Tag Archives: Frieda river mine

Australian miners in firing line of PNG law shake-up

The streets of Sydney are paved with Papua New Guinea’s gold

Jewel Topsfield | Sydney Morning Herald | 17 July 2018

Major Australian mining companies face the prospect of higher royalties, tough restrictions on fly-in fly-out workers and the potential nationalisation of assets under reforms under consideration by the cash-strapped Papua New Guinea government.

The proposed law changes have sparked warnings from the country’s peak mining body that they would pose “significant deterrents” to investment in future projects and “threaten the existing operations of current mines”.

Several Australian Securities Exchange listed companies including Newcrest, Highlands Pacific and St Barbara Limited operate mines in Papua New Guinea, which has significant resources including gas, gold, copper, cobalt and nickel.

Mineral exploration in Papua New Guinea

The PNG Chamber of Mines and Petroleum says the proposed changes to the Mining Act could clamp down on international fly-in fly-out workers, impose a right for the state to compulsorily acquire mining projects (on commercial terms) after 24 years and result in an increase in royalties.

It says some of the proposed changes – which have been under discussion for years – would have “severe negative impacts in the immediate and long term on both existing operations and proposed projects”.

But the Resource Owners Federation of Papua New Guinea claims existing laws are “primitive, unjust and self-harming”, and mining companies continue to reap benefits while keeping the landowners and citizens who own the resources poor.

PNG Deputy Prime Minister Charles Abel told Fairfax Media the government was concerned about a number of factors including increasing the share of benefits to landowners.

The Papua New Guinea resource industry is responsible for just 20,000 jobs in nation of over 8 million people.

“Any proposed amendment must address the underlying concerns and keep PNG competitive as an investment destination,” he said.

New copper and gold projects inlcuding the Newcrest-led Wafi-Golpu mine and PanAust’s Frieda River mine are currently awaiting special mining leases from the PNG government.

At an update last month Mr Abel said the PNG government was bringing on Wafi-Golpu, the expansion of a ExxonMobil-operated PNG liquefied natural gas plant and Papua LNG “under an improved fiscal template”.

The Wafi-Golpu project, a joint venture between Newcrest and Harmony Gold, is a key part of Newcrest’s future and is considered the company’s top growth asset.

Newcrest’s Wafi-Golpu joint venture mine in PNG.

Australian company PanAust holds an 80 per cent interest in the Frieda River copper-gold project, which has an estimated initial mine life of 18 years.

PNG Chamber of Mines and Petroleum executive director Albert Mellam said some of the proposed changes had undermined investor confidence in PNG.

“We are concerned that some of the draft amendments are internationally uncompetitive, are a serious deterrent to investment in future mining projects in PNG and will threaten the existing operations of current mines in the country,” he said.

Dr Mellam said the transitional arrangements were inadequate to protect existing operations and could affect permit applications that already been submitted. He also said businesses would have to wear increased royalties, fees and levies and “unreasonable penalties”.

He said the passing of legislation in February – which removed industry representation on the Mineral Resources Authority Board and doubled the production levy rate from 0.25 per cent to 0.5 per cent – had already created a “great deal of uncertainty in the minerals sector and for international investors watching PNG”.

“The industry has already observed a gradual decline of investment into mineral exploration over the past two years.”

Mr Abel, who is both the Treasurer and Deputy Prime Minister of PNG, told Fairfax Media the current system had yielded good returns to government from mining projects in the past but a number of circumstances had combined to greatly reduce these flows as a share of government revenue.

These included projects approaching maturation, tax concessions, low prices, PNG LNG and Lihir, the gold mine owned by Newcrest, accessing accelerated depreciation provisions and greater use of the tax credit scheme.

“The state is not necessarily seeking to increase its take but wants earlier returns and smoother flows at lower cost,” Mr Abel said.

The gold processing plant on Lihir Island in PNG. Photo: Reuters

“This may necessitate a tax regime that is more production based rather than profit, has longer depreciation periods, has an element of free carry equity and simpler, more transparent structural arrangements and doing away with tax concessions.”

Mr Abel said PMG also wanted to minimise international fly-in fly-out operations to retain more benefits in Papua New Guinea.

