Tag Archives: Glencore

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.

Advertisements

2 Comments

Filed under Mine construction, Papua New Guinea

Another ‘world class’ mining company in a corruption scandal

Glencore shares drop nearly 7% on report of SFO probe

Henry Sanderson | Financial Times | May 18, 2018

Shares in Glencore fell by their most in almost two years on Friday after a report said the miner may face a bribery probe by the UK’s Serious Fraud Office over its ties to Israeli billionaire Dan Gertler in the Democratic Republic of Congo. 

The SFO is planning to seek formal approval for a probe into Glencore’s dealings in the country with its former business partner Mr Gertler, Bloomberg News reported. Mr Gertler was sanctioned by the US in December for his “opaque and corrupt mining and oil deals,” in DRC. 

Mr Gertler previously owned stakes in Glencore’s two key projects in the resource-rich country, before Glencore bought him out for $960m in 2017. 

Glencore shares fell 6.8% per cent to 370.75p after the news. 

The reported possible probe is the latest setback for FTSE 100 member Glencore over its activities in the DRC. Last month the country’s state-owned miner Gecamines launched legal action against the company seeking to dissolve its joint venture Katanga copper mine, saying Glencore had drained it of money. 

Mr Gertler has also taken Glencore to court saying he is owed almost $3bn in royalties from its mining projects under previously agreed contracts. 

The SFO said it could neither confirm or deny the Bloomberg report. Glencore declined to comment. 

Leave a comment

Filed under Corruption

Tanzania cancels license of Barrick, Glencore nickel project

Another example of a Nation standing up and dictating terms to the international mining companies 

Fumbuka Ng’wanakilala | Reuters | 13 May 2018

Tanzania has revoked a retention license for an undeveloped nickel project jointly owned by Barrick Gold Corp and London-listed miner Glencore Plc as part of enforcement of a new mining regime.

The license for the Kabanga nickel project in northwestern Tanzania was among 11 retention licences canceled by the government under the Mining (Mineral Rights) Regulations of 2018, which were approved in January.

A retention license is granted to holders of a prospecting license after they identify a mineral deposit within the prospecting area which is potentially of commercial significance but cannot be immediately developed due to technical constraints, adverse market conditions or other economic factors.

“The Mining Commission would like to inform all owners of retention licences that the licences have been canceled,” commissions chairman Idris Kikula said in a statement.

Barrick Gold Corp and Glencore Plc which own the 50-50 joint venture project were not immediately available for comment. Their license was due to expire in May 2019.

Other retention licences canceled by the mining commission target other nickel, gold, silver, copper and rare earth exploration companies.

Tanzania, Africa’s fourth-largest gold producer, is seeking a bigger slice of the pie from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector.

Retention licences were previously granted for a period not exceeding five years, which was renewable.

Tanzanian President John Magufuli appointed the chairman and commissioners for the country’s new mining commission last month, paving the way for tighter regulation of the mining sector.

Magufuli sent shock-waves through the mining industry with a series of actions since his election in late 2015.

In July last year, he suspended the issuance of all new mining licences until the new mining commission was in place. 

The new mining rules state that “all retention licences issued prior to the date of publication of these regulations are hereby canceled and shall cease to have legal effect.”

“Consequent upon cancellation of retention license…rights over all areas which were subject of retention licences are hereby and without further assurance reverted to the government.”

Canada’s Barrick Gold Corp, the world’s biggest gold producer, is also the majority shareholder of London-listed Acacia Mining Plc, which is embroiled in a tax dispute with the Tanzanian government over mineral exports.

Barrick and Glencore have been looking for potential buyers for the Kabanga project since 2015 after lower global nickel prices derailed the project, according to mining sources in Tanzania.

The two miners have held the license for the project since 2009, which is estimated to have inferred resource of 36.3 million tonnes, grading 2.8 percent nickel.

Under legislation passed last Julyr, the mining commission has been given extensive powers to regulate and monitor the mining industry and mining operations in Tanzania.

Leave a comment

Filed under Uncategorized

Global mining major needed to re-open Bougainville’s Panguna copper mine?

