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Thursday, November 15 2018 @ 07:57 AM UTC

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Equinox circles in on Lundin Mining after Inmet merger deal falls apart

Gold & MiningBy: Craig Wong, The Canadian Press - Equinox Minerals Ltd. pitched its hostile takeover bid with renewed vigour Wednesday after Lundin Mining's planned merger with Inmet Mining fell apart. Equinox said its $4.8-billion cash and stock offer, which has been rejected by the Lundin board as inadequate, "remains the clear and compelling choice for Lundin shareholders." "It provides them with the flexibility to receive significant value in cash now or to benefit over the long term by participating in the potential of a leading pure-play copper company with a portfolio of world-class assets and a strong growth profile," Equinox president and chief executive Craig Williams said. Shares of Lundin traded up about six per cent after the company agreed to call off its merger with Inmet. The company, which has repeatedly called the Equinox offer too low, has said it would launch a new search for alternatives to "improve shareholder value."

The merger had been in doubt since Lundin became the takeover target of a third Canadian mining company and questions arose about the future of an Inmet copper project in Panama. The failure to consummate the merger with Inmet is the second time Lundin has not been able to close a major deal in recent years. A proposal that would have seen Lundin acquired by HudBay Minerals fell apart in 2009 after it was opposed by HudBay shareholders because it would have significantly diluted the company's stock. Meanwhile, investment firm UBS suggested Wednesday there was a 40 per cent chance that Lundin would attract multiple takeover offers. "Lundin did not appear to have conducted a thorough auction prior to committing to the merger-of-equals proposal with Inmet in January," UBS analyst Onno Rutten wrote in a note to clients. Rutten raised his target price on Lundin from $8.20 to $8.90 and maintained a "buy" rating on the stock. To aid in its search for another bidder, Lundin has adopted a shareholder rights plan to defend against hostile takeover offers. The plan could see Lundin double its number of outstanding shares, making an unsolicited takeover offer prohibitively expensive. Lundin has operations in Portugal, Spain and Sweden, producing copper, nickel, lead and zinc as well as an equity stake in the Tenke Fungurume copper-cobalt project in the Democratic Republic of Congo. Equinox has offered $8.10 per Lundin share in cash or 1.2903 Equinox shares plus a penny for each share. The amount of cash is limited to $2.4 billion, while the number of shares offered is capped at 380 million. Lundin shares were up 40 cents at $7.99 Wednesday afternoon on the Toronto Stock Exchange, while Inmet shares were up $3.35 at $65.80. Equinox shares were up 14 cents at $5.62.

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Inmet Panama mine setback is 'material change': Lundin

Gold & MiningBy Christopher Donville (Bloomberg) Lundin Mining Corp., which agreed in January to be acquired by Inmet Mining Corp. for $3.47-billion (US$3.55-billion), said Panama’s opposition to part of a proposed Inmet copper project represents “a material change.” Lundin Chief Executive Officer Phil Wright said he first learned that Panama’s government doesn’t favor construction of a coal-fired power plant to supply electricity to the Cobre Panama mine last week. “That is quite a material change for us,” Mr. Wright said in a telephone interview yesterday from London. Lundin, which like Inmet is based in Toronto, is fending off an unsolicited $4.28-billion cash-or-stock bid from Australia’s Equinox Minerals Ltd. The Inmet deal is “dead,” Equinox CEO Craig Williams told the Globe & Mail March 22. Lundin won’t consider scrapping the takeover until it has assessed the viability of alternative power sources for Cobre Panama, Mr. Wright said. “Inmet are saying there are alternatives and that those alternatives would not delay the project,” Mr. Wright said. “I see nothing that would enable me to draw that conclusion.” (more)

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Repeal of Mining Law Goes To Second Debate

Gold & MiningThe President of Panama's National Assembly, José Muñoz, said the second debate on the repeal of Law 8, which amended the Code of Mineral Resources, will begin on Wednesday (today, 16 March 2011). "The initiative will be adopted as it was a decision as part of the agreement, in order to then later create a new law for the benefit of all Panamanians," he told Noticias AM. Muñoz also said the Commerce Commission today began to discuss a draft law (bill) to reform the Electoral Code. He called to the people to participate in the consultations being held on this subject, because, as he added, this will be the law that will govern the elections in 2014. (Panama America)
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Indigenous People and Government Reach Agreement To Initiate Dialog on New Mining Code