The proposal to reduce maximum mining licenses from 40 to 25 years was “still under consideration”.

Mr Abel said the government was determined to deliver Wafi-Golpu, the PNG LNG expansion and Papua LNG to early works and final investment decision by 2019.

“These and other imminent projects should be based on the current legal framework with negotiated terms to meet some of the requirements I mentioned.”

The Resource Owners Federation of Papua New Guinea said the Mining Act should be reviewed in its entirety, so the ownership of minerals was retained by customary landowners.

“Minerals can still be mined only after development agreements are reached between the landowners and mining companies,” it said in a statement.

“All parties then benefit from a project, in contrast to Papua New Guinea in the past and today, where the landowners are the ultimate losers.”

According to the 2018 PNG economic survey by the Australian National University and University of PNG, the country is experiencing an “urgent economic crisis” and a shortage of foreign exchange is worsening.

The economy is dependent on the resource sector, which makes up 30 per cent of GDP, but much of it is foreign owned and a large share of the benefits flow offshore.

“Since 2015, resources revenue (corporate taxes and dividends from mining and petroleum) have been at their lowest level since 1992,” the economic survey says.

It says accelerated depreciation and tax holidays meant new projects paid no or virtually no resource revenue but it was surprising that even older projects were paying very little revenue.

“On the one hand there are genuine concerns in PNG that the country and landowners haven’t been getting a good deal from resource projects and change is needed,” said Professor Stephen Howes, the director of the Development Policy Centre at ANU.

“On the other hand the economy is in a very precarious state and the government is desperately looking for stimulus from new resource projects. That’s the tension … I think the government is in a difficult position.”

Professor Howes said he did not believe big new projects would go ahead until the uncertainty was resolved.

“They want clarity on these issues because they are long-term investments and these issues are seen as very important.”

Austmine, the leading industry body for the Australian Mining Equipment, Technology and Services sector, said current macroeconomic conditions and mining regulations in PNG had proven to be “considerable roadblocks to investment, creating uncertainty and stifling exploration”.

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Banking Giant Standard Chartered Takes Stand Against Mine Waste Dumping

Ditch Ocean Dumping Campaign applauds broad prohibition to protect oceans, rivers and other water bodies

Earthworks | 10 July 2018

Standard Chartered has  announced a full prohibition of financial services for clients practicing marine and riverine mine waste dumping. Standard Chartered adopted their policy shortly after the launch of the Ditch Ocean Dumping campaign, joining Citigroup, which has also confirmed that it will no longer finance submarine mine waste disposal.

“We have long held the view that marine or riverine tailings disposal is not good industry practice, and we are proud to add it to our prohibited activities list,” said Amit Puri, Managing Director and Global Head of Environmental and Social Risk Management at Standard Chartered.

“We applaud Standard Chartered for taking a leadership role in ending ocean mine waste dumping. It’s dirty, unnecessary and wrong,” said Ellen Moore of Earthworks, a nonprofit organization which is coordinating the campaign.

“Banks and financial institutions must actively take steps to ensure that they are not bankrolling the destruction of our oceans. I hope other banks follow the example set by Standard Chartered and Citigroup.”

The Ditch Ocean Dumping campaign, which includes 40 groups in 17 countries, is calling on financial institutions to divest from any project or company that employs aqueous tailings disposal.

Mining companies dump 220 million tonnes of mine waste directly into 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.

By drawing a clear line in the sand against aqueous mine waste dumping, Citi and Standard Chartered are joining a growing movement of governments, companies, mine-impacted communities, and civil society organizations calling for an end to the practice.

At the 2016 conference of the International Union for Conservation of Nature, 51 of the 53 participating countries voted in favor of an international ban on ocean mine waste dumping and to develop a plan to stop ongoing dumping due to the irreparable destruction and degradation of marine environments.

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Time PNG govt exercised better control over its own resources

A Britten Norman Islander, the first plane to land at Frieda River in 1970. Kiap John Pasquarelli had discovered gold and copper in 1963. Now, 55 years later, the mine is still undeveloped and the object of great controversy

Gabriel Ramoi | PNG Attitude | 12 June 2018

Resources firm Pan Aust (wholly owned by the Chinese state company, Guangdong Rising Assets Management, GRAM), has lost its way with the Frieda River copper-gold project in Papua New Guinea’s Sandaun Province.

