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The natural resource dynamics of postneoliberalism in latin America : New

developmenta lism or extractivist imperialism ?

Article  in  Studies in Political Economy · September 2012

DOI: 10.1080/19187033.2012.11674991

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 The Natural Resource Dynamics of

Post-Neoliberalism in Latin America:

New Developmentalism or Canadian Extractivist Imperialism?

By

Henry Veltmeyer
hveltmeyer@gmail.com

Draft prepared for presentation and discussion at the

Global Capital, Global Rights workshop, SFU-UBC

May 3-4, 2012

In a recent book on ‘the study of natural resource extraction in resource-rich countries,’ the

former director of development research at World Bank, Paul Collier, and the director of Oxford

Centre for the Analysis of Resource Rich Economies, Anthony J. Venables, conclude that ‘often

plunder, rather than prosperity, has become the norm in the industry.’(2011) However, rather
than tracing this problem to its all too obvious roots—imperialism and capitalism—they reduce it

to a matter of ‘distortion and dependence’ in the ‘decision-making chains in various [developing

country] states.’ In line with the post-neoliberal objectives of improving social outcomes through

the better governance, Collier and Venables set out improve the management of natural resources

in developing countries by ‘highlight[ing] the key principles that need to be followed to avoid

distortion and dependence.’ But they do this narrowly focusing on the decision-making process

in the management of natural resources, while ignoring the dynamics of capitalism and

imperialism that generate the distortion and dependence in the first place.

Another related approach to the economics and politics of natural resource extraction is

based on the view that resource extraction has to do primarily with economic growth strategies

and politics of international trade, rather than with resource pillage and labour exploitation, or

even environmental degradation and class conflict. In this view, governing regimes in the

developing countries (especially in Latin America) have responded to the growing demand for

primary commodities (i.e. raw materials, food products, minerals) and shifted their economic

growth strategies to the extraction of natural resources, given relatively high prices for primary

commodities on the world market. The result is a reversion to Latin America’s trade structure

toward dependence on the export of these commodities, which, Latin American structuralists

warned is disadvantageous to countries on the periphery. This growth strategy in Latin America

was abandoned when the world market collapsed during the Great Depression in favour of an

alternative economic growth strategy based on state-led import-substitution industrialization

(ISI). The ISI strategy of industrialization and modernization was designed to overcome what

development economists have theorized as a ‘resource curse’—that is, rather than the extraction

and exploitation of a country’s abundant natural resources, such as minerals and fuels, leading to
development, more often than not, it has resulted in underdevelopment and the impoverishment

of the vast of the deemed ‘owners’ of these resources (Acosta, 2009; Norman, 2009; Sachs and

Warner, 2001).1

In the context of a ‘new world order’ established in the 1980s under conditions of an

ongoing overproduction crisis, widespread fiscal crises and an emerging debt crisis, this ISI

strategy fell victim to forces of neoliberal globalization. Neoliberalism began the process of

reverting Latin America’s economies toward the export of primary commodities, as state owned

enterprises were privatized and tariffs were lowered, forcing national industries to compete with

imports from transnational corporations. The International Monetary Fund (IMF) imposed

structural adjustment programs on Latin America, which reverted to a commodity export strategy

so as to capture the ‘comparative advantages’ derived from their abundance of natural resources

to pay their foreign debts. With the exception of Chile, this strategy failed to activate the capital

accumulation and economic growth process in the region until the early years of the new

millennium, when conditions in the global economy changed with the rise of China, and, to a

lesser extent, India. With the favourable commodity prices in the 2000s, Latin American

economies accelerated their shift back toward a growth strategy based on the primarization of

exports.2 (Gallagher & Porzecanski, 2010). With this ‘reprimarization’ strategy, state officials

1
. The idea of a ‘resource curse’ is an expansion of the idea of the Dutch disease, first coined by The Economist
magazine in 1977 to refer to how the Dutch discovery of oil in the North Sea precipitated its industrial decline.
While the Dutch disease focuses attention on foreign exchange rate dynamics, the ‘resource curse thesis,’ as first
stated by Richard Auty in 1993, emphasizes the role of conflict, corruption, political instability, and price volatility
to explain how countries rich in natural resources have failed to climb the ladder of development (Auty, 1993).
While many of these factors help explain the resource curse, they are merely manifestations of the underlying
dynamics of imperialism and capitalism.
2
The ECLAC Statistical Yearbook 2010 indicates a strong continuing trend towards the primarization of exports,
traced back to 2002. In the Andean countries, the percentage of primary products in total exports rose from 81
percent in 2008 to 82.3 percent in 2009, and, in the Mercosur countries, the jump was even higher (from 59.8 to
63.1 percent). Of all South American countries, Bolivia has the highest rate of export primarization (92.9 percent in
2009), but other countries—Peru, Ecuador and Chile (and probably also Venezuela, although, for this country, there
are no systematic data)—are not far behind. Preliminary data for 2010 are consistent with this picture. Furthermore,
the tendency is to deepen this dependence. In Bolivia, over the last five years, the share of primary goods in exports
renewed their focus on the economics of resource extraction, but this time with a better

regulatory framework and management of the country’s resource extraction industry. This is the

so-called ‘new extractivism’ based on ‘post-neoliberal governance’ in which renewed state

activism is combined with a resource-based growth strategy in order increase social inclusion

(Bebbington, 2009; Burdick et. al. 2009; Grugel & Riggirozzi 2009; Levitsky & Roberts 2011;

Silva 2009).

As for the presumed state activism in this post-neoliberal strategy—dubbed ‘inclusionary

state activism’ by Arbix and Martin (2010), a feature of the ‘new developmentalism’ (Bresser-

Pereira (2006, 2007, 2009)3 —it is predicated on the idea that rather than constituting a curse, the

exploitation of natural resources such as minerals and hydrocarbons (oil and gas) ‘generate easily

taxable rents’ that can be used to finance social development (Stijns, 2006). Cases in point: Chile

and Venezuela, as well as Bolivia and Ecuador, have each witnessed in recent years a major

upsurge in primary export-led growth and associated increased fiscal revenues.4 Thus, Haber and

Menaldo (2007), with reference to the increased social development program spending derived

from this upsurge, conclude that ‘natural resources are neither a curse nor a blessing.’

Reprimarization combined with social spending typifies the post-neoliberal era.

The post-neoliberal literature on resource-based growth and the regulatory state views

increased from 89.4 percent in 2005 to almost 93 percent today. But the same is also true for Brazil, a country often
presented as an economic success on the path to industrial development; over the two consecutive terms of Lula da
Silva as President, the share of primary goods in exports rose from 48.5 percent in 2003 to 60.9 percent in 2009. The
temptation to follow a primarization strategy is enormous. International demand for minerals and agro-food products
is strong and prices are rising: according to UNCTAD the price of minerals rose 30% from 2009 to 2010. But the
primarization also exposes these economies to the whims of the world market.
3
A concern for greater state activism in the economy is shared by the neoinstitutionalists and neostructuralists at the
social democratic centre of the political spectrum and those more clearly aligned on the left. The difference is that
the former seek to establish a ‘better balance between the state and the market’ while the latter, as Hogenboom
(2012: 1) notes, seek to establish the ‘supremacy of the state over the market, and of politics over the economy’.
4
Notwithstanding the increased expenditures on anti-poverty measures and associated social programs in these and
other countries in the region, a study by the authors (Petras & Veltmeyer, 2009) showed that at least until 2008 that
the taxes collected by the government on commodity export rents did not result in any substantial shift in fiscal
revenues toward social programs.
resource extraction as a matter of the state’s capacity to regulate the operations of the mining and

oil companies, to exact a better deal from these agencies of global capital, and to hold these

companies accountable for the environmental and social impacts of their operations.5 Exponents

of this approach define the issue of resource extraction, as a matter of ‘politics’—as in the

‘politics’ or ‘political ecology’ of natural resource extraction,’ (Auty, 2001; Hogenboom,

2012ab), and the ‘international political economy’ resource extraction (Gudynas, 2010; Nem

Singh, 2012). On this point, there are two fundamental dynamics. One is the ‘economic

imperatives [that] compel elites to adapt market opening strategies in response to pressures of

global competitiveness’ (Gudynas, 2010). The other is the mechanisms of this adaptation, in

these accounts, which are ‘development policies [that are]… engineered to cushion the impacts

of neoliberal reforms.’ As a result, the only cases of ‘successful’ adaption found by Collier &

Venables are based on the transformation of the neoliberal into a post-neoliberal state, in line

with a new generation of development theorists and self-styled ‘international political

economists’ (Burdick et. al. 2009; Grugel, 2011; Grugel & Riggirozzi 2009; Levitsky and

Roberts 2011; Silva 2009). Thus, the ‘new extractivism’ is predicated on a more interventionist

state and regulatory regime, and a post-neoliberal policy agenda (i.e. softening the social costs

of )—in what the exponents of this approach term ‘post-neoliberal governance’ (which has both

a national and global dimension).

At issue is in this academic debate is the nature and role of the state in the development

process— that is, the transformation of a neoliberal state, the handmaiden of foreign investment
5
In recent years there has emerged a ‘new set of non-state or multi-stakeholder institutions’ concerned with
‘improving the social and environmental record of business, and holding corporations to account’ (Utting, Reed &
Mukherjee-Reed, 20xx). The aim of these institutions is to facilitate the operations of the corporations, while
mitigating their negative social and environmental impacts by means of stronger regulation and ‘corporate social
responsibility’. The idea, advanced by some development theorists (Utting, for example), is that when regulated and
held accountable even the controversial operations of the capitalist corporations in the extractive sector can have a
‘development dimension’, i.e. lead to sustainable development and the ‘well-being and empowerment’ of ‘subaltern
groups’ in developing societies (Utting, Reed & Mukherjee-Reed).
and capitalist development, into a post-neoliberal state that is more interventionist, and disposed

to strike a better deal with global capital as well as regulate it in the public interest (for the sake

of equity or social inclusion, as well as protection of the environment). Essentially, this (neo-

structuralist and international political economy) approach ‘place[s] domestic politics within the

broader context of the global political economy and show[s] how these models of resource

governance are constitutive of state strategies in managing globalization’ (Nem Singh, 2012).

The aim, then, is to theorize the transformation of the neoliberal state, based on the much but

justly maligned Washington Consensus, into a more sustainable and inclusive post-neoliberal,

new developmental state (Bresser-Pereira, 2009; Burdick et. al. 2009; Grugel, 2011; Grugel &

Riggirozzi 2009; Levitsky & Roberts 2011; Silva 2009; Sunkel and Infante, 2009).

