Tag Archives: Citigroup

Citigroup limits financing for mines that dump tailings at sea

Jim Tan | Mongabay | 12 June 2018

  • Following pressure from advocates, Citigroup said last month that it will not fund any future mining projects over $50 million that dispose of mine waste in the oceans.
  • Tailings, a fine-grained, often toxic slurry left over after the processing of mined ore, are still disposed of in oceans, lakes and rivers in several countries.
  • Mines in Papua New Guinea, Norway and Chile are proposing to dispose of tailings in the ocean.
  • Local communities are often most affected by pollution from mines and have vocally opposed tailings disposal in the ocean in Norway and Papua New Guinea.

Several mines around the world dispose of potentially toxic mine waste directly into the ocean. Environmentalists have criticized the practice, arguing that the waste smothers ocean habitat and leaches harmful chemicals and heavy metals that can poison marine life. Last month Citigroup, a major shareholder in four mining companies that either actively dispose of mine waste into the ocean or propose to do so, agreed not to finance any new operations that pipe mine waste into the sea.

Citigroup’s move comes after pressure from an international coalition of NGOs that launched a campaign this year to end the disposal of mine waste in natural water bodies. The coalition, led by the Washington, D.C.-based environmental NGO Earthworks, is calling for a global ban on the practice and pressuring financial institutions to stop funding mining operations that engage in it. Earthworks announced Citigroup’s move in a May 2 press release.

“Citi’s decision says loud and clear: ocean dumping is dirty, unnecessary and wrong,” Ellen Moore, who coordinates the Ditch Ocean Dumping campaign for Earthworks, told Mongabay.

There are few signs of life on the bottom of Jøssingfjord in southern Norway 35 years after dumping ceased at the Tellnes titanium mine. Scientists believe it may never recover. Image by Erling Svensen.

Toxic tailings

One of the key problems miners face is how to safely dispose of the huge quantities of waste rock and tailings produced in the mining process. The tailings, a fine-particle slurry left over after the target metal has been extracted from the mined ore, are particularly tricky to handle. Tailings often contain potentially harmful chemicals used to process the ore, like cyanide and petroleum, as well as by-products like sulphuric acid and heavy metals like lead.

Nowadays, the vast majority of the world’s 2,500 industrial-scale mines dispose of their waste on land. But several mines still dump into water bodies, including at least seven into the ocean, in Papua New Guinea (PNG), Indonesia, Turkey and Norway; at least three into rivers, in PNG and Indonesia; and at least five into lakes in the U.S. and Canada, according to a non-exhaustive list from Earthworks. The group calculated that mines dispose of more than 220 million metric tons of waste in water bodies every year — enough, the group says, to fill 55 sports stadiums.

“Although mine waste dumping in water has been phased out in many parts of the world, mining companies still use it, governments still allow it, and the world’s largest banks and investment firms still profit from it,” Moore told Mongabay.

This is partly the result of geography. In Norway, suitable and stable terrestrial locations to store mine tailings are hard to find because of the mountainous terrain. In PNG, mines face a similar problem and must also contend with frequent earthquakes and flooding during the rainy season that can destabilize tailings dams.

Tailings pipes from the Marcopper mine in Marinduque, the Philippines, enter the sea at Calancan Bay. Image by Catherine Coumans/MiningWatch Canada

It is now widely accepted that tailings disposal can have a catastrophic impact on rivers and the creatures that live there. But the effect of tailings disposal in the ocean is somewhat more contentious.

Companies including Oslo-based Nordic Mining, which proposes to pump tailings from a rutile mine into Førdefjord, a fjord in southwestern Norway, suggest that deep-sea tailings disposal can be safe. They argue that, due to the layered nature of the ocean, so long as tailings are piped deep enough, ocean currents will not spread them, and their impact on marine life will be minimal and localized.

Charles Roche, executive director of the Mineral Policy Institute, an Australian NGO that assists communities affected by mining and is a signatory to the campaign, is less convinced. He points to the very limited peer-reviewed literature as evidence of the impact of submarine tailings. Two studies conducted around the Lihir gold mine in PNG found fewer deep-water fish and reduced marine life on the sea floor compared to the surrounding areas.

Part of the problem is that there is very little independent research into the effect of submarine tailings disposal, Roche told Mongabay.

“Research into submarine tailings is generally done by or for proponents [of submarine tailings disposal],” he said.

