of the mortgaged lands would be quickly resolved in favor of the community. Only a series of protests and political actions assured that the lands of Nuevo San Andrés Minas were not also auctioned.
Continued demands by the community lead to negotiations with the bank's newly formed subsidiary, Minerales de Occidente. In a meeting in May 2001, the general manager of Minerales, a corpulent mining engineer from Pennsylvania, indicated that land titles will soon be given to the residents of San Andrés.
Pay Unto Cesar
When Greenstone bought the mine from Minerales de Copán in 1997 it promised to pay the debts of the prior owner. Yet when it went bankrupt, Greenstone still owed $15,000 in back taxes to the municipality of La Unión. Worse still, Greenstone hadn't paid a penny of the new tax required under the freshly passed General Mining Law, which requires companies to pay 1% to the municipalities in which they operate. At first Greenstone argued that it operated in a "tax free zone", much like the controversial "maquilas." Later it conceded the tax debt, but calculated it incorrectly using net sales rather that brute sales, and in any case, never paid. According to company representatives and municipal officials, Minerales de Occidente is currently paying the correct tax and is working towards paying off the back debt.
Interestingly, municipal officials who were once attentive to the social and environmental problems of the communities affected by the mine, no longer speak up to protect the communities. A resident of Azacualpa said: "When the company owed the municipality taxes, the mayor always supported us, but now he has a new truck [paid for by company taxes] and he doesn't offer us much support."
To its credit, Minerales de Occidente has worked to fulfill some of the promises left by Greenstone. For instance, the water project was completed and homes in San Andrés now have running water. The health center and community center constructed by Greenstone were painted and fenced. Several road improvements have been made and a new cemetery was constructed. Among other items, the company currently gives a number of scholarships to local students and pays the salary of a kindergarten teacher. Feeling the effects of community criticism, Minerales recently
made public relations use of these projects by sending an elaborate list of its social achievements to the press.
Dig Your Own Gold Mine
Imagine going to your yard with a shovel and a teaspoon. With the shovel, dig a hole nine feet wide, by nine feet long, by nine feet deep. That's how big your pit mine is. Now, with the teaspoon, reach down and scoop one spoonful of soil. That's how much gold you've extracted from your mine!
The mine at San Andrés, like most "modern" gold mines around the world, will extract and abandon over 30 tons of rock for each ounce of gold it produces. That's a ratio of a million to one! Some of the rock extracted contains minute quantities of gold. That rock is crushed and then piled on top of thick plastic where it will be sprayed with a liquid solution that contains cyanide. That solution is then carried by gravity (in the case of San Andrés) to holding ponds before it is treated, so as to separate the gold and silver from the solution and other heavy metals. This process can extract gold from low grade ore, and is extremely dangerous and contaminating.
Recent data from the US Environmental Protection Agency (EPA) show that the metal mining industry in the United States is the dirtiest of all industries, worse than the petrochemical or coal mining industries. In wealthy countries, the cyanide leach process in particular has caused environmental disasters. To cite just one example, an Australian company operating in Rumania caused an accident last year in which over a hundred miles of river were polluted and over two million people were left without potable water. The accident caused nearly $250 billion in damages and clean-up costs. The environmental damage was so great that UNESCO declared it the worst environmental disaster in Europe since Chernobyl. And this was in Europe. In poor countries with weak regulatory systems, like Honduras, ideal conditions exist for even larger "disasters".
The "Gold Standard" of Environmental Protection?
It is July 28, 1999. Greenstone Mining Company is discharging mining wastes (what they euphemistically call "water") from its third holding pond into the Lara River. Five miles downstream the Lara meets with the Higuito River, which in turn joins with the majestic River Ulúa on its way to the Caribbean sea. Present during the discharge is the Center for the Study and Control of Contaminants, CESCCO, an investigative branch of the Honduran government's Secretary of Natural Resources and the Environment. The lagoon holds more than ten million gallons of waste, including concentrations of cyanide, copper, hexavalant crome, zinc and lead. It is CESCCO's job to monitor the discharge and analyze its effects. Somewhat unexpectedly, CESCCO found something as dangerous as cyanide - hexavalant crome, the same substance that Julia Roberts fought against in the movie "Erin Brockovich", which caused cancer in hundreds of Californians. In San Andrés, according to CESCCO, the level of this ion of crome was "41 times greater than the limit." The CESCCO study also showed that the presence of this substance caused the death of certain aquatic microorganisms in the Casa Viejas stream. These organisms function like the canaries that miners in earlier years carried into the coal mines with them. Their death indicates that there are serious risks for other animals as well. The CESCCO study concluded "These toxicological results show that if the [mine] continues to discharge, even sporadically, this could impact life" along the Lara River.