In this paper, we take a different approach to an analysis of these issues, based on what

might be termed a Marxist theory of capitalist development, with a focus on imperialism as an

essential agency that advances this development. In these terms, and with reference to the

expanding literature on the ‘new extractivism’ and the post-neoliberal state in Latin America,

we argue that these recent developments are better understood via the lens of class analysis and

the notion of the ‘new imperialism’.

We construct this argument as follows: First, we review the dynamics of foreign direct

investment in Latin America in the context of the new world order of neoliberal globalization

established in the 1980s. Here we argue that the neoliberal policies of structural adjustment were

designed to pave the way for a new wave of capitalist development and imperialist exploitation.

Secondly, we review the brief history of this ‘development’ over the past two decades to

establish the demise of neoliberalism and the emergence of a new development consensus that

has led to the formation of what some have termed the ‘post-neoliberal state’, focused on the
economics and politics of natural resource extraction—i.e. the ‘new extractivism’. Here we argue

that the post-neoliberal state, which is the supposed outcome of a sharp turn to the left in national

politics and a more socially inclusive form of development, is but the latest twist and turn in the

politics of what has been termed the ‘new imperialism, ‘advancing capitalist development via the

power of the state. Thirdly, we explore the economics and political sociology of this

development in terms of an imperialist strategy of natural resource exploitation, and the

consequences of this strategy: the pillage of natural and financial resources, the destruction of the

environment and livelihoods (and habitat) of the local communities affected by the resource

extraction process, and widespread resistance leading to a new and virulent form of class conflict.

Here we argue—or, to be more precise suggest—that the agents of the post-neoliberal state will

rally to the defence of global capital as the result of congruent economic interests. The likely or

possible outcome of this political development is uncertain but promises to be bloody.

Foreign investment in Latin America: natural resource development or imperialist

exploitation and plunder?

The first major wave of FDI to hit Latin America (see Table 1) was in the 1960s and 1970, but

the imperialist strategy behind this investment was impeded by the regulatory constraints of the

developmental state in the region. To liberate the ‘forces of economic freedom’ (that is, global

capital) from these constraints, the Washington-based agents of imperialist expansion (the World

Bank and the IMF, as well as the US Department of Treasury) designed a program of structural

reforms in macroeconomic policy imposed via the Third World debt crisis that set the stage for a

new wave of capital inflows into Latin America. Table 1 captures some of the dynamics of these
capital inflows, and associated outflows. While the late 1970s were dominated by the inflow of

capital in the form of international bank loans, and the 1980s saw a veritable decapitalization in

the form of an outflow from the major economies in the region, the 1990s again saw a major

inflow of global capital, especially Foreign Direct Investment (FDI), facilitated by the structural

reforms mandated by the Washington Consensus, such as the privatization.

Table 1 indicates a rapid expansion of FDI in the early 1990s through the acquisition of

the assets of privatized state enterprises (asset-seeking FDI) and resulting increased market share

for FDI. But it also points toward the dynamics of imperialist exploitation: the massive outflow

of capital extracted in the form of foreign bank loan payments, FDI profit repatriation, and

speculative portfolio investments. John Saxe-Fernandez (2001) estimated that the operations of

capital and imperialist resource exploitation in the 1990s resulted in the net transfer of $100

billion out of Latin America to the imperial centres of capital accumulation. And this does not

include the pillage of natural resources, the hidden transfer of capital in the disguised form of the

maquilla industry and intra-firm trade, nor the transfer of surplus through the mechanism of

unequal exchange (Delgado-Wise & …, ). The 1990s can well be described as the ‘golden age of

US imperialism’.

Table 1: Long-Term North-South Financial Flows, 1985-2001 (in US$ Billions)

____________________________________________________________________________
‘85-89 ‘90-94 ‘95 ‘96 ‘97 ‘98 ‘99 ’00 ’01
____________________________________________________________________________
ODA 200.0 274.6 55.3 31.2 43.0 54.5 46.1 37.9 36.2

Private 157.0 547.5 206.1 276.6 300.8 283.2 224.4 225.8 160.0
FDI 76.0 268.5 106.8 130.8 172.5 178.3 184.4 166.7 168.2
PI 6.0 111.5 36.1 49.2 30.2 15.6 34.5 50.9 18.5
Other 75.0 172.5 63.2 126.2 98.1 -10.7 25.5 8.2 -26.7

NR Inflow 357.0 822.5 261.4 307.8 343.8 337.7 270.5 263.7 196.2

FDI Profits 66.0 96.5 26.5 30.0 31.8 35.2 40.3 45.4 55.3
Debt Payments 354.0 356.5 100.8 106.6 112.9 118.7 121.9 126.7 122.2
NR Outflow 420.0 453.0 227.3 136.6 144.7 153.9 162.2 172.1 177.5
______________________________________________________________________________
Source: IMF (2000); World Bank (2002); OECD (2002).

The 1990s saw a major expansion of foreign investment in developing countries, also

known as ‘emerging markets’ by investment bankers. But in Latin America, a substantial part of

this investment was ‘unproductive’ in that it was primarily used to acquire the assets of already

existing profitable state enterprises on the auction block as the result of neoliberal privatization

policy, with a minimal transfer of capital or technology. Structural adjustment also privatized

major assets in the ‘service sector’, especially banking and other financial services, resulting in

the denationalization of strategic sectors of the region’s national economies. In Mexico, for

example, all of the major banks but one (Banorte) passed into the hands of foreign investors, who

purchased the assets of these banks at a cost of an estimated $45 billion to Mexican taxpayers.

Thus, FDI was the major mechanism of imperialist domination.

As for the more ‘productive’ foreign direct investments made in the 1990s, they were

predominantly in three sectors: 1) manufacturing; 2) resource extraction—exploration for and the

production of oil and gas (hydrocarbons) and minerals—to fuel the process of industrial

development; and 3) a multitude of ‘services’. The most important change in the sectoral

distribution of FDI over the past two decades has been the shift toward services, accompanied by

a relative decline in the share of FDI in natural resources and manufacturing. However, in the

context of changes in the global economy and growing demand for primary products, leading to

commodities boom, or a rapid rise in prices of oil, minerals and other commodities, FDI in the

extractive industries of resource-rich countries has rebounded in recent years.6

6
The boom in mineral prices in the first decade of the new millennium fuelled a rise in global investments in both
the metal mining and oil and gas industries. Indeed, those industries account largely for the recent increases in FDI
 Despite a dip in FDI inflows to Latin America in 2006 and 2008 with the global financial

crisis, foreign investment in mining has remained buoyant. In Chile and Colombia, the high

levels of FDI in 2005 were maintained in 2006: $1.25 billion and $2 billion respectively, while in

Peru, investments amounted to $1.6 billion (Proinversión, 2007)—up from $1 billion in 2005

(WIR06), and the government anticipates continued rapid growth in mining FDI, estimated to

total nearly $10 billion over the next five years. In Bolivia, despite uncertainties created by

revisions to the country’s mining tax regime, most of the foreign mining companies have

continued operations. In 2010, exports of minerals exceeded USD 2.4 billion, 23% over the year

before, and the greatest beneficiaries of this export growth were the multinationals and the

medium-sized bourgeois miners in the cooperative sector, with the government taking a

relatively small share of the proceeds.7 Meanwhile, the insistent demands by local communities

and popular sector organizations for the government to renege on the concessions made to the

multinational companies to explore and extract the wealth of the country’s natural resources—

demands that are resonating loudly throughout the region, especially in the other Andean

countries—have fallen on deaf ears. In short, the principal beneficiaries of the commodities

boom and the new extractivism are the transnational corporations that dominate the oil and

mining sectors across the region.

By far the highest share of FDI in the primary industries in recent years has been in

mining and petroleum exploration and production. While FDI stock and capital flow estimates

are not available for mining and petroleum separately, data on cross-border mergers and

acquisitions (M&As) suggest to economists at UNCTAD (2011: 50-54) that both these industries

in Africa and Latin America. The boom has similarly triggered a series of cross-border mega-mergers in these
industries, resulting in higher levels of market concentration (UNCTAD, 2011: 126).
7
Despite the ‘nationalization’ of the country’s natural resources, of the dollar value of Bolivia’s mineral exports
since November 2009, only 9.7% accrued to the state sector in the mining industry.
have attracted increasing volumes of foreign investment in recent years. For instance, two of the

five largest cross-border M&A deals in 2006 were in the mining sector. The most recent data

show that Mexico and Brazil, with inflows of $19 billion each, remain the region’s leading FDI

recipients, followed by Chile and Colombia (UNCTAD, 2011: 54). Oil and gas—and mineral—

exploration and production account for most of this FDI. In Ecuador and Peru, mining-related

FDI also accounted for most of the increased inflows of capital. Peru hosts some of largest

mining exploration projects in the world (UNCTAD, 2011: Table IV.5). In 2009, Latin America

received 26 percent of the capital invested globally in mineral exploration,8 According to the

Metals Economics Group (MEG), the 2010 bonanza in world market prices led to another

increase of 40% in investments in mineral exploration and mining, with different governments in

the region competing fiercely for this capital.9

In South America, the locus of the primary commodities boom, income on inward FDI

has grown steadily since 2003, the beginning of the boom. In 2006, it grew by 49% to reach $59

billion, exceeding the total FDI inflows of any year since economic liberalization began in the

1990s (UNCTAD, 2011: figure II.18). Income on FDI (i.e. profits on capital invested in the

resource sector) was particularly high in Brazil and Chile, $14 billion and $20 billion

respectively, leading to a surge in the share of retained earnings in total FDI inflows. In the

8
In the context of this investment, the region remains the world’s leading source of metals: iron ore (24%), copper
(21%), gold (18%), nickel (17%), zinc (21%), bauxite (27%) as well as silver (Journal of Developing Societies,
2012). From 2000 to 2004 oil made up 83.4 percent of Venezuela’s total exports, copper represented 45% of Chile’s
exports, nickel 33% of Cuba’s exports, and gold, copper and zinc 33% of those of Peru. Together with agricultural
production, the extraction of oil, gas and metals remains central to the region’s exports. From 2008 to 2009, the
exports of primary commodities accounted for 38.8% of the total in Latin America (Campodónico, 2008; CEPAL,
2010; UNCTAD, 2007: 87).
9
In Ecuador, for example, the leftist President and US-trained economist Rafael Coreea announced the
government’s plan to sign three contracts this year with Canadian gold miners Kinross, International Minerals and
IAMGOLD, which, in addition to the first ever large-scale mining deal signed with Chinese-owned Ecuacorriente,
should help the country diversify its economy away from oil exports and meet future needs. Declaring his awareness
that ‘mining is necessary for modern life’, he also made clear the government’s intention to ride out the march on
Quito of thousands of indigenous protestors and to push ahead with plans to develop large-scale mining (Reuters,
March 23, 2012) ,
South American countries for which data are available, income on FDI soared from an average

of 10% in 2000-03 to 61% in 2006, the year before the publication of UNCTAD’s landmark

study of FDI in the extraction industry. A large part of the capital invested in the resource sector

takes the form of concessions to for exploratory projects, which means that the profits are as yet

uncertain and to be realized sometime in the future. Thus, the ability to reproduce capital in the

sector with relatively minimal investments demonstrates how exceptionally profitable operations

of mining capital actually are.