 Kevin McQuillan | Business Advantage | 18 July 2017

Moves to re-open the Panguna copper mine on Bougainville are gathering momentum. Funding the re-opening is a key concern, however, says Bougainville President, John Momis. Could one of the global mining majors get involved?

Bougainville Copper Ltd (BCL) is currently advertising for a local Bougainville-based manager, and are looking at the payment of K14 million in rent and compensation that was owed to the 812 customary clan groups who own the blocks of land within the mining lease areas.

Autonomous Bougainville Government President John Momis tells Business Advantage PNG, that over the next year, he expects BCL to open an office and ‘start dealing with some of the legacy issues, demonstrating BCL’s commitment, in a just and fair way, to some of the real issues that have been bothering the land owners.’

That includes, he says, the ecological, environmental, and health damage issues caused by former owner, Rio Tinto.

‘They have walked away, so now BCL has to address that.’

Momis says the Joint Steering Committee preparing for the mine’s re-opening consists of representatives from the nine official landowner groups, BCL, the national government, and the ABG, and is to be chaired by an independent chairman.

Funding

A key challenge is the cost of reopening the mine; back in 2012, BCL estimated it would be US$5 billion.

‘BCL has to demonstrate to us they have ability to solicit funds and attract a developer and I’m sure they are thinking about this,’ says Momis, pointing out that under Bougainville’s 2014 Mining Act, BCL has first right of refusal about re-opening the mine.

‘The Panguna mine is a “high-risk, high-return” investment.’

‘We are giving BCL the opportunity to get funds and to meet the conditions as per the mining law. If they fail, then other companies will have to apply and be put through this process.’

High-risk, high-return

Mining industry analysts describe the Panguna mine as a ‘high-risk, high-return’ investment, which only global miners would be interested in.

Greg Evans, KPMG’s Perth-based Global Leader, Mining Mergers and Acquisitions, believes there will be considerable interest.

‘If you look at what the resource is, and what it can deliver to both an owner and investor—and, probably more importantly, the local economy—it would have to be a definitive “yes”.

‘The copper price is heading in the right direction, the supply metrics are working in the favour of copper broadly and I would expect that BCL are being approached reasonably regularly by a number of metals traders.’

Evans points to growing demand for copper, noting that batteries in electric vehicles are likely to use 927,000 tonnes of copper a year by 2030, according to forecasts by Bloomberg New Energy Finance. That alone equates with 5 per cent of current production.

Global

Evans believes a global miner, ‘like Glencore or similar’, is likely to become involved.

‘KPMG just completed a survey around transaction activity across a bunch of sectors. In the mining sector, the preference of the majors was particularly for joint ventures at the asset level.

‘Batteries in electric vehicles are likely to use 927,000 tonnes of copper a year by 2030.’

‘To me, that would be the form that a transaction would likely take. BCL would ensure the social licence to operate, and look after stakeholder management, political and administrative management on the ground, with perhaps a partner coming in providing financial and operational support.

‘So, it is likely to be a large industry player used to dealing in remote locations, eliciting strong local community engagement, and creating local employment as an obligation and priority. All those things are going to be required.’

Risks

Satish Chand, Professor of Finance at the University of New South Wales and based at the Australian Defence Force Academy in Canberra, says risk assessment will be crucial.

‘There has been a history of conflict where a very small number within the population has the ability to stop a very large mine. That risk remains.

‘There is a contest over the distribution of proceeds and that has not yet been settled to my understanding. There is little that is known about the magnitude of the cost involved in the clean up.’

Chand notes that the Bougainville Mining Act says 51 per cent of the mine must be locally-owned. The non-binding referendum on Bougainville’s independence from PNG scheduled for 2019 must also be considered a ‘risk’.

Greg Evans agrees the local shareholding requirement makes the financing prospect ‘more challenging’.

‘The biggest successes that the majors have had in countries such as Africa and South America, have been where they’ve engaged local communities, shared the profits, and shared the benefits. The control over how those profits flow and are allocated is equally the challenge—as it is the solution.

‘You’ve always got to come back to the quality of the resource; which will always make it attractive.’

