Release: Salvadoran president reiterates opposition to mining projects

Press Release

FOR IMMEDIATE RELEASE - January 13, 2010

Contact: Alexis Stoumbelis (202) 521-2510 ext. 205

Salvadoran president: 'My government will not authorize any mining extraction projects'

Lawsuit now seems last chance for Pacific Rim Mining to avoid complete loss on El Salvador holdings

President Mauricio Funes commits to full investigation of mining opponents' murders; Canadian company denies wrongdoing

SENSUNTEPEQUE, EL SALVADOR – Speaking at a ceremony marking the startof the school year on Tuesday, Salvadoran President Mauricio Funes madehis most explicit statement yet against the mining of precious metalsin El Salvador, declaring “There can be no misunderstanding: mygovernment will not authorize any mining extraction projects.”

Funes cited environmental and health concerns in reaffirming thegovernment's refusal to grant extraction permits for various projectsaround the country, including the proposed El Dorado mine, owned byVancouver, B.C.-based Pacific Rim Mining. “No one has convinced us thatthere are ways to extract minerals and metals, especially metals,without contaminating the environment and affecting public health,”Funes stated. “We are not going to [authorize extraction permits].”

Pacific Rim has extensively explored the El Dorado site near the town of San Isidro and claims to have found substantial gold and silver deposits. However, the company's environmental impact statement has never been accepted by the Salvadoran government, leaving the company without the permits it needs to begin mining. In response, Pacific Rim filed an investor-state dispute against the government in April under the rules of the U.S.-Central America Free Trade Agreement (CAFTA), in which it seeks hundreds of millions of dollars in damages.

Canada not being party to CAFTA, Pacific Rim filed the international lawsuit through a U.S. subsidiary – PacRim Cayman, LLC – based in Reno, Nevada. Yet even as it moved forward with the suit in late 2009, the company held out hope that the Salvadoran government would grant extraction permits, telling shareholders in a November 12 statement it was “hopeful that a resolution can be reached.” After Funes' comments on Tuesday, the lawsuit now appears to be Pacific Rim's last chance to avoid a total loss on its three proposed projects in El Salvador. Proceedings for the case are expected to begin in the coming weeks at the World Bank in Washington, D.C.

Funes also condemned the recent murders of three prominent community leaders who had opposed Pacific Rim's activities in El Salvador, including the El Dorado project. Dora “Alicia” Sorto Recinos and Ramiro Rivera were killed on separate occasions by gunmen in late December. Marcelo Rivera (no relation) was kidnapped, tortured and murdered in June 2009.

“I have personally given instructions to the Minister of Justice and Security and the Director of the National Civilian Police to investigate those cases,” Funes declared, pledging to shed light on “the motives that are behind these assassinations.” The president stated that those killed had “sacrificed their lives in pursuit of a better environment and a better quality of life for Salvadorans.”

For its part, Pacific Rim has denied any involvement in the recent wave of violence, which has also included death threats and kidnapping attempts against journalists and clergy members. In a January 4th statement posted on its website, Pacific Rim asserted that the two December murders stemmed from “a longstanding feud between two local families,” a claim that it attributed to reports in “the mainstream Salvadoran press.” Articles reporting on the murders in El Salvador's most widely-read newspaper, La Prensa Gráfica, discredited this theory.


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