In the new millennium, in the context of a growing demand in China and the BRIC

countries for agricultural and forestry products, fossil fuels and other sources of energy, and

strategic industrial minerals, the sectoral distribution pattern of foreign investment based on

sectoral distribution has changed, with a greater focus on land for agriculture, the production of

biofuels, and the extraction of minerals (Bebbington, et al., 2009). Table 2 points to one feature

of this change: a relative shift of FDI flows into the developing countries from manufacturing

into services and the resource-extraction industries. The latter were directed primarily towards

fossil fuels (oil and gas) and metal mining. Aggregate statistics do not reveal what is actually

going on in the sector, partly because of the lack of reliable statistics,10 and partly because the

overall pattern of investment flows do not show significant regional, sub-regional and country

variations in the dynamic pattern of FDI flows. But a general shift of FDI toward the extractive

industries is clearly discernible.

10
When analyzing FDI data related to extractive industries, a number of limitations should be kept in mind. First,
owing to the noted lack of comprehensive data on FDI in extractive-industry (see UNCTAD, 2011: box IV.1) on
this), it is difficult to make comparisons between individual countries and regions. For example, According to
UNCTAD only 22 countries report data on outward FDI stocks in this area and some forms of TNC involvement are
poorly covered in official statistics. Also cross-border mergers and acquisitions (UNCTAD, 2011: 99) can lead to
large FDI flows into countries where owners are based but where very limited extraction takes place. It is therefore
important, as counseled by the UNCTAD economists, to complement FDI data with other statistical information
when analyzing the extent and nature of TNC involvement.
Table 2: World inward FDI, average annual flows, by sector and region,
Developed and Developing countries, 1990 and 2009
__________________________________________________________________________
(US$ billions)
1990 2009
__________________________________________________________________________
DCs LDCs DCs LDCs

Resource extraction 157.3 24.5 873.5 318.0

Manufacturing 687.8 167.7 3,695.8 1,181.4
Services 835.3 179.6 8,100.8 3,020.0
__________________________________________________________________________
Source: UNCTAD, World Investment Report - Web table 24. World inward FDI stock, by
Sector and industry, developing countries, 1990 and 2009.

One interesting and as yet undocumented by-product of this expansion of FDI into

exploration and mining of oil, gas, and minerals was the concentration of capital in the sector11

and increased foreign land ownership based on land-grabbing (Borras et al. 2011: 9)—what FAO

prefers to term ‘large-scale land acquisitions’—and the rapid expansion of mineral extractive

industries that require the capture or control of lands.12

The role of Canadian capital in Latin America’s extractive industries

The first wave of FDI flows into Latin America came in 1990-94 under conditions generated by

the imposition of the Washington Consensus policy reform agenda (in particular, liberalization,

deregulation, and privatization). In the 2000s, under quite different conditions (a turn in the tide

against neoliberal globalization), there was another wave of FDI but this time with a greater

focus on natural resources (‘resource-seeking FDI’)—with Canadian capital taking a leading role
11
The degree of concentration in the metal mining industries increased significantly between 1995 and 2005
(UNCTAD, 2011: 110-111). The degree of concentration rose the fastest in gold mining (from 38% to 47%), an area
in which Canadian capital has been particularly active.
12
Borras et al. (2011) [NOT IN THE BIBLI] document this as a process of capitalist development across the globe.
As for Latin America and the Caribbean, they write that “there has been a significant increase in [foreign]
investments in land and agriculture during the past decade. The level of these investments,” it is noted, “is high for
nearly all seventeen countries” studied in the region (p.10).
(Arellano, 2010). 13 Canadian capital was particularly aggressive in its acquisitions and

operations in the mining sector, especially the extraction of gold and other strategic minerals. By

the end of the first decade of the new millennium, Canadian capital accounted for up to

40percent of the global mining exploration—including 1,010 projects in South America and 578

in Mexico alone (see InfoMine. http://www.mining.ca). For that reason, this study will focus on

the role of Canadian FDI to illustrate the general dynamics of the extractive industries in the

region.

Studies by CEPAL (2010) document the scope and scale of foreign investments in Latin

America’s natural resource sector and the emergence of Canada as a major source of direct

investments in the subsector of mineral exploration and mining (see discussion below). Partly as

a result of the participation of Canadian capital, FDI flows to Latin America and the Caribbean

reached a record high in 2008. Excluding the offshore banking centres in the Caribbean, the

region received US$128.3 billion in FDI, surpassing by 13% the record level reached in 2007.

With Canadian mining capital leading this investment wave, it achieved a dominant

position in the extractive industry, particularly in the mining of gold and other strategic minerals.

In fact, this represents a global phenomenon as Canadian capital has come to dominate the

industry worldwide, including major operations in Africa. But it is positioned particularly well in

Latin America, where Canadian companies achieved a virtual hegemony as it came to dominate

the sub-sector of gold and silver mining.14 In Mexico, for example, it is estimated that up to 23%

13
In the 1980s, Canadian outward-FDI stock grew from around 5% to 10% of its GDP, but then in the next two
decades, it made steady progress to reach around 35% of its GDP, eventually exceeding inward-FDI stocks. Today,
Canada is in fact a net investor abroad, most of it related to what Arellano (2010: 2) terms ‘resource-seeking FDI’
(vs. ‘efficiency-seeking FDI’).
14
Nowhere is the Canadian mining sector’s presence felt overseas more acutely than in Latin America. The region
is the single most important destination for Canadian mining capital, surpassing by a wide margin Africa, the
industry’s second preferred region for its operations. More than half of Canadian mining companies’ global assets
of the national territory has been ceded to extractive capital for the exploration and mining of

minerals, and that up to 70% of these concessions to explore for and extract minerals have been

made to Canadian firms. In Argentina, a major locus of the recent worldwide foreign ‘land

grabbing’ process, a map constructed by lanosturadigital.com maps the spread and degree of

‘foreign control’ of Argentine national territory. According to the map, almost 30 million

hectares of the best land and fertile soil, watersheds and nature reserves—and reserves of

strategic minerals—in 23 provinces are already foreign owned. And another 13 million hectares

are currently up for sale. Thus, even in the era of the ‘pink tide,’ Latin America has ceded much

of its territory for exploration and much of the control of its extractive industries to transnational

corporations based in the imperial centres.

Foreign investments in Latin America

The main sectors in Latin America today targeted by FDI are the services (particularly banking

and finance) and the natural resources sector—basically the exploration, extraction and

exploitation of hydrocarbons (oil and gas) and minerals.15 The service sector accounts for almost

half of Canadian direct investments in Latin America, but Tables 3 and 4 point towards a steady

inflow of capital into Latin America in the natural resources sector, especially in mining, in the

first decade of the new millennium.16 Despite the global financial and economic crisis at the time,

are located in Latin America, at a value close to CAD$57 billion (Keenan, 2010: 30; based on unpublished data,
Natural Resources Canada).
15
The share of the extractive industries in global inward FDI stocks declined throughout the 1990s until the start of
the current commodity boom in 2003, after which it recovered to about 9% in 2005 (figure IV.1). The decline of the
primary sector’s share in global FDI has been due to its slower growth compared with FDI in manufacturing and
services. In absolute terms, however, FDI in the primary sector has continued to grow: it increased in nominal terms
nearly five times in the 1970s, 3.5 times in the 1980s, and four times from 1990 to 2005 (WIR 2005; annex table
A.I.9). The stock of FDI in extractive industries was estimated at $755 billion in 2005 (UNCTAD, 2011: Annex
Table A.I.9).
16
According to ECLAC () Canadian FDI in Latin America and the Caribbean is a recent phenomenon, taking place
mainly in the 2000-2008 period. Since 1995, from 42 to 56% of the Canadian stock of FDI in developing countries
FDI flows to Latin America and the Caribbean reached a record high in 2008 (US$ 128.3 billion).

This is an extraordinary development considering that FDI flows worldwide at the time had

shrunk by 15%. This countercyclical trend signals the continuation of the primary commodities

boom.

Table 3 Net inflows of FDI, by leading country in Latin America

(US$ billion)
_____________________________________________________________________________
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Argentina 24.0 10.4 2.2 2.2 1.7 4.1 5.2 5.5 6.5 8.0
Bolivia 1.0 0.7 0.7 0.7 0.2 0.1 -0.3 0.3 0.4 0.5
Brazil 28.6 32.8 22.5 16.6 10.1 18.2 15.1 18.8 34.6 45.1
Chile 8.8 4.9 4.2 2.6 4.3 7.2 7.0 7.4 14.5 16.8
Colombia 1.5 2.4 2.5 2.1 1.7 3.0 1.0 6.7 9.1 10.6
Mexico 13.8 18.0 29.8 23.7 16.5 23.7 21.9 19.3 27.3 22.0
Peru 1.9 0.8 1.1 2.2 1.3 1.6 2.6 3.5 5.3 4.1
Venezuela 2.9 4.7 3.7 0.8 2.0 1.5 2.6 -0.6 0.7 1.7
_____________________________________________________________________________
Source: J.M. Arellano, Canadian Foreign Direct Investment in Latin America,” Background
Paper, North-South Institute, May 2010, pp.57, 13; based on ECLAC data.

Table 4 Percentage distribution of FDI by sector in Latin America

_____________________________________________________________________________
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

_____________________________________________________________________________

Resources 26 10 12 12 11 12 13 12 15 30
Manufacturing 24 25 26 38 35 38 37 36 35 22
Services 49 60 61 51 48 46 48 51 49 47
_____________________________________________________________________________
Source: J.M. Arellano, Canadian Foreign Direct Investment in Latin America” (based on
ECLAC data).

has been concentrated in Latin America (42% of CA$60 billion in 2008). And most of this FDI to Latin America on
an annual flow basis was in the natural resources sector—ranging from 10 to 12% from 2000 to 2007, but rising to
30% in 2008; and most of this ‘natural resources seeking’ FDI went to the mining sector, which accounts for up to
50% of mining exploration in the region—up from 30% a decade ago.
 The increase in FDI to South America was fuelled by two factors: commodity prices,

which remained high through most of this period, attracting ‘natural-resource-seeking

investment,’ and the solid economic growth of the South American sub region, which

encouraged market-seeking investment. In fact, FDI in natural resources, as a proportion of total

FDI, continues to surpass manufacturing. The strong increase of FDI in South America was

largely the result of a sharp rise of inflows to the top four recipient countries in the subregion:

Argentina, Brazil, Chile and Colombia, which together represented 89% of the subregion’s total

inflows. The extractive industries, particularly mining, absorbed the greatest share of these

inflows. As a result, in 2009, Latin America received 26% of global investments in mineral

exploration (Sena-Fobomade, 2011). Together with the expansion of oil and gas projects,

mineral extraction constitutes the single most important source of export revenues for a majority

of countries in the region. Therefore, control of this represents the commanding heights of the

region’s economy.

