Brazil Charges 21 People With Homicide in BHP Mining Dam Collapse

It is a shame PNG did not hold BHP mining executives similarly accountable over Ok Tedi and never seems to consider criminal charges in other cases of severe environmental damage

Last year’s failure of the Fundão dam released a torrent of sludge that washed away villages.

Last year’s failure of the Fundão dam released a torrent of sludge that washed away villages.

Current and former officials from Vale SA and BHP Billiton and joint venture Samarco Mineração named

Paul Kiernan | Wall Street Journal | October 20 2016

Brazilian federal prosecutors filed homicide charges Thursday against 21 people in connection with a catastrophic collapse of a mining dam last year that killed 19 people.

Those charged include current and former top executives of mining giants Vale SA and BHP Billiton Ltd. and their joint venture, Samarco Mineração SA. Among them are former Samarco Chief Executive Ricardo Vescovi, Vale’s current iron-ore director Peter Poppinga, and eight Vale and BHP representatives at Samarco.

The charges mark the end of a nearly year long criminal investigation into the Nov. 5, 2015, failure of Samarco’s Fundão tailings dam in southeast Brazil.

Believed to be the biggest disaster of its kind anywhere, the incident released a torrent of sludge that washed away villages, displaced hundreds of people and traveled more than 400 miles through southeast Brazil’s Rio Doce basin before reaching the Atlantic Ocean. Almost a year later, the river is still tainted a rusty red from sediment, its washed-out banks visible from the cruising altitude of commercial airliners.

Additional charges against the 21 individuals include the crimes of causing a flood, landslide and grave bodily harm. Vale, BHP and Samarco were also charged with 12 different kinds of environmental crimes. Employees of a consulting firm that performed periodic checkups on Fundão were charged with presenting false stability reports.

In an emailed statement, Samarco said it “refutes” the charges and said the prosecutors ignored defense statements that it presented over the course of the investigation, “which prove that the company had no prior knowledge of the risks to its structure.”

“Safety was always a priority in the management strategy of Samarco, which reiterates that it never reduced investments in this area,” the company added.

BHP Billiton said it “rejects outright the charges against the company and the affected individuals. We will defend the charges against the company, and fully support each of the affected individuals in their defense of the charges against them.”

Vale reaffirmed its “deep respect and total solidarity” with the disaster’s victims but said it “vehemently repudiates” the charges filed Thursday. It added that its representatives on Samarco’s board confirmed that they “were never informed by Samarco’s technical or leadership team of any irregularities that could have represented real or untreated risks to the dam, nor by any consultancy responsible for monitoring the structure.”

The individual defendants couldn’t be reached.

Some 400 miles of rivers in the Rio Doce basin were flooded with mud and heavy metals from the dam collapse. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

Some 400 miles of rivers in the Rio Doce basin were flooded with mud and heavy metals from the dam collapse. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

If convicted of “qualified homicide,” the individuals could face sentences of between 12 and 30 years in prison, prosecutors said, adding that Brazil has extradition agreements with most or all of the countries from which the suspects hail.

“[The victims] were killed by the violent passage of the tailings mud, they had their bodies thrown against other objects, such as pieces of wood, they had their bodies mutilated and…dispersed across an area of 110 kilometers,” federal prosecutor Eduardo Santos de Oliveira said at a press conference. “The motivation of the homicides was the excessive greed of the companies—Samarco, here charged, as well as its shareholders—in the name of profit.”

Potential penalties for Vale, BHP and Samarco range from payment of fines and funding of charitable programs to partial or total suspension of their activities. Prosecutors added that they requested damage payments for the victims, the amount of which remains to be determined.

A judge must accept the charges for a trial, which would take place before a jury, to begin.

In a report released in August, the companies presented a report on the factors that contributed to Fundão’s failure.

All three firms have apologized for the disaster and committed to a full remediation of the damage. But Brazilian courts rejected a March settlement signed by the companies and the government. Prosecutors are seeking to replace it with a civil lawsuit filed in May in which they sought 155 billion reais ($49 billion) in damages and compared the Samarco disaster to BP’s Deepwater Horizon oil spill in the Gulf of Mexico.