It is now time for the PNG government to exercise leadership and rein in control over the Frieda asset if the PNG is to sustain its free education and health policies and lift the rest of the country out of poverty, disease and ignorance.

The view from Frieda is now very different compared with the corporate carnage of 2013 following Glencore’s hostile takeover of Xstrata Mining. In that epic battle for world copper supremacy, Mike Davis’s Xstrata lost to Ivan Glasenberg’s Glencore and with it went a chunk of PNG’s national asset, the K260 billion Frieda mine.

Glasenberg has gone on to become the king of copper and head of the number one mining house in the world.

But then, for a deposit of just K80 million, little known Australian miner Pan Aust Ltd moved in and acquired Frieda from Glencore while PNG government advisers and ministers slept on the job despite warnings from industry that the government should exercise control and reclaim ownership over its strategic asset.

Pan Aust went on to the sell out to GRAM in 2015 for a reported K1.2 billion although officially the deal was closed at K450 million.

GRAM is owned by the municipality of the city of Guangzhau in southern China, although the deal maker in this transaction was a leading Australian Chinese billionaire Dr Chau Chak Wing, the subject of a current controversy because of allegations that he is an agent of the Chinese Communist Party.

Additionally, the influential South China Morning Post reported in September last year that the chairman of GRAM, Li Jinming, as well as the CEO and chief financial officer had been arrested and are facing prosecution in China for failing to account for a number of acquisitions made by GRAM in Australia, including Pan Aust, leading to a loss by GRAM of more than K3.2 billion.

None of these corporate maneuverings went unnoticed by the government of China and eventually Glencore was forced to sell a number of its copper assets to China in order to keep selling its copper ore to the communist country.

I suspect the sale of the Frieda copper mine may have been part of an arrangement between Glencore and the government of China for a number of its assets to be sold to Chinese-controlled companies.

But the question that now needs to be asked in PNG following the arrest of the GRAM directors is what can the PNG government do with Frieda?

Last week, the PNG Mineral Resources Authority reported that Pan Aust had advised it of the withdrawal of an application for the mine development license over Frieda that was filed in 2016.

I suspect the real reason for this is that Pan Aust does not have the required capital to follow through with the development of Frieda Mine since the arrest of the GRAM executives in China and the freeze on GRAM’s activities pending finalisation of court proceedings in China.

Pan Aust and its junior partner Highlands Pacific are already in arbitration over the issue of the costs relating to each partners contribution to the feasibility study.

In the wake of this total mess, an opportunity exists for the PNG government to open dialogue directly with the government of China to revisit the Frieda project.

Already two leading Chinese state companies – China Energy Engineering Ltd and China Railway Yunnan Construction & Development Ltd – have expressed interest in developing the infrastructure associated with the mine.

The PNG government and the provincial governments of West and East Sepik – the ministers of the two provinces in particular – should take the lead in opening dialogue with China on the Frieda project.

How the Frieda project will be developed is part of the unfolding resource war being waged worldwide between private capital (represented by figures such as Glasenberg, Donald Trump and Malcolm Turnbull) and powerful state actors such as the gvernment of China and other savvy emerging states such as Russia and Indonesia.

The leading US-based mining journal Behre Dolbear reported last week that the Republic of Congo, Ghana, Tanzania, Zambia and Mauritania have recently enacted new legislation apportioning greater revenues from mining in favour of the state to the rejection of Barrick Gold in Tanzania and Glencore in Congo.

Over the last six months we have also seen the rise of resource nationalism in Indonesia with a direct challenge to BHP Billiton and Freeport Copper to divest up to 51% of their interest in the Grasberg mine to the Indonesian state.

At the time of writing, BHP has agreed to sell its 40% stake to the state and current negotiations continue on the quantum of compensation for environmental pollution by Freeport.

While there is a much kneejerk reaction by our neighbours about Chinese checkbook diplomacy in the region, it must be remembered that China is Australia’s number one trading partner.