1 Comment

Filed under Financial returns, Mine construction, Papua New Guinea

Calls to halt Australia’s McArthur River mine operations over safety and remediation concerns

The McCarthur river mine in the Northern Territory has been plagued by technical, social and environmental issues since it began in the 1990s. Photograph: Ilya Naymushin/Reuters

The McCarthur river mine in the Northern Territory has been plagued by technical, social and environmental issues since it began in the 1990s. Photograph: Ilya Naymushin/Reuters

Report demands mining stop until it can be determined how and at what cost the operation can be made safe

Michael Slezak |The Guardian | 21 August 2016

The huge McArthur river mine must stop operations until a public commission of inquiry is set up and has examined whether it can be made safe and at what cost, according to an independent report being released on Monday.

Based on the limited public data on the mine, up to $1bn will need to be spent to safely remediate the site, according to Gavin Mudd from Monash University and the Mineral Policy Institute, who wrote the report.

The McArthur River mine in the Gulf of Carpentaria is one of the world’s largest zinc, lead and silver mines. It has been plagued with technical, social and environmental issues since it began in the 1990s.

It has involved the diversion of the McArthur River in the Northern Territory, and resulted in fish eaten by the traditional owners being contaminated.

The piles of waste rock that are dumped alongside the open-cut pit have been reacting with the air and smouldering, giving off toxic fumes.

Mudd says the technical and environmental problems caused by the mine have been a result of the environmental assessments underestimating the difficulties faced by the site.

For example, the smouldering of the waste rock shows that the concentration of dangerous acid-forming rock is much higher than originally thought.

Mudd showed that in 2005 an environmental impact statement estimated that the dangerous rock type made up just 11% of the waste.

But in 2015, an independent monitoring report found that more than 90% of the waste rock was the dangerous acid-forming type, partially explaining why the mounds of waste had been smouldering.

Mudd said that despite being asked by both government authorities and community groups, Glencore, which operates the mine, has not released information about how much waste rock is actually produced.

Mudd says this has made it difficult to assess exactly how the site can be rehabilitated: “We can’t be clear on that because they haven’t published a lot of the data.”

Based on the amount of ore thought to be left at the site, Mudd estimates there could be another 30 years of mining there. He said what happens to the site after that needs to be decided ahead of time and planned for both technically and financially.

Mudd found that, given the high proportion of acid-forming rock in the waste product, the company’s plan to leave a giant open pit in the ground, and a giant pile of waste rock along site it, was not viable.

With that much acid-forming rock, there wouldn’t be enough clay to properly encapsulate the mound and it would leach acid into the environment for years or centuries.

Mudd said the only viable option was to insist the company backfill the pit. He said that would minimise the amount of acid that would leach into the environment in the long term.

In Australia, very few mines have been properly backfilled, and none the size of the McAurthur mine has.

Mudd said it could cost as much as $1bn to move the dirt from the mound into the pit and properly rehabilitate the site: “That’s just the cost of doing business.”

Ensuring the company has put aside enough money to cover that was one of Mudd’s key recommendations.

Currently the size of the company’s rehabilitation bond is unknown, and a recently leaked government report from Queensland revealed that rehabilitation bonds regularly fall short of the actual cost.

Mudd called for a public commission of inquiry set up under the Northern Territory’s inquiries act to be set up “immediately”. It could consider how, if at all, the site could be made safe, and how much it would cost.

“Until then, mining should stop,” he said.

Glencore has been contacted for comment.

1 Comment

Filed under Australia, Environmental impact

Glencore zinc mine must be shut down, say traditional owners

Protests will occur in Bangladesh, South Africa, Zambia and London against Glencore, which has been the target of previous protests. Photograph: Fabrice Coffrini/AFP/Getty Images

Protests will occur in Bangladesh, South Africa, Zambia and London against Glencore, which has been the target of previous protests. Photograph: Fabrice Coffrini/AFP/Getty Images

A protest planned outside the company headquarters in Sydney will be matched by others around the world by people affected by Glencore mines

Michael Slezak | The Guardian | 18 May 2016

The McArthur River mine in the Northern Territory – one of the world’s biggest zinc, lead and silver mines – must shut immediately and owner Glencore must cover the clean-up costs, say traditional owners who will protest outside the company’s headquarters in Sydney on Thursday.

