Exposing the ugly truth about Rio Tinto

IndustriALL Global Union


IndustriALL Global Union has produced a new report: “Unsustainable: The Ugly Truth about Rio Tinto” highlighting the multinational’s global practices. IndustriALL is calling for Rio Tinto to live up to its claim to be a sustainable company including by respecting workers’ rights.

Kemal Özkan, assistant general secretary of IndustriALL says:

Rio Tinto’s blind pursuit of profit at any cost has caused disputes with numerous unions as well as environmental, community and indigenous groups. IndustriALL has launched a campaign working with civil society organizations to defend against Rio Tinto’s abuses. Through demonstrating that Rio Tinto does not operate in a sustainable manner, we aim to force the company to live by its own claims.

The report exposes Rio Tinto’s performance on areas including environmental, economic, social and governance issues which the company claims to be key areas for its sustainable development .

• Rio Tinto took huge losses on its investment in Mozambique, while at the same time forcing people off their land.
• Rio Tinto took huge losses on its Alcan acquisition, while at the same time laying off thousands of workers and provoking a costly labor dispute.

• 40 workers were killed at Rio Tinto fully or partially owned operations in 2013. In the case of a disaster in Indonesia that killed 28 of the workers, a national human rights commission found it could have been avoided.
• Over one-third of the company’s workforce is continually exposed to work noise levels at which hearing loss can be predicted.

• Rio Tinto consistently refuses to seek free, prior and informed consent from communities before mining.
• Rio Tinto says that closure costs of its operations represent a significant financial liability, however they publish little detail on how they calculate those liabilities.

• In a single month last year, Rio Tinto had uranium spills at both of its uranium operations.


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Marengo replaces CEO as it struggles with Yandera weaknesses

Marengo Appoints New Chief Executive Officer

Marengo Mining | The Wall Street Journal

Marengo Mining Limited is pleased to announce the appointment of current Director, Mr. Pieter Britz, as Chief Executive Officer (“CEO”), effective immediately.

With effect from today, Mr. Les Emery, Founding Director, President and current CEO, has stepped down from the Company.

Mr. Emery, a well respected and experienced Australian mining executive, founded Marengo in 2002, listing the Company initially on the Australian Stock Exchange (“ASX”) and subsequently, the Papua New Guinea and Toronto Stock Exchanges, and acquiring the Yandera Project, Madang Province, Papua New Guinea (“PNG”), where the Company has been working to develop a copper-molybdenum-gold project for the last eight years. Under the leadership of Mr. Emery, Marengo has developed strong working relationships with the local Yandera community and land owners, and the Provincial and National Governments of PNG.

Mr. Emery will assist in the transition to the new senior management team and their introduction to government and stakeholders in PNG.

“On behalf of the Board, our senior management team and employees, I would like to thank Les for his strong leadership, contributions and commitment to the Company and the Yandera Project over the last twelve years,” said Company Chairman, Mr John Hick.

“With the appointment of Mr Pieter Britz as CEO, as well as the appointment of Mr John Mears as Chief Operating Officer (“COO”), and the previously announced appointment of Mr Alex Dann as Chief Financial Officer (“CFO”), Marengo is well positioned to continue to pursue its goal of the successful development of the Yandera Project.”

Mr. Britz is an industrial engineer with over 20 years’ experience as a mining professional, and has served on the board of a number of resource companies in Canada, Australia and China. Pieter is a registered professional engineer, and a member of AusIMM.

After spending 13 years in mining in Africa with Kumba Resources, Pieter spent 3 years in investment banking with Royal Bank of Canada in Australia, until 2007 when he joined The Sentient Group (“Sentient”) as an investment professional in private equity. Sentient is the largest shareholder of, and a lender to Marengo.

Mr. Mears is a licensed geologist in the USA and is also a member of AusIMM. He has over 20 years experience in exploration and mining, during which time he has been a director of a number of companies and was involved in a number of successful mine start ups. He currently operates his own geological consulting firm and drilling company.

Through his consulting firm, John has worked with The Sentient Group since the mid 1990s, where his role includes ensuring that geological assessments are undertaken to the highest standards by qualified personnel, as well as initiating new exploration concepts.

