An interview with Eduardo Villacorte, General Manger for the Entre Mares mining company

Revistazo: How much is that a year?

Villacorta: I would have to do the conversion. It's close to 200 gallons daily. Remember that we don't use water seven days a week-we use water for a period of four or five days a week. Then we recycle some, and lose some to evaporation. We don't just throw the water out, we reuse it. This figure I am giving you includes water for domestic use, not just for the process of extracting ore.

We had a study done by a third party, an English company called Water Management that is working with the Honduran Water Authority to study water resources. Their study has shown that there is a great deal of water in the Siria Valley, which is unfortunately not being accessed and used adequately because it is underground.

Also, the water Entre Mares uses is from public sources. We have permission to use six wells and any additional water we have used has come from alternative sources, ground wells that do not have any influence on the public water sources for the Siria Valley. These alternative wells belong to private property owners, and the water comes and goes from their property. I mean that if we did not use that water, it would not be used.

Revistazo: Why do people say that the water sources have dried up since Entre Mares began working the mine?

Villacorta: It is very simple to prove this because there are maps, even maps from the National Cartography collection, that show that this number of rivers never existed. What does exist are ravines that carry water intermittently during the winter depending on how much rain falls. That is a completely false argument.

Revistazo: According to a legal proceeding against you, there was an arrest warrent issued for a company representative. What can you tell us about that?

Villacorta: It is completely false. The charges were initiated at the beginning of 2000 by the Public Prosecutor for the Environment, who was then Clarisa Vega. And we all know that she is no longer a part of the Public Prosecutor's office because of some problems.

Revistazo: What problems?

Villacorta: According to stories in the media, there were complaints from people who were charged without evidence and I don't know what all else. I don't want to go into it because I don't know the details. I'm just telling you what the news said.
In the beginning, when the case began, the charge was not based on water but on the use of sand. And what is more, they accused Entre Mares as though we had a concession for sand, but that was not true. We proved it. There were three or four concessions for sand belonging to people in the community-they were organizations in the area including the communities of Cedro, San Ignacio and El Porvenir.

The charges were really against them, but since that didn't sound good enough, they added Entre Mares to the list, as I understand it. But we were simply buyers acting in good faith.

Revistazo: It is said that at least 100 vehicles are used by the mine.

Villacorta: The number of vehicles is more or less right. Logically, there were three separate concessions, each with a contract and mitigation requirements. They were controlled by DEFOMIN (the Honduran government body in charge of mines). They control everything that has to do with quarries and with this type of metal or non-metal concession.

Revistazo: About the water, people say that you get water from cysterns and that you pay three or four million lempiras for it.

Villacorta: That is completely false. Our payments vary. Remember that we have not had to buy water in a long time. The winter last year was very rainy and we were able to collect a lot of rain water. Our system is based on water use and we anticipate problem by having concrete basins to collect rain water. Because of this, we have not had to resort to buy water this past year.

The price per gallon was 22 cents (on the lempira). We used close to three cysterns of two million gallons each and we made two or three trips to the cystern daily.

Revistazo: The criminal charges say that you are not permitted to exploit sand.

Villacorta: I want to make this very clear. I presented the reciepts for the purchase and sale of sand.

Revistazo: The law speaks of forced expropriation of property. You moved some people in Palo Ralo. How many families were moved and what benefits did they recieve from the company?

Villacorta: The community was called Palo Ralo. It was on the edge of the ore deposit and we had to do a little observation. The minerals belong to the State, so that is why the law allows expropriation. Logically, in the case of Entre Mares in particular, and I believe this to be true for any other mining company, we are not interested in taking people's homes or going to fight on our own about compensations in the Property Registry. That was not our interest.

On the contrary, we always treated the people in the community as friends. We are talking about more or less 19 or 20 households. Their living conditions were very precarious in homes made of mud without any services. So, the benefit to these people in the first place is that the move was voluntary. There are letters of agreement where the people accepted the move.

Revistazo: Do you have the letters?

Villacorta: Of course.

There was always a willingness to relocate. Furthermore, we paid them a compensation of close to 5,000 dollars per house, just for accepting. We also gave them homes with full services. These are block houses with water, electricity, bathrooms and even latrines outside because that was the custom. In every instance it was a change 500% for the better.

Revistazo: They say you did not give them public property titles.

Villacorta: That is completely true. To give them some formality we gave them written documents of commitment. The we made some property certificates but after that we continued with the more positive process. They did not have any property document beyond private titles that are not public and would not hold up in court against third parties.

The mine had to make a supplementary title to legalize all the properties and at the same time it had to divide the lots among the individuals, which happened through a kind of ntofication and sectioning off. Now, after having a worthless title, they have public titles and we have registered close to 12 as of today. The others are still being processed. This is a process that has taken us years and we have seen fabulous results. We have six to eight titles still in the process of being registered and we hope they will be finalized for the gentlemen now living in those homes.

Revistazo: What about the deforestation?

Villacorta: This is completely untrue. You only have to talk with the people to know that there were only some charcoal trees. One or two other trees were found, maybe a small fruit tree. It was never the magnitude that is now being described.

