The El Salvador Congress passed a bill to ban metals mining nationwide following a long-running dispute with OceanaGold Corp. over permission to mine the El Dorado gold-silver property in the country's north, London's Financial Times reported March 30, citing the nation's environment minister, Lina Pohl.
The bill was passed by 69 votes and comes after OceanaGold indirect subsidiary Pac Rim Cayman LLC lost the arbitration against the South American country in October 2016 at the International Centre for Settlement of Investment Disputes.
The company was seeking US$301 million in lost exploration costs and future profits related to the development of the gold-silver property.
Environmental activists believe that the project could have contaminated water in the country, where supplies are already scarce and are among the most contaminated in the region, the Financial Times added.
"Such bans often prove short-lived as sense eventually prevails," Investec analysts wrote in a note to clients.
"Modern mining practices enable operations to be built which have little impact on the environment — a fact conveniently ignored by some activists. The sins of the past have led to revolutionary changes in mining technology and environmental practice," the analysts said.