An analysis of inflows of individual countries in the region shows that Argentina, Brazil,

Chile, Colombia and Mexico received 80% of the region’s FDI—but Brazil accounted for the

bulk of it. FDI flows to Brazil reached a new high of US$45 billion in 2008, 30% above the

record posted in 2007. Mexico, the second largest recipient of FDI in the region, was hit hard by

the financial crisis, centered in the US, its major trading partner, and, consequently, saw FDI

inflows fall 20% from 2007 to US$22 billion in 2008. Much of this drop can be attributed to the

decline in FDI in the services and manufacturing sectors, especially in regard to exports for the

US market. In contrast, natural resource seeking FDI’ drove the rise of FDI flows into Argentina,

Chile and Colombia, especially in the mining industry in Chile and Colombia. In fact, natural

resource-seeking FDI accounts for the largest proportion of FDI in South America, while
‘efficiency-seeking’ and ‘market-seeking’ FDI have more weight in FDI flows to Mexico and the

Caribbean Basin countries (UNCTAD, 2007: 122-23). As for Bolivia, where the current regime

passed a law declaring the country’s natural resources to be owned by the people and requiring

the state to be their guardians and to assume control over their exploitation—viewed by some as

a form of nationalization—as already noted over 90% of mineral exports were made by

companies in the ‘private sector’, mostly foreign.17 Thus, the centre of gravity of FDI in the

extractive industries in terms of scale and growth is in the subregion of South America.

Mining for gold and silver—and profit—in Mexico

Although mineral extraction in Mexico does not assume the predominant place that it occupies in

the national development strategy of countries in South America it accounts for a significant

share of Mexico’s production apparatus, contributing more to its GDP than all other economic

sectors, except for automobile manufacturing, oil production and migrant remittances.

Under President Calderon administration, the number of mining properties ceded to

foreign companies almost doubled, from 390 to 757 from 2006 to 2010; thus, on average, it

authorized foreign investment in 73 new projects a year since taking office (Secretaría de

Economía (SE). According to the Cámara Minera de México (Camimex), or the Mexican Mining

Chamber of Commerce, México has become the fourth most important destination of mining

capital investment in the world. Of the foreign enterprises with investments and operations in the

sector of gold and silver exploration and extraction in Mexico, seven out of ten are Canadian—

17
Capitalist and state enterprises from Spain, the US, Brazil, France, Russia, China, Japan, Korea and Canada have
an interest in exploring for and exploiting the country’s mineral resources, but, President Morales has revealed, none
of them has any interest in industrializing the minerals in Bolivia, preferring to and insisting on exporting them
unprocessed (Sena-Fobomade, 2011).
fully 77% to be precise (SE data).18 While these foreign firms, including the Canadian ones,

account for less than a third of all investments in the sector, they account for over 60% of the

value of the extracted ore, most of which is exported. Thus, the commanding heights of Mexico’s

mining sector is dominated by foreign capital, particularly Canadian.

At the beginning of Calderon’s term in 2006, foreign investment in the mining sector

amounted to US$657 million, 34% of total capital invested in the sector. By 2008, in the context

of the so-called global financial crisis, foreign investments dropped to US$616 million, or 29%

of the total. Foreign investment in the sector climbed again to US $840 million by the end of that

year, but given a record investment portfolio of US$3.7 billion this represented only 25% of the

total FDI. Although production in Mexico’s mining sector has experienced rapid growth in

recent years19 foreign investments in gold and silver mining in 2009 represented barely 15% of

total investments in that sector, even though over 70% of exploration projects are financed by

foreign investments. This points to the fact that the exploration and extraction of gold and silver

is highly profitable20—given the discrepancy between the share of FDI in investments in the

mining sector and output and moreover, that 81% of all mining projects are still in the

18
Los registros de la SE sobre los 757 proyectos mineros que operan 286 compañías extranjeras detallan la
preponderancia canadiense. Por sí solas tienen a su cargo 556 proyectos y operan otros 30 en asociación con firmas
de otros países, es decir, 586, que representan 77 por ciento del total de empresas mineras foráneas. En total hay 44
compañías estadunidenses con 113 proyectos, apenas 15 por ciento del total.
19
Mexico is now the world’s leading producer of silver, 11th in gold, and 12th in copper production. As regards to
gold mining, in which Canadian capital dominates (Goldcorp to be precise), output has tripled in recent years. At the
beginning of the Calderon administration,’ it represented only 8% of total production in the sector, but according to
the most recent data, it represented 25.4% (SE data).
20
According to studies by Eduardo Gudynas, Executive Secretary of the Centro Latino Americano de Ecología
Social (Claes), the rate of average profit in the extraction industry (mining, etc.) is the highest in the world—37%
(Fernán, 2011: 9). Because of the corporate money maze in the mining sector—a ‘network akin to a pipe system
pumping profits’, according to a Norwegian report on the world’s extractive industrial giants and the 6,038
subsidiaries owned by the ten biggest (Mathiason, 20xx), it is very difficult, if not impossible, to trace the total
profits generated in the sector. For example, Canada’s Barrick Gold Corporation (BGC) in 2010 declared that $3.29
billion net of tax in profit based on its worldwide operations of i 24 goldmines, but indications are that this is but the
tip of the profit iceberg for Barrick [CITATION].
‘exploration’ stage (indicating that most of the profits are yet to be realized (González, 2011).21

From neoliberalism to post-neoliberal governance

The reprimarization of Latin America’s economies began with the IMF imposed neoliberal

reforms, coming out of the Third World debt crisis in the 1980s. These reforms theoretically

would exploit the region’s comparative advantage in natural resources to increase export and

generate the foreign exchange needed to pay its foreign debts. Given the relatively low prices for

primary during most of the neoliberal period, this did not happen, but the neoliberal reforms did

open up the region’s extractive industries to foreign domination.

Key players in this process were the governments of Brazil and Chile, the former, a more

socially inclusive neoliberal regime, and, the latter, an overtly neoliberal regime. What is striking

about both regimes is that notwithstanding a strategic commitment to neoliberal structural

reforms (privatization, deregulation, and liberalization) in both cases the government’s growth

strategy and the resource extraction sector were led by state enterprises—Petróleo Brasileiro,

a.k.a. Petrobras, in the case of Brazil, and Codelco, in the case of Chile. Chile alone produces

35% of global supply of copper, a strategic industrial commodity, especially critical to the rapid

urbanization process occurring in China. However, although the world’s largest copper mine,

Escondida, located in the Northern Atacama Desert is privately owned (primarily by the Rio

Tinto Group and BHP Billiton), Codelco controls up to 70% of the nation’s copper reserves. As

21
In this lucrative market (i.e. mining concessions), 13 Canadian firms have been awarded 15% of all projects,
according to Camimex. They are as follows: Dia Bras Exploration (16); followed by Oro Gold Resources, and
Pediment Gold Corp (14 each); then MacMillan Gold Corp and Soltoro (11 each); Canasil Resources and
Chesapeake Gold Corp (10 each); Remstar Resources and Golden Goliath Resources (7 each); and Evrim Metals
Corp and Silvermex Resources (8 each);also Pan American Silver, Alamos Gold, Farallon Resources and Teck
Cominco.
for Petrobras, it has proven to be very proficient and efficient in bringing about advances in

offshore drilling technology as well as establishing a ‘culture of innovation,’ both of which were

crucial in the discovery of new offshore oil reserves in 2008. In this case, the role and status of

Petrobras in the country’s growth strategy differs greatly from its counterpart in Mexico, Pemex,

the state oil company. Pemex has been deliberately undercapitalised to provide a pretext for

denationalization. Thus, the state still dominates strategic extractive sectors in Chile and Brazil,

copper and oil respectively.

In the literature, the consequences of neoliberal policies applied to resource extraction are

claimed, or expected, to be the following: economic dynamism; global competitiveness;

technology/knowledge transfer; and sophisticated techniques in managing environmental and

social costs. The ‘wisdom of the international epistemic community’ (or the neoliberal ideology)

is that private capital can unlock the hidden potential of natural resource development and

unleash a sustainable growth process. However, the experience has been otherwise. Not only has

private corporate capital failed to kick-start the economic growth process but it resulted in a

massive pillage of natural resources, providing few tangible benefits to the local economy but

major negative socioeconomic and environmental costs. The record on this point over the

neoliberal era is clear enough albeit not substantiated in this study: the failure to generate

promised conditions for stable long-term growth in the forces of production; the plunder and

pillage and transfer of natural, human and financial resources; and the destruction of the forces of

production with significantly negative environmental and social impacts on the environment and

livelihoods of working people and local communities.22

Under these and other such conditions (such as the concentration in the distribution of

22
On the economic, social and environmental dynamics of capitalist development in the form and in the era of
neoliberal globalization, and the well-documented and studied impacts of these dynamics, as well as the forces of
resistance to these impacts see, inter alia, Petras & Veltmeyer (2011ab).
productive assets and income, a deepening of social inequalities, new forms of poverty), the

forces of resistance to capitalist development and imperialist exploitation mounted and

successfully challenged the hegemony of neoliberal globalization. By the end of the 1990s, two

decades into the neoliberal agenda, neoliberalism was very much on the defensive, generating

conditions for what many now see as a transition to a post-neoliberal state and governance.

After a short downward turn in the capitalist development process (in 2001-2002, 1989-

2001 in Argentina), the 21st century in Latin America opened with (i) a wave of anti-neoliberal

sentiment and a turn to the left in national politics (a resurgence of left-of-centre politics) by

regimes seeking and able to exploit this sentiment; (ii) an unprecedented primary commodities

boom, and resulting rise of ‘the new extractivism.’ This was unprecedented in two ways. On one

hand, it took place against the backdrop of the failure of neoliberal policies to achieve economic

growth and political stability in Latin America. On the other hand, the left-centre governments

that emerged under these conditions, pursued new strategies (resource extractivism and

nationalism) to consolidate power and meet the demands of their social bases (Petras &

Veltmeyer, 2009). This strategy of resource governance has been pursued within the framework

of the post Washington Consensus (PWC), and its emphasis on socially inclusive growth to

stabilize the neoliberal capitalist development (Castañeda & Morales, 2008; Levitsky & Roberts,

2011; Panizza, 2009). The coincidence of anti-neoliberal sentiment with a commodities boom led

to a post-neoliberal, or PWC, politics based on a resource extraction growth strategy.