Gold & MiningOn 21 March 2011 a new series of talks will commence with the intention of adopting a new proposal for a law to govern mining activities in the country, as agreed between the Coordinator for the Defense of Natural Resources and Rights of the Ngäbe People and the national government. "We hope to reach an agreement as soon as possible for the benefit of the Ngäbe people and for all Panamanians," said Rogelio Montezuma, a member of the Coordinating committee. During the meeting the two sides reached an agreement to establish an office in the indigenous area which will address the issue. The deal came after the Indians held a meeting with the President of the National Assembly, José Muñoz, where he presented a proposal that includes twelve articles. (Panama America)

Editor's Comment: Someone must have explained to them that there's copper in the ground worth about $900 billion dollars, and unless they let someone else in to extract and exploit those resources, they will stay underground forever. The government has learned their lesson when it comes to dealing with the various indigenous groups - you want them to be on your side no matter what. If not, they can make your life really, really miserable. So, take your time, play nice, make them happy, and get what you want in the end.

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Inmet-foreign state-owned entity funding in Panama 'viable'

Gold & Mining(Reuters) - Inmet Mining Corp said financing a copper-gold project in Panama through foreign state-owned entities was still a viable option, despite the country's plan to repeal a law allowing foreign government investment in mines within the Central American country. The law, passed less than a month ago, is crucial to Inmet as it plans to partner with Singapore's state investor Temasek and Korea Resources Corp to finance and build its $4.3 billion Cobre Panama copper-gold project in the country. "As to the potential investment of foreign government owned entities in the project, Inmet will seek further clarification during the repeal process but remains of the opinion that such investment is still a viable option," the Canada-based miner said in a statement. In an interview with Reuters on Friday, Inmet's Chief Executive Jochen Tilk said it was still unclear whether the company would be a part of the consultation process that the government plans to initiate. Tilk stressed that the government's move does not block the development of the project, but he conceded that Inmet may have to look at other alternatives for financing the project. Shares of Inmet fell 7.4 percent and closed at C$64 Friday on the Toronto Stock Exchange on fears that the repeal of the law could hurt its plans to finance the project. (Reporting by Savio D'Souza; Editing by Prem Udayabhanu)
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Inmet shares drop as Panama mining law repeal weighs

Gold & MiningTORONTO (Reuters) - Shares of Inmet were among the biggest losers on the Toronto Stock Exchange on Friday, after the government of Panama announced plans to repeal a recent law that allows foreign government investment in mines within the Central American country. The law, passed less than a month ago, is crucial to Inmet Mining, as the company plans to partner with Singapore's state investor Temasek and with Korea Resources Corp to finance and build its $4.3 billion Cobre Panama copper-gold project in the country. Shares of Inmet fell as much as 3.7 percent to C$66.55 in early trade, as the repeal of the law could impact Inmet's plans to finance the project. Toronto-based Inmet, which owns copper mines spread across Turkey, Finland and Spain, is trying to acquire rival Lundin Mining. However a C$4.8 billion counter offer from Equinox Minerals could derail Inmet's friendly deal with Lundin. Many analysts doubt that Inmet will join a bidding war for Lundin, as it needs to build a war chest to finance Cobre Panama. BMO analyst David Cotterell said he views the development of Cobre Panama as a key part of Inmet's future growth. "The funding options for the Cobre Panama Project could potentially place constraints on offering more attractive terms for Lundin," he said, in a note to clients. (Reporting by Euan Rocha; editing by Janet Guttsman)

Editor's Comment: Following along now? Law 8 had nothing to do with the development of Cerro Colorado in the comarca, and everything to do with trying to find a way to help Inmet obtain financing and partners for their Cobre Panama project, the rights to a concession they obtained in the divorce from Petaquilla. I bet there are mechanisms in existing bilateral free trade agreements between Panama and Canada as well as between Panama and South Korea that would allow for much of what needs to happen anyway, with or without Law 8. The whole Law 8 thing came up after South Korean president Lee Myung-bak visited Panama in June 2010. They wanted assurances from the Panamanian government before they committed a couple of billion dollars to help Inmet build their mine. That's why after Law 8 was passed, Vice President Juan Carlos Varela personally called the South Korean president to let him know they had gotten the deal done. I wondered who called him yesterday to tell him "never mind..."