The prosecutors’ case hinges what they say is evidence that Samarco and its shareholders were aware of chronic structural problems at Fundão dating back to April 2009. They say Samarco’s board—made up of Vale and BHP officials—was informed of flaws in the dam but responded by pressuring the company to extract more iron ore.

Samarco’s board was also allegedly informed of the likely consequences of a dam failure, prosecutors said. Company risk managers allegedly had estimated as recently as 2015, according to prosecutors, that a collapse of Fundão could kill 20 people, stop Samarco’s operations for two years and deal a substantial blow to the mining companies’ reputations.

Surviving residents of the devastated community of Bento Rodrigues reported after the accident that they received no official warning from Samarco in the crucial minutes after the dam gave way.

“There were internal committees, operational committees, dam committees, in which the issues were discussed, and on those committees there were representatives of Vale and BHP,” prosecutor José Adércio Leite Sampaio said. “Based on the minutes, on what was debated in those minutes, on the documents that were presented at those meetings, we identified the list of people on the charge sheet.”

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$5.4 Billion Melanesian ocean economy in peril

Fish caught just outside the Marine Protected Area (MPA) area in Tikina Wai, Fiji. Photograph: Brent Stirton/1521

Fish caught just outside the Marine Protected Area (MPA) area in Tikina Wai, Fiji. Photograph: Brent Stirton/1521

The authors single out seabed mining for example as a potentially lucrative emerging industry in the short term, but one that could threaten marine life while providing little benefit to local communities

Johnny Langenheim | The Guardian | 19 October 2016

A new WWF report values Melanesia’s marine ecosystems at half a trillion dollars. But radical action is needed to maintain them.

That Melanesian Pacific island economies are heavily reliant on the ocean is hardly a surprise. But a new report by WWF has quantified the annual economic output from the region’s waters – what they term Gross Marine Product (GMP) – at $5.4 billion – a sum equivalent to the combined GDP of Fiji and the Solomon Islands.

The Reviving Melanesia’s Ocean Economy report was produced in partnership with the Boston Consulting Group (BCG) and the Global Change Institute (GCI) at the University of Queensland. It aims to highlight the need for urgent action to safeguard Melanesia’s marine resources in the face of threats like climate change, over-fishing and pollution.

Fisheries account for half of Melanesia’s marine-derived economic output according to the report. Projections suggest that by 2030 the region will need 60% more fish to feed its rapidly growing population – yet stocks are projected to decline not increase. Since most coastal fishing in Melanesia is subsistence based, there is the very real prospect of a nutritional shortfall that will affect millions of people.

“There is no doubt the ocean has delivered the majority of food, livelihoods and economic activity for Melanesia for a very long time,” says the report’s lead author Ove Hoegh Guldberg of the Global Change Institute, University of Queensland. “Given some of the troubling trends in the status of the ecosystems that generate these benefits, however, the question is now: how long will these benefits last?”

The data on negative impacts is alarming. Natural assets from coral reefs to mangroves to sea grass meadows are all under intense pressure. 57% of reefs in the South Pacific face medium to high level threats from human impacts, while ocean warming and acidification could see them disappearing altogether by 2050. Mangroves that provide a host of services including protection from storms, are being cleared to make way for coastal development. Rates of sea level rise are three to four times higher in Melanesia than the global average and already some populations are preparing to evacuate their island homes.

By conflating ecosystem with economy, the report not only quantifies Melanesia’s ocean assets (a ‘shared wealth fund’ worth half a trillion dollars based on what the authors describe as conservative estimates), but suggests those assets are being squandered. It also warns that future investments should be considered carefully. The authors single out seabed mining for example as a potentially lucrative emerging industry in the short term, but one that could threaten marine life while providing little benefit to local communities.

“With this analysis, no one can be in any doubt about the importance of carefully managing the ocean assets that underpin so much of the Melanesian economy,” says Marty Schmit of BCG. “A prudent economic approach would see strong conservation actions rolled out across Melanesia to secure its natural assets.”