This notion of a post-neoliberal regime is not without controversy. Petras and Veltmeyer,

among others, have argued that this turn to the Left was more rhetorical than real while Tockman

(2011) writes of ‘divergent paths’ and ‘varieties of post-neoliberalism’ in regard to ‘natural

resource policy.’
 Of the issues contested in this debate are the matter of state control over natural

resources and the relation of the post-neoliberal state to both foreign investors seeking to

exploit these resources for private profit, and the local populations and communities that

depend on these resources for their livelihoods and survival.23 For example, intense

political debates have developed in recent years as regards how to best use resources for

welfare provision without falling into the trap of the ‘resource curse’ (the paradox that

countries and regions with an abundance of natural resources, specifically point-source

non-renewable resources like minerals and fuels, tend to have less economic growth and

worse development outcomes than countries with fewer natural resources).24

The resource curse is hypothesized to happen for many different reasons,

including a decline in the competitiveness of other economic sectors (caused by

appreciation of the real exchange rate as resource revenues enter an economy), volatility

of revenues from the natural resource sector due to exposure to global commodity market

swings, government mismanagement of resources, or weak, ineffectual, unstable or

unaccountable corrupt institutions (due to the easily diverted revenue stream from

23
We elaborate below on the state-capital relation in the context of post-neoliberal capitalist development.
But the relation of the state to organizations and social movements in the popular sector is another matter.
In theory (see Hogenboom, 2012), this relation is mediated by ‘civil society’, a complex of social or non-
governmental organizations formed to the purpose of ensuring a more participatory form of development,
led by the State but with international cooperation and social participation. However, when it comes to the
extractive industries in the natural resource sector, the role of ‘civil society’ in mediating the relationship
between the State and the community-based grassroots organizations and the social movements in the
popular sector has proven to be more problematic. According to Hogenboom, civil society has generally
supported the grassroots organizations and social movements in their resistance against the pro-capital
policies of neoliberal state officials, but the ‘new extractivism’ has posed i… [hmmm]
24
A variation of the resource curse thesis is the conception of oil as the ‘devil’s excrement’ by Juan Pablo
Pérez Alfonzo, a Venezuelan politician and a founder of OPEC (Useem, 2003).
E 23
extractive activities). One way to overcome the resource curse, according to case studies,

is to use resource revenues directly and indirectly to ameliorate the social costs of

neoliberalism through the financing of social and anti-poverty policies but within the

framework of fiscal conservatism. In the context of the commodity boom since 2002,

natural resources have played a central role in the ostensibly socially inclusive politics of

the centre-left regimes that emerged in that context.25

The natural resource politics of a post-neoliberal regime

The emergence of a ‘pink tide’ of left-leaning regimes has given rise to a spate of

publications about the emergence of a post-neoliberal state as an alternative policy

regime and form of governance based on the post-Washington Consensus on the need for

a more socially inclusive form of development (Burdick, et al. 2009; Grugel and

Riggirozzi, 2009; Macdonald & Ruckert, 2009; Silva, 2009). However, Fernando Leiva’s

review of the contradictions of post-neoliberal development suggests that the movement

to push beyond neoliberalism is anything but consolidated, or perhaps even real.

Arguably, Venezuela is the only case of a real post-neoliberal state. Neither Bolivia nor

Ecuador, and certainly not Brazil, Chile and Argentina—the three regimes most often

thought of as exemplifying a post-neoliberal policy regime—have managed to move

beyond market-friendly and -led capitalism, except for assigning the state a role in

25
On this issue—the pursuit by the post-neoliberal regimes in the southern cone of south america of a
strategy of socially inclusive development in the new millennium—see Sunkel & Infante (2009), who argue
that Chile has pursued this strategy, and Petras & Veltmeyer (2009), who show that this strategy has been a
matter of smoke and mirrors, more illusory than real.
ensuring that the market is to some extent regulated in the public interest and that the

fruits of economic growth are more equitably shared in terms of a reduction in the

incidence of extreme poverty. Beyond that, private market institutions still dominate,

except in Venezuela, where strategic sectors have been thoroughly nationalized.

This post-neoliberal politics was the essence of the consensus reached by the G20

at their 2000 summit and the United Nations New Millennium conference soon

thereafter: boost economic growth via a neoliberal macroeconomic policy regime (and a

natural resource extraction and export strategy), but regulate capital in the national

interest (via a good governance regime) and reduce the incidence of extreme poverty via

a more inclusive form of development, including targeted social programs such as

conditional cash transfers (Sunkel and Infante, 2009).

A belief in free market capitalism, in fact, had waned and died as early as 1989,

when every development agency in the UN system of international cooperation, including

the World Bank, came to the conclusion that they had ‘gone too far’ in the direction of

the unregulated market and, as Dani Rodrik, one of many centrist liberal critics of

neoliberalism, put it, that it was necessary to ‘bring the state back in’ (Rodrik, 1999;

Wade, 2005). The result was a synthesis of neoliberalism and structuralism/social

liberalism (or neostructuralism), and a new approach to ‘development’, what the theorists

and architects of the new consensus termed ‘the new developmentalism’ (Bresser-Pereira,

2007) or ‘inclusive development’ (Infante & Sunkel, 2009). However, as Fernando Leiva

(2008) makes clear in his critique of this neostructuralist synthesis, and we have made in

earlier studies, the resulting move beyond neoliberalism did not succeed in creating a
post-neoliberal state, an effective post-neoliberal governance regime, or even a new

economic model. For example, in regard to the relation between capital and the state in

the resource sector, the purported ‘new extractivism’ (see Gudynas, 2011) boils down to

nothing more than the State striking a better deal with global capital in regard to its share

of rent and taxes on the export of minerals and other raw materials and natural resources.

Despite the rhetoric of populist resource nationalism (the country’s resources and

wealth belongs to the people), the nature of the Bolivian state’s relation to global capital

under the Evo Morales regime has not substantially changed. Even in the oil and gas

sector, where the Morales regime declared the resources belong to the people, the

exploitation of the resources in the sector remain under control of the 29 multinationals

that remain in the country (Petras & Veltmeyer, 2009). While the government in some

resource sectors (iron, lithium) has been holding out for what might be deemed ‘structural

change’—such as the insistence that the raw materials be processed in Bolivia—it has

been unable to close the deal or either attract or access the capital needed to change its

status as an exporter of raw materials. The result is that all that it has been able to do is

cut a better deal—gain greater share of the resource rents in an industry that in conditions

of the growing global demand for resources has proven to be exceptionally lucrative for

the companies operating in the sector.26 A particularly egregious case of an evident

26
How lucrative can be illustrated by the case of Canada’s Gold Corp’s operations in Argentina’s Valle de
Huasco. In 2011 the company anticipated the extraction of between 6 and 8 million ounces of gold, at a
cost of $340-80 an ounce and the market price of US$1,652. What facilitated the company’s bottom line
was a secret deal with the presidents of Chile and Argentina (see Bonassa’s exposé) for the extraction or
ore at one of the lowest resource royalty payment regimes in the world (10-15% depending on whether the
ore is refined or concentrated) and the washing of the ore in the pristine waters of the glaciers in
Argentina’s Valle de Huasco via a tunnel at no cost (Bonassa, 2011). The environmental and social costs of
contradiction between the government’s nationalist rhetoric (the country’s resources

belong to the people, and will be developed by the state, not permitting the multinationals

to simply extract the resources and export them in an unprocessed form) and actual

practice (letting the multinationals extract these resources and export them for processing

overseas) is Mutún, the country’s (and region’s) major iron mine. Notwithstanding the

promise of the mine’s operator, Jindal, the giant Indian multinational steel and power

producer, at the outset of renegotiations with the current regime of a contract signed

under a previous neoliberal regime, that it would process the iron ore in Bolivia and

invest in the creation of an industry within Bolivia, seven years on there is no sign of any

such investment.27

A number of studies suggest that while this might indeed be the case regarding

Bolivia and Ecuador, both relatively weak states in their relation to capital and dependent

on it, it is argued, Brazil in particular, but also Chile and Argentina are different. They

have managed to institute a new form of ‘natural resource politics’ based on the presence,

and effective agency, of a competent state company in the resources sector (as mentioned

above, oil in the case of Brazil, and copper in the case of Chile), and thus represent a

these operations are born by local populations and the people of both Argentina and Chile; Barrack Gold
meanwhile registered a profit for the year of $3.3 billion
27
In 2007 the government and Jindal Steel & Power signed a contract for the extraction and exploitation of
50% of the massive iron ore reserves of Mutún, and the investment of $600 million by 2012. In a June 2011
visit to Bolivia Naveen Jindal, VP of Jindal, confirmed the intent to invest in the processing of iron ore
within Bolivia once certain problems are overcome and misunderstandings with the government resolved.
“We need each other,” Jindal was quoted to have declared—with reference to Jindal and the government
(Agencia EFE, L Paz, June 210, 2011).
more effective post-neoliberal ‘regulatory regime’.28 This is, in fact, what the notion of a

‘new extractivism’ hinges on.

However, a closer look at these two cases of the so-called new extractivism

reveals that global capital is very much in command of these sectors, with the State

conceding large tracts of land and territory to the multinationals for their operations under

new regulations that do very little to impede them. On this point take the example of Peru,

which Bebbington et al. (2009) have documented as a key area of mineral extractive

industry expansion.29 President Ollanta Humala came to power in June 2011 with a

promise to support local communities against the mining companies (on a platform of

‘water before gold’). Local and indigenous communities in Peru have violently opposed

the planned major expansion of mining operations by a consortium of Newmont Mining

Corporation, Peru’s Compañía Minera Buenaventura and the World Bank’s International

Finance Corporation—and successfully put these plans on hold.30 But Humala, who after

only three months in office, sent some 3,000 troops to the conflict zone, and made it very

clear that, aalthough the government agreed to order an outside review of plans for the

28
Rousseff, the current President of Brazil, like her predecessor Da Silva (‘Lula’), is a moderate (i.e.
centre) leftist who has built her presidency around policies she believes will help expand Brazilian
industries in areas from auto-production and agro-industry to oil exploration.
29
In 1990, the government of Peru had turned over to multinational capital two million hectares in
concessions to explore and exploit mineral deposits. By 2010, mining concessions encompassed 221
million hectares (Fernán, 2011: 9). Needless to say, these concessions have resulted in enormous damage to
the environment and livelihoods of the communities affected by the resulting operations—and endless and
continuing conflicts and protests.
30
The scale of the conflict was such as to force the government to declare a state of emergency and
eventually to lead to the resignation of the entire Cabinet. The reason for the unprecedented scale of the
resistance of the local communities was that the proposed ‘Congas’ gold and copper mine would destroy
four lakes and a high-altitude wetland at the top of three watersheds that drain toward the Amazon River.
Plans called for the company to replace the lakes with reservoirs of equal or greater capacity, but small
farmers in the area feared (for good reason, given experience elsewhere) the mine would dry up the water
supply for their crops and livestock [CITATION].
mine expansion, the country could not afford to and would not halt the $4.8 billion

project.