CESCCO no longer conducts environmental studies at the San Andrés mine. Those studies are now conducted by DEFOMIN, the Executive Department for the Promotion of Mining. Putting aside conflict of interest arguments, that it the same office in charge of both promoting mining and protecting the environment from mining, DEFOMIN has conducted a number of studies at the mine site. These studies, according to DEFOMIN, prove that the discharges have caused no environmental damage!
And yet at a recent meeting between community members, mining officials and company representatives, DEFOMIN engineers were openly hostile to the idea of an environmental study being conducted by a water quality specialist from the United States, even though the non-governmental organization, ASONOG (Asociación de Organismos No Gubernamentales), had offered to pay for the study. Experiences such as these leave the communities doubting the veracity of Honduran mining officials.
Laws Are Weak, Non-Existent or Ignored
In January of this year, the community boards of San Andrés, Azacualpa and San Miguel formally denounced the environmental damage being caused by the mine. In its complaint to the Special Prosecutor for the Environment, the local community boards denounced:
1) Illegal discharges of industrial waste "water" into the Lara River;
2) Dangerous proximity (40 yards) of the cyanide leach pad to homes in San Miguel;
3) High level of erosion and risk of landslides above San Miguel and below Azacualpa;
4) High and unacceptable levels of dust and noise in San Miguel and Azacualpa;
5) High level of smoke in San Miguel and the death of a farm animal due to contaminants;
6) High intensity explosions along the road to Azacualpa, which cause this public road to be closed periodically, stranding residents on both sides of the mine.
The Special Prosecutor has yet to send a team to investigate the complaints! Instead, a team of mining specialists from DEFOMIN arrived to investigate the communities' allegations. To date, the only concrete action taken has been to relocate and fence the company crematorium. In the important area of discharges, no action has been taken to stop the illegal discharges, even though the mine's environmental impact study states over forty times that the mine was designed to operate without discharging and Article 79 of the General Mining Law states that companies must operate strictly in accordance with their environmental impact studies.
Likewise, no action has been taken to close or move the cyanide leach pad that is operating close to homes. Honduras' weak laws and regulations do not speak of a minimum distance between cyanide applications and occupied homes. But the mine's environmental impact study indicates that when Honduras does not have a regulation applicable to a given situation, that the US or Canadian standard will be used. Yet even when it was pointed out that the distance between cyanide applications and homes - less than a city block - would be illegal if the mine was operating in Nevada, (the state where the cyanide leach process is most used), the company and DEFOMIN indicated that they were not willing to stop the application of cyanide close to homes. The Nevada minimum distance is approximately 310 yards, more than seven times the distance at the San Andrés mine!
These, and other complaints, point to only one conclusion - the San Andrés mine would be illegal to operate if it were located in the United States. Community members ask if foreign mining engineers couldn't operate this mine in this dangerous fashion in North America, why should they be able to in Honduras?
Victimized By A Distorted "Development" Model
The Asociación de Organismos No Gubernamentales, ASONOG, based in Santa Rosa de Copán, has spent more than a year investigating the massive influx of gold mining companies from Canada and the United States. The results are, as usual, disturbing. In just two years, 1996 and 1997, the Honduran mining department issued concessions totaling 21,000 square miles, or more than 30% of Honduras' territory to foreign companies, mainly from the United States, Canada and Australia.
In December of 1998, just four weeks after Hurricane Mitch ravaged much of the country, these companies achieved their first objective, the passage of a new mining law which reduced taxes and gave them nearly unlimited power to petition for the removal of traditional communities located near mineral deposits.
The argument in favor of expanding mining operations in Honduras is rooted in neo-liberal economic thinking, based on attracting foreign venture capital at all costs. Passed under the shadow of Hurricane Mitch, the new mining law offers companies lifelong concessions, low taxes, unlimited access to water, legal rights to expropriate campesino and indigenous lands, and few environmental regulations with which to comply.
In December of 2000, the International Monetary Fund -IMF- pressured Honduras to reduce taxes even further with the elimination of the export tax on mining products. With land use fees as low as $1500 a year for a large mine and a nominal 1% municipal tax, Honduras has created an ideal tributary environment for foreign companies.
Supporters of the neo-liberal mining model argue that the Honduran economy will benefit from rising employment offered by the mines. This, too, has not materialized. In San Andrés Minas, the community forcibly removed by Greenstone, only 11 people are employed by Minerales de Occidente. Overall, Minerales employs just 144 people, less than half of the 370 jobs promised by Greenstone when it convinced the government to grant it the concession. Considering that the land occupied by the mine was used previously to grow corn and graze cattle, there is little evidence to show that the local economy of San Andrés has experienced real growth since the arrival of Greenstone. And the government, when questioned, admits that it has not conducted any economic studies which show that giving tens of millions of dollars of free gold to foreign companies in return for projected employment and tax income is a viable strategy of economic development.
