Manhattan Minerals has sold its Peruvian mineral interests for US$600,000 and the assumption of $2.4 million in liabilities. So ends a cautionary tale for explorers and their backers alike.
We’d be among the first to concede that Manhattan’s Tambo Grande property, with a vast polymetallic deposit that had what promoters like to call “robust economics,” trailed some political risk. In most countries in Latin America, the holder of a mineral title should consider his tenure to be a little uncertain, simply because legal systems are still finding their feet after many years of crony capitalism, state interventionism, or both. In Peru, a country with a history of political upheaval, the uncertainty was that much greater.
But it wasn’t legal uncertainty that killed the Tambo Grande project. The development met with sustained resistance from both local landowners and First World activist groups, who raised the public’s consciousness with a tendentious advertising campaign against Manhattan Minerals.
It’s entirely possible the local groups would have seen the mine as a danger to their lives and livelihoods anyway — and, as we’ve said before, a polity that doesn’t want a mining project in its backyard has every right to choose to block it, and one that doesn’t want mining at all has every right to choose to ban it. Maybe the people of Tambogrande would have blocked the project anyway — but intervention by First World non-governmental organizations was carefully timed and intensive. Consider that the French government agency, Bureau de recherches gologiques et minires, held the project for years without anyone pushing the Peruvian government to annul its title to the property — yet when a Canadian junior took the project over, the fireworks started.
Was it a mistake for Manhattan Minerals to get involved? Or did NGOs push this project over the cliff? The answer is highly relevant to the company’s shareholders, who saw Manhattan write off a US$60-million investment, and in the end, get a penny on the dollar in cash.
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