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Henríquez: Now Mining Companies Will Pay Less Royalties To The State

Gold & Mining"The miners are happy because they will pay less royalties to the state, " said Panama's Minister of Trade and Industry Roberto Henríquez, after the Cabinet approved the repeal of Law 8 which amends the Code of Mineral Resources. He said the Government took a courageous decision to repeal the law because the people did not want it. "The government decided social peace and tranquility is much more important, and now he can move forward with the various social projects we are developing," said Henriquez. According to Minister Henriquez, with the repeal of Law 8 the existing Mining Code of 1964 will remain in effect which does not contemplate the removal of metal mining in our country. He added that companies wishing to break into the business will have to seek financing elsewhere because the government has no money to invest in a business in the medium to long term. Yesterday afternoon yesterday Minister Henríquez filed a bill before the full session of the National Assembly to ask for the repeal of Law 8. (Panama America)

Editor's Comment: Law 8 was really all about finding a way to let the Canadian company Inmet obtain about $4.6 billion dollars in financing, mostly from Korean companies, in order to make it easier to develop their copper project. Now they will have to find another way to finance the building of the mine. And Henriquez is right - the new law (Law 8) that is about to be repealed required all mining companies operating in Panama to pay more in royalties than they are paying now. The new law also had stricter measures for environmental concerns. So now the old law remains - with less royalties and less environmental protections. And the environmental radicals are calling this a win? Dumb. They don't even know what they are fighting for, but rather they just fight for the sake of the fight, which is ridiculous. Typical "don't confuse me with the facts" kind of knee-jerk attitude. Whatever. I hope they're happy.

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Panama president says will repeal mine law reform

Gold & MiningBy Sean Mattson and Euan Rocha - PANAMA CITY/TORONTO (Reuters) - Panamanian President Ricardo Martinelli on Thursday asked lawmakers to repeal a recent law that allows foreign government investment in mines within the Central American country. The law, passed less than a month ago, is crucial to Canada's Inmet Mining , as the company plans to partner with state-owned firms such as Korea Resources Corp in a bid to finance and build the $4.3 billion Cobre Panama copper-gold project in the country. Martinelli, who originally championed the new law, made the surprise announcement about the repeal at a meeting with an indigenous community in Western Panama. The group has strongly protested against the legislation. Martinelli rushed the repeal proposal through an emergency cabinet session in Panama City on Thursday. And Trade Minister Roberto Henriquez has taken the proposal to the legislature asking lawmakers to repeal the law in its entirety, according to government statements.

The legislature is expected to approve the repeal when it reconvenes in the coming days. Inmet's Chief Executive Jochen Tilk said that the government did inform Inmet of plans to repeal the new mining law. The company does have the right to proceed with the development of the project, but the fate of its proposed tie-ups with foreign state-owned investors will probably only be decided when a new law is enacted, Tilk told Reuters in an interview late on Thursday. "We think we can develop the project, as it affects partners it will really depend in the end on how the final code will be enacted," he said. Tilk said he was confident the move to repeal the law will not delay the development of the project, as the company has a strong enough balance sheet to "initiate the process" of developing Cobre Panama. "There are clearly many options and different types of funding support (that we can tap)," he said. Tilk said the government's move to repeal the new law is aimed at giving indigenous communities and other stakeholders an opportunity to express their views, before a new code is enacted. "We do support this and think this is the right approach and we think the government is taking the right step to include the indigenous communities," he said.