Despite just 70 years ago China being rolled over by Japan after a long period of being pushed around by colonial powers, it has emerged in recent times as a super power extending its hand of friendship to countries around the world as it builds a new world order with itself at the centre.

“Developing countries where 90% of the world lives are at a crossroad,” says the leading black African woman of our generation, Zambian economist, lawyer and banker Dambisa Moyo. “They are facing a choice between the United States model of democracy and private capitalism or the Chinese model of state capitalism and no democracy.”

This may be too unequivocal as many third world countries including PNG are now better poised to consider bartering our copper, gold and other mineral wealth for infrastructures such as roads, ports, railways, universities and hospitals rather than simply allowing private capital through direct foreign investment.

Our experience over 40 years has been dismal as highlighted by reports such as that by Jubilee Australia. As PNG struggles to build its next generation of mines, the young lawyers and technocrats advising our leaders must take it upon themselves not to repeat the mistakes of the past but to look at recent deals between China and a number of counties in Africa and negotiate a new mining development contract for PNG that we all can be proud of.

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Frieda Mine Lease On Hold

Frieda River mine camp

Frankiy Kapin | Post Courier | May 31, 2018

Frieda mine project developer PanAust Limited has indicated further alterations to its initial proposal for mine development thus holding back the Special Mine Lease (SML) application.

Mines regulator, Mineral Resources Authority (MRA) revealed this week that the assessment of the application had to be put on hold as the applicant has indicated there may be significant changes to the initial proposal for development and feasibility study.

According to MRA, PanAust is considering a range of potential material changes.

These include the relocation of the integrated storage facility to Frieda River from the Nina River, and increasing the hydro potential to over 300 Megawatts.

The project is also considering development of a public road corridor between Vanimo and Hotmin instead of using the Sepik River.

“This is to significantly reduce its activities within the river system.

“The proposed airport may be upgraded to a regional status and there may be consequential changes to tenements. Some relocation of landowners may also be required,” said the MRA.

MRA confirmed that PanAust’s application for a SML for the Frieda project is on hold pending the company’s lodgment to the government indicating amendments to the development proposal.

According to MRA, the tenement holder initially lodged the SML last year in June 2016 but has indicated to the State negotiating team that it may submit an amended proposal for development and feasibility study by October this year.

“Mining Act and Environment Act approvals will be delayed as a result against the original timetable.

“To date, PanAust has yet to submit its amended proposal two,” MRA issued.

MRA further stated that PanAust will also be required to lodge any amended environment impact assessment report to the Conservation Environment Protection Authority (CEPA) if the original proposals alter.

East Sepik Governor Allan Bird said as the host province, the provincial government will have a say once all mine development documents are assessed by MRA and submitted to the provincial heads.

The Frieda River project is copper dominated with gold and silver as bi-products and presently the project’s mine life is 17 years with a potential to extend.

Current indications from initial submissions are that the porphyry copper gold deposits contain an estimated total combined mineral resource of over 2.7 billion tones at an average grade of 0.42 per cent copper and 0.23 grams per tonne gold.

From this assessment, the project has a total mineable ore reserve of 608 million tonnes at 0.49 per cent copper and 0.27 grams per tonne gold.

The Frieda River project operator is Frieda River Limited (FRL), a subsidiary of PanAust.

Frieda River Project is located in the provinces of West and East Sepik and jointly owned by PanAust (80 per cent) and Highlands Pacific (20 per cent).

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Highlands loses first round in Frieda River arbitration

Protest outside the Highlands Pacific offices against the Ramu nickel mine marine waste dumping. Nov 2010.

Esmarie Swanepoel | Mining Weekly | 10 April 2018

ASX-listed Highlands Pacific is facing a $12.4-million bill relating to the Frieda River copper/gold project, in Papua New Guinea, after the first stage of arbitration found in favour of project partner PanAust.

Highlands, which has a 20% interest in the Frieda River joint venture (JV), has been arguing that a feasibility study submitted to the Papua New Guinea government as part of an application for a special mining lease in June 2016, was incomplete, and that the company’s free carry should continue.

However, an arbitrator has determined in the first stage of an arbitration process that Highland’s free carry for the Frieda River project feasibility study ended on the date of the lodgement of an application for a special mining lease.