The new management team’s immediate priority will be to conduct a comprehensive evaluation of the feasibility of the Yandera project. As part of this review, a full geological audit of the Yandera resource, and a program to identify potential higher grade, near surface prospects aimed at significantly improving resource economics, has also commenced. Marengo will continue to work very closely with the Government of Papua New Guinea, the Yandera community, and other relevant stakeholder groups.

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Flaws in Ramu NiCo pollution denial

The scientific analysis by experts at Cocoa Coconut Institute of PNG (CCIPNG) for Ramu NiCo on the alleged gas explosion at Basamuk, rather shows obvious flaws in their attempt to cover up what seems to be major gas pollution.

First of all, the scientific analysis was carried out several weeks after the initial alleged pollution from the explosion. Even the experts themselves admitted the evidence of pollution would have disappeared by then. It does not take an expert to point out the first compromise of their analysis.

Secondly, poor visual evidence was presented in the article, only showing a bunch of unidentified leaves and the faces of those experts. There was no proper visual display of proof by the experts.

Thirdly, experts stated that if the pollution was sulfuric acid, it would have destroyed the other crops as well. Below is a picture that was taken in Dein village recently after the explosion. It shows the yellowing of almost all vegetation in the area.


Is this not a possible indication of sulfuric acid leakage? Those experts have to question their 100% certainty on the taro blight.

Furthermore, these are sample pictures of the taro blight:


And these are pictures from a garden in Mindre near Basamuk, taken recently after the alleged gas leak:


It only requires common sense to know there is something wrong here, and people in authority are not speaking out on what is really going on. Unofficially, according to an inside source, “there are pressing environment non-compliance issues that need regress”.

Hence, the credibility of the expert analysis may be down to individual comprehension, but the obvious flaws cannot be denied. CCIPNG have to be honest on their analysis when reporting such matters because this is not about securing interests, it is about protecting peoples’ lives.

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Ramu mine denies pollution

Post Courier

ramumineRAMU NiCo Mine in Madang Province has denied allegations from nearby communities that smoke from the mine’s refinery is affecting their food crops like yam and taro.

In a statement last week, the miner said preliminary findings from a combined plant experts including Yak Namaliu, plant pathologist and Waike Yasinge, plant agronomist from Cocoa Coconut Institute of PNG (CCRIPNG) and Moses Moruba from food Crops and agriculture division of the Department of Agriculture and Livestock in Madang Province have confirmed that.

The findings said a common fungal disease called phytophtora or “taro blight” is the main cause withering taro leaves and affecting other garden food crops including yam and banana at Basamuk villages close to the Ramu NiCo owned Basamuk Refinery and not the alleged smoke from Ramu NiCo Refinery.

In a statement, Ramu NiCo said CCRIPNG is the public state entity mandated to carry out research on coconut and cocoa in PNG.

After a week of assessment on villages and food crops, the research team concluded that the crops were 100% affected by taro blight and not the alleged sulfuric gas from Basamuk Refinery.

“Taro blight is common during rainy or wet season. If it was sulfuric acid then banana and sugar canes, including other crops would be severely affected,” Mr. Namaliu said.

The team also denied a report by John Bivi from Madang Provincial Government’s Director of Mines that villagers in the Rai Coast District were affected by the alleged gas emission.

Bivi’s report alleged that thick fumes and smelt acid were reported in the Rai Coast villages, including impacts on human lives and garden crops.

“Bivi does not have the scientific data and lab analysis to prove that. He must be very careful,” the team warned. Ramu NiCo also categorically denies any pollution caused by Basamuk Refinery.

Mr. Namaliu said during their assessment, they discovered that most garden crops were healthy but those that showed signs of withering were due to either taro blight or black-cross which are common fungal diseases during the wet season.

“It is impossible that any damage been done by the sulfuric gas. It would even be deflated with no impact on plants as sulfur gas is common in the air and diluted fast,” Mr. Namiliu said.


Filed under Environmental impact, Papua New Guinea

Bougainvillean agriculture can finance independence

Since the earliest days of colonialism, foreign powers have learnt that the best way to prize the peoples’ resources from them, is to convince them that they a) are poor; and b)  need outsiders to help them ‘develop’. Worse still is when our own leaders, wrap up this fiction in their own speeches.

