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Volume 14, Number 22
November 25, 2008

economy

Also in this section:
Petaquilla hit with fine, fractional restitution, market rejection
DMG: not your ordinary investment pyramid
New Tribunal de Cuentas
Retirees take their protest to the street
Balboa's crumbling infrastructure
High court slaps down Lucom will challenge tactic
Business & Economy Briefs



Petaquilla Minerals stock over the past year

Petaquilla hit with maximum fine, partial restitution, market rejection
by Eric Jackson

Richard Fifer's Petaquilla Minerals, the parent company of Petaquilla Gold, which runs the illegal Molejon gold mine, has been hit by the National Environmental Authority (ANAM) with the maximum million-dollar fine for violating environmental laws and ordered to pay $934,694 in restitution for those affected by its road building and strip mine development activities, which have been carried out without an environmental permit or any of the ordinarily required damage control measures. Runoff from Petaquilla's operations has silted streams, damaging fisheries and muddying surface waters upon which people and farm animals depend.

Despite the lack of approval for its activities, the company is threatening in international press releases to begin gold production in December, which will mean the introduction of cyanide and mercury into the environment. These toxic chemicals are used to separate gold from the quartz in which it is embedded. Though the norm is to build a retaining pond for toxic residues from the separation process, the usual thing in Panama has been that at the height of rainy season these ponds overflow and mining companies say that the resulting fish kills and long-term heavy metal contamination of streams and rivers are "acts of God."

A movement of farmer, community, environmentalist and Liberation Theology Catholic groups that has for a number of years been doing battle with Fifer and Petaquilla has denounced ANAM's restitution order as "really ridiculous" because it's only based upon the cost of reforestation of the big hole that Petaquilla is digging at El Molejon and doesn't contemplate the degradation of water quality stretching along streams and rivers and running out to the Caribbean Sea.

ANAM has ordered a stop to all operations in all Petaquilla mining concessions. Fifer split the original Petaquilla concession in northern Cocle and western Colon provinces into Petaquilla Gold, which he still controls, and Petaquilla Copper, which was taken over in a hostile process by Canadian-based Inmet and has changed its name to Minera Panama. The copper concession is much further from production and its Canadian proprietors are less prone to outright defiance of Panamanian environmental laws than is Fifer. The latter has been blessed by the support of President Torrijos, even in the face of charges that Fifer embezzled public funds as governor of Cocle during the Moscoso administration and Fifer's brazen defiance of ANAM and the courts. Petaquilla, however, was one of the main reasons why the US Congress adjourned its lame duck session without taking up the US-Panama free trade pact ratification. Yes, the Torrijos administration agreed back in 2007 that environmental laws would be enforced, but the timing of the latest action against Petaquilla only on the eve of the post-election congressional session bore all the hallmarks of insincerity and, along with President Bush's pleas, it was ignored on Capitol Hill.


President Torrijos doing a Palacio de las Garzas  publicity photo with Fifer, left, and a Petaquilla publicist

If Fifer has been able to set up roadblocks to exclude environmentalists and reporters, paint the angry neighbors as a bunch of crazy radicals, mobilize the president's backing and convince the Catholic hierarchy to pull anti-mine Claretan missionaries from the affected communities, it turns out that he has been less effective with the ordinary capitalist machinations of world markets. Petaquilla Minerals stock has risen and fallen with world gold prices, but apart from that it has fallen much more severely than trends in the industry can explain. That's because, despite published misrepresentations of his embezzlement troubles --- in many cases actually because of these, once the truth has become known --- and all of the glowing press releases, over the years the company's claims haven't added up, its predictions have not come to pass, and Fifer's inability to get along with industry heavyweights like Teck Cominco and Inmet have been telling to sophisticated mining investors. As far as the markets are concerned, Fifer is not to be trusted and his charmed relationship with the government is not expected to last after next year's change of administrations. Thus the dive in Petaquilla Minerals share prices.



Also in this section:
Petaquilla hit with fine, fractional restitution, market rejection
DMG: not your ordinary investment pyramid
New Tribunal de Cuentas
Retirees take their protest to the street
Balboa's crumbling infrastructure
High court slaps down Lucom will challenge tactic
Business & Economy Briefs


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