The Illustrated Honduran Encyclopedia writes:
"[This] administration opened the doors to North American capital, whichwas expanding throughout Latin America, with the initiation of mining exploitation in Honduras. The concessionary system was extremely damaging to the country, because with the goal of protecting foreign investors and attracting foreign capital, the country lost its riches without obtaining important economic advantages."
This passage of the Encyclopedia is describing the notorious actions of President Marco Aurelio Soto, in 1876, not the present situation which is remarkably parallel to the past. This reality, however, does not stop DEFOMIN representatives from arguing otherwise. At a recent meeting with community members from San Andrés, San Miguel and Azacualpa, DEFOMIN engineers stated that while his office recognized that five thousand people in the area may be experiencing some problems with the mine, this had to be tolerated because six million Hondurans were being benefited by increasing mining revenue. This, as could be expected, brought jeers from the community in attendance.
"El Pueblo Unido, Jamás Será Vencido"
"The people united will never be defeated" is a chant frequently heard at strikes and demonstrations in Latin American countries. It may be true, too, but unifying people is a difficult task, especially when people lack funds to mobilize themselves, are illiterate, or out of sheer necessity are focused on day-to-day routines like making sure their families are fed.
Still, the first steps to organize national opposition to environmental and socially damaging mining have been taken. Beginning early this year, community members from San Andrés, Azacualpa and San Miguel in Copán began conversations with community members from San Ignacio and El Porvenir located in the department of Francisco Morazán, twelve hours away by bus. Residents of San Ignacio and El Porvenir had formed the "Committee to Protect the Environment in the Valley of Syria" over a year earlier in response to mining operations by Nevada-based Glamis Gold.
Glamis, according to community members, has deforested a section of pine forest without permission, dangerously lowered the ground water table, commenced operations without the required environmental license, and damaged local streams. Entre Mares, Glamis' Honduran subsidiary, faces civil and criminal charges based on several of these claims. [In a side note, Glamis Gold also made history in the US in January, when for the first time ever then-Interior Secretary Bruce Babbitt denied its permit for a mine slated for sacred Quechan indigenous land in southern California.]
Assisted by the ASONOG, and Catholic-based CARITAS, community members from Copán traveled to meet with residents in San Ignacio in January. Residents of San Ignacio and El Porvenir completed the exchange, traveling to Copán the following month. These exchanges clearly showed that these communities, located far apart, were experiencing similar problems. Plans were made for a national meeting to bring together communities affected by mining operations.
Nearly seventy people from fifteen different communities located adjacent to eight different mines or proposed mines gathered together on March 9 of this year to share their experiences. Some, like the inhabitants surrounding the San Andrés and San Ignacio mines, were already quite aware of the environmental and social problems that a mine cause. Others, like representatives from Quimistan, Santa Barbara, where a new foreign owned mine opened up just this year, are only beginning to learn about and monitor the mine.
As a result, the first national meeting did not attempt to draw definitive conclusions and instead worked to permit the airing of various opinions. Some argued against large mining operations in general and felt that negotiating for cleaner, more socially acceptable mines is a waste of time. Others focused on the use of cyanide in particular as an evil. Others felt like the national campaign that was forming needed to focus on educating and assisting communities so that they could negotiate on a more equal footing with mining officials and engineers.
One person, Miguel Miranda, President of the Azacualpa Community board summed up his participation in the event:
"Our community has existed on this land for nearly 200 years. When Greenstone came they offered us employment and promised to leave our road, the cemetery and surrounding lands intact. But we were fooled. The company's explosions shake our homes and their open pit is swallowing our homes, causing landslides and cracks in our walls and foundations. They close our road so we have no access to our homes and their heavy equipment put our children's lives at risk. When we complain, the Mining Department says that we have to understand that this is for the good of the country ... . In Azacualpa we have the problem of the open pit, in San Miguel they have the heap leach pad, and San Andres was forcibly relocated to open the mine and is now relocated downstream. Maybe our problems are distinct, but they're all caused by the company. This mine is violating our human rights and if we don't join together we'll never end these abuses."
While it is still too early to predict the outcome of this campaign, or even in the long run what its specific goals will be, four early goals are evident: 1) prohibit the use of cyanide in mining operations, 2) prohibit the expropriation of campesino and indigenous lands, 3) strengthen mining and environmental laws, and 4) seek a viable strategy for sustainable employment and development in rural Honduras.