This was by no means an unusual situation or political development. Throughout

the region, examples can be found of variations of the same dynamic. In every case—and

in this the ‘post-neoliberal’ regimes in Brazil and Chile are no different than the Humala

regime in Peru or Felipe Cálderon’s decidedly neoliberal regime in Mexico—the

developing country state is either favourably disposed toward the mining companies and

other multinational corporations, as well as the imperial states that back them up, or it is

compelled by a coincidence of economic interests to concede to the demands of—and to

ally with—the multinational corporations in the extractivist sector. These corporations

operate under post-neoliberal paradigm in which they receive a license to explore and

extract resources under a regulatory regime designed to protect the environment and the

livelihoods of the local communities affected by the mining operations. But, in reality

(see our discussion below on Mexico’s ‘saqueo minera’, the aim of the government in

issuing this license, and in demanding an environmental review or impact study, is to find

a way to advance projects, in which they have a vital interest while somehow eluding the

social conflicts and opposition that they invariably generate.31 Indeed, it is evidently in

31
As President Fernandez of Argentina, another post-neoliberal advocate of the new regulationism and
extractivism, puts it (in regards to a series of major conflicts between mining companies and local
communities and workers): “We must have a responsible, serious discussion in this country. We must
demand high environmental standards, but we must do so responsibly without falling into dogmatic, close-
minded positions...” (Página 12, February 2, 2012). Last month Canada’s Osisko mining corporation
suspended a gold mining project in La Rioja, after intense protests by locals, and announced that (to win
community support) it would not resume operations until it acquired a ‘social licence’ provided by the
government on the basis of a pledge of ‘corporate social responsibility,’ including full prior consultation
with the local population and an environmental impact study. In the meantime, the operation is ‘on hold’:
“If there is no social licence for exploration and development around the Famatina project area, no work
will be conducted by MEP,” the company said in a press release. Meanwhile the Catamarca media reported
the interest of the state, whether neoliberal or post-neoliberal, to maximize the capacity of

the foreign companies to extract resources and sell them on the global market, placing the

government on the side of capital rather than the population and communities directly

affected by these operations.

Mining capital in Latin America: The dynamics of Canadian extractivist

imperialism

Historically, the bulk of FDI in Latin America originated from the US, but, in recent

decades, Canada has turned out to be a major player, particularly in the strategic sector of

the mining of minerals, where Canadian capital has staked out a major position, not only

in Latin America, but worldwide. Indeed Canadian mining capital dominates global

mineral production, accounting for up to 60% of capital invested in the industry.

In the 1980s, Canadian outward-FDI stock was around 5% and 10% of its GDP,

but then it made steady progress to reach around 30% and 35% of its GDP, respectively,

eventually exceeding inward-FDI stocks in the mid-1990s. Today, as already noted

Canada is in fact a net direct investor abroad, most of it related to ‘resource-seeking FDI’

to secure access to natural resources (Arellano, 2010: 2).

As already noted Canada’s mining companies have managed to acquire a

commanding position in the exploitation of mineral resources, both in Latin America and

that the federal Secretary of Mining, Jorge Mayoral, had met with leaders from the mining sector,
particularly foreign corporations, to address an ‘homologation chart,’ a program intended to ensure that all
companies involved purchase their supplies and inputs from Argentina (a feature of both the earlier pre-
neoliberal regulatory regime, ISI, and the so-called ‘new regulationism’.
elsewhere in the world. In the case of Mexico, as noted above, seven out of ten

multinationals operating in the mining sector are Canadian (SE data).32 For example, in

Mexico, Oremex Gold, a Canadian gold ‘exploration and development’ company, holds a

portfolio of gold projects in the prolific mining regions of Mexico with its main

operations in the lucrative Sierra Rosario gold belt of Santa Catarina, San Lucas in the

state of Durango as well as Cerro del Oro in the state of Zacatecas, as of February 2012.33

Canadian capital dominates much of the commanding heights of Mexico’s mining

industry.

Canadian firms in recent years have been particularly active in Zacatecas, the

biggest producer of gold and silver in the country and one of the principal producers of

gold and silver in the world (second and first respectively), where mining operations in

the extraction of both silver and gold have tripled over the past eight years. In February

2012 Oremex Gold, a Canadian gold ‘exploration and development’ company holding a

portfolio of gold projects in the prolific mining regions of Mexico joined, joined several

other Canadian companies that have moved to Zacatecas to participate in the spoils (and

32
Los registros de la SE sobre los 757 proyectos mineros que operan 286 compañías extranjeras detallan la
preponderancia canadiense. Por sí solas tienen a su cargo 556 proyectos y operan otros 30 en asociación
con firmas de otros países, es decir, 586, que representan 77 por ciento del total de empresas mineras
foráneas. En total hay 44 compañías estadunidenses con 113 proyectos, apenas 15 por ciento del total.
33
On January 23, 2012, Oremex Gold announced that its wholly-owned Mexican Subsidiary, Minera Tres
Diamantes, S. de R.L. de C.V., had acquired the Cerro del Oro (Gold Hill) project which comprises two
concessions totaling 78.9 hectares in the Melchor Ocampo gold mining district in the Zacatecas state. Prior
to this acquisition the mine had been operated for some decades by what Oremex Gold describes as ‘small
miners, drawn by very high-grade mineralization’ of the ‘Cerro del Oro property’. The acquisition by
Oremex Gold of this ‘property’ was based on an agreement with Minera Mantos, a wholly-owned
subsidiary of Oremex Silver (which owns 40% of Oromex Gold’s share capital) to consign to it the Cerro
del Oro concessions in exchange for a cash payment of just USD 108,100
(http://www.ccnmatthews.com/logos/20111020-ore200.jpg).
the environmental and social carnage) of mineral extraction. 34 In March 2012 the

governor of the state of Zacatecas visited Canada (the International Mining Fair) to

consolidate its status as the primary host of Canadian mining capital and to concretize a

number of exploratory and production projects that promise to generate up to 664 direct

and 1,992 indirect jobs, and the proposal of Scotia Bank to finance a number of mining

and agro-industrial projects (Zacatasonline, 2012). However, a number of legislators in

the state parliament observed that neither these jobs (if they were to materialize), nor the

donation of $72 million that the Canadian mining giant Goldcorp had just offered the

state, were enough to compensate the state for the lucrative and controversial (in terms of

environmental and social concerns) operations of these companies. 35 A majority of

legislators agreed that new legislation was needed to ensure that the communities affected

by the mining operations received benefits that at least matched the social and

environmental costs of these operations.36

34
How lucrative gold and silver mining has been is reflected in the conference presentation to a Zacatecas
audience by Carlos Fernández Vega, an award-winning journalist with La Jornada. Fernández Vega noted
that the Canadian firms that invested their capital in gold and silver mining in the state have been the only
beneficiaries of the tripling of mineral production and the twofold increase in the world price of these
metals (La Jornada, March 15, 2012). In addition, he noted that these mining companies, mostly Canadian,
paid not one cent for this investment. Further, he noted, notwithstanding that the complex of foreign
companies ceded by the federal government the right to explore and operate in Mexico have exported an
estimated USD80 billion in profit over the past decade their investments over the period were in the order
of only $25 billion (ibid).
35
To assuage the tempers and smooth the feathers of these legislators Goldcorp announced a social
development program in which it would provide an initial investment and grant of $72 million in support of
the social development of various communities in Zacatecas where it was operating (La Jornada, march 15,
2012). This program could be seen as part of what is described by its proponents, the proponents and
officials of a post-neoliberal state, as international cooperation with the ‘new developmentalism’. It bears
comparison to projects pioneered in West Africa by Canadian mining companies—dubbed ‘the new
humanitarianism’ (Globe & Mail, March 21 2012)
36
One of the proposed legislative reforms would ensure that for example Fresnillo, a major operational site
for Goldcorp, the biggest gold producer in the world, would receive some $150-200 million a year in taxes
from the mining companies rather than the $480 it currently receives (La Jornada, March 16, 2012).
El saqueo minero en México

The plunder and looting of Mexico’s mineral resources via the operations of foreign

mining capital is made possible and facilitated by legislation that gives mining companies

the right and ability to do so, but, also because in cases where the government imposes

some conditions, they are circumvented. This is evident from a report submitted in

February 2012 by Mexico’s Auditor General (Bércenas, 2012: 31). This is not the first

such report by the AG. In a report on an audit of government spending in 2008, the AG

had noted that the General Directorate of Mines had ceded the right to explore for and

extract minerals to companies that failed to provide documentary evidence of their

nationality as required by law, and that the officials provided licenses to mine without the

required studies to ensure protection of the environment and livelihoods.

In his latest report, the AG, according to the investigative journalist Francisco

Bércenas (2012: 31), put his finger on the ulcer that has caused—and continues to

cause—Mexico to bleed minerals so profusely over the years. The AG established that

the fees paid for the concessions to mine are below the costs of the administrative

procedures involved. The Auditor’s report literally reads: “The amount of the fees

currently paid is symbolic and contrasts with the volumes extracted from the non-

renewable mineral resources, since their value is well above the concession fees charged

by the State over, as observed in the period 2005 to 2010, when the value of production

amounted to 552 billion pesos [USD 46 billion] and the fees charged were only 6.5
billion pesos [USD 543.4 million], some 1.2% of the first.”37 Furthermore, there is no

evidence provided that the fees charged were actually paid. Further still, the report

reveals the utter laxity of the application of the law and the ‘omissions of the authorities

in monitoring compliance ‘with the law (Bércenas, 2012). In this manner, the wealth

obtained by the extraction of mineral resources in Mexico is accumulated by private

capital, in particular Canadian capital. What the report shows then is that, in regards to

the plunder of Mexico’s mineral wealth, the conquest continues, or in the words of

Eduardo Galeano, the ‘open veins of Latin America’ continue to bleed.

As Bércenas notes, this has repercussions. Each day social protests erupt over the

environmental devastation caused by mining in various parts of the Mexico, or the unfair

contracts signed with the owners of the land under which the coveted ore lies, or the

damage to people’s health that the use of mining companies chemicals cause, or the lack

of safety for the mine workers.38 Examples abound, both in Mexico and elsewhere in the

region, particularly in the form of protests by indigenous communities over the

introduction of mining operations in their territories without their consent, destroying

their social environment and livelihoods, and jeopardizing their very existence as a

people.

