Tag Archives: AXF Group

Can the Solomon Islands’ Gold Ridge Mine serve as a new model for resource extraction in the South Pacific?

The coastline view near the capital, Honiara. Photo by Paul Hilton/Greenpeace.

Catherine Wilson | Mongabay | 15 November 2017

  • After 17 years of foreign ownership and a checkered environmental history, the Solomon Islands’ Gold Ridge mine is now being led by a local landowner-driven joint venture.
  • The company saw its first major test in April 2016, when rainfall triggered a spillover from the mine’s tailing dam. However, independent tests found the water quality downstream remained safe.
  • Though concerns still remain, the new ownership structure could be a model for mining operations elsewhere in the region.

In April 2016, thousands of villagers living in the vicinity of the Gold Ridge Mine in the southwest Pacific nation of the Solomon Islands braced themselves for a major disaster as torrential rainfall triggered a spillover of thousands of cubic meters of untreated water from the mine’s tailings dam.

The Ministry of Health issued instructions to people to cease using water from the nearby Kwara, Tinahula and Matepono rivers for drinking, washing or fishing, due to possible risk of chemical contamination.

The gold mine is situated on the country’s main island of Guadalcanal, 40 kilometers (25 miles) from the capital, Honiara.

Stanley Holmes Vutiande, who lives in Navola village, located along the Gold Ridge Road leading to the mine and 2 kilometers (1.2 miles) from the dam, remembered when it happened.

“We fled because there was water overflowing from the dam and we thought it might burst, so people just panicked and took off,” he recounted. “There was general information to look for safety, for higher ground, but no specific instructions as to what to do.”

Joe Horokou, the environment and conservation director at the Ministry of Environment, said the incident “was bad because it took us by surprise,” even though the company had been given approval to discharge tailings from the dam. “The approval was given with conditions like before it is discharged the water has to be treated to acceptable standards.”

Despite the dire warning, the expected disaster didn’t materialize. The dam held, and stakeholders, including Gold Ridge Mining and the ministries of environment and health, commissioned numerous independent tests of nearby rivers and streams.

“Based on the findings of those analyses we were able to determine that, even if the water was discharged untreated at the time, it caused no immediate harm to the downstream communities … the water quality was safe within the dam,” Horokou said.

Vutiande also said that, at the time, he noticed nothing of concern in the water quality of the Tinahula River near Navola.

A palm oil plantation in the Solomon Islands. The land used to be grassland and bush. Photo by Lorette Dorreboom/Greenpeace.

The incident was the first major test for the new landowner-led company, Gold Ridge Community Investment, which had taken ownership of the mine only the year before. After 17 years of foreign ownership and a checkered environmental history, the Gold Ridge mine is now being led by a local landowner-driven joint venture that is emerging as a potential new mine management model in the Pacific Islands region.

In 2015, Gold Ridge was sold for 100 million Australian dollars ($73.8 million at the time) to Gold Ridge Community Investment (now Gold Ridge Mining), by its Australian owner, St. Barbara. The company decided to abandon the mine, which contains an estimated 3.18 million ounces of gold, in the wake of extensive damage caused by Cyclone Ita and flooding the previous year.

The mine hasn’t been operational since, but following the signing of an agreement with Australia-based AXF Resources, which will provide the majority of investment, plans are now in place to resume extraction by the end of next year.

Walton Naezon, chairman of the landowner-led Gold Ridge Mining, said he is now keen to both reduce any risk the tailings facility poses to the surrounding environment and communities, and to increase public transparency of the company’s environmental processes. The top priority, he said, is dewatering, or emptying out the dam to ease pressure on its wall and decrease the chance of any further overflows.

Naezon spoke to Mongabay about implementing his vision of an extractive project where local communities are part of the corporate structure. About 3,000 to 5,000 people live in villages surrounding the mine, and traditional landowners own 30 percent of the company. They have already participated in making key decisions, such as the selection of an independent environmental consultant. They also observe operations at the tailings dam and take part in the company’s environmental testing and monitoring of nearby rivers and streams.

Larger than life in a blue Pacific print shirt, Naezon is bullish in his drive and optimism about the enterprise when we meet in a Honiara hotel. But he also comes across as astute, widely informed about the industry and its issues, and attuned to the sensibility and needs of his own people. No doubt this is a product of his previous career in politics, as well as skills and grasp of the cultural context as a traditional leader. He was minister of mining and energy from 1997 to 2001, minister for state government until 2003, and minister for commerce for another two years.