That means applying the principles of a blue economy -one that sustains the ocean’s natural capital while providing long term social and economic benefits. Practical measures include establishing more marine protected areas, improving fisheries practices, slowing climate change and investing in education and gender equality.

According to Kesaia Tabunakawai, WWF’s Pacific Representative, the region’s political leaders need to act urgently and comprehensively to prevent a crisis. “We have seen good commitments in the past but the objective analysis shows that we are running out of time and need action at a much greater scale and urgency if Melanesia is to have a healthy and prosperous future.”

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Mining industry to meet in Sydney to plan further exploitation of PNG resources


Frieda river mine camp

Papua New Guinea’s resources sector still has some ‘bright stars’, says Anderson

David James | Business Advantage | 19 October 2016

Times are undoubtedly tough in Papua New Guinea’s mining and petroleum sector, but as the industry prepares for its biennial conference in Sydney in December, the PNG Chamber of Mines and Petroleum’s Greg Anderson tells Business Advantage PNG there are still ‘bright stars’ to get excited about.

In spite of encouraging rallies this year from gold and silver, global prices for mineral commodities remain  low. PNG’s mining and petroleum industry is not alone in feeling the effects.

Profits are down worldwide and exploration activity is at a low ebb.

But experienced hands like Greg Anderson, Executive Director of the PNG Chamber of Mines and Petroleum, understand that the industry is cyclical in nature and that the preparatory work that will create the next upturn is already underway.

‘There are still some bright stars, in spite of the global situation,’ he tells Business Advantage PNG.

Anderson and his team at the Chamber are preparing for the 14th Papua New Guinea Mining and Petroleum Investment Conference, set to be held at the Hilton Hotel in Sydney from 5 to 7 December.

The biennial event, the industry’s major gathering, will provide a comprehensive overview of these positive developments, as well as providing updates on PNG’s many existing resource projects, including the ExxonMobil-led PNG LNG project.

More LNG to come

Anderson believes the takeover by ExxonMobil of InterOil (finally approved by a US court in the last week in September) will clear the way for greater synergies between the existing PNG LNG project and the Papua LNG project, the country’s second planned LNG development in which InterOil had a significant stake.

He expects ExxonMobil and France’s Total SA, which is the designated operator of Papua LNG, to optimise the project.

‘Papua LNG is expected to be in the lower cost quartile of LNG projects around the world,’ he observes, indicating that prospects for financing of the second LNG project are positive.

In addition to this, ExxonMobil’s promising efforts to develop the P’nyang gas field in Western Province could well underpin the opening of a third train at its LNG plant outside Port Moresby. That would be a significant expansion for a project already beating production targets.

Mining progress

‘The highly promising Frieda River and Wafi-Golpu copper-gold projects continue to make significant progress towards commencement,’ notes Anderson.

PanAust, the developer of the Frieda River project, applied for its mining lease in late June, less than a year after being acquired by Chinese provincial investment fund, Guangdong Rising Assets Management.

Newcrest Mining and joint venture partner Harmony Gold are not far behind, having applied for a special mining lease for Wafi-Golpu only last month.

Nor has exploration activity altogether stalled in PNG.

Harmony Gold, which only this month ramped up its presence in PNG by acquiring joint venture partner Newcrest’s 50% share of the Hidden Valley gold mine, is getting exciting results from its Kili Teke prospect in Hela Province. Latest estimates suggest a resource of some 1.2 million ounces of gold and half a million tonnes of copper.

Meanwhile, Anglo American and Highlands Pacific are continuing exploration activity in their joint venture in the Star Mountains in West Sepik Province, north of the Ok Tedi copper-gold mine. 

New Act

If there’s one key issue outstanding for miners, it is the proposed new Mining Act. Despite a lengthy drafting process, industry still has many major outstanding issues with the current draft.

Anderson says what PNG needs is ‘a continuation of our successful internationally competitive and stable legal, fiscal and regulatory regime so that benefits such as royalties, employment, education and training among others are maintained and that there is continuous growth in both the mining and petroleum sectors.’