37
In this same connection, the Portal de Información Minera (http://www.imcportal.com), a source of
information on the impacts of mining in Colombia, reports that the royalties paid by the multinationals to
the state are ‘derisory’ in that they do not add up to even 1% of the value of the resources extracted and
exploited.
38
Of all economic activities, mining is causes more negative health effects and diseases that can reduce life
expectancy by up to 15 years, according to the Pan American Health Organization (PAHO). Scientific
evidence from across the world support the fact that the mining industry pollutes surface and groundwater,
the air, soil, vegetation and fauna, with incalculable costs to the health of the affected population and thus
the economy.
 As Bércenas editorializes this situation, in which the nation’s resources (‘minerals

that belong to all Mexicans’) are extracted—plundered to be more precise—without any

or very few benefits to its citizens, it ‘should be reason enough to undertake a thorough

review of mining legislation and policies.’ Needless to add, the problem goes well

beyond a review of mining legislation and policies, and even beyond the issues of

corporate social responsibility and politics of the new extractivism, which attempt to

regulate capital in the extraction of minerals. At its core, the issue in the ‘politics of

resource extraction’ is a class struggle over the imperialist exploitation of these resources.

Capitalist resource extraction and imperialist exploitation: The struggle dynamics of

community-based resistance

Prior to the 1990s, the class struggle and the popular movement in Latin America was

primarily concerned with issues of social class related to the struggle over land in the

countryside and the labour movement for wages and working conditions in the cities. In

the 1990s, however, the popular movements, with the agency of class-based and

community-based social movements, mobilized against the neoliberal state (and the

governing regimes) in resistance against their policies. By the end of the decade a number

of these movements, led by proletarianized peasant farmers, rural landless workers and

indigenous communities, in a number of contexts (Chiapas, Brazil, Ecuador, Bolivia, etc.)

achieved major gains in their struggle, placing the existing neoliberal regimes on the

defensive and provoking a legitimation crisis for the neoliberal state. At the turn into the
21st century, to all intents and purposes, neoliberalism was dead, no longer able to serving

it legitimating function to naturalize the class structures. With the already observed—and

widely reported—left turn in national politics (the so-called pink tide), the regimes that

came to power in the wake of widespread disenchantment with neoliberalism each and all,

including overtly neoliberal regimes in Mexico and Colombia (and Peru at the time),

sought to move ‘beyond neoliberalism,’ at least rhetorically, in the search for a new form

of governance, an alternate path towards national development, a new post-neoliberal

state.

As noted by the establishment economist Paul Collier (2003)—an expert in

drawing attention to the obvious, if not the underlying dynamics of capitalist

development and imperialist exploitation—natural resources can, and often do, provoke

conflicts within societies as different groups and factions fight for their share. Sometimes,

Collier adds, these emerge openly as separatist conflicts in regions where the resources

are produced (such as gas rich department of Santa Cruz in Bolivia) but often the

conflicts occur in more hidden forms, such as fights between different government

ministries or departments for access to budgetary allocations. This, Collier notes, tends to

erode the government’s ability to function effectively.

However, Collier continues, there are several types of relationships between

natural resources and class conflicts—and between global capital and the State in regard

to these conflicts. First, ‘resource curse effects’ can undermine the quality of governance

and economic performances (Norman, 2009: 183–207), thereby increasing the

vulnerability of countries to conflicts (the ‘resource curse’ argument). Second, conflicts

can occur over the control and exploitation of resources and the allocation of their

revenues (the ‘resource war’ argument). Third, access to resource revenues by

belligerents can prolong conflicts (the ‘conflict resource’ argument) (Le Billon, 2006).

According to one study, a country that is otherwise typical but has primary commodity

exports around 25% of GDP has a 33% risk of conflict, but when exports are 5% of GDP

the chance of conflict drops to 6% (Bannon and Collier, 2003). While Collier focuses on

internal dynamics of such conflicts, the international dimension is continuously at play,

as the imperial state intervenes (sometimes instigates) into the conflict to gain control of

the natural resources via proxy.

The dynamics of class struggle in the natural resources sector: Global capital vs.

local labour and the environment

The agency and key agents involved in this ‘politics’ (resistance against the imperial

incursions of capital in the exploitation of ‘natural resources’)—at least in the Latin

American context—are the predominantly indigenous communities that populate the

areas ceded by the different governments (be they neoliberal or post-neoliberal in form)

to the foreign mining companies for the exploration and exploitation of the natural

resources in their territorial lands.39 However, they also include a variety of civil society

39
Although governments generally acknowledge the rights and ownership of the land in the areas
populated by the indigenous communities, and also the right of indigenous peoples to be consulted in
regard to proposed mining operations and other extractivist ‘projects’ in their ‘territory’, they usually also
reserve the right to cede to the mining companies the right to exploit the sub-soil resources under a ‘social
license’ issued under a regulatory regime (e.g.to protect the environment) and a royalty-tax payment
groups and non-governmental organizations that have been drawn into the conflict

between global capital and the local communities.40 And the forces of resistance to

resource imperialism include new social movements formed to protest the damage caused

by the resource extraction to the environment, as well as the effects on the health and the

livelihoods of the local population and the miners themselves who face life-threatening

working conditions and health concerns. In other words, many of these movements are

rooted in those ‘affected’ by the impacts of resource extraction and mining operations

(for example, REM—Red Mexicana de Afectados por la Minería; and Conacami—

Confederación Nacional de Comunidades del Perú Afectadas por la Minería).

According to a forum of peoples, communities and groups ‘affected’ (’negatively

impacted’) by the operations of mining capital and the resource extraction industry (Foro

de los Pueblos Indígenas Minería, Cambio Climático y Buen Vivir ) celebrated in Lima

on November 2010, the exploitation of the region’s mineral resources in 2009 had

reached levels hitherto never experienced .41 Of particular concern was the Amazon

region, whose abundant deposits of gold, bauxite, precious stones, manganese, uranium,

etc. are coveted by the multinational companies operating in the mining sector. Another

agreement. That is, the indigenous peoples are to be consulted, but the state has the ultimate authority to
grant foreign companies the right to explore and produce minerals in their territories.
40
An example of one of these NGOs is Global Response, which has prepared a manual that can be used by
activists to engage the mining companies in the class struggle against imperialist exploitation—to resist the
diverse strategies used by these companies to overcome local resistance. See C. Zorrilla, Protegiendo a su
comunidad contra las empresas mineras y otras industrias extractivas (Boulder CO: Global Response,
2009)..
41
According to the forum organizers, who included Fobomade—A Bolivia-based Forum on the
Environment and Development that includes all sorts of community-based and nongovernmental
organizations concerned with protecting the environment and the country’s wealth of natural resources
from the depredations of mining capital and capitalist industrialization—2010 saw the maximum expansion
of mining capital in the continent, which dictates a continent-wide mobilization of the forces of resistance.
concern was the perceived connection between the multinational corporations in the

sector and a host of foundations and NGOs with an alleged humanitarian or religious

concern for the environment and the livelihood of the indigenous peoples and

communities. In this connection, Eddy Gómez Abreu, President of the Parlamento

Amazónico Internacional, declared that they had “incontrovertible evidence of these

transnationals and foundations, under the cover of supposed ecological, religious or

humanitarian concerns, collaborated in the effort to ‘extract diamonds, strategic minerals

and genetic’ as well as espionage and illegal medical experiments on the indigenous

population” (Sena-Fobomade, 2011). In effect, he alleged that the mining companies

regularly used foundations and other NGOs as one of their tactics to secure the consent of

the local population to their projects and operations, and to manipulate them. If this is

true, these foundations and NGOs continue the long sordid history of European

missionaries in the Americas of expropriating the lands of the indigenous, but in an

updated form.

On the one hand, the forces of resistance use tactics such as marches and

demonstrations, road and access blockades, and other forms of direct collective action, to

impede the mining operations Zorilla, 2009). On the other hand, the tactics of the mining

companies include visiting the community for the purpose of gathering information and

evaluating the local situation (e.g. the degree of opposition) under false pretexts such as

representing themselves as members of an NGO concerned with the welfare of the

indigenous; arranging public meetings, with the help of local allies or ‘friendly’ officials;
bribing government officials with the promise of jobs and social development funds;42

manufacturing a ‘social license’ by negotiating with a friendly local group supportive of

the project, albeit not representative of the ‘community’; creating a support group and

organization, when a submissive or complaint group does not exist in the community; or

seeking support for a proposed mining project by offering gainful employment to

unemployed members of the community, work for local contractors or service contracts;

purchasing land with access to the concessions; infiltration of the community and spying

on the opposition; and strategic litigation against public participation, false accusations,

intimidation and death threats, and paramilitary action. And ultimately the mining

companies rely on the direct violence of military, paramilitary, and/or police forces to

overcome opposition to their highly lucrative mining operations.

As for the problem at issue in these tactics, and the underlying conflict, it is to

defeat the forces of resistance against the operations of mining capital and the extraction

of resources for the purpose of capital accumulation. From the perspective of the local

communities, however, at issue is not only the health of their members and sovereign

control over their national territory, but the environment on which their livelihood and

way of life, and life itself, depends. In this regard, Gómez Abreu reported—in a socio-

metabolic analysis of the economy—over a million people in the Amazonian basin suffer

from diseases derived from exposure to and ingestion of toxic and carcinogenic

42
An example of this tactic is the approach used by Goldcorp, the Canadian firm that dominates the global
gold extraction industry to consolidate its operation in Zacatecas, the country’s (if not the entire region’s)
biggest producer of gold and silver. With the stated purpose of assisting the state in promoting the social
development of communities suffering from a high degree of ‘marginality’ (marginación) Gold Corp
announced in Zacatecas (La Jornada, march 15, 2012) a grant of USD 72 million—in addition to the $36
million that it spent in the state in 2011.
substances, such as mercury. And the researcher, Edgardo Alarcón, in the same regard,

documented the scientific evidence that the Peruvian city of Oroya is one of the ten most

contaminated cities in the world, with high levels of lead and sulphur in the air and high

levels of mining-based and related carcinogens such as cadmium, arsenic and antinomy in

the soil, agriculture-based food products and the water supply—toxins that also detected

in other towns and surrounding communities (Sena-Fobomade, 2011). Thus, what is a

source of profit for the transnational mining corporations represents a ‘death sentence’ for

local communities.