Naezon is visibly relaxed about the attention given the mining industry worldwide by what he refers to as the “greens” movement, commenting that it “makes the developer and company stronger.”

The revived Gold Ridge venture, at this stage, comes across as more than ticking the right boxes in order to be assessed a responsible corporate citizen. There is evidence of an attitudinal shift, a genuine motivation to alter the structure of power, participation and accountability.

The Gold Ridge Mine tailings dam in Guadalcanal Province, Solomon Islands. Photo by Catherine Wilson for Mongabay.

Community Involvement

As I stood in the water treatment plant at the edge of the vast blue expanse of the dam, reflecting the brilliant tropical sun, Gaheris Porowai, the supervisor, readily answered questions. He said that we were looking at 1 million to 2 million cubic meters (264 million to 528 million gallons) of water, with the water level currently 1.5 meters (5 feet) below the spillway. Treated water was being discharged, as permitted, at 500 cubic meters (132,086 gallons) per hour or 12,000 cubic meters (3.17 million gallons) per day, with water testing conducted twice weekly.

This will be done persistently, Naezon said, until the dam is empty.

“There should be no water there. In the next two years, no water, we don’t want to see water there,” Naezon said emphatically, adding that Golder Associates, the company responsible for the dam’s construction has also been reengaged to review its current state and potential future.

Phil Fairweather, Gold Ridge’s general manager, said that he and many other people had been attracted to the venture by the vision of building an enterprise on greater transparency, community inclusion and social and environmental sustainability.

“Any dewatering that is happening at the moment, for example, involves the communities,” Fairweather said. “It actually involves unqualified community people coming and observing the testing, coming and being involved in community awareness prior to any discharge and during.”

Local village chiefs, landowners and students are all invited to visit the tailings dam to learn about the water treatment process and witness its discharge.

“We want to see the mine open, but the health and safety and environmental responsibility is an utmost priority to us,” said Robert Rafaniello, the company’s deputy CEO. “And that is why as we lower the water, we will do more investigations into the stability of the dam, assess it. Does it need any strengthening to future-proof it for any other unknown event? Do we use the tailings dam in its current form, do we look at alternatives?”

Tropical forest, Vella Lavella, Solomon Islands. Forests cover more than three quarters of the country’s land area, but illegal logging remains a serious problem. Photo by Lorette Dorreboom/Greenpeace.

In hindsight, the lack of continuity in the mine’s foreign corporate ownership since the late 1990s — and intermittent periods of closure resulting in inconsistent environmental practices — can be seen as factors in the problems being experienced today.

The start of mining in 1998, by the Australian company Ross Mining, coincided with the stirrings of civil unrest. The mine was forced to close a mere two years later when the violence escalated. While a peace agreement was achieved in 2003, Gold Ridge didn’t reopen until 2010 after acquisition by Allied Gold. The venture changed hands again in 2012, this time to St. Barbara. Then, in April 2014, calamity struck when a cyclone and torrential rain caused massive flooding that damaged mine infrastructure, raising concerns about the stability of the tailings dam and forcing a second shutdown. Losses and damages at the mine amounted to $27.7 million, 26 percent of the total economic impact of the disaster on the country.

Soon after, St. Barbara decided to exit the country, selling the mine and its legal liability to Gold Ridge Community Investment the following year, while the Solomon Islands government declared the site a disaster zone.

A model for the region?

The Solomon Islands is not the only Pacific Island state to experience environmental problems in the mining industry.

Natural and mineral resource extraction has, over decades, generated major revenues in a number of other countries in the region, such as Papua New Guinea and Nauru, while many more are now considering the lucrative potential of deep-sea mineral extraction. But in both island states the extractive industries have been plagued by environmental disasters. Both have failed to achieve environmental sustainability, and the economic windfalls have not led to substantial improvements in human development.

Glaring examples include the Panguna copper mine in Bougainville, Papua New Guinea, where the fallout from the destruction of land and waterways nearly 30 years ago remains unaddressed; as well as the OK Tedi copper and gold mine in the country’s Western Province, where massive discharge of mine waste into local river systems since the mid-1980s decimated fish and animal species and contaminated water sources and farmland. In the tiny state of Nauru, aggressive phosphate extraction has ravaged 80 percent of the country’s landscape.

