Tag Archives: Ok Tedi

Mining in Ok Tedi will end around 2027: Exec

Peter Esila | The National aka The Loggers Times | March 2, 2020

OK Tedi Mining Ltd in Western invests about US$20 million (K66.46 million) annually in drilling for reserves, chief executive and managing director Peter Graham says.

Graham said current exploration was focused near the Mt Fubilan mine and within existing special mining lease (SML).

“The most prospective targets indicate underground rather than open pit mining,” he said.

Graham said the life of the mine, based on current reserves and mining rate, would end around 2027.

“The mine is limited by an agreement with communities on the amount of waste material mined and placed in waste dumps,” he said.

“Without this limitation, mine life would be longer.

“Efforts are therefore being focused on potential stable waste dumps, in-pit waste disposal and a potential tailings storage facility.”

Meanwhile, OTML is a major producer of copper concentrate for the world smelting and refinery market in Germany, India, Japan, South Korea and the Philippines.

The mine exports copper as a concentrate which contains gold and silver.

From start of operations in 1984 to end of 2018, Ok Tedi has produced 4.83 million metric tonnes of copper, 14.8 million ounces of gold and 32.7 million ounces of silver.

In addition to the SML, OTML holds a portfolio of several exploration leases (ELs), other leases for mining purposes (LMPs) under the PNG Land Act.

Apart from its direct monetary contribution, OTML is also involved in Western’s development through tax credit scheme and other infrastructure projects such as health centres, school classrooms, houses, roads, airstrips, jetties, water supply and communication systems for the villages.

Leave a comment

Filed under Financial returns, Papua New Guinea

Companies leave communities to grapple with mining’s persistent legacy

John C. Cannon | Mongabay | 28 February 2020

  • The destructive legacy of mining often lingers for communities and ecosystems long after the operating companies leave.
  • Several large, multinational mining corporations have scrubbed their images — touting their commitments to sustainability, community development and action on climate change — but continue to deny accountability for the persistent impacts of mining that took place on their watch.
  • A new report from the London Mining Network, an alliance of environmental and human rights organizations, contends that these companies should be held responsible for restoring ecosystems and the services that once supported communities.

The scale of excavation for copper and gold in the 1970s and 1980s at the Panguna mine, then one of the world’s largest open-pit mines, was massive: It swallowed up surrounding tracts of forest and farmland and wiped out wildlife populations on the island of Bougainville off the coast of Papua New Guinea. The company that operated Panguna, a predecessor of London-based mining giant Rio Tinto, dumped the mine’s contaminant-loaded wastewater into local streams for more than a decade and a half, killing off fish and rendering them too polluted for human use.

A mill at the Panguna mine, Bougainville. Image by Robert Owen Winkler

Neither the Papua New Guinea government nor the company stepped in to protect the environment, even after local communities, reeling from the impacts, sounded the alarm on the mine’s effects on their health, lives and livelihoods. Those tensions festered, and soon a war for Bougainville’s independence began. Fighting throughout the 1990s killed some 20,000 Bougainvilleans, and though a 2001 peace treaty granted Bougainville a measure of autonomy, the effects of the conflict and the mine still linger.

The company abandoned the mine in 1990, leaving it under the control of the Bougainville Revolutionary Army, and in 2016, Rio Tinto officially handed over its shares in the mine to Papua New Guinea and Bougainville.

“There is, in my personal view, an obligation of Rio Tinto to come back and to contribute to cleaning up the mess they left behind,” Volker Boege, who has studied the conflict and co-directs the Peace and Conflict Studies Institute Australia in Brisbane, said in an interview. “The effects of mining will be with the people on the ground long after [the] mining ceased.”

Holding Rio Tinto and other corporations accountable once they’ve relinquished their control of mines remains a difficult task, according to a new report published Feb. 19 by the London Mining Network, a consortium of environmental and human rights groups.

Equipment at the Panguna mine in the early 1970s. Image by Robert Owen Winkler

Rio Tinto said in a 2016 letter written by a company executive that the operation of the Panguna mine “was fully compliant with all regulatory requirements and applicable standards at the time.” But for Boege, who wrote the case study on the Panguna mine included in the London Mining Network report, that assertion doesn’t address the company’s ethical responsibility.

“I think it’s not good enough to just say, ‘We followed the legal obligations of the early 1970s or late 1960s,’” Boege said, “because everybody knows that this enables this kind of environmental destruction that people are suffering from even today.”

The report details lays out similar stories throughout Oceania and Southeast Asia. In western Papua New Guinea, BHP, a mining company with headquarters in Melbourne and London, elected to go with riverine tailings disposal — the same waste management strategy that polluted waterways around Panguna — for the