Four million in fines – effective and pending – in exchange for more than 590 million in profits. The mining company Cobre Las Cruces received last Tuesday the second sanction of the Council of Ministers for staying groundwater illegally in its mining operation in Seville. Both fines punish irregular “detractions” between 2014 and 2018, while in those years the mining company beat its production and income records: only in 2014 it recorded a gross profit of 153 million euros, its annual record, according to its own economic reports.
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Cobre Las Cruces (which belongs to the Canadian multinational First Quantum) has managed to squeeze the open-pit copper deposit to the limit despite a string of sanctions and even prison sentences for its environmental damage to the water. In August 2020 it ended the extraction of the quarry with a last detonation: it has carried out 1,827 blasting operations since 2006. It is now working on a project for an underground mine in the same area and a polymetallurgical refinery.
Both this 2021 sanction and the previous one, signed by the Government in 2016, punish the fact that the mine has derived more water from the Gerena aquifer for its activities than it could according to the environmental authorization. The fines amount to one million euros, to which compensation for damage to the Public Hydraulic Domain is added. In addition, the resolution of another file (for 1.5 million euros) for the same practices between 2014 and 2018 is pending.
The company states on its website that “the sustainable use of water is a maxim of commitment in CLC and is at the heart of the process from the beginning to the end of the copper processing. Cobre Las Cruces provides the maximum guarantees and necessary controls in terms of water management, making a sustainable use of water”.
However, the infringing trajectory has not remained in these sanctions imposed by the central Executive. In 2016, three executives of the company were convicted by the Provincial Court of Seville for a continuous crime against the environment. The sentence, in addition to economic penalty, condemned the executives to one year in prison for having contaminated the Public Hydraulic Domain with arsenic, in addition to extracting water above what is allowed. In 2008, the Junta de Andalucía even had to stop the deepening works of the quarry that the mining company was carrying out due to the risk of contamination of the same aquifer (which was then called Niebla-Posadas).
A deposit to take advantage of the copper boom
After resuming its activity, there was a succession of years with high profits. When reporting on the year 2014, First Quantum said about the Sevillian exploitation: “Las Cruces has presented an extraordinary performance in 2014 with a second consecutive year of record copper production”. It added that “gross profit increased by 3% due to higher sales revenue and lower production costs”.
The Seville deposit has been for more than a decade one of the jewels in the crown of the Canadian multinational. The extracted mineral had a very high grade: between 5-6% of copper in each ton, “7 to 12 times higher than any other deposit,” reported the mining company itself. The production at Las Cruces has allowed the company to take advantage of the copper market multiplication. “The demand has doubled in the last 25 years,” describes the employer, the European Copper Institute.
The increased demand has meant that the international price of this mineral has gone, with its fluctuations, from about 1,800 euros a tonne in January 2000 to 7,900 euros in August 2021. In the period of “abstractions” without water permits, the price was never below 4,000 euros per tonne. The McKinsley Global Institute has calculated that copper consumption in 2035 will be 45% higher than in 2014.
So the sequence of results has been: in 2013 Cobre las Cruces made 149 million profit, in 2014 it reached 159 million, in 2015 it was 84 million profit and in 2016 it was down to 50 million “due to the fall in price”, they explained. In 2017 they recovered to €90 million and in 2018 they rose to €99 million. In 2019, a collapse in the cut caused the company to lose €32 million. In 2020, its last year, Cobre Las Cruces reported a gross loss of €11 million.
“It is profitable for them to face these fines in exchange for the benefits they have been getting,” reflects Isidoro Albarreal, of Ecologists in Action, the organization whose initiative prompted this recent disciplinary proceedings. “Of course they appeal and prefer not to pay them, but I am convinced that these amounts are planned as a cost of production more”. The organization has calculated that, since the mine began its work, “has illegally detracted 15 million cubic meters of groundwater”. 15 cubic hectometres.
The company has decided to appeal the last sanction of September 2021 as it did with that of 2016 (which was definitively confirmed by the Supreme Court). Las Cruces argues that it has made “an unprecedented effort both from a technical and investment point of view, to respond to the extraordinarily demanding conditions related to water management of the project”. The mine explains that it has created a system of drainage and re-injection of the water it captures in its activity to return it to the natural reservoir.
Environmental liability file
The aquifer from which the water has been extracted is made up of two groundwater bodies now called Gerena and Guillena-Cantillana. These reservoirs are considered a strategic emergency reserve for human consumption in Seville in the event of a shortage.
But they have also been the daily supply for some surrounding towns such as the municipality of Burguillos. They are no longer so because the state of the aquifer has been worsening to the point of making it impossible to pump quality water for the inhabitants. So much so that the Junta de Andalucía will have to bring water to Burguillos with a project that will cost 4.2 million euros.
Ecologists in Action has asked the Andalusian Government to initiate “a file of environmental responsibility” against Cobre las Cruces for considering that it has been their water extractions that have led the aquifer to its current state. They request that “the valuation of the damage” is at least those 4.2 million “corresponding to the expenditure that the Andalusian administration will have to make,” according to the Andalusian government.The Commission has not yet submitted its written statement of claim.
First Quantum is currently awaiting authorization to consume 3.3 million cubic meters per year of groundwater to extend the mining activity, this time underground for 15 years. The project has obtained the environmental authorizations responsibility of the autonomous government and it lacks the permission for the liquid that falls to the Confederación Hidrográfica del Guadalquivir of the Ministry of Ecological Transition.
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