In the Solomon Islands, the government is looking to mining as the next big revenue earner as it faces the challenges of post-conflict economic recovery and the exhaustion of commercial forestry after decades of unsustainable logging. The country is known to have significant mineral resources, including gold, silver, nickel and lead.

“The Gold Ridge mine reopening is very important for the government and Solomon Islands as it contributes significantly to the economy,” a spokesperson for the Ministry of Mines, Energy and Rural Electrification told Mongabay.

Nevertheless, the economic, social and environmental success of mining ventures over the next generation depends on not repeating the problems of the past.

A 2013 UNDP symposium on managing extractive industries in Pacific Island states highlighted some of the steps needed to overcome the hurdles. These include conducting better consultations with stakeholders and communities, developing a more complex understanding of customary land tenure, improving the transparency of political processes and revenue management, and achieving greater commitment to environmental protection, over and above the basic requirement of developers producing environmental impact assessments.

Expert observers have also expressed concerns about the influence of corruption and limited capacity of the government to manage the demands of regulating and overseeing mining activities.

Logging road in a deforested area in Vangunu Island. Photo by Paul Hilton/Greenpeace.

“Too close an identification of political leaders with resource extraction companies has not served Solomon Islands well,” Graham Baines of the Bergen Pacific Studies Research Group has written (pdf). “The chance to build an economy based on sustainable timber production has been lost. And just as government institutions have been shown to be ineffective in controlling logging abuses, so, too, their role in guiding and controlling mining is weak and compromised.”

Recently the government has tried to address some of these issues with the launch of a new National Minerals Policy (2017-2021). It aims to guide reformed financial practices, industry oversight, and procedures for tailings management, corporate environmental audits, biodiversity management and the mitigation of deforestation and soil erosion.

“With the policy now launched, the ministry is working closely with the World Bank to begin implementing the policy, and this process is already under way, focusing mainly on the regulatory framework,” the Ministry of Mines spokesperson confirmed. This includes reviewing resource and manpower capacity and rolling out public outreach and awareness of the new policy.

Progress in these areas is vital to turning around the suspension of the Solomon Islands by the Extractive Industries Transparency Initiative (EITI), which in March of this year sanctioned the country due to assessed deficiencies in areas including licensing procedures, monitoring and control of production, and revenue distribution.

The revival of the Gold Ridge mine will bear witness to how much progress the government has been able to make in the short term.

In May, the government and company began consultations with landowners about the mine’s proposed reopening next year, seeking to address issues such as royalties and environmental impact.

There is evidence, though, that not everyone is satisfied and local environmental concerns persist.

Vutiande said that in Navola, “the water system was always a long-term concern since the opening [of the mine] by the previous companies. The water issue is an ongoing issue. There were a few times when there were people who found things that have died in the river, such as fish and frogs.”

Despite the company’s stated commitment to transparency, Gold Ridge Mining remains tight-lipped while it considers the range of options for dealing with mine waste. The decision as to whether the dam will continue to be used is still to be made, and the government is still awaiting the environmental management plan.

The contents of these will be the first step in translating the new Gold Ridge vision into reality and establishing, or debunking, its standing as a model for the rest of the region.

Advertisements

Leave a comment

Filed under Environmental impact, Financial returns, Human rights, Solomon Islands

Gold Ridge to restart within 18 months

Solomon Star | 11 August 2017

AXF Gold Ridge Pty Ltd of Australia says it has secured additional investor funding to start the immediate recommissioning of the Gold Ridge Mine Project.

“This investment will see mine production on track to start within 18 months,” a statement issued by the company on Wednesday stated.

“In an unprecedented partnership arrangement, Gold Ridge Community Investment Ltd (GCIL), which comprised the local land owners, owns 10% of Gold Ridge Mining Limited,” the statement added.

AXF Gold Ridge holds the balance of 90%.

The statement said additional capital and technical expertise from the Hong Kong publicly listed new shareholder Wanguo International Mining Group strengthens AXF Gold Ridge.

“New capital will help the Gold Ridge Mine Project reach its full potential.

“Wanguo International Mining Group led by Mingqing Gao has provided technical expertise to the Gold Ridge Mine Project for the past year.

“The strength of the partnership between landowners and AXF Resources, combined with the support from the government, has given Wanguo the confidence to commit as an investor to this project.”