The 14th Papua New Guinea Mining and Petroleum Investment Conference will be held at the Hilton Hotel, Sydney from 5 to 7 December. 

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‘Old Panguna mine site is a tourism gold mine’

panguna mine pit

Post Courier

SOUTH Bougainville MP, Timothy Masiu says the old Panguna mine site is a tourism gold mine.

It can become the gold mine for the Bougainville region if it is developed as a tourism attraction, he said.

“Rather than talking about re-opening the mine, I am saying let us turn the old mine site into a major tourism attraction by building the necessary infrastructure. Tourism in Panguna is our new gold mine.

“There are a lot of former foreign employees of Panguna mine who would want to revisit the mine site with their children.Yes, there may be law and order issues but let us build around it. It is a problem experienced everywhere in the world so that should not stop us.”

Mr Masiu outlined his dream for the former gold mine while acknowledging and supporting plans by the Siwai District Tourism Association to develop tourism in the district.

Like-minded business individuals in the Siwai district which is in South Bougainville electorate have formed the association as the first step towards developing the tourism venture.

On Friday last week, association secretary Peter Siunaiheld an impromptu meeting with the Member and outlined the association’s ambitions.

He told the leader the association has set a timetable within which to work and achieve certain targetsbut needed a good business structure (plan).

He said the association has identified tourism products and needed support to develop attractive and viable tour packages.

Mr Siunai spoke passionately about the huge tourism potential which include abundant war relics and tracks, bush tracking, bird watching, cultural activities and traditions, and surfing at Mamagota beach.

Member Masiu told Mr Siunai that he would assist to get the association registered with the Tourism Promotion Authority.

He encouraged the association to develop affordable tour packages and establish a local tourism network.


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Concern over Fiji river mining


Felix Chaudhary | The Fiji Times | October 18, 2016

DESPITE assurances by the parent company of a mining project near the mouth of the Sigatoka River that environment impacts would be minimal, some residents remain concerned.

Robert Kennedy, a member of the Western Division development committee said people needed to understand all the implications of the proposed project by Magma Mines Ltd, a subsidiary of Australian company, Dome Gold Mines.

“I was there when this iron-sand mining project was first suggested and I had expressed reservations because of the possible implications to tourism properties and historical sites,” he said.

Mr Kennedy is also the owner and operator of Sandy Beach Cottages at Korotogo near Sigatoka.

“My understanding is that once the heavy minerals are taken out of the sand, the residual sand becomes lighter and it will float and affect reef area and coral around the river mouth and out to sea.”

Magma Mines Ltd also plans to conduct drilling work on Korura Island near the mouth of the Sigatoka River.

Mr Kennedy said the island was considered historically significant because of the number of prominent citizens who were buried there.

“These are some of the early Europeans and other people who contributed significantly to the establishment and development of Sigatoka and it would be a real shame if mining work is allowed on the island.

“I would urge all the authorities concerned and the people of Sigatoka to reconsider allowing mining of the river because of the impact on the environment and also on historic Korura Island.”

Mineral Resources director Raijeli Taga said the Department of Environment had given the project the go-ahead after completion of the environment impact assessment carried out by an independent organisation.

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Ramu mine still operating below capacity and making ‘great’ losses

MCC's tax free Ramu mine headquarters in Madang

After four years of production, the Ramu mine is STILL not operating at full capacity and is making “great” losses – despite the upbeat PR from MCC…

MCC sets new production record
The National aka The Loggers Times | October 17, 2016
THE exportable mixed hydroxide precipitate output from the Ramu NiCo project in Madang set a record last month – a production capacity of 95.2 per cent.
According to operator Ramu NiCo ManagementMCCLtd, the achievement sets a new record since the project load commission in December 2012.
The company in a statement said total production was 7100.49 tonnes.
Metal nickel was 2637.87 tonnes while metal cobalt was 264.45 tonnes.
The company reported that based on the working principle of “stabilise and improve production” and subtle management at the Kurumbukari (KBK) mine and Basamuk refinery.
Both successfully completed their monthly target with production cost at both sites greatly reduced.
However, the company still recorded a great loss due to the low nickel price and high operational cost.
The company had taken measures to control operational costs including reducing bulk materials.
“The Ramu NiCo management team had set up the operational principle of compliance in safety, operation at high efficiency, processing at stable and proper maintenance for both KBK mine and Basamuk refinery for the remainder of 2016 to reduce deficit.”
MCC manages the Ramu Nickel project on behalf of the Ramu Nickel Joint Venture.
The project boasts a total reserve of 140 million tons of nickel including over 78 million tons that are proven and mineable. It employs integrated processes including mining, concentration and refining.