And what you must remember is that for each tree we cut we had to plant seven. Just in this year we have planted a little more than 10,000 trees. Let me make a point here. Given all the controversy surrounding the company, the only way it can prove that it is not going to leave the disaster the environmentalists warn about is to begin the process of restoring the land.

We have finished mining in some areas as we follow the ore lode. We have already begun to restore those areas and we have seen fabulous results, which have been confirmed. We monitor this process and keep it strictly under control.

Revistazo: It is said that California adopted very strong environmental measures that caused the company to cease operations there.

Villacorta: Not necessarily. We have recieved two prizes for the closing of mines. California has the most rigorous environmental laws in the world. We left California because the mine was finished.

Revistazo: Why has there been protest in California by an indigenous group?

Villacorta: That could possibly be a project that was never realized, the Imperial project in California. But the protests were part of the negotiation of benefits, not against the establishment of the mine.

Revistazo: Speaking of money, what were the profits reported by Entre Mares, separate from the profits reported by the parent company Glamis?

Villacorta: Remember that these are investments on a grand scope, and the risk of these investments is that you don't earn a profit for the first few years. What made Honduras an attractive place to invest 45 million dollars was the competitive law. It is not an exceptional law, but it is competitive, even in comparison to South American countries' laws, and there are South American countries who base their entire economies on mining.

So the first thing is the attraction to come and invest. Honduras is a country with a lot of mining potential. Upon investing, you have to evaluate the cost per ounce of ore of production. To date we have not reported any profit, we are operating at a loss.

Revistazo: But you cannot operate for many years without some profit.

Villacorta: There is not net profit, because if you invest 45 million dollars you are not going to make that back in a year.

Revistazo: But you have to expect to generate more income each year.

Villacorta: In the first year of production we extracted 113,000 ounces of gold. Unfortunately, when we established the contract of sale and purchase for the product we are exporting, the value of gold was not as high as it is now.

Revistazo: What happened in 2002?

Villacorta: In 2002 we exported 129,000 ounces. We had a contract for more or less 323 dollars per ounce. I'm estimating now because I do not have the exact value, I am giving you an approximation. What I am describing was not a net profit. To the contrary, you have to subtract the operating cost from the total sale.

Revistazo: Following up with the money, what benefits has the State recieved in economic terms?

Villacorta: Let's start with the Municipality, San Ignacio. Before we established the mine, San Ignacio had an annual income of 225,000 lempiras. In 2002 alone we paid 6.7 million lempiras to the municipality throught the 1% tax on exports. Then there are all the other taxes we pay for various services.

We also invest money in community project to the tune of 3.4 million lempiras in social project in 2002 alone. The contract detailing the mitigation requirements requires us to make these investments in San Ignacio.

Revistazo: Do they not want these projects in El Porvenir?

Villacorta: There has been a difficult situation in El Porvenir since the mine began.

Revistazo: Why do you think that is?

Villacorta: It is because of the tax payments. When the municipal boundaries were being establish it was unclear where we would pay our taxes. That was a decision outside the mine's control and so the mayor's office met with us and told us that the mine was in this jurisdiction and we had to pay our taxes there. Immediately after, El Porvenir declared war on us because, according to them, they were recieving no benefits.

We wanted to do some of the social projects in El Porvenir, but they did not accept that. We noticed tht their argument was to recieve money in cash.

Revistazo: What is the time period of the concession?

Villacorta: No, concessions do not have a time table. Let me explain to you about the operational part. If you put a time limit on the concession, you would encourage an irresponsible attitude in any company in the sense that time could run out for them and they would not have the patience to do things well.

Revistazo: What is the expectation for Entre Mares in Honduras?

Villacorta: We expect to be here for eight more years, including the time for mining, processing and replanting. We began here in 2000.

Revistazo: Is it true that when Entre Mares finishes it will leave behind a cyanide cemetary?

Villacorta: First of all, we are in a time of globalization. No one can afford the luxury anymore of being environmentally irresponsible. Globalization has greatly strengthened all the international environmental laws. All this about the cyanide is a myth.

The cyanide is about as dangerous as a common household insecticide used to kill mosquitos. If you are exposed to bug spray, it is the same as the cyanide.

We are are ambitious for the project of closing the mine. We have first-class instalations. We have a foundation within the company dedicated to education, because the main problem in this area is education.

The idea is to develop self-sustaining projects with an artificial lake. We want to leave behind projects like agriculture, fish-farming and chicken farming. We have bought cattle to improve the area. We are mining and taking care of livestock at the same time so people will see there is no problem.

Revistazo: Are you aware of the health problems?

Villacorta: CESSCO (Honduran government's Center for the Study and Control of Contaminants) did a study. We sent our own doctors and they found that the people who are sick have been sick for more than 10 years. Anything that happens gets blamed on the mine.

Revistazo: Speaking of CESSCO, is it true that they never visited the area but that you sent them the information?

Villacorta: They have done the analysis, but according to the mitigation contract we have the responsibility to present trimester reports.

Revistazo: But why did they not do the reports?

Villacorta: Maybe because of insufficient funds. I don't know the reason. But they have done the analysis, believe me, though not as continuously as we do. We have a report that says that we are not polluting with cyanide.

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