Costa Rica lawmakers vote to ban open-pit mining

SAN JOSE, Costa Rica Tue Nov 9, 2010 10:43pm EST

SAN JOSE, Costa Rica Nov 9 (Reuters) - Costa Rica's congress voted on Tuesday to ban all new open-pit mining projects, citing environmental concerns, without blocking the development of the country's only major gold mine.

The small Central American country prides itself on jungle wilderness that draws tourists and the lawmakers who proposed the initiative say open-pit methods to dig for metals can cause deforestation and destruction of wildlife habitat.

Less than one percent of Costa Rica's gross domestic product comes from metals mining.

President Laura Chinchilla, who passed a moratorium on mining shortly after taking office this past May, is likely to sign the bill into law, said Jose Castro, head of mining at the Environment Ministry.

"Costa Rica is a country that has dedicated itself to protecting the environment," Castro told Reuters. "We think it is contradictory to promote the environment and continue to pursue mining activity," he said.

The law will not affect the country's biggest gold mining project Crucitas, owned by Canadian company Infinito Gold Ltd (IG.V), which already has an environmental permit to operate although a court ruling has stalled the mine's development.

Crucitas has an indicated resource of 1.2 million ounces of gold and was declared a project of national interest by Chinchilla's predecessor Oscar Arias. The company says Crucitas will not cause environmental damage.

The law passed on Tuesday is not retroactive and can only be applied to future projects, said Claudio Monge, a legislator whose Citizen's Action Party proposed the ban five years ago.

Some other Central American countries, like El Salvador, Guatemala and Honduras have also put the breaks on new mining projects. [ID:nN02135545] (Reporting by Alex Leff; Editing by Clarence Fernandez)