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Benefit sharing remains a great challenge


Cyril Gare | PNG Blogs | 17 October 2016

Resource development, ownership, and fair and equal sharing of benefits accrued from development projects such as mining and oil and gas remain a biggest challenge yet for Papua New Guinea 41 years on as an Independent country.

And the people of Londolovit on Lihir island, New Ireland province are among one such group of resource owners who are still searching for a correct matrix to balance the scale.

They own the traditional Londolovit river where Newcrest Mining Limited (NML) operator of the Lihir Gold Limited (LGL) extracts water for its operations since 1995.

Their fight is three fold between LMALA (Lihir Mining Area Landowners Association) who are owners of the “gold”, LGL, and State.

Their issues have been to:

  • get LMALA to acknowledge them as “water” resource owners and remit adequate benefit as possible under the Integrated Benefit Package (IBP) of the Lihir mine Agreement which stand is justified on the premise that water is fundamental in gold processing without water there will be no gold;
  • LGL to acknowledge and sign a new water use and impact agreement with them as the current water impact agreement was obsolete since it was first created in 1998 and does not include payment for water use except environment impact; and
  • State to acknowledge them as original and traditional owners of the Londolovit river and not State as stipulated in the Environment Act 2000 so that State to create a separate facility (trust account) for them to share with State all monies paid to State by LGL as issuer of water permit and “owner” (in their stead) of Londolovit river. 

It has been four years since the search for answers began. Delegation after delegation and costly trips between Lihir and Port Moresby were taken only to become a “football” kicked here and there between MRA (Mineral Resources Authority) and CEPA (Conservation and Environment Protection Authority) each shrugging off liability and responsibility alike over the Londolovit water resource owners’ issue.

It was in February this year after LGL refused to become a party in a new proposed Londolovit river water use and impact agreement that prompted the Office of the Chief Secretary Isaac Lupari (Office of the Prime Minister and National Executive Council) to show some sign of interest and intervention.

Directions were issued to CEPA to re-look at the issues of the Londolovit community. This also prompted the Minister for Environment, Conservation and Climate, Hon. John Pundari to intervene and getting CEPA off its comfort zone at the Beemobile building at Gordons.

LGL had refused to become a party to sign on a new proposed water use and impact agreement that will supersede the obsolete Supplementary Agreement of 1998 which only cater for a minimal payment of K300,000 per annum for environment impacts on their traditional Londolovit river where LGL has a weir which extracts water for its mining operations.

The creation of the Londolovit Sagomana Association (LSA) through the Investment Promotion Authority (IPA) on 16th February, 2016 was a breath of relief and new lease of energy and confidence to further pursue their long standing water fight.

On the 09th September, 2016, LSA Chairperson, Ms. Roselyne Arau led a small delegation to Port Moresby and held talk with Minister Pundari.

Among others, the K113 million claim against LGL for water extraction “over and above” permitted rates were discussed. Failure by State (CEPA) to effectively regulate and monitor water extraction by LGL according to the conditions of the water permit was also discussed with the view for State to admit liability for negligence.

The good Minister agreed to look into these outstanding issues and sort these issues before Christmas out once and for all. Prior to doing so, he arranged for an advance team led by CEPA’s Deputy Managing Director, Mr. Dilu Muguwa to travel to Lihir for fact finding and for a report to be presented to him within two weeks.

The advance team travelled to Lihir on October 11, met with LSA on October 12 and went through a total of nine (9) terms of references (OR) set by Environment Ministry and returned to Port Moresby on October 13.