The United Nations Speaks Up
On May 11th of this year, the United Nations Committee on Economic, Social and Cultural Rights concluded its review of conditions in Honduras. Among its numerous observations, the Committee voiced concern over the forced eviction of campesino and indigenous populations to make way for mining activities. The Committee also stated that it was particularly concerned about the extremely negative effects of the use of toxic substances in the banana and gold mining industries, and recommended that Honduras implement legislative and administrative measures to avoid violations of environmental and labor laws by transnational companies. The Committee also called on Honduras to adopt and implement measures to protect workers from health hazards resulting from the use of toxic substances such as pesticides and cyanide.
The Committee made its observations and recommendations after hearing from Honduran government officials, a representative active with the campaign against the Glamis Gold mine, and representatives from the Center for Economic and Social Rights (CESR) in New York. CESR conducted extensive interviews with DEFOMIN and other government officials involved in monitoring mining activities or the environment, as well as interviews with community representatives. A full report can be obtained from CESR.
A Final Word
What has happened to San Andrés Minas is not unique to Honduras, and what is happening in Honduras is not unique to Latin America. What San Andrés has experienced is part of a global problem that instead of abating is accelerating. On the one side are world political and business leaders intent on establishing global free market conditions that will ultimately benefit those who are already rich. On the other side are residents of small rural communities, workers and the urban poor, and environmental and human rights activists, who see in San Andrés a model that should never be repeated.
The last word goes to Jacobo Lopez, Secretary of the San Miguel Community board:
"The San Andres Mine is slowly killing us ... . We've seen an increase in respiratory diseases and skin infections in the community, and we fear that this is just the beginning. The Mining Department, DEFOMIN, says we're suffering but that it's for the good of the country ... . Each day the mine takes more of our land, we no longer have land to grow corn and beans, and all the gold and the profits are shipped out of the country ... . The company hasn't even come through with the employment they promised us. This mine is a disaster, a complete disaster."
- end -
Honduras Mining Law-Aug 2004 Background article
No love lost between Honduran NGOs & miners
Dorothy Kosich
'18-AUG-04 06:00'
RENO (Mineweb.com) -- As Vancouver-based SilverCrest Mines and Defiance Mining of Toronto may attest, Hondurans aren't exactly putting out the welcome mat for foreign mining and exploration companies.
One obstacle after another is being tossed into the paths of mining companies, often at the behest of the Catholic Church.
The latest hurdle is a proposed 10% tax on mining production in addition to a wished-for new 3% royalty on the sale and export of mining products, which was recently submitted by group calling itself the Civic Alliance for the Reform of the General Mining Law. Meanwhile, the National Congress of Honduras is also in the processing of making changes to the nation's mining law to make it more difficult to permit and develop new mines.
Generally, mining and exploration companies contacted for this story by Mineweb weren't in the mood to comment about what is going on between the mining sector and the government and NGOs of Honduras. They insisted that, like everyone else, mining companies have to ascertain the mood of the country through rumors and newspaper articles. As this reporter can attest, it takes considerable effort to piece together a semblance of a story.
Defiance Mining has had enough of Honduras' politics, the rumors of a tougher mining law, and proposals for increased taxation, a company spokesman told Mineweb in an interview Tuesday. The company recently informed Doublestar Resources that it wishes to be dealt out of the joint venture on the Zopilote property in Honduras. In a news release, Defiance announced that it ceased its exploration activities in the country “and does not expect to continue with operations beyond the reclamation of Vueltas.” The Vueltas mine ceased mining activities earlier this year.
Last month, Honduras’ Attorney General suspended a mining concession that was granted to the Canadian mining company Maverick. The company, a subsidiary of SilverCrest, had been working for several years on the El Ocote concession. However, they were accused of exploring outside the concession and onto a buffer zone a national preserve, El Guisayote. In a recent interview with Mineweb, a SilverCrest spokesman said the company was continually harassed by NGOs who allegedly spread lies that mining would poison local water supplies and the land. Two communities mobilized against Maverick and Minerals de Occidente S.A. (Minosa) in western Honduras.
Juan Carlos Elvir, mayor of Santa Rosa de Copan, told Tierramerica that the public protests against mining are so strong “that we have even received death threats.” Elvir said his community is not opposed to development, but residents are against open pit mining because it requires logging the forests.
Elvir has led protests against Maverick, joined by his colleague Mayor Amilcar Rodriguez of La Labor in the western Department of Ocotopeque. In his interview with Mineweb, the SilverCrest spokesman referred to these anti-mining activities as an “eco-cancer.”