This sums up the Autonomous Bougainville Government, as it sends a travelling road show across Bougainville to inform people of how poor the island is, and the pressing need to invite Rio Tinto back for another crack at Panguna.

In the excerpt below from the documentary ‘Mining the Future’, James Rutana, a London trained economist, explains how Bougainvilleans can build a vibrant and independent economy, that could meet the needs of people and government, through sustainable forms of agriculture.

Why should we listen to him?. Here is what ANU scholar, Satish Chand said of James following a visit in 2010:

“The Rutanas provide hundred of jobs to people from the surrounding villages, and support many more indirectly.  James is a model farmer, and eager to share his knowledge with the community.  He is supplying seedlings to other growers, has lent space on his farm for cocoa research, and is willing to host aspiring growers on the farm to let them learn the ropes of the trade”.

Bougainvilleans helping Bougainvilleans, cultivating our own resources through our own sweat, to build a brighter and independent future, free from the criminals who plundered our island. That is a message we need hear more of!


Filed under Financial returns, Human rights, Papua New Guinea

Papua New Guinea Mining: Risk and Reward in the Land of the Unexpected

Mining opportunities abound despite harsh environment and political unpredictability.

Nathan Allen | Global Business Reports

Credit: Flickr/Tech. Sgt. Tony Tolley

Credit: Flickr/Tech. Sgt. Tony Tolley

Papua New Guinea is one of the mining industry’s last truly unexplored frontiers. Covered by steep, densely forested mountains, one of the country’s most remote communities remained completely unconnected to the outside world until the early 1990s when a chance encounter with a team of anthropologists catapulted them into the international media. Whilst it is increasingly unlikely that any further tribal groups continue to live on in total isolation, there is little doubt that the country’s rugged terrain still holds vast undiscovered mineral deposits. The country’s position on the collision zone between the continental crust of the Australian Plate to the south and the oceanic crust of the Pacific Plate to the north has led to the development of spectacular mineralization in almost every province. However, this same characteristic geology makes navigating certain parts of Papua New Guinea almost impossible, and so the country remains one of the most prospective countries in the world, and one of the most unknown.

Today PNG plays host to eight producing gold and copper mines and, since 2011, the Ramu NiCo nickel and cobalt mine, operated by the Chinese MCC. Australian gold miners Newcrest are the country’s most prolific operators, having operated the Lihir gold mine since 2010 and developed the Hidden Valley mine in joint venture with South African producers, Harmony. PNG has not been immune to the spiraling costs that have afflicted mines all over the world, but over the past 12 months most of the major operations have been successful in reining in operational costs to more reasonable levels.

As for the next wave of producers, the release of a major geological survey at the 2010 PDAC conference served to stimulate interest amongst junior explorers from around the world. However, this flurry of activity was short-lived as the predominantly optimistic climate of the global mining boom gave way to the current downturn. This trend has recently been reflected by the exit of several major players: over the past year, Barrick, BHP Billiton and Vale have all abandoned their exploration programs in the country, leaving some concern about the short-term potential for smaller companies to find development partners.

Nevertheless, Papua New Guinea still boasts a very healthy pipeline of advanced exploration projects now at the feasibility stage, which should enter construction within the next two to three years. It is estimated that by 2020, major mining projects could contribute to the economy in excess of $15 billion in capital expenditure alone. Whilst the vast majority of these investments will focus on the type of copper/gold porphyry deposits that have so far typified PNG’s mining industry, there is also great potential for diversification. Brisbane-based junior Mayur Resources has eschewed traditional exploration paths in favor of proving up their high-grade iron sands precint, which surrounds the Gulf of Papua. The company is also involved in early stage exploration for coal in the same region, and preliminary results suggest that the quality and scale of these deposits could rival those of neighboring Indonesia.

In spite of this encouraging news, working in PNG still presents numerous difficulties to both explorers and operators, including security risks and poor quality infrastructure. In the 2013 Fraser Institute Mining Survey, Papua New Guinea takes third place in the ranking of mining areas purely by mineral potential. However, when other factors are taken into account, the country plunges to 77th place out of a total of 96 nations surveyed.