A spokeswoman for Martinelli's office said there was no word on whether another reform of the original 1960s-era mining law that had blocked foreign government investment in the sector would be presented to lawmakers. She said lawmakers planned to meet with indigenous leaders to discuss possible reforms in the coming weeks. Inmet's project is expected to produce more than 250,000 tonnes of copper a year, as well as significant quantities of gold, silver and molybdenum over a 30-year life span. Toronto-based Inmet, which owns copper mines spread across Turkey, Finland and Spain, is in the process of attempting to acquire rival Lundin Mining. However, the company's friendly deal with Lundin could be derailed by a counter offer from Equinox Minerals worth about C$4.8 billion. Many analysts doubt that Inmet will enter into a bidding war for Lundin, as it needs to build a war chest in order to finance Cobre Panama. Inmet's shares, which closed Thursday at C$69.12 on the Toronto Stock Exchange, have risen more than 60 percent over the last six months, driven largely by strong demand and prices for copper. ($1=$0.97 Canadian) (Reporting by Sean Mattson in Panama City and Euan Rocha in Toronto; Editing by Clarence Fernandez)

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All Foreigners Promoting Mining Order To Leave Indian Country

Gold & Mining The Minister of Government, Roxana Mendez, announced yesterday that all foreigners who are promoting mining activities in the NgäbeBuglé area must leave the region within two weeks. Mendez, who is part of a committee appointed by the government to negotiate with the ngäbes, said through a brief, four paragraph press release, that they have taken this measure in order to prevent people from outside of the tribe from generating anxiety, disturbing the peace and tranquility enjoyed by the community Ngäbe. Zorel Morales, the executive director of the Mining Chamber of Panama (CAMIPA), said he does not understand the measure that is being taken, because right now in the area of the district there are no mining activities of either exploration or exploitation. (El Siglo)

Editor's Comment: The administration of Ricardo Martinelli has clearly decided that they don't want to spend the rest of their time in office fighting the "indigenous" personnel over the issues of mining. This week president Ricardo Martinelli signed an executive decree saying that they have no intention of promoting mining activities in the Indian lands, which has the power of law. No matter, the Indians are protesting again today anyway. Apparently some of the companies what were still hoping to make some of the $900 billion dollars from the copper in the ground under Cerro Colorado have been up there doing positive PR efforts, and apparently this is just pissing people off. So, this statement by Roxana Mendez is an attempt to make them stop. Oh well, no copper mine. Too bad.

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Panama clashes: Guaymi angry over copper mining law

Gold & Mining Police in Panama have clashed with dozens of indigenous protesters trying to prevent copper mining on their ancestral lands. Members of the Guaymi indigenous group occupied a bridge on a major highway on the outskirts of Panama City. Clashes erupted when police tried to move the protesters to clear the way for traffic. Lawmakers last week approved a law which opens up the western Ngobe-Bugle reservation to foreign mining projects. Police say demonstrators, some of whom were armed with spears, threw stones at them when they tried to clear the section of the Pan-American highway. Indigenous leaders complained that police had used tear gas against women and children. The Guaymi say the new law would spoil pristine rainforest areas and force their communities to relocate. The government has already opened for tenders a copper deposit in Cerro Colorado, in Ngobe-Bugle territory. But President Ricardo Martinelli insisted that "no mining concession or exploitation will be made in a district in any area" of indigenous lands. On Tuesday, riot police clashed with students who were also protesting against the changes. (BBC)
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Mining Reforms Adopted In Second Debate

Gold & MiningIn an eventful session that lasted over 11 hours, the full National Assembly last night approved the second reading of Bill 277 to amend the Code of Mineral Resources, which is being promoted by the Executive. After heated discussions that highlighted the fierce Indian allegations of opposition deputies and Irene Prado Crescencia Gallego, the National Assembly proceeded to vote article by article on the controversial project. In the end, 44 deputies voted in favor and 16 voted against. Jorge Alberto Rosas, deputy of the Nationalist Republican Liberal Movement (Molirena) - the political party allied with the government of Ricardo Martinelli - abstained from voting on the article in the law regarding the granting of mining concessions to foreign governments and states, through corporations. Previously, Rosas has made strong statements against mining. The approval of this project came amid severe criticism from indigenous groups, environmentalists, university students, workers and lawmakers from opposition political parties, who warned that the Government is giving to other nations or companies controlled by them, a part of the national territory, violating the Constitution.