The director of Honduras’ Department of Mining and Exploration (Defomin) confirmed the cancellation of more than 4,000 mining exploration permits, and levying more than $44,000 in fines for failing to carrying out exploration activities. In the 112,494 square kilometers of territory in the country, 35,359 square miles have been earmarked for mineral exploration and mining. The concessions have been granted to more than 15 companies.
LET'S PRAY MINING GOES AWAY
Meanwhile, Cardinal Oscar Andres Rodriguez recently submitted proposed reforms of the General Law of Mining to the President of the Honduras National Congress. The reforms are being sponsored by several organizations under the umbrella of Caritas Internationalis, a confederation of 162 Catholic relief, development and social service NGOs operating in over 200 countries and territories. Caritas is affiliated with the Holy See and the Pope in Rome.
Rodriguez has served as the Vatican’s spokesman at the International Monetary Fund and the World Bank concerning world debt. He was President of the Conference of Latin American Bishops for four years. Honduras' National Congress awarded him with the Great Order Cross while the Executive Branch has awarded him the Order of Morazan. Both government groups lauded him for his work denouncing the (alleged) contamination of water and groundwater by transnational mining companies. Ironically, Rodriguez received two plates of gold along with his awards!
Rodriguez said that the law should be reformed since he believes mining activity is not environmentally sustainable, doesn’t generate benefits for nearby communities, and has not proven to be economically sustainable for the state. “We cannot continue delivering the wealth for some crumbs that fall off the table,” he declared.
Honduras’ present mining law was enacted in 1998, four weeks after Hurricane Mitch devastated the country. Rodriguez claims that mining in Honduras has become a profitable “paradise” for investors and a “hell” for nearby communities. A recent study presented to the Congress found that the direct and indirect employment of mines only totals 1,000 and 5,000 persons, respectively.
Meanwhile, mining executives have complained about the “negative campaign” undertaken against mining by NGOs. The sales of gold, silver and zinc ranked fourth in Honduran exports, exporting $89 million in 2003. So far, the four main mining operators exported $46 million as of the end of June. Meanwhile, mining companies paid $7 million in taxes, according to data accumulated by Defomin, and the National Association of the Metallic Mining Industry of Honduras. However, due to the closure of one of the country’s major mines, Honduran exports of precious metals and other minerals are expected to be lower this year. The mine closure is expected to cost the country 400 mining jobs.
Last March, the Catholic Church criticized a subsidiary of Glamis Gold, which it accused of poisoning the water of the Valle de Siria in Honduras’ central zone. Glamis has operated in the area since 1998, and has asked the government to expand its 14,000 hectares concession by an additional 10,000 hectares. Rodriguez headed a protest against the mine two years ago.
Another anti-mining protest took place in June. The Salvadorian priest Andres Tamayo who organized the protests said the objective of the “Goes by the Life March” was to educate people about the “neoliberal conspiracy” to develop natural resources including gold and silver deposits. Unfortunately, for Tamayo, only 100 persons participated in the protest which took place in Honduras’ major city of Tegucigalpa. The march included members of Caritas, the Committee of Development and Solidarity, and other environmental groups.
The protestors also sent a letter to Honduras President Ricardo Mature demanding that the “criminal character” of the General Law of the Mining Industry be revoked including the elimination of mining concessions, which were granted between 1999 and 2004.
finally, that 24 month Gold range is edging upwards...
how about a chart...!!
New Honduras Mining Laws
New Era for Mining & Exploration in Honduras
By David J. DesLauriers
08 Jul 2005 at 08:00 AM EDT
TORONTO (ResourceInvestor.com) -- La Tribuna, a leading newspaper in the Honduran capital of Tegucigalpa ran a front page story Wednesday indicating that the major relevant parties had agreed to a new mining law to be presented to the Honduran Congress shortly.
Background
This comes after more than a year of wrangling during which time the country effectively ceased to grant concession licenses. It was and is part of a broader recent Central American and indeed global phenomenon in which anti-mining NGO's, the Church, and uninformed citizens have fulminated against the mining industry prohibiting exploration, development and production the world-over.
Particularly noteworthy recently is Peru which has seen demonstrations, striking workers and vandalized mines, and Guatemala where the communities in the vicinity of Glamis' Marlin project have been polarized by the anti-mining brigade. The question at hand is: What are the implications of this putative new mining law in Honduras?
Pertinent Changes
The signatories to the agreement include DEFOMIN, equivalent to the Ministry of Mines, the Secretary of Natural Resources (SERNA), Anamimh which is the Metallic Mining Association of Honduras and represents mining companies operating in the country, and Caritas International, a group that describes itself as "a confederation of 162 Catholic relief, development and social service organisations working to build a better world, especially for the poor and oppressed, in over 200 countries and territories", effectively a proxy for the Catholic Church in this matter.
