World Rainforest Movement

Chile: Campaign against a Canadian project for the production of aluminium

Presently, the Chilean Patagonia is threatened by a mega-project to be carried out by the Canadian transnational company Noranda Inc., a long-standing mining company that proposes to build one of the largest aluminium reducing plants in the world in the pristine region of Aysen.

To give an idea of the dimensions of the damage that the construction of this aluminium plant (known as “Alumysa”) will cause, the zone where it is to be installed together with the related works, need to be described.

Aysen is one of Chile’s 13 regions, and covers an area of over 10 million hectares (108,494 km²), of which 4.8 million hectares are native forests, 1.1 million are wetlands and 1.8 million hectares correspond to snow covered areas and glaciers. It is important to note that it is the region of Chile having the greatest extension of native forest.

According to the last census carried out in 2002, the human population in this region amounts to 86,697 inhabitants, a density of 0.8 inhabitants per km². The inhabitants of the Aysen region are concentrated in some urban centres, the largest cities being Coyhaique and Puerto Aysen, the latter located very near the place where the converting plant is to be installed.

This part of Chile is remarkable because it maintains characteristics that are hard to find today, such as thousands of hectares of forests and pristine ecosystems with species of fauna and flora that are unique in the planet, clear skies and pure air, non-contaminated lakes and rivers. In addition to the natural wealth of flora and fauna, many glaciers can be found in this region such as the San Rafael lagoon and Campos de Hielos, considered as one of the major freshwater reservoirs in the world.

The region is also characterized by its enormous natural beauty, and year by year the number of national and foreign tourists who arrive in the search of unique landscapes and places increases. It should also be noted that the inhabitants of the region value the natural heritage of their territory and for this reason call it “Life Reserve.”

It is within that context that the mega-project “Alumysa” pretends to be implemented. The project presently undergoing environmental impact assessment implies at least the construction of an aluminium reducing plant, the building of three hydroelectric plants and six dams to supply electric energy to the plant (Rio Cuervo hydroelectric plant, Lake Condor hydroelectric plant and Rio Blanco hydroelectric plant), a port at Bahia Chacabuco and a landing stage and floating dock. As if this were not enough, the project also includes a plant to manufacture anodes and cathodes, 79 kms of electric transmission lines from the power plants to the plant itself, and 95 kms of roads and decantation lagoons for liquid effluents.

The Alumysa project, belonging to Alumysa Joint Venture and NORANDA Holding Ltd., domiciled in the Cayman Islands, proposes to invest US$2,750 million, placing it as the greatest foreign investment in the history of Chile for a project with a 50-year shelf life.

What is incredible is that only 101 million dollars of this project will be used to build the major works and 350 million dollars will be used for labour, while most of the remaining 2,200 million dollar investment will be used to purchase machinery to operate the plant. This seems curious, if we consider that there are special laws in Chile for extreme regions (such as Aysen) facilitating the importation of machinery with very low import taxes.

If we add to this that companies classified as mining companies in Chile do not pay taxes as there are mechanisms to encourage the installation of this type of enterprise dating back to the Military Dictatorship, we easily come to the conclusion that this is a magnificent business for this foreign transnational company and a further attack on the ecology and economy of a third-world country.

The following important background information, describing the economic and ecological attack, is important to note:

– Chile does not possess the necessary raw material to produce aluminium: it will have to be imported. During the operational stage, annual production would amount to 440,000 tons of aluminium per year, requiring the importation of approximately 846,000 tons of alumina, 146,000 tons of burnt coke, and 43,500 tons of tar, brought in from other countries such as Australia, Brazil or Jamaica.

The aluminium production process requires a great amount of electric energy and the abundance of water resources existing in the Aysen region will enable electricity to be generated at a very low cost as, unlike the first world, the national water code gives free access to these resources.

– To produce 440,000 tons of aluminium per year, Alumysa will need to import 1,100,000 tons of inputs, both for the production process and for the manufacture of anodes and cathodes. A simple subtraction will enable us to see that a minimum amount of 660,000 tons of waste per year will be generated in the region.

– Furthermore, for 365 days a year, massive and continuous releases will take place of toxic gases, such as sedimentary particulate fluoride, organic particulate material (which is highly cancerigenic), greenhouse effect gases (carbon dioxide, perfluorocarbon), sulphuric gases causing acid rain, carbon monoxide and a great amount of liquid industrial effluents.

– On producing 440,000 tons of aluminium per year, 980,000 tons of carbon dioxide will be generated, therefore over 50 years, this would reach the amount of 49,000,000 tons of CO2, added to the perfluorocarbon type gases which are highly dangerous due to their duration and contaminating effects, increasing the greenhouse effect and global warming.

– To this should be added a non-assessed amount of methane and CO2 produced by the dams on flooding almost 10,000 hectares of land with organic matter.

Summing up:

– Chile has comparative advantages for foreign investment due to its weak legislation in terms of low environmental, labour and tax requirements.

– The environmental, social and economic costs for the region are enormous. Alumysa implies the destruction of ecosystems that are unique in Chile and in the world. The production of aluminium generates the release of fluorides in the air and in the water, placing at risk the zone’s biodiversity, the terrestrial and aquatic flora and fauna and human health.

– The region’s forests are unique ecosystems in the planet and are characterised by many endemic species, of which various are endangered. In Chile, most of the fresh water fish are endemic and their conservation is to a certain degree threatened. The Alumysa project will increase this risk.

– This region would be used as a corridor in the production of aluminium and as a rubbish dump for the region, because raw material will be imported to carry out a highly contaminating production process, the profits will be taken away and the rubbish left behind, including toxic waste and highly contaminating releases in the air and in the water.

– This means that we are clearly facing a case of mining “maquila” (sweatshops), in which a first world country will use the benefits of an open economy such as the Chilean one. All this is taking place with the approval, the blessing and even the clear support of well-known Chilean politicians, among whom, we may mention the Minister of Finance.

For these reasons, environmental and citizen organizations in Chile have set up the Aysen Life Reserve Alliance to say: Alumysa? NO THANKS!!!!!

By Flavia Liberona, e-mail: , web site:

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