Cerro Vanguardia (CVSA) is a joint venture between AngloGold Ashanti and Formicruz, a government organisation of Santa Cruz province in Argentina, in which AngloGold Ashanti maintains a 92.5% share and has operational control.
At the beginning of the 1990’s conditions in the Santa Cruz province in Argentina were very difficult. The area was traditionally dedicated to the breeding of sheep, soil management was poor and decline in international wool prices added to economic hardship. The aftermath of the Hudson volcano eruption in southern Chile in 1991 made growth and development almost impossible. The population therefore depended almost exclusively on state-sector employment. The start of mining operations at CVSA in 1998 reversed the situation, provided an alternative source of employment and began a period of remarkable growth that continues to date.
Understanding the inevitability of eventual mine closure, the company proposed the creation of an agency to promote the development of sustainable economy.
With the support of CVSA, the Santa Cruz province and local city governments, the Puerto San Julian Development Agency Foundation was established in 2004 as a non-profit organisation which comprises key representative organisations from the community.
Importantly, the development agency consists of eight members that represent key stakeholders: the municipal government, the chamber of commerce, the local university, the provincial government, rural society, the city council (including one representative of both the majority and minority party), and a representative of CVSA. Its objective was to establish a vehicle which would enable public and private entities to drive economic growth through the provision of services and development policies based on social equality and environmental sustainability.
One of the most important undertakings of the agency has been to establish a sustainable development plan for San Julian. This plan was developed through a participatory process and has provided the municipality with a framework through which it considers strategies for development beyond CVSA’s current mining activities. It is important to highlight that San Julian’s sustainable development plan is the first of its kind in Argentina in which a mining company has been an integral partner.
The final plan was presented in 2008 to the entire community of San Julian as well as to local and provincial authorities. The focus of the plan is alternative economic development and improvements in key social areas such as education and health.
“This plan has been developed with the participation of the entire community of Puerto San Julian, and indicates to us what direction San Julian wants to take for its development. Cerro Vanguardia acts in accordance with that decision and is committed to supporting the community to progress in that direction” says Adolfo Valvano, Head of Community Relations and representative of the company in the agency.
The agency is working in 16 different areas as defined in the development plan. Below are some and projects currently being developed or underway:
- Wind power: in order to take advantage of the climatic characteristics of the region, a wind measuring tower (anemometer) was installed. As a second step, a renewable energy company was established with the mandate to establish contact with international wind power companies. Various international companies have been contacted to commission a pilot wind generator, as a first step towards the installation of a wind generation park. The first to visit was Grupo REOLID from Spain in December 2008. Contact was also made with the WPD Group in 2009, and this German company has offered to have the pilot installed by 2011/12.
- Aquaculture: a mussel breeding programme has been established in the bay of San Julian.
- Waste management: a plan for a waste management treatment facility has been created.
- Child and substance abuse: The Council of Childhood and Adolescence was established to develop solutions to these destructive social challenges of child abuse and addiction.
- Technical education: the agency, together with CVSA and the municipality of San Julian, engaged the provincial educational council during 2009 to promote the idea of establishing a technical school. These efforts were successful and the first courses in electro-mechanical studies commenced in March 2010.
- Local supply chain: with the participation of the local chamber of commerce, a programme designed to increase the number of local suppliers working with CVSA has been implemented. Key aspects of this programme are providing entrepreneurs with training and helping them to develop their business plans.
- Productive loan programme for entrepreneurs (small and medium enterprises): the agency assesses and approves various projects submitted by entrepreneurs. CVSA then transfers the associated funding required to the Municipal Bank, which implements and handles credit guarantees and collects repayments. The programme is competitive, offering interest rates of 7%, a grace period of six months and a repayment period of 36 months. Entrepreneurial projects are being executed in different industry sectors including fishing, greenhouses, construction and mechanical equipment.
The last project developed by the agency and financed with contributions from CVSA was geared to the sustainable reactivation of the local port by acquiring a fishing-cooling drag boat and bringing it to San Julian to be manned together with local fishermen, thus increasing raw material to the local fish processing plants. This project has various benefits including:
- developing and building business and social relationships and capturing income for the town residents;
- taking geopolitical care of the sea and revamping the local port activities; and
- generating local employment for the community and guarantying fish supply to local plants.
“The most important thing in this whole process is the interaction among the authorities, the local representative institutions and Cerro Vanguardia, consistently building working relationships together for the benefit of sustainable development in the region”, concludes Valvano.