Congress would appear to be recessed presently and it is expected that this new agreement consisting of proposals and recommendations by a committee created by Congress to deal with the problems surrounding mining will be put to the vote upon the assembly's return, and certainly before federal elections to be held in November.
The articles agreed upon consist of 15 pages and Resource Investor has learnt that the major changes involved in the new mining law are principally:
A proposed increase in the NSR from 1% to 2%. The split will be 1.5% NSR for the municipalities and .5% to a social fund for affected municipalities. This is interesting because at one point last year the Church was demanding an increase to an NSR of 13%! Maybe when they sat down at looked at the spectrum of royalties around the world they got a dose of reality.
The embedding in the new mining law of the required practice of wide scale community consultation prior to granting an exploitation concession - in other words an actual mining permit and related permits.
Implications
Sources operating in the country have told Resource Investor that the implementation of this community consultation program is worrisome. Clearly this is a process that is easily hijacked by interest groups whose only real interest appears to be ensuring that rampant poverty will continue to be a permanent feature of the landscape.
The thinking among those close to the situation is that this sort of community consultation model is one that will most likely be adopted in many other Central American nations in the years to come. The good news is that vein systems/underground deposits and other sorts of ore bodies not amenable to heap leach or open pit mining will probably be able to forge ahead. The bad news is that we will most likely see far fewer heap-leach gold mines that rely on cyanide, and less open-pit mining generally, as these types of mines seem to really be the main point of contention.
Conclusion
In the near term the good news for investors is that mining exploration companies operating in Honduras should be able to get their concessions granted and get back to the business of finding mines. It has been a frustrating period for companies working in the country as they set aside their prospecting work and diligent staking of properties and walked away from drill-ready projects, patiently waiting for things to resolve themselves.
Companies like Gold Ore Resources (TSXv:GOZ) and First Point Minerals (TSXv:FPX) are two examples of quality juniors run by proven mine finders that have suffered from the anti-mining environment in Honduras but should be able to finally get back to work in the region, and ply their trade in an attempt to enrich all stakeholders. And investors may want to take note that both of these concerns are investigating vein systems!
It has been a long road but hopefully an agreement in Honduras could signal that the pendulum which has swung too far towards disruption by anti-mining groups, will finally begin to right itself for the good of investors, mining companies, and the countries that are home to exploration and mine development.
We should be getting fiscal year end results from KGI within the next week, i.e. fiscal year end April 2005 should be released by July 15th to meet deadline.
Will be interesting to see how KGI is progressing in being able to finance drilling and additional capex via internal cash flow. From April 28th news release:
"- Operationally, the mine is breaking even on a cash flow basis. The next target is to improve margins per ounce and to increase production in order to pay for all costs, including capital and exploration internally, whilst generating a profit"
Will be looking to buy more KGI if and when they start generating cash flow sufficient to internally finance operations. KGI has great reserves now and proving up higher grade new ounces, but they must start generating cash flow to finance operations within the next 9-12 months to avoid future PP share dilution. Like with RNC Gold, now is the time to start hitting guidance which can be readily met via ramping up production ounces to drive down unit cash costs...
nice results, much prefer seeing ounce per tonne figures rather than grams per tonne...!
Believe Bonanza drill results will be out in next 2 weeks or so. 2Q05 earnings expected by month end, RNC is well managed in regard to getting their financials out early/timely... RNC going through the process to get AMEX listing and this should be obtained within next 9 months.
Project US$.06 EPS for 2Q05, but remember most of this is via non-cash items (i.e. CORNAP reversal). The expected significant improvement in the 2Q05 balance sheet and positive retained earnings will be the highlight of the 2Q05 financials.
Expect to to see Jennings update their analyst report and to see Canaccord issue an initial analyst report. Canaccord & Jennings have 14 months remaining to exercise their broker warrants so you can count on them to issue new analyst reports with a target price well over C$1.21 by year end...
"Canaccord Capital Corporation and Jennings Capital Inc (collectively “the Agents”) received a cash commission equal to 7 per cent of the gross proceeds raised under the private placement. The Agents also received broker warrants exercisable to purchase 626,640 common shares of the Company at a price of Cdn$1.21 per common share for a period of 18 months from today. "
The wildcard is the San Andres acquistion via RNC's right of first refusal. If this acquisition can be made on accretive EPS and cash flow per share terms, this will be significant since RNC will have annualized production over 175,000/ounces by year end 2005 and over 225K annualized ounces by year end 2006:
Bonanza=32K
La Libertad=70K
San Andres=75K
Panama=48K
It will be difficult for analysts to ignore a 200K ounce/yr gold producer, IMO, as this will vault RNC to near intermediate producer level. Nonetheless, RNC has got to start meeting their 25K quarterly production and $285 cash cost targets starting this year and preferably this quarter.