During the second debate reforms were introduced to the original project, such as increasing royalties from 4% to 5%. In addition, it was agreed that this 1% increase would go to the program of Disability, Aging and Death of the Social Security Fund. According to estimates from the Ministry of Trade and Industry, this will represent about $22 million annually. They also approved that 2% of those royalties would go to construction projects and development programs in the areas and communities surrounding the mining concessions.

Roberto Henriquez, the Minister of Trade and Industry, estimated that with these changes the company Minera SA Panama - which has a copper concession Donoso - will have to pay about $22 million dollars more per year to the treasury. "If they [Minera Panama SA] want to do business in the country, they have to pay more. They will have to adapt to the new canon" he said.

After the second debate - after 10:00 pm - a group of indigenous Ngäbe who had remained in the Assembly during the discussion of the project, were enraged against the government and deputies and they tried to enter the Palacio Justo Arosemena. At press time, a contingent of riot police arrived at the Assembly to control the situation, but the Indians demanded the withdrawal of the project and the presence of the president, Ricardo Martinelli. While this was happening in the capital, in San Felix, Chiriqui, the Deputy Minister of Labour, Luis Ernesto Carles, who chairs the committee appointed by the Executive to mediate with the opposition to mining, met with members of the Association Ngäbe Bugle. (La Prensa)

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Ngöbe reject statements by President Martinelli

Gold & MiningIndigenous leader Rogelio Montezuma rejected accusations made by president Ricardo Martinelli, and he said the Ngöbe Bugle people have come out with their own efforts to defend the right that corresponds to their land and territory. "We are not sponsored by any opposition political party, NGOs or foundations," said Montezuma in response to statements made by Martinelli and Vice President Juan Carlos Valera, who blamed opposition politicians and foreign businessmen of financing the protests against reforms to the Mining Code. Montezuma added that they left the mountains with their own efforts, some on foot and some with the support of carriers (bus drivers). As for the riots that occurred on Monday in the district of San Felix, in the province of Chiriqui, the Indian spokesman reiterated that the protests were announced in a peaceful manner. However, he said the riot control units of the National Police did not even allow them to reach the Inter American highway when they began to use tear gas, pepper spray and rubber bullets against the Ngöbe families. "The Ngöbe brothers repudiate that you are using these types of actions and equipment against the people, but we decided to keep protesting because we believe that we live in a democratic country," said Montezuma on the TVN Channel 2 news. (Panama America)

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Martinelli Says Foreign Business Interests Are Behind Mining Protests

Gold & Mining The President of the Republic, Ricardo Martinelli, blamed political groups and foreign companies this morning, for the protests that have been organized against the reforms to the Code of Mineral Resources. Martinelli said these companies do not want any more copper mines to be developed anywhere in the world, so they can continue to maintain a monopoly and high prices. The president said on channel 13 Telemetro Report that they will get it done, referring to the reforms to the Mining Code. "We are not going to do anything that has anything to do with destroying the environment and rivers, all we are seeking is for the state to have more resources," said Martinelli. He added that they are also trying to develop employment opportunities for the Indians. The President said there are people who are taking advantage of the situation to cause chaos and unrest among the Panamanians. (La Prensa)

Editor's Comment: There are more than 100 million tons of copper in the ground at Cerro Colorado waiting to be exploited. That's 200 billion pounds of copper. A quick check of the Kitco spot copper price tells me copper is currently being traded $4.55 per pound. Translation = the copper in the ground under Cerro Colorado has a current value of $910 billion dollars. That's right, almost one TRILLION dollars. I have to assume that Ricardo Martinelli has some kind of intelligence information to back up his public statements today. I already know the every-day knuckleheads like the SUNTRACS, Frenadeso, Conato, and PRD are going to be stirring up as much trouble as possible, the same way they did in Changuinola. These are the guys who are "taking advantage of the situation to cause chaos and unrest." But guys, when you're playing with a deck of cards that's marked in the trillions of dollars, you can promise just about anything to anyone to buy their cooperation. Maybe Raisa Banfield would like to be Panama's new Ambassador to Greenland? Get it? Green. Land? Environmentalist? OK, it was a stretch...