Gold Ridge Mine’s principal landowners and community leaders confirmed their continued full support and commitment to the project during consultation.

Landowners agreed that by working together, the recommissioned Gold Ridge Mine would achieve new heights (Yu mi tugeda bae mekem Gold Ridge mine waka gud).

Richard Gu, Managing Director of the AXF Group and Director of AXF Gold Ridge Pty Limited, said:

“I feel humbled and proud that the project has reached this stage.

“I look forward to a long and fruitful development partnership with Gold Ridge Mine landowners, our investor, and the people and government of the Solomon Islands”.

Senior executives from AXF Gold Ridge including Chairman-elect Mingqing Gao, Richard Gu, and Dr Shaun Ren visited the Solomon Islands this week to celebrate the milestone with landowners and government officials.

At a meeting with Prime Minister Manasseh Sogavare, chairman-elect Mr Gao reinforced:

“The reopening of the Gold Ridge Mine will send a strong message to the investment community that the Solomon Islands is open for responsible and transparent mining business”.

Over the next 18 months, the come said the Gold Ridge mine site will undergo a complete refurbishment with infrastructure upgrades to improve site access and the construction of a new power station.

“An independent review of the tailings storage facility will be commissioned to minimise risk to local communities.

“Community relations activities will ramp up with one of the priorities the establishment of socially inclusive engagement mechanisms with landowners and local communities.”

Leave a comment

Filed under Environmental impact, Financial returns, Mine construction

Solomons landowners discuss concerns on reopening gold mine

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen – ANU

Landowners on Guadalcanal in Solomon Islands have been consulted about the proposed reopening of the Gold Ridge gold mine.

The mine was closed in 2014 after massive floods and its ownership was then transferred from the Australian owner St Barbara to a local land-owning company Guadalcanal Community Investments Ltd.

Guadalcanal Community Investments Ltd is now working with Chinese-owned Australian property developer AXF Group which plans to have the mine operational by the end of 2018.

Bringing the gold mine back to life is also a major policy objective of the government which says it wants to do it right.

Members of landowning communities discussed a range of issues with government officials and company representatives relating to royalties, security, environmental impact, revenue sharing and the relocation of people.

They were assured by both the government and the company that their concerns would be taken onboard and addressed to ensure a smooth reopening.

Leave a comment

Filed under Financial returns, Mine construction, Solomon Islands

Solomon Islands govt signs agreement to restore mining lease

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo:  Dr Matthew Allen – ANU

Radio NZ | 9 March 2017

The Solomon Islands government has withdrawn last year’s cancellation of the mining licence for Gold Ridge Mining Ltd.

This effectively restarts efforts by landowners and the new majority shareholder, Chinese-owned Australian property developer AXF Group, to re-open the Guadalcanal mine.

In a statement the chairman of the cabinet sub-committee on Gold Ridge said the minister cancelled the mining lease because he felt the previous owner St Barbara’s sudden departure breach of the Mines and Minerals Act, and the Mining Agreement.

The miner’s departure from Gold Ridge followed complications around flash floods in April 2014, which compromised the mine’s tailings dam and impeded access to the mine.

St Barbara however, has repeatedly denied abandoning the mine.

It stands by its transfer of ownership, via the sale at a nominal amount, to local landowning company Gold Ridge Community Investments Ltd.

The Australian miner also denied claims by GCIL following the sale that it had saddled the local landowner company with all the environmental liability of the closed mine.

Following the signing of the agreement with government to restore the mining licence, GCIL’s chairperson, Walton Naezon, said landowners would be working closely with their chosen investor and the government to restore the mine to profitability.

Leave a comment

Filed under Mine construction, Solomon Islands

Solomon Islands mine begins long road back to production

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen - Australian National University

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen – Australian National University

The new owners of the Gold Ridge gold mine in Solomon Islands plan to begin reconstruction of the closed mine within the fortnight.

Radio New Zealand | 27 February 2017

Rehabilitating the mine, which was abandoned by its last owner St Barbara in April 2014 after massive flooding, is a major task which includes the reconstruction of washed out roads and bridges to restore access to the mine.

However, work has been delayed by a falling out between the ministry of mines and the minority shareholding landowners company, Guadalcanal Community Investments Ltd.

Its chairperson, Walter Naezon, said this resulted in the mines minister cancelling their mining lease last year.