Many of the studies are environmental impact assessments conducted on behalf of mining corporations applying for a licence to operate and are rarely publicly available, according to a 2015 article in Oceanography magazine.

The lack of peer-reviewed research on the topic is a problem for Lisa Levin, an oceanographer with the Scripps Institution of Oceanography in California. A 2015 review she co-authored in Marine Pollution Bulletin suggests that a major reason is the high cost of conducting research in the deep sea.

Despite the limited research, Levin is also convinced tailings disposal has a negative impact on the ocean. “It will never be good for marine ecosystems,” she told Mongabay.

Citigroup acts

Citigroup, a multinational investment bank and financial services corporation based in New York, is among the top 20 largest financial institutions in the world, with total assets of $1.84 trillion in 2017.

Citigroup’s business is split into two divisions: consumer banking under the Citibank brand, and investment banking. It was Citigroup’s investments that attracted Earthworks’ attention. Citigroup is the third-largest shareholder in the Australian mining companies Highlands Pacific and St. Barbara Limited, which Earthworks says have together disposed of 54 million tons of toxic tailings in the ocean around PNG. Citigroup also holds shares in Norway-based Nussir ASA and Nordic Mining, which have both proposed disposing of tailings at sea in Norway.

Fishing boat on Repparfjord, Norway, where Norwegian mining company Nussir ASA proposes to dispose of tailings from a copper mine. Image by Kjerstin Uhre.

The campaign wrote an open letter to Michael Corbat, Citigroup’s CEO, in January 2018 asking the bank to sever ties with companies that dispose of waste at sea.

“Citi was immediately responsive after we launched the public campaign,” Moore told Mongabay. “It was clear that the bank did not want to be associated with the harmful and outdated practice.”

Following negotiations, Citigroup revised its Environmental and Social Policy Framework to state:

“Citi will not directly finance new mining projects … that utilize submarine waste disposal.”

The policy will only apply to future projects requiring corporate loans over $50 million, and does not apply to the bank’s brokerage business, which holds shares on behalf of clients.

When asked about the company’s new policy, Citigroup spokesperson Laura London responded:

“Citi has a comprehensive Environmental and Social Risk Management Policy that covers our business with a range of sectors, including the mining sector, and we carefully review any sensitive environmental and social impacts of activities we finance, in line with our global standards and good industry practice.”

London declined to respond to detailed questions, and the bank has not publicly announced the move itself.

Roche welcomed Citigroup’s policy change, but he recommended the bank “extend the policy and prohibit any involvement, including company or nominee shareholdings, of riverine and [marine tailing disposal projects].”

Nevertheless, Moore believes this quick win for her campaign is the first step in the right direction. She said Citigroup also agreed to add companies that dispose of mine waste in lakes, rivers or the ocean to the bank’s internal watchlist and subject them to tighter scrutiny.

Levin agrees that Citigroup’s move is significant.

”[Citigroup’s] policy certainly helps to raise awareness of the negative effects of submarine tailings disposal,” she said. “Because the economic sector drives so much of human behavior I believe it is an important first step to engender change.”

The campaign is also targeting the multinational financial institutions Bank of America, Credit Suisse and J.P. Morgan, contending that they also “have ties” to mines that dispose of waste into water bodies.

Local communities pay the price

View of the Ramu Nickel mine refinery where mine waste is disposed of into the ocean in Papua New Guinea. Image by Christopher McLeod/Sacred Land Film Project.

When mine tailings cause environmental damage, it is often local communities and indigenous groups that pay the highest price. Moore is critical of brokerage businesses, such as Citigroup’s, that hold so-called nominee shares for clients, which can be used to shield the clients’ identities. She said that if affected community groups could identify shareholders and then communicate their concerns directly to them, it would make a difference.

In PNG, tailings from the Tolukuma gold mine resulted in elevated levels of arsenic, lead and mercury in the drinking water and flooded croplands for communities downstream, according to a 2013 report prepared for the International Maritime Organization and the United Nations Environment Programme. The report also notes anecdotal reports from local communities of increased illness and deaths after drinking and bathing in the river where the mine disposed of its tailings.