Coinciding with Glencore’s annual general meeting in Switzerland on Thursday, a delegation of the four groups that share responsibility for the river – the Gudanji, Garawa, Yanyula and Mara people – will be joined by protests in other communities impacted by Glencore mines around the world. Protests will occur in Bangladesh, South Africa, Zambia and London, organising under the banner #makethempay.

A 2014 independent report found the mine contaminated the McArthur river, concluding 90% of fish stock in a nearby creek had shown dangerously high levels of lead.

Residents and environmentalists have also complained of a large pile of smouldering waste, which the independent report said was polluting surrounding water and emitting poisonous fumes.

glencore protest australia

Glencore then delayed erecting signs warning of the contaminated fish for over a year, despite members of the clans that control the river fishing extensively from it for food. The mining group, which turned five executives into paper billionaires when it floated on the London stock market in 2011, later said it was waiting for regulatory approval from authorities for the signs.

Government documents later showed the Northern Territory government and Glencore knew about the signs of contamination but did not fully inform the communities.

Glencore now has plans to double the size of the mine, but will need to submit an application to the federal government for approval.

The company has denied polluting the river, pointing to other 2014 findings which did not show evidence of “mine-derived lead” in McArthur river and Surprise creek, and only recorded elevated levels in “small non-eating fish deep within the mine itself”.

“Glencore had no right to poison our river and damage the land,” said Gadian Hoosan, spokesman for the Garawa Land Trust, whose land is situated downstream of the mine. “All four clan groups rely on that river. It was our main food source and livelihood and they took that away from us.”

Lauren Mellor from the Mineral Policy Institute’s legacy mines project, said the mine has been a disaster for people living downstream.

“Instead of digging itself into a bigger hole by pursuing expansion plans, Glencore must move its operations to a closure and clean-up phase and guarantee rehabilitation of the site.”

ActionAid helped facilitate the protests, and have been fighting what they say is Glencore’s “tax dodging” around the world.

Archie Law, the executive director of ActionAid, said:

“Glencore is robbing communities all over the world of their livelihood and the public funds that should be paying for basic infrastructure and public services.”

Leave a comment

Filed under Australia, Environmental impact, Human rights

The race to avert disaster at the NT’s McArthur River Mine

IMAGE: GARAWA TRADITIONAL OWNER NANCY MCDINNY IS WORRIED ABOUT WHETHER THE MCARTHUR RIVER MINE IS AFFECTING THE RIVER (ABC/JANE BARDON)

GARAWA TRADITIONAL OWNER NANCY MCDINNY IS WORRIED ABOUT WHETHER THE MCARTHUR RIVER MINE IS AFFECTING THE RIVER (ABC/JANE BARDON)

Jane Bardon | ABC | 12.02.2016

When a giant toxic waste dump spontaneously ignited at one of the world’s largest zinc mines, serious questions were asked about how it could have happened. Jane Bardon investigates how regulators allowed a mine to operate with no known solutions to its massive waste problem.

In the Northern Territory’s Gulf country, Indigenous residents fear they’re on the cusp of an environmental disaster.

They’re calling for the McArthur River Mine, the world’s largest bulk zinc-lead-silver concentrate exporter, owned by the Anglo-Swiss company Glencore, to be closed because its waste rock dump and tailings dam are leaching acid, metals and salts into the McArthur River system.

But Glencore says its operation hasn’t contaminated fish in rivers outside its mine lease. It’s hoping to find solutions to the challenges it faces managing reactive waste rock on its site so it can get approval under a federal and Northern Territory government environmental impact statement (EIS) to keep on mining.

Approved as an underground mine in 1995, the mine was allowed to go open cut in 2006. In an move that outraged the area’s four Indigenous clans, the miner Xstrata was allowed to divert five kilometres of the McArthur River to get to the ore body underneath, and plough through the Rainbow Serpent dreaming site.

That move still hurts some of the clans’ leaders, including Garawa elder and well-known Indigenous painter Jack Green.