The arbitration will now proceed to the second stage, with Highlands telling shareholders that it will be contending that other provisions of the JV agreement should be applied to make PanAust liable in the first instance for the full cost of the feasibility studies undertaken since June 2016, with the right for Highlands to pay its share at a later date, if the project proceeds.

If Highlands is unsuccessful in the second stage, and if the cash calls made by PanAust are held to be valid, the ASX-listed company will be expected to pay its share of project expenditure from June 2016 to May 2018, which amounts to some $12.4-million.

In this case, the company could either elect to pay the amount, or have its share in the JV dilute by around 2.2%.

Meanwhile, the permitting process for the Frieda River project is continuing, although the Papua New Guinea authorities are awaiting the completion of current feasibility study work, which is scheduled for the second half of 2018. 

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Chinese looking to cut costs for Frieda river mine

What will be the costs for the environment and the mighty Sepik river as PanAust looks to “decrease capital expenditure”?

Frieda River upside options explored

PNG Industry News | 16 February 2018 

THE Frieda River copper-gold project in Papua New Guinea’s Sandaun Province represents PanAust’s long-term strategic growth opportunity.

This was said by PanAust managing director Fred Hess when he presented the company’s quarterly report for December 2017 this week.

[PanAust is wholly owned by Chinese State company, Guangdong Rising Assets Management Co. Ltd (GRAM)]

“In 2017, we made strides towards making the project a reality through identifying opportunities to increase the value of the project, decrease capital expenditure, and reduce its overall risk profile. 

“We will continue to evaluate these opportunities in 2018,” Hess said. 

The company says it continues to liaise with PNG authorities on Frieda River following lodgement of a special mining lease (SML) application and environmental impact statement (EIS) with the Mineral Resources Authority (MRA) of Papua New Guinea and Conservation and Environment Protection Authority (CEPA) of PNG, respectively in 2016.

“The overall approval and permitting process for the SML application and other permits and approvals is now being coordinated by a government appointed state negotiating team, chaired by the Department of Mineral Policy and Geohazards Management.

PanAust says it is investigating opportunities to increase the value of the project and access alternative development pathways to decrease capital expenditure and reduce the overall Project risk profile. Study work to investigate these opportunities continued throughout the quarter, and indicate several potential pathways for value enhancement. The outcomes of this work will inform a decision as to whether an update to the project’s SML application will be made.

Hess added: “Looking to the year ahead, PanAust will look to further strengthen the relationships that have become integral to the company’s success, and are synonymous with how it conducts itself where ever it operates.

“The common currency of PanAust’s success is the strength of its relationships; relationships with our employees, communities, host governments, suppliers, peers, and partners. These relationships depend on trust and consistent transparent communication. This is what pushes PanAust way ahead and will continue to do so throughout 2018,” Hess said.

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Mine tailings dam failures major cause of environmental disasters: report

Mining companies in PNG have an appalling record when it comes to tailings management.

Will the proposed Frieda river mine be the next disaster in waiting?

Zoe Sullivan | Mongabay | 19 December 2017

  • Between 2008-2017 it’s estimated that more than 340 people died, communities have been ravaged, property ruined, rivers contaminated, fisheries wrecked and drinking water polluted by mining tailings dam collapses. Estimates from the year 2000 put the total number of tailings dams globally at 3,500, though there are likely more that have not been counted.
  • A new United Nations Environmental Programme (UNEP) report states that as mining production escalates globally to provide the minerals and metals required for a variety of industrial needs, including green technologies, it is urgent that nations and companies address tailings dam safety.
  • The UNEP report recommends that mining companies strive for a “zero-failure objective” in regard to tailings dams, superseding economic goals. UNEP also recommends the establishment of a UN environmental stakeholder forum to support stronger international regulations for tailings dams, and the creation of a global database of mine sites and tailings storage facilities to track dam failures.
  • One idea would be to eliminate types of tailings dams that are just too dangerous to be tolerated. For example, mining experts say there is no way to insure against the failure of “wet tailings disposal” dams, like the Samarco dam that failed in 2015 – Brazil’s worst environmental disaster ever. As a result, they recommend storing all future tailings waste via “dry stock disposal.”