I am growing weary investing in potential and am ready to start seeing results, namely annual cash flow per share over US$.20. Do the math, RNC can easily hit $.20 CFPS with gold prices at $430 on Nicaragua operations alone, they just have to crank up Nicaragua production to over 100K ounces to realize production economies of scale. No more missing production and cash cost guidance, now is the time for RNC to start generating cash.
Gold - very positive news out today...
Monsoon rains in India are now forecast at 98% of average rainfall. Cumulative rainfall has gone from 49% below average to 15% below average from June 22nd to June 30th, that's a lot of rain... Why are monsoon rains so important to gold? India accounts for about 20 percent of global gold demand which is primarily purchased in rural areas; and whose wealth depends on these monsoon rains, that's why... Thus, it appears we can count on India offtaking 20% of gold supply again this year when the crops are harvested rather than seeing these Indians having to sell/recycle their gold to offset a poor crop.
As I have stated before, we gold bugs are highly dependent on the buying transactions of third world citizens.
_____________________________________
Wednesday, July 06, 2005
"Monsoon was sluggish during the first half of June. By the third week of June, monsoon became active, but only along the west coast. By 22 June, rainfall over the country as a whole was large deficient by 49%. However, during the last week of June, monsoon revived vigorously, which improved the rainfall situation over the country. By 30 June, cumulative rainfall deficiency over the country as a whole has significantly reduced to 15%. During the period 1 to 30 June, out of the 36 meteorological sub divisions, 19 sub divisions received excess /normal rainfall and 17 sub-divisions received deficient rainfall."
http://pib.nic.in/release/release.asp?relid=10054
July 7
NEW DELHI: The India Meteorological Department (IMD) forecast on Wednesday that the rainfall during the current month would be normal, at 97 per cent of the long period average (LPA) with a model error of plus or minus nine per cent.
This bodes well for the agriculture sector as July is the crucial month for the kharif crop. Out of the four monsoon months from June to September, July is the month of maximum rainfall. The monsoon turned out to be deficient last year mainly on account of suppressed rainfall during the month because of an unexpected development of El Nino.
IMD also issued region-wise seasonal forecasts: the rainfall is likely to be 97 per cent of the LPA in the south peninsula and the north-east, 95 per cent of the LPA in the north-west and 102 per cent of LPA in central India. The forecasts are with a model error of plus or minus eight per cent.
South peninsula comprises Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Lakshadweep and Andaman and Nicobar Islands.
The north-east region covers West Bengal, Bihar and Jharkand, besides the north-eastern States.
The north-west region consists of Delhi, Haryana, Punjab, Uttar Pradesh, Uttaranchal, Jammu and Kashmir, Himachal Pradesh, and Rajasthan.
The central Indian region covers Gujarat, Maharashtra, Madhya Pradesh, Chattisgarh, Orissa and Goa.
In addition, IMD issued an updated forecast for the prospects of rainfall during the monsoon season as a whole and for the country in its entirety: the rainfall is likely to be 98 per cent of the long period average with a model error of plus or minus four per cent.
The forecast is almost the same as that made in April-end. The only difference is that IMD has scaled down the probability for the rainfall to be near normal or above.
In April, it had stated that there was a 75 per cent probability for the seasonal rainfall over the country as a whole to be near normal or above. Wednesday's forecast has scaled down it down to 70 per cent.
IMD noted that as of now, there appeared to be very little possibility of the El Nino problem cropping up this year. But, the situation could change in future.
"The latest El Nino predictions suggest higher probability for near neutral conditions during the next three to four months. However, the likely evolution of SST (sea surface temperature) anomalies over the Pacific Ocean remains a matter of uncertainty. IMD is carefully monitoring the developments,' an IMD press release said.
ok, I'm back, after 19.5 hours in the air on return flight... time to get caught up.
decided to finally log on...
Ok, guys on vacation until July 5th...
ANO/ARQ
Let's hope ANO has first mover advantage as noted at end of this article...
____________________
Changes in South African Regulations Spark Interest in Platinum Companies
By Tara Perkins
17 Jun 2005 at 04:23 PM
TORONTO (CP) -- Platinum prospectors from the Canadian mining sector could be focusing more on South Africa in the near future following a recent change in that country's legislation forcing the holders of a mineral right to 'use it or lose it.'
'You can't overstate the impact of the change in legislation,' which took effect May 1, says Frank Hallam, chief financial officer of Platinum Group Metals Inc. [TSX:PTM], a Vancouver miner concentrating on South Africa.
