BUCARAMANGA - Tucked away in the hills of northeastern Colombia, a gold mine led by Canada's Greystar has split local communities between those who call it a blessing and environmentalists who brand it a curse.
The Angostura project illustrates one risk facing new oil and mining operations in Colombia, where increased security is attracting a wave of foreign investors to exploit rich resources even as environmentalists push for stricter control.
Ecologists and opponents have called Greystar's project a threat to most of Santurban, a 7-million-year-old so-called "paramo" area believed to be the source of rivers and streams that supply water to 2.2 million inhabitants in Colombia.
Greystar, one of the junior Canadian gold companies leading the way in Colombia, dismisses any environmental concerns, citing instead the benefits to the local economy and community.
But the project has already divided inhabitants in California and Vetas towns in Santander province between those defending job prospects they see and others opposing it for the impact they fear it will have on the ecosystem.
"Greystar cannot guarantee that during the mining phase it will not cause environmental damage," Jorge Ortiz, a Bucaramanga resident, recently told an audience attending a hearing on Angostura.
Colombia, once written off as a failing state mired in drug and rebel violence, is enjoying a resurgence in oil and mining investment as its long guerrilla war wanes and companies return to explore areas rejected in the past as too dangerous.
As in other commodity-producing countries, environmental concerns are rising but Colombians often clamor for companies to arrive in the hope of jobs and infrastructure development.
"Thanks to Greystar and Angostura, my family has a job," said Edilma Tolosa, an artisan miner from the California municipality where the mine is located. "When Greystar arrived in the region, security improved, so did roads."
Greystar is not alone in dealing with environmental hurdles to get its project up and running. Local authorities are also discussing whether to grant AngloGold Ashanti a permit for its La Colosa project.
Greystar is no stranger to the past risks of doing business in Colombia. The company suspended activities in 1999 when a contractor was kidnapped. It never left, but only restarted in 2002 after the local government sent an army battalion to the Angostura area.
But while security improved, new challenges emerged. The local environmental authority for the city of Bucaramanga (CDMB), some local congressmen and the state's ombudsman oppose the Angostura proposal, saying it would impact the delicate ecosystem.
"The project will destroy the ecosystem. Its damage is irreversible because the possibility of recovering the ecosystem is limited," said Orlando Beltran, director of a committee that includes activist groups, environmentalists and local industry groups that oppose the project.
Critics are instead promoting Santurban as an ecotourism site as some plants there can grow only in paramo regions that exist in Colombia, Venezuela and Ecuador.
Paramo occurs in the Andes between upper forest limits and the lower edges of the snow line, but in Colombia, paramo ecosystems vary depending on the mountain range and a new mining code forbids mining in paramo ecosystems.
Greystar President and CEO Steve Kesler told Reuters the project posed no threat to water supply and was designed to provide the maximum benefit to the economy and job creation.
The company plans to invest $1 billion over the next four years including building the mine and $3 billion in operating expenses over the 15-year life of the project.
"This project will not impact the availability of water to Bucaramanga in any way," Kesler said. "The community understands there would be impacts, but they will be well managed ... There are tremendous benefits to the economy."
Colombia's government is studying whether to grant a license for the project, but officials have already accepted that the company does not have to resubmit its environmental study to conform to new regulations in the Andean nation.
Output of gold and silver was originally expected to begin in the second half of 2012 with average production of 2.3 million ounces of silver per year, but due to license delays, the company now says output could start in mid-2013.
Elvia Paez, CDMB general director, says the mine would require intervening in around 1 100 hectares (2,700 acres), of which more than half are located above paramo and the rest in Andean forest.
"They could extract gold in 15 years, but it could take 100 to 200 years to recover the ecosystem," Paez said.