The Imperial Metals Mount Polley gold and copper mine tailings dam disaster in British Columbia, Canada, dumped 24 million cubic meters (more than 31 million cubic yards) of mine waste and sludge into neighboring Lake Polley and polluting the Hazeltine Creek watershed. Photo courtesy of the Multinationals Observatory

It’s estimated that more than 340 people have been killed since 2008 in mining tailings dam failures –preventable environmental disasters that also saw the ruination of communities and property, the contamination of rivers, destruction of fisheries, and pollution of drinking water supplies.

Spurred by those calamities, the United Nations Environmental Programme (UNEP) has issued a report stressing the need for increased tailings dam safety around the globe. Tailings dams store pools of toxic mining waste.

UNEP notes that large quantities of minerals and metals will be required in the near future for a variety of industrial needs, including the development of green technologies that support the UN´s 2030 Sustainable Development Goals (SDGs). The report offers two key recommendations and a number of policy actions to dramatically reduce tailings dam fatalities and accidents.

The first recommendation: Mining companies should strive for a “zero-failure objective,” superseding economic goals. UNEP cites an expert panel convened in the wake of a major tailings dam failure in British Columbia, Canada, the Mount Polley gold and copper mine, which dumped 24 million cubic meters (more than 31 million cubic yards) of mine waste and sludge into neighboring Lake Polley. The panel concluded that “safety attributes should be evaluated separately from economic considerations, and cost should not be the determining factor.”

The second key UNEP recommendation: Establish a UN environmental stakeholder forum to support stronger international regulations for tailings dams.

Payal Sampat of Earthworks, a US-based NGO, notes: 

“Mine waste storage facilities are like ticking time bombs, putting communities and waterways in harm’s way in the event of catastrophic failure.”

Aftermath of the Samarco tailings dam failure that sent a wall of toxic mud into the village of Bento Rodrigues, Brazil, killing 19 people and contaminating more than 500 miles of the Doce River. The UN report says that many such disasters are preventable if Mining companies strived for a “zero-failure objective,” superseding economic goals. Photo by Romerito Pontes licensed under the Creative Commons Attribution 2.0 Generic license

A record of disaster

The UNEP report was prompted by multiple serious accidents occurring around the world over the past decade. It points to China and Canada as the two countries with the worst recent safety record. Canada has had seven accidents since 2011, while China has had eight. Chile registered five separate tailings dam failures in 2010, according to the report, while the U.S. saw five tailings dam accidents over the past decade.

Other countries have experienced disasters and grief. In Minas Gerais state, Brazil, on November 5, 2015, the Fundão dam collapsed releasing 50 million tons of toxic iron tailings into the Doce River – the nation’s worst environmental disaster ever. The dam held back waste from the Germano mine run by Samarco, a joint venture of BHP Biliton and Vale, two of the world´s largest mining firms. Nineteen people died when the slurry engulfed the town of Bento Rodrigues. Survivors fled for their lives to high ground and were left homeless. More than 500 miles of the river was contaminated, all the way to the Atlantic Ocean.

Ugo LaPointe of Mining Watch Canada told DeSmog Canada that these major disasters represent just a portion of the problem: “This is just a glimpse of what we know. A lot of the data is missing. We need an international database of mining spills and mining failures. If you don’t collect that solid data, you are not in the best position to correct the problems.”

Along with increased international regulation of tailings dams, UNEP’s Safety is No Accident report also calls for the establishment of a first-of-its-kind global database of mine sites and tailings storage facilities to facilitate the tracking of dam failures. Research cited from the year 2000, estimates that there are 3,500 tailings dams around the globe, though that figure is likely low considering that there are around 30,000 industrial mines planet-wide. No one knows how many tailings dams there may be, or their current condition.

The UNEP report also calls for financial securities firms to give mining companies an economic incentive to prioritize safety. Suggestions include a global insurance pool, mandatory financial securities for the life of every mine, and a global financial assurance system for mine sites.