South Africa's Bushveld complex - rich in minerals including gold and iron ore - contains the vast majority of the world's supply of platinum, used widely in jewelry and pollution control equipment, said Hallam, whose company was recently bumped to The Toronto Stock Exchange from the junior TSX Venture Exchange.
'That is the No. 1 place you want to go in the world if you want to be a platinum miner or explorer,' says Jim Mustard of Haywood Securities Inc.
Until recently, the industry's dominant players - Anglo Platinum, Impala Platinum, Lonmin PLC and Russia's Norilsk Nickel - had the Bushveld complex wrapped up.
'It used to be that if they owned the ground on the most desirable mineral resources in the country, there was no requirement for them to do anything with that,' Hallam said.
'They could hold it forever. So there was no development of the junior mining industry.'
Changes to the law - which have been in the works for years now, but came into effect last month - have got junior platinum miners salivating.
'There's a lot of new deals being done with new partners coming in, equity investment,' said Platinum Group chief executive Michael Jones. 'It's a very exciting, dynamic time.'
Many Australian and European companies now have platinum projects in South Africa, but so far the Canadian entry into the market has been limited to a couple of companies, Mustard said. There is opportunity there, he said, but it doesn't come without risks.
One of the factors scaring prospectors and investors off has been the strong South African rand. It has squeezed margins in the platinum industry, which buys and sells the specialty metal in U.S. dollars.
'The South African rand has been on a tear the past year, and that's taken the wind out of the sale of a lot of operating companies,' Mustard says. 'It has caused a lot of pain for companies like PTM to finance their projects in South Africa.'
The rand changed directions recently, and 'if it continues that way, it will certainly attract more capital in that country,' Mustard says.
Jones suspects much of that capital will come from Canada.
'The Toronto Stock Exchange is the number one platform for mining finance in the world,' he says. 'There's more money raised in mining equity on the Toronto Stock Exchange than in the United States, the UK, and Australia combined.'
PTM shares, trading at about 40 cents in mid-2003, spiked above C$1.80 early last year, and have hovered around C$1 since. On Friday, they were trading at 95 cents, up one penny, with 1,300 shares trading hands.
The company lost C$2.2 million in the year ending Aug. 31, 2004, and also lost C$2.2 million in the three months ending Feb. 28, 2005.
Jones describes the Bushveld complex as a 400-kilometre salad bowl of molten rock that produces 70 per cent of the world's platinum.
In October, PTM partnered with the world's largest platinum company, Anglo Platinum, on a joint venture project covering 67 sq. km's. A South African company, Africa Wide Mining, will finance 26 per cent of the project.
As part of the legislative changes, South Africa has set a policy objective 'that you have to find a way to get 26 per cent ownership of the minerals into the hands of local, historically disadvantaged South Africans within 10 years,' Jones says.
Mustard says the 'black ownership requirement' is one of the issues keeping many Canadian juniors out of South Africa.
'It's not an easy concept for many. It's not an easy concept for investors,' he says.
Another Vancouver company, Anooraq Resources Corp. [TSXV:ARQ] has qualified as a Black Economic Empowerment company in South Africa - the first offshore firm to do so - through a reverse takeover by Pelawan Investments Ltd., a firm owned by 'historically disadvantaged South Africans.'
That deal sets the stage for other companies to pursue the idea, Mustard said.
The price of platinum - which is used predominantly in jewelry and catalytic converters for vehicles - has soared from about $500 per ounce to $880 over the last five years. The cost of mining the metal is also expected to rise as the limited supply of near-surface platinum in South Africa runs out.
US$ Spot Gold vs Other Currencies
Today
Last 30 Days
Last 6 months
Cannot figure out if Jennings is profit taking or puking... Jennings purchased about 215K shares below $.75 and has now sold about 160K above $.85
Jennings was involved in the last PP and all prior PP.
Minefinders welcomes shareholders to its annual general meeting, to be held on June 16, 2005 at 2:00 p.m. at the Vancouver Marriott Pinnacle Hotel, 1128 West Hastings Street, Vancouver.
Was hoping there would be a news release by now...
thanks
can someone give me RNC.to trades from after 9:53 and before 10:05
missed a large block or two, need to know share quantity traded and buyer and seller
Thanks!
Gold Companies Have More Cash - Not From Mines ... Tim Wood
http://www.resourceinvestor.com/pebble.asp?relid=10608
Hey Frank, I just do the charts... If you want to housekeep the chart arrangements and mission statement, then by all means go ahead.
By the way, are you no longer a member of the 700 Club...? Please advise!
If this chart was updated daily, I would likely include it in Mostly Gold, but believe this chart is not updated daily or even weekly...? Please advise.