Perhaps the most serious concern for new investors in PNG is the perceived high level of sovereign risk. After the 2012 general election that brought Prime Minister Peter O’Neill to power, it was hoped that a new climate of stability would descend over PNG politics, and to a certain extent this has proved to be the case. However, two key developments over the past year have brought consternation to the international community. The first is the state’s assumption of the Singapore-based PNG Sustainable Development Program’s (PNGSDP) equity in the Ok Tedi mine, effectively bringing the operation entirely under state control. Depending upon which side of the fence you sit, this either constitutes the expropriation of a foreign-owned asset or simply the redistribution of funds, which already belong to Papua New Guineans, amongst the mine-affected communities. The case is currently under international arbitration, and whilst it is difficult to predict what exactly the outcome will be, mine operators have asserted that there will be no impact on day-to-day activities at the mine. The second issue is the state’s failure to comply with a payment program by which they were contractually obliged to pay $118 million for 30% equity participation in Nautilus Minerals’ Solwara 1 deep-sea mining project. After arbitration ruled in favor of Nautilus, payment has still not been forthcoming and the original partnership agreement with the state has been terminated.

Whilst these developments are worrying, it is also important to point out that these two events have done little to stop on-going investments. Australian miner PanAust chose to proceed with the acquisition of Xstrata’s Frieda River assets, even after the takeover of PNG SDP, whilst in the oil and gas sphere ExxonMobil’s mammoth $19 billion LNG investment is forecast to come online ahead of schedule, proving that it is possible to deliver world class projects in PNG. New arrivals must be prepared to take risks and battle with a range of problems, however, for those that stay the course, the rewards can be immense.

This article was written as part of the research being conducted by GBR on Papua New Guinea’s mining industry for Engineering & Mining Journal, which will be published next December 2014. If you wish to contribute with your comments, please contact Pavlina Pavlova at ppavlova@gbreports.com.

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Autonomous Bougainville Government must denounce threats against mine landowners

Dansi Oearupeu

In 2013, ABG President John Momis assured Rio Tinto communities in the mine area supported the company’s return. Whether he believe this was actually true or not is anyone’s guess, but at least Momis was confident that the ABG, with help from the AusAID sales team, could win the communities over. The subsequent pitches have gone down like lead balloon, and the President is no closer to realising his vision, which may turn out to be a mirage.

Now a customary pincer-move is being used, or as they call it in the Hollywood films, good-cop, bad-cop. The good-cop is Lawrence Daveona and his utterly discredited and deeply unpopular landowners’ association. They are going around telling village people that BCL have agreed to pay bel kol – a traditional form of compensation. But they haven’t, not really. There is no admission of guilt on BCL’s part for the killing of thousands of innocent people. And the offer of K450,000 is an insult.

So the good cop routine is failing. Enter bad cop. ABG representatives are telling citizens that ‘the Panguna mine … [is] now owned by the people of Bougainville and not just the landowners as blood was spilled for this piece of land and these fighters must be compensated for the part they played to protect Panguna’.

In its haste to reopen the mine, the ABG is lighting a fire that may soon burn out of control. Threats are circulating, by a loud minority, that the people of Panguna must reopen the mine and pay compensation to the rest of Bougainville, or they will suffer the consequences.

But the ABG’s view, which this loud minority mimics, makes no sense. The war began, as they acknowledge, over the right of communities to protect their soil, and the birth right of future generations, from being vandalised by foreign corporations out to enrich their shareholders. It was also a war to liberate Bougainville from the casino mentality of Waigani, which sees bloated politicians place the nation’s natural resources on the roulette wheel so they can make a few million, while the foreigners take the rest; with barely a trickle making it through to the silent majority.

The ABG is now suggesting we honour the blood of those who fought for these two causes, by turning Bougainville into a casino, and vandalising the land and environment.

It would be laughable, were the ABG not playing such a dangerous game. If this blood-debt fiction starts to circulate, and communities outside the mine area feel they have been betrayed by the people of Panguna, things could get nasty, very quickly. The President needs to put a stop to this blood-debt talk by opposing it, loudly – otherwise, the loud minority will take his silence as approval.

He must tell his people, that if the landowners do not want the mine, this is a dignity and a right won through the spilling of blood, and it is one that the ABG will uphold as the custodian of the peace agreement and constitution. If it fails in this act, it is a government without legitimacy.

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Filed under Corruption, Environmental impact, Financial returns, Human rights, Papua New Guinea