‘The hole was hurting me a lot. It’s part of that old rainbow. A lot of old people that were fighting for it; they’re all gone now,’ he says.

‘If they were still here today I think they would be still here with me arguing about that hole. It looks like I am only one person standing up on behalf of myself and my kids and my missus.’

IMAGE: THE MCARTHUR RIVER MINE'S WASTE ROCK DUMP WAS BURNING FOR MORE THAN A YEAR (ABC: JANE BARDON)

THE MCARTHUR RIVER MINE’S WASTE ROCK DUMP WAS BURNING FOR MORE THAN A YEAR (ABC: JANE BARDON)

In 2013 the territory government approved another expansion of the mine, to double its size, increase its production rate, produce 500 million tonnes more waste rock, and extend the mine life to 2038.

But six months later, by the end of 2013, the mine’s waste dump spontaneously started combusting. The fire sent a plume of toxic iron sulphide smoke over the pristine coastal floodplains and savannah of the Gulf Country.

Residents, including painter and Garawa traditional owner Nancy McDinny, were horrified.

‘It was really smoking. We saw smoke all around it,’ she says. ‘It made people really scared. We thought it was turning into a volcano or something, getting burst and going down to the river again.’

Pyrite iron sulphide stacked in the dump had heated up in oven-like conditions and ignited.

Glencore had misclassified its waste rock during the EIS as 12 per cent reactive potentially acid-forming rock, and the rest non-acid-forming.

When it received the results of new geotechnical studies in August 2013 it realised it actually had 90 per cent reactive rock—made up of several categories that were potentially acidic, alkaline or metals leaching.

The company had dismissed warnings from the Northern Territory Environment Centre during the expansion EIS process that there was potential for misclassification.

In its reply to the Environment Centre’s objections, the company said in its EIS Supplement: ‘ECNT’s interpretation of the basis for conducting further geochemical work on the non acid forming material is incorrect. Significant information and understanding on the geochemical properties and behaviour of the non acid forming is held.’

Former campaigner Lauren Mellor says the Environment Centre recognised problems before the expansion went ahead.

‘Our submission to the phase 3 expansion for MRM pointed out the fact that no classification for the waste rock had been done adequately to determine the sulphur content, the pyritic nature of the rock material that was on site and what we thought that might pose further down the track,’ she says.

There were also delays in the company informing the NT government it needed to deal with majority reactive rock.

The Territory Mines Department complained in a briefing paper to the chief minister, Adam Giles, that the information was buried in a mine management plan lodged in November 2013, three months after the discovery. It did not call the company in to find out what was going on until February 2014.

The Mines Department also says that although the combustion started in 2013, it was not notified until 2014.

‘The department was advised of a change in the waste rock classification in February 2014 and was alerted that on site practices were not adequately controlling combustion by a complaint from the public about smoke emanating from the wasted rock dump early in the dry season of 2014,’ the department said in a statement.

Glencore’s McArthur River mining manager Sam Strohmayr says there was no attempt by the company to hide the information.

‘That’s not the case at all,’ he says.

‘It’s very clear in the mining management plan about the changes in the classification and we’d already started to put in place changes on the actual mine site at the same time. It’s very clear in the MMP about the changes in the classification.’

The Mines Department’s chief executive, Ron Kelly, says the department has historically dealt with issues that come up on mine sites through the annual and biannual mine management plan process, and that has led to delays in tackling issues at mines.

But he says that is changing, ‘so that when a new technology, or when a new issue is uncovered, that we can move quickly to address those issues’.

‘That is something that the independent monitor has said we need, to be more reactive and ensure that we don’t allow a problem to occur, and then wait a year until a new mine management plan is put in place to address an issue. That’s how we are working into the future,’ Kelly says.

The dump problems were referred to the Environment Protection Authority, and its chairman Bill Freeland decided that the company must submit a new EIS to explain how it was going to deal with the reactive waste rock.

‘They haven’t got there yet but they have done an immense amount of work,’ Freeland says.

‘I think we have to give them a bit of credit, that after this long, long period of probably negligence, what’s happening now is they are actually actively doing things and seem to be looking for answers.’