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Political Cartoons To Learn Spanish - Mining Code Debates

Gold & MiningBy DON WINNER for Panama-Guide.com - The following political cartoon appeared in the El Siglo newspaper today, and the topic is the ongoing debates regarding a Bill currently before the National Assembly to reform the Mining Code in Panama. These changes are necessary to eventually allow for the development of the massive copper mine project in Cerro Colorado. Pictured in the cartoon is a person who appears to be the Panamanian Minister of Commerce and Industry, Roberto Henriquez, speaking to a group of stern faced Ngäbe-Buglé indigenous Indians about the reforms, and what the new copper mine will bring. In the first panel he says:

  • "Con la explotacion de Cerro Colorado, el pueblo Ngäbe tendra empleos, calles, electricidad..."

  • (With the exploitation of Cerro Colorado, the Ngäbe people will have jobs, streets, electricity...")

  • The stern faced public is not impressed, but the men break into huge smiles when he adds...

  • "... bodgeas, cantinas ..." (Bars and cantinas) and the toothy grinning response of "Ofi" from the men, but the women, not so much.


"Oficial" In Panamanian Spanish they use the slang term "oficial" which literally translates to "official" in English - and in this political cartoon it's shortened to the even shorter slang of "ofi" - which would be translated as "cool" or "great" or "alright" - indicating acceptance. Also, don't miss the fact that the guy on the right is wearing a baseball hat with the logo for the Cleveland Indians - get it?

Copyright 2011 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.

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Ombudsman Vargas Calls For Suspension of Mining Code Debates

Gold & MiningThe focus is on the National Assembly, which is discussing in the second debates amendments to the Code of Mineral Resources in Panama, a proposal that has met with much opposition. On this subject, Ricardo Vargas, the Ombudsman, called for the suspension of the debate to achieve a more comprehensive and participatory consultation of all stakeholders who somehow feel affected. For Vargas, the fighting caused by their rejection of the proposal to change the Mining Code is similar to what happened in July 2010, when the Indians revolved in the province of Bocas del Toro over the so-called "Law Chorizo." (Telemetro)

Editor's Comment: No matter what happens, no matter what the government does, there will still be protests and demonstrations against any action to reform the Mining Code. I have to find out (for myself) what's in this thing that's so onerous to these people. They are convinced that these reforms will allow for the development of the copper mine in Cerro Colorado. And for the record, the government and mining companies are doing a flat-out terrible job of information management. They are getting kicked in the nuts every day, and they are not effectively explaining why this is, in fact, a very good thing for Panama - a project which represent literally billions of dollars in foreign direct investment, and a means and method to (finally) life these impoverished Indians to a much better standard of living. If I was a poor Indian living up in those mountains and a project like this came along, I would run the environmentalists like Raisa Banfield out on a rail. She thinks she's defending the poor, but in fact they are condemning these people to a continued existence in extreme poverty. Golly, thanks for that...

Put The Money Into Perspective: It will cost more than $6 billion dollars to fully develop the Cerro Colorado copper mine. All of that money will be Foreign Direct Investment - meaning it's new money from outside of Panama that will be landing here in big buckets. And, at $6 billion that means this project is larger than the expansion of the Panama Canal. What's more, this is only the initial investment, the money that will be spent just to get the mine fully up and running. After that, the estimated deposits are of 100 million tons of copper that can be extracted, deposits that will keep the mine operating for more than 70 years. The mine will directly create at least 500 permanent new jobs - in an area where there are no jobs right now - and the trickle down economic impact of the project will be enormous for this impoverished region. What's more the government (if they are smart) will establish and designate funds and monies to spend in this region, specifically to help the people who live there now. Better schools, roads, clinics, opportunities. They don't know it, but this copper mine could be the best thing that ever happened to them. And what do they do? Protest. They don't call them "ignorant Indians" for nothing. And what bugs me is that the political operatives - who really only want to promote their own agendas - use and manipulate these people. It's simply sad to watch.

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