Conacami, one of the major organizations participating in the Forum, denounced

the fact that by the end of 2010 the vast majority of ancestral sites in its territory were in

the hands of the mining and oil companies (the ‘transnationals’), which have been ceded

up to 72% of Peru’s national territory for the purpose of exploration and the exploitation

of the country’s natural resources. In this connection, Conacami alerted forum

participants of the actions of the government—at that time under the control of Humala’s

neoliberal predecessor, President Alan García—in declaring 33 mega-projects to be in the

‘national interest’ and thus without the need for the companies to submit environmental

impact studies (Sena-Fobomade, 2011).

These and other such reports reflect the fact that Peru, together with Ecuador, is

one of the major Latin American sites of class struggle over the extraction and

exploitation of natural resources.43 A major continuing focal point in this struggle relates

43
On this particular class struggle in Ecuador, see inter alia Webber (2010). In Ecuador as elsewhere in the
region the State is actively engaged in the class struggle—invariably on the side of capital (even in the case
of post-neoliberal regimes of the ‘radical populist’ variety). On this point, witness the position of the
to the Conga mine, the largest extraction operation in the country and one of the largest in

the entire region. At the point of this writing (March 2012), this mining operation

expansion is ‘on hold,’ stalled as a result of the organized resistance of the local

communities in the Cajamarca region.44

This mine expansion project, known as the Conga Project, a joint project between

Denver-based Newmont Mining Corp. and Peru’s Buenaventura, would help the

company (and the government) meet the goal of producing seven million ounces of gold

and 400 million pounds of copper by 2017—a major boost to both the GDP, rents

(royalties and taxes) collected by the government, and the company’s profits. But, of

course, these immense rents and profits would come at the cost of devastating the land,

water, and livelihoods of the local indigenous communities surrounding the mining

operations.

The chances of the stalled operation proceeding is now in doubt. In February

(2012), around the same time that President Cristina Fernandez of Argentina was

confronting a similar situation, the on-going resistance to the Conga Project took the form

‘leftist’ government of Rafael Correa, which has labeled indigenous resistance to large-scale mining and oil
exploitation as ‘terrorism and sabotage’ (cited in Webber, 2010: 1). The government’s support of the
regulated operations of mining companies and the extraction industry over the protests of the indigenous
nationalities and communities led the representative organization of these nationalities (CONAIE) to break
with the government in open resistance against and opposition to its policies.
44
The gold and copper mine would destroy four lakes and a high-altitude wetland at the top of three
watersheds that drain toward the Amazon River. Plans call for the company to replace the lakes with
reservoirs of equal or greater capacity, but small farmers in the area fear the mine will dry up the water
supply for their crops and livestock. The Peruvian government approved the environmental impact study
for the Conga mine in late 2010 and construction was to begin in October 2011. But when heavy machinery
moved in, however, local communities began to protest. President Humala, who had been in office just
three months, sent Cabinet ministers to negotiate, but residents called a regional strike and blocked
highways. The government then declared a state of emergency and sent some 3,000 troops and police to
restore order. Escalation of the conflict finally forced the entire Cabinet to resign in early December, and
the mining company to put its plans on hold.
of a national march for ‘water and life,’ a mobilization that gained broad public support

as well as the active participation of diverse social groups and sectors. And if the local

communities in their struggle against mining capital and the extractive industry were to

succeed in stopping a project that the government has declared to be of strategic

importance, it would also provide a major boost to the forces of resistance throughout the

region. It would be viewed as a major victory for ‘the people’ in an on-going class

struggle against capital—one of very few (only two in fact) in recent years. It would

signal a shift in the correlation of class forces, one of several reasons why the resistance

most likely will not succeed: the stakes are too high—for both the mining companies and

the State (both in Peru and elsewhere in the region). The odds are that the government

will rally in support of mining capital, and take action to create the conditions that will

allow the project to proceed, be it cooptation or repression.45

The thousands of protesters who packed Lima’s downtown core in the ‘March for

Water and Life’ called on the government of President Humala to cancel the project over

fears that the mine’s tailing ponds and reservoirs would seep into local water supplies.

“We’re here because we don’t want foreigners taking our water,” one of the protesters

declared as he marched down a boulevard in central Lima, with the trademark straw hat

of a Cajamarca farmer perched atop his head.i “It belongs to Peru”, he added.. The

presence of police in riot gear confronting the march was a frightening reminder of the

hostility protesters face from mining proponents. In December 2011, Humala declared a

60-day state of emergency after a series of violent clashes erupted between police and

45
Although the government agreed to order an independent review of plans for the mine expansion before
resumption, it also said the country could not afford to halt the $4.8 billion project.
protesters in Cajamarca as a general strike and roadblocks paralyzed the region. Much of

the anger at the time stemmed from a perceived flip-flop by Humala, a former left-

nationalist and radical populist in the mould of Evo Morales, who spoke out against

foreign mining companies during his election campaign for the presidency and even

hinted at the possible nationalization of the industry. However, as predicted by some

since taking office last summer, he has sided with the mining companies in their conflict

with the indigenous communities. The reason for this supposed flip-flop (in fact,

Humala’s stance was entirely predictable) is clear enough. At issue in the conflict—and

in this the Conga mine issue is no different from struggles over the decade and

throughout the region—is the capitalist development of the country’s natural resources,

including the rents and taxes collected by government—which, as developments in

Bolivia over the last five years suggest, can be considerable, reason enough for a political

turn to the right (i.e. a coincidence of economic interests between State and Capital). On

this point, there are no end of examples—from Peru and Bolivia to Brazil and

Argentina46—of an ostensibly anti- or post-neoliberal regime spouting nationalist rhetoric

regarding ownership and control of the country’s natural resources, but then settling all

46
One of the most egregious and well publicized cases of an (all too often hidden) ‘connection’ (and
master-servant relation) between multinational corporate capital and those of obliging or corrupt
government officials, rentierism and payoffs in terms of securing a secret deal to a mutual benefit, is that of
Barrack Gold’s now exposed connection to the Kirschners in Argentina—dubbed ‘Model K’ by the
investigative journalist Miguel Bonasso. The secret deal sealed between the governments of Argentina and
Chile with Barrack Gold, under the Kirschner-Peneda regimes, created a territory, dubbed Pasciualama,
where Barrack Gold could operate almost freely with little regard to the sovereignty of either nation. The
incognito and as yet unexplained question is why the government of Argentina would make a deal, with
such an exceedingly high social and environmental cost and so few if any tangible benefits to the country.
Bonassa’s conclusion is that there must have been a major payoff (in addition to documented contributions
to at least three presidential campaigns.
too quickly (or slowly if need be, as in the case of Peru’s Conga Project) with global

capital in the exploitation of the country’s natural resources to a mutual benefit.47

In the case of the Conga mine in the Cajamarca region, the company responsible

for the project has pointed out that the project, slated to open in 2015, if allowed to go

ahead will create as many as 7,000 construction jobs and 1,600 operation jobs. Further, it

will be expected to pay the government close to $3 billion in taxes over the next two

decades as well as royalties, the proceeds of which will be distributed by the government

in an equitable fashion in a policy of social inclusion.

Conclusion

Since the late 1990s across Latin America here has been an increasing incidence of local

protests against large private (privatized) mining and oil projects based on foreign capital.

With respect to mining, the Observatory of Latin American Mining Conflicts (OCMAL)

has registered 155 major socio-environmental conflicts in recent years, most of them in

Argentina, Brazil, Chile, Colombia, Mexico and Peru.48 Diverse ‘stakeholders’ (to use the

47
Take the case of Rafael Correa, Ecuador’s beleaguered leftist President, viewed by many on the left as a
beacon of hope against the forces of capitalist development. Having come to power with the support of
CONAIE, the country’s most powerful indigenous organization and social movement, his government is
currently engaged in a major direct confrontation with the forces of popular resistance against the
expansion of mining capital in the country. In opposition to the demands of local communities and the
indigenous movement for a moratorium on concessions given to multinational corporations to explore and
mine mineral resources Correa in March 2012 announced the government’s intention to continue
negotiations with the multinational companies in the area to develop large-scale mining no matter what.
The contracts signed, and to be signed, with these companies, he declared, are in the national interest and
‘the best ever negotiated’. Designed to ensure that the government, rather than the miners, will receive most
of the benefits, the contracts negotiated with these companies ‘are the best…ever in world history’ (Reuters,
March 23, 2012). He added: ‘[w]e got as much out of them as was possible.’
48
See he Observatory’s website [www.olca.cl/ocmal] for details about these conflicts.
development jargon), especially campesinos, indigenous groups, workers and small-scale

miners, have resisted new investments and projects that give little (few jobs and

development) but take and damage a lot (land, water, air—and livelihoods). The

numerous mobilizations against extractive activities focus on land and water rights,

territorial claims and the notorious environmental record of extractive industries (North,

Clark and Patroni, 2006). While some of these local protests take place in marginalized

areas and receive little external support or attention, other conflicts have become well-

known and have achieved online status with the global ‘antiglobalization movement’: the

resistance of Peruvian farmers and other local groups against gold mining in

Tambogrande and Yanacocha; the massive protests against Barrack Gold’s goldmine

operations in Argentina’s Valle de Huasco, leading to the disappearance of several

glaciers, widespread contamination and drought; the mobilization of Mayan communities

against silver and gold mines in Guatemala; and various indigenous protests against

extractive activities in the Amazon, including the long history of mobilization against

Chevron/Texaco in Ecuador. Many of these local protests have been related to the

ecological worldview or growing strength of indigenous movements, or the increasing

popular resistance to neoliberalism and globalization in the region. However, most of the

all too abundant reports and studies of this resistance have been linked to the struggle for

a more participatory politics and an alternative post-neoliberal model of capitalist

development, and as a consequence have failed to appreciate its significance in regard to

the class struggle against capitalism and capitalism.

In this regard the growing protest movement against mining capital and
extractivism have engaged the forces of resistance not just against neoliberalism and

globalization, but against the underlying and operative capitalist system. Thus the so-

called politics of natural resource extraction is not just a matter of better resource

management, a post-neoliberal regulatory regime, a more socially inclusive development

strategy or a new form of governance—securing the participation of local communities

and stakeholders in decisions and policies in which they have a vital interest. Given the

interests that they represent, and the coincidence of these interests with those of the

‘transnational capitalist class’ (to use the phrase of some sociologists of globalization),

the officials and managers of the post-neoliberal state generally side with capital against

labour and have not reacted well to the civil society organizations that criticise or resist

their mineral policies or extractive projects. The anti-extractivist protests in the region

have received international activist (and academic) recognition as part of a global

environmental justice movement, but the agents and progressive officials of the ‘post-

neoliberal’ states simply ignore them—and proceed with their geopolitical project: to

advance the exploitation of the country’s natural resources by global capital in the public

interest. Thus, the politics of natural resource extraction resolves into a matter of class

struggle—of combatting the workings of capitalism and imperialism in the economic

interests of the dominant class, and mobilizing the forces of resistance against these

interests.

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