The federal government has also realised it needs to be involved. It will assess the plan under its EPBC Act, because that act is responsible for making sure threatened species, including the freshwater sawfish, are protected from mine impacts.

Glencore plans to submit its EIS by the end of this year, two and a half years since it was called for.

In the interim, Borroloola residents including Nancy McDinny have been increasingly concerned that the dump’s reactions may have contaminated fish in the McArthur River and its tributaries.

When iron sulphide gets wet, it turns into corrosive sulphuric acid, and other reactive rocks in the dump can leach salts and metals if wet.

‘Fish, sea turtle, dugong that we eat along the sea, shells, we’re too frightened to eat all of our bush tucker now, we grew up eating that stuff,’ she says.

By May 2013 Glencore had doused the dump fire by uncovering the reactive rock and cooling it down, and it has attempted to keep it dry by covering the dump with a layer of clay. It’s also pumping seepage away from the dump into dams.

But the residents’ concerns have not been allayed, because for four years now, since 2012, testing of fish in the Barney Creek on the mine site, by the mine’s consultant, and by the Territory Department of Primary Industries, has found that small species, including rainbow fish and bony bream, have been contaminated with lead above maximum-permitted concentrations, which denote safe eating levels.

Glencore and the government-appointed independent monitor, David Browne from Erias Group, point out there are several possible sources for the Barney Creek fish contamination, including dust off haul trucks on the Barney Creek bridge, dust from the processing plant and seepage from both the waste rock dump and tailings dam.

The company says it’s addressing these problems by catching more dust and better managing seepage from the dump and tailings dams.

But in 2014 and 2015 the fish tests picked up elevated lead, zinc and mercury in fish people catch off the mine site.

Glencore has continued to deny that it has contaminated fish off its site. It has pointed to the fact that many rivers in the region are naturally heavily mineralised. And it says analysis of the isotopes of the lead in the fish caught off the mine site show that they contain non-mine derived lead.

Sam Strohmayr says the isotopes act like a kind of signature for the metals. ‘Each ore body or source of lead has an isotope, or a signature if you like, and you use that to determine where the lead is coming from. So that is the basis of our understanding so far,’ he says.

But the Territory Health Department’s Steven Skov, who works in the Centre for Communicable Diseases, says the science isn’t conclusive.

‘I couldn’t say that what we were seeing was because of the mine and I couldn’t say that it wasn’t because of the mine either,’ he says.

‘Unfortunately, there doesn’t seem to be any data or testing of fish from that area from before the mine was put in place, either when it was an underground mine or when it moved to open cut. I haven’t been able to find anything; nobody’s been able to tell me about anything. So there’s no before and after stuff to make an comparison to.’

He wants signs to be put up warning people about the risks of eating fish, particularly from Surprise or Barney Creeks, or the mine’s Bing Bong port, because he feels the current advice he’s giving to Borroloola people, to just eat a bit of fish two to three times a week, needs to be made clearer.

He is also pushing the NT government to make sure there’s a better fish testing program put in place.

Ron Kelly from the Mines Department also doesn’t believe the isotopes argument is conclusive.

‘There’s no evidence of any minerals or contaminants leaving the mine site and having an impact on fish stocks, there’s no evidence that there’s not, but if there were issues, the department of health through the public warning system would take action,’ Kelly said.

The EPA’s Bill Freeland also thinks the jury is out, but says there doesn’t appear to be a major off-site pollution problem yet.

‘They have detected isotopes in the fish downstream, which clearly come from the mine, but they are in trace levels so it’s not a significant issue in that sense,’ he says.

‘I think, though, that we need more data and better understanding and I think we just have to be patient. These things can’t be done overnight. It’s very complex.’

The NT government is still investigating the fish contamination, and the federal government is also investigating whether the fish contamination has breached the EPBC Act.

It said in a statement: ‘The independent monitor in their 2012-13 report identified that lead isotope ratios in the environment indicate that the mine could be a source of this contamination. The Department of the Environment is investigating whether identified impacts constitute a breach of the Environmental Protection and Diversity Act.’