In both PNG and Norway, local community groups have been vocal in their opposition to the disposal of tailings at sea. Landowners in PNG attempted to prevent the Ramu Nickel mine, majority owned by the Metallurgical Corporation of China, from dumping its tailings in the sea through a class action lawsuit, but were unsuccessful. In Norway, Saami indigenous people have frequently voiced their opposition to proposals by Nordic Mining and Nussir ASA to dispose of tailings in Førdefjord and in Repparfjord, in the northern part of the country.

“It is illogical and immoral to sacrifice our traditional, sustainable and profitable fisheries for an uncertain mine project that relies on outdated practices to turn a profit,” said Silje Karine Muotka, a member of the Saami parliament, in Earthworks’ press release.

Nevertheless, both projects appear to be moving forward.

Citations

Brewer, D.T., Milton, D.A., Fry, G.C., Dennis, D.M., Heales, D.S., & Venables, W.N. (2007). Impacts of gold mine waste disposal on deepwater fish in a pristine tropical marine systemMarine Pollution Bulletin 54(3): 309-321.

Hughes, D.J., Shimmield, T.M., Black, K.D., & Howe, J.A. (2015). Ecological impacts of large-scale disposal of mining waste in the deep seaScientific Reports 5:9985.

Ramirez-Llodra, E., et al. (2015). Submarine and deep-sea mine tailing placements: a review of current practices, environmental issues, natural analogs and knowledge gaps in Norway and internationallyMarine Pollution Bulletin 97(1-2):13-35.

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Citigroup Commits to Ditch Ocean Mine Waste Dumping

Bank is the first to establish prohibition on financing all submarine waste disposal

Earthworks | 2 May 2018

This week Citigroup announced it will no longer finance mining projects that dump mine waste into the ocean. The move comes in response to pressure from the Ditch Ocean Dumping campaign, which is calling on financial institutions to divest from any project or company that employs the practice.

“Citi’s decision says loud and clear: ocean dumping is dirty, unnecessary and wrong,” said Ellen Moore of Earthworks, who is coordinating the campaign. “It’s high time we ditched ocean dumping once and for all. Banks and financial institutions must actively take steps to ensure that they are not bankrolling the destruction of our oceans.”

After negotiations with the campaign, Citigroup agreed to add specific language to its environmental and social policy framework: “…Citi will not directly finance new mining projects… that utilize submarine waste disposal.” The policy framework covers corporate loans over $50 million, general corporate transactions and project finance.

Companies that employ aqueous mine waste dumping will land on the bank’s watchlist, an internal policy and process document used to identify high risk practices. Inclusion on the watch list means companies are identified as having elevated environmental, social or reputational risks and are automatically subjected to additional environmental and social review. The policy change does not, however, address Citi’s brokerage business that holds nominee or custody shares on behalf of clients, which makes is possible for such investors to remain anonymous.

“We are encouraged by Citi’s decision but remain concerned about transparency in financing of these types of harmful practices,” said Eiliv Erdal, local chair of the Association of Norwegian Salmon River Owners. “My livelihood depends on a healthy Førdefjord and I should be able to communicate directly with shareholders about how their investment will affect my business and my community.”

Mining companies dump 220 million tonnes of mine waste directly into our oceans, rivers and lakes every year:  more waste than the United States puts into its landfills. While the outdated practice has been phased out in many parts of the world, new mining proposals in Papua New Guinea and Norway signal ocean mine waste dumping is being ramped up, not phased out.

Following Citi’s commitment, the campaign will shift focus to other financial institutions that facilitate mine waste dumping. In Norway, two proposed mines escaped a recent moratorium on submarine dumping permits, jeopardizing the fish-rich Førdefjord and Repparfjord, as well as the traditional lifestyle of the indigenous Saami people.

“The Saami Parliament has twice voted against dumping mine waste in the Repparfjord,” said Silje Karine Muotka, member of the Governing Council of the Saami Parliament of Norway. “It is illogical and immoral to sacrifice our traditional, sustainable and profitable fisheries for an uncertain mine project that relies on outdated practices to turn a profit.”

Traditional reindeer herding and fishing are an important source of sustenance and livelihoods for the Saami. According to the Institute for Marine Research, the area of the Repparfjord designated for mine waste dumping is a critical cod spawning ground.

Mine waste can contain up to three dozen dangerous chemicals, including arsenic, lead, mercury, and cyanide. These metals accumulate in fish and, ultimately, the wildlife and people that eat them. The pollution contaminates drinking water, decimates ecosystems, and destroys fisheries.

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