As a State Team comprising officers from State Solicitor, MRA, CEPA, and department of PM and NEC is set to follow suit on October 24, the people of Londolovit were grateful of Minister Pundari and Chief Secretary, Ambassador Isaac Lupari for their interventions and are hoping for better soon.

In its six page written submission to CEPA’s advance team, LSA stated among other issues and demands that: “Water and Gold are two different resources. Under the existing benefit sharing arrangements such as the Integrated Benefit Package (IBP) only “gold” resource owners through LMALA tend to enjoy all the benefits compared to “water” resource owners and rest of the impacted surrounding communities on Lihir island. Although water remains the single most important resource needed to process gold, this fact has been long overlooked since the start of the mine in 1995/1997.

“The IBP is subject to jurisdiction of the LMALA management which experience so far has proven that LMALA was only bias and lack the virtue of ‘equal and fair sharing’ of benefits to the water supplying community of Londolovit and or other impacted surrounding communities. Perhaps this is to do with the mineral resource development regime in the country where “gold” resource owners are given more recognition by State and developers than “water” resource owners in mining activity areas in PNG.

“Poor management resulting in recent investigations (Business Audit) into the affairs of LMALA can only further confirm the general feeling of mistrust for LMALA management and its executives among the impacted communities on Lihir island.

“What we want:  The formation of the Londolovit Sagomana Association (LSA) which was registered with the Investment Promotion Authority on the 16th February, 2016 was an affirmation for succession away from the umbrella of LMALA who has failed to adequately stand for and in the interest of the Londolovit water resource owners since 1997.

Among others, LSA’s principal objectives in the Association’s Constitution are simply straight to the point: 

  • to conduct, encourage, promote, advance and administer development aspirations of the Londolovit people from the proceeds of Londolovit River Weir where the Lihir Gold Limited (LGL) is extracting water from for its mine operations; and 
  • to act, at all times, on behalf of and in the interest of the Members and the Association as a mining impact community. 
  • In a letter dated 14th March, 2016 to Coordinator of the Lihir Agreement Review (LAR) committee, LSA blatantly stated: “We intend to pursue our own interest as “water” resource owners in the Lihir gold project for a separate benefit package of our own. We want to have nothing to do with LMALA and the LAR process. 
  • LMALA and LGL to honour all outstanding benefits owed to Londolovit under IBP. 
  • MRA (Mining Warden) and LGL to review and honour all outstanding benefits/compensation owed to Londolovit under LMP 34 and ME 73 tenements. 
  • Option A – State to create a trust account where payments receive from LGL for the “use” of water is shared with Londolovit as traditional (original) owners of the water. The metamorphosis ‘State’ is supposed to be “custodian” to properties of traditional and customary landowners and not itself “owner”. The sacrosanctity of customary/traditional properties rights is in this way lost and stolen by this beast forever. 
  • Option B – State to intervene and impose on the LGL to review its decision why it refused to become a party to the new proposed water agreement by LSA (Londolovit). This proposed water agreement stemmed from Recommendation # 4 of the CEPA sanctioned Londolovit River Environmental Audit Report –August 2015 by Moroka Pty Ltd. 
  • Option C – All State, LGL and LSA to become parties to an all new proposed water agreement over the Londolovit river for its use, impact, and benefit sharing with the view to reaching a long lasting win win situation for all parties in future. 
  • State and LGL to resolve to an amicable outcome and pay K113 million as compensation to the Londolovit people for over extraction of their water illegally.
  • LMALA and LGL to honour all outstanding benefits owed to Londolovit under IBP. 
  • Copy of the Business Development Audit Report be provided to us forthwith for perusal and record.
  • Until Londolovit is more involved and participating from the benefits from the Lihir mining operation Lihir Agreement Review (LAR) is insignificant to the Londolovit water resource owners at its current stage. 

At the time of meeting (October 12) in Lihir, the LAR process attended by a State Team, LMALA, and LGL was in progress in Kavieng without LSA attendance after request by LAR coordination team was turned down.

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