While the Territory and federal governments wait for Glencore to submit its EIS, a series of other problems with the waste rock dump have continued to grow. The company has kept adding to the dump, even though the clay used to line its base has failed many of its moisture and compaction tests. The liner is meant to be a key barrier against leaching.

The company has also admitted that because of the waste rock classification mistake, reactive rock has been stored in the base of the dump below the one-in-100-year flood line. Bill Freeland says that’s a major problem for a mine on a floodplain.

‘It’s not acid-generating, but what happens with some rocks, say they’ve got a high level of arsenic or, or lead or whatever it might be, that will leach out and it will become soluble and it will go into the environment,’ he says.

‘It’s exactly the same as acid metalliferous drainage, but it’s not acidic—it’s alkaline. And you get the same sorts of effects.’

To tackle that in the short term, Sam Strohmayr says the company is building a clay and rock flood wall around the dump base.

‘What we’re doing there is putting in flood protection bunding so that in the case, the rare occurrence of a one-in-100-year flood, that the water can’t ingress into the base of the dump,’ he said.

Neither the Mines Department nor the company have been able to yet say whether the reactive rock will have to be taken out of the already-giant dump’s base in the long term.

The company’s key long term problem will be convincing the regulators it can it can find a solution that safely encapsulates all of the reactive rock it needs to dump, with the amount of benign rock available to do that on the site now severely limited—just 10 per cent of the waste it’s mining out. Strohmayr is confident a solution will be found, however.

‘Glencore is 100 per cent committed to McArthur River,’ he says. ‘We have invested a lot of money in McArthur River over the last years. We see McArthur River as a long-life asset. We have 20 years of resource to go.

‘We’re 100 per cent committed to doing things correctly, making sure we’re running the operation firstly in a safe manner, doing it in an environmentally safe manner, and ensuring it’s profitable into the future.’

Instead of waiting to see what Glencore proposes in the EIS, Borroloola residents have commissioned an alternative plan to close the mine.

Activist Lauren Mellor has facilitated the plan, and says residents are worried Glencore’s mine will be left leaking into the environment like many other old mines in the area.

‘They want to see a fully costed and comprehensive closure plan and so they’ve actually fundraised, through the sale of artworks, to raise their own funds to bring on a team of experts who are recognised around Australia as being experts in lead pollution and legacy mine containment and acid metalliferous drainage,’ she says.

‘These experts are coming on board to write this report to look at an option for backfilling that reactive material into the pit.

‘The job will be for the community and those experts to convince the government that this is the most sensible, this is the most cost-effective, this is the best way to deal with this problem.’

One of the closure plan’s authors is Monash University civil engineering department senior lecturer Gavin Mudd.

‘We cannot leave tens to hundreds of millions of tonnes of sulphidic mine waste above ground, and expect that it’s going to be safe forever,’ he said.

‘Sometimes you have to wait 20 years for acid mine drainage problems to really become apparent. At the former Goldsworthy iron ore mine in Western Australia, which was closed in 1994, acid mine drainage problems, like those at McArthur River, only became apparent in 2004, 10 years later.’

Worried that taxpayers could be left carrying the cost of cleaning up the mine site, the NT government last year demanded an increase in the financial bond it holds against Glencore, under the threat of ordering the mine to close.

Chief minister Adam Giles says the bond would pay for a 100 per cent clean-up. But he won’t say how big it is.

‘I don’t make comments about the level of the bond,’ he says.

‘They are commercial in nature, but we just take advice from independent experts to guide is on what the bond should be, and then it’s a negotiation process with the company themselves.’

Bill Freeland hopes the company will be able to keep mining and come up with viable solutions to deal with its problems while protecting the environment.

He says bond or no bond, the last thing Borroloola’s residents and the Australian public need is another legacy mine site. And he says it will be on the taxpayer if the mine goes bust.

‘We would much rather the miner did it and the complexity of what’s got to be done is huge,’ he said.

‘We don’t have, as yet to my mind, an adequate closure plan just for the waste rock dumps. It makes it very difficult to predict how much you’re going to need and all the rest of it.

‘The only certainty is if we’ve got someone there to pay for it, and if they stay there then it solves a lot of problems for everybody.’

1 Comment

Filed under Australia, Environmental impact, Human rights