“We actually looked at this and [we] understand that the land was held by the land owner, the PE [Perpetual Estate Title] of the land, so how can he cancel the mining lease. You can do that with a foreign company but since the landowners took over 100 percent of the mine I don’t think you can cancel it. So those are the misunderstandings. We have settled that.”

Mr Naezon said it had taken several months but the dispute has now been resolved and the majority shareholder, Chinese-owned Australian company AXF Group is expected to begin rehabilitating the mine within the fortnight.

Leave a comment

Filed under Mine construction, Solomon Islands

Solomon Islands Government pushes for controversial Gold Ridge mine to reopen

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands' capital, Honiara. (Concrete Evidence, file)

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands’ capital, Honiara. (Concrete Evidence, file)

Richard Ewart, Bindi Bryce | ABC News | 31 January 2017

The Solomon Islands Government says it is planning to reopen the gold mine that was sold to local landowners by an Australian miner in 2015 for $100.

Key points:

  • The only gold mine in Solomon Islands has been closed since 2014 amid environmental concerns
  • Gold Ridge mine is owned by a local landholder group which supports its rehabilitation
  • A Chinese property investment company says it has invested in the mine

Mining company St Barbara controversially sold its legal liability in the mine to local landowner company Goldridge Community Investment.

The Solomon Islands Government said it was now negotiating with landowners and an investor — Australian-based Chinese property developer AXF Group.

A statement on the company’s website said AXF had partnered with Goldridge Community Investment, “and aims to repair, refurbish and upgrade the Gold Ridge plant to bring it back into operation”.

The mine on central Guadalcanal, south-east of the capital Honiara, was closed after severe flooding in 2014.

Since then, there have been constant concerns over the risk posed to public safety by the threat of toxic water overflowing from the tailings dam.

Shortly after St Barbara sold the mine, the Solomon Islands Government declared it a disaster area when a tropical cyclone filled the dam to capacity.

In 2016, after an “uncontrolled release” of untreated water from the mine’s tailings dam, Solomon Islands health authorities warned villagers living downstream not to use river water because it could be contaminated by arsenic.

Plans to reopen ‘as soon as practically possible’

PHOTO: Gold Ridge gold mine in Solomon Islands has had a chequered history.

Gold Ridge gold mine in Solomon Islands has had a chequered history.

The Government said in a statement it now hoped the mine would be reopened “as soon as is practically possible”.

Prime Minister Manasseh Sogavare’s chief of staff, Robson Djokovic, told the ABC’s Pacific Beat program there were still risks associated with the mine reopening, but they were being addressed.

“There are procedures and systems that have been developed … to ensure the highest standards of safety are met to avoid any potential hazards or risks,” Mr Djokovic said.

“Of course, not everybody is going to agree. We understand the reality of those who might object.

“But the Government is ensuring that thorough consultation is being carried out and we are listening to the various stakeholders, particularly those that are located in the area of the mine site.”

PHOTO: Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

The chairman of the landowner company, Walton Naezon, said local landholders did not oppose the Government’s push to reopen the mine.

But he told Pacific Beat it would take time.

“We’re trying to restructure and rehabilitate an old mine which has gone, run down almost 100 per cent,” he said.

“We are going to look at all the aspects of environment issues [and] we are going to make sure that our foreign partners are listening to us.

“We want to do everything right according to law. We must make sure everyone likes the operation and the benefits of the operation.”

1 Comment

Filed under Mine construction, Solomon Islands

Solomon Islands govt reinstates Gold Ridge mining lease

gold-pan

Radio New Zealand | 24 January 2017

The mining lease for a closed gold mine in Solomon Islands is being reinstated by the government after having been cancelled by the mines minister last year.

A government statement said the relevant framework for the Gold Ridge mine to reopen was being finalised.

But the chairperson of the customary land-owning company, Gold Ridge Community Investments Ltd, which is the minority shareholder in the mine, said this basically referred to cancelled mining lease.

Walton Naezon said the majority shareholder, the Chinese-owned AXF Group, wanted to begin reconstruction of the mine in early February provided the lease has been reinstated.

“There is two things, one is to start the mine, doing the roads, rehabilitating the mill, doing constructions and doing explorations and assessing the tailings dam. Those are mining activities that can be taking place quickly from February upward. The actual production was look at end of 2018.”

He said it was projected that the cost of bringing the mine back into production would be between $US80 and 90 million.

Leave a comment

Filed under Mine construction, Solomon Islands