La Tortolas tailings dam high in the Andes Mountains of Chile. The dam was built in a seismically active area, but is designed to resist earthquakes. Photo by Lodecop licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license

Views within the industry

Canada’s mining industry plays a significant and influential role internationally, with 30 Canadian mining companies operating in Brazil, for example. Further, Canadian mining firms were given advance notice earlier this year about the Brazilian government’s plans to open up a vast region in the Amazon to mineral extraction. Canada’s mining sector contributed $56 billion to Canada’s gross domestic product in 2015.

The Mining Association of Canada told DeSmog Canada it would soon be releasing a revised Tailings Guide informed by mine reviews conducted by an independent task force it had assembled.

A spokesperson for the U.S. National Mining Association (NMA) told Mongabay via email that the UNEP report’s recommendations don’t apply to the United States, “where mining is heavily regulated for any releases to the environment and where the only event of this type in recent years was caused not by miners but by a faulty EPA operation in an old legacy mine [Gold King] in Colorado.”

However, a Bureau of Reclamation audit of that spill found that the circumstances “are not isolated or unique, and in fact are surprisingly prevalent” in the United States. The audit also reported that the release was the culmination of events over several decades including an “inadequately designed closure of the mine portal” and misinterpretation of the groundwater conditions when it was reopened in 2014/2015.

Asked whether the NMA plays any role in monitoring U.S.-based companies’ international operations, the spokesperson said that the NMA doesn’t regulate mining operations.

LaPointe emphasized that: “The problem is that the industry is not yet acknowledging publicly that there are too many financially risky, marginal mines that are being permitted.” He maintained that marginally profitable companies and mines are a major part of the problem because they cut corners on safety and don’t have the money to guarantee the safety of people and the environment.

Dry bed of the tailings dam at the Brukunga Pyrite Mine east of Adelaide in the Mount Lofty Ranges, South Australia. The mine was closed in 1972 and this photo comes from 1992. In 1974, a severe storm resulted in the retention ponds overflowing into nearby Dawesley Creek with water quality impacts occurring downstream. Tailings dams continue to be environmental hazards long after mine closures. Photo courtesy of CSIRO ScienceImage licensed under CC BY-NC-ND 4.0

“Reducing the number of dams that can fail”

Suzanne Greene, a communications officer for the Massachusetts Institute of Technology Metals and Minerals for the Environment group, told Mongabay that a “key element of dam safety is reducing the amount of waste produced by the mine. MIT has a number of technologies under development that will help achieve this, such as low or no-waste extraction and separation.” Greene also pointed to new technologies, such as sensors that can be embedded in dam walls, to monitor and detect cracks or bulges in these structures in real time.

As importantly, some types of dams may need to be abandoned all together. Speaking with Mongabay by phone, Earthworks’ Alan Septoff explained that there are “financial assurances that are intended to do reclamation after a mine completes operations, and financial assurances for when something goes wrong.” But in the case of a disaster as extreme as Brazil’s Fundão disaster, Septoff cited research by Chambers and Bowker which concluded that “it’s essentially impossible for a company to get insurance for this severity.” And logically, if companies can’t get insurance for a particular type of operation because it is too risky, that type of operation will be eliminated, preventing future disasters, and promoting safer methods.

As an example, Septoff points to Canada’s Mount Polley rupture and to the conclusions the review panel produced: “The independent review panel, which was peopled with mining engineers working for industry, said there was no way to insure against ‘wet tailings disposal’ like the kind that failed at Samarco [in Brazil] and that all future tailings storage need to be ‘dry stock.’”

The Mount Polley report added: “The Panel firmly rejects any notion that business as usual can continue.” And also that “The Panel does not accept the concept of a ‘tolerable failure rate’ for tailings dams.” Rejecting the idea of slow incremental change within the industry, the panel concluded: “dam failures are reduced by reducing the number of dams that can fail.”

For Septoff, this conclusion contrasts with most industry rhetoric: “Industry is trying to give the perception that this problem is going to go away, and so people should keep investing, but if the true cost of this type of disposal is made known, then the prospects for responsible investors investing in them will go considerably down.”

A mining tailings dam in the Balkans. Estimates from the year 2000 put the total number of tailings dams globally at 3,500, though there are likely more that have not been counted. With mining operations fast expanding around the globe, more accidents are likely unless action is taken to safeguard tailings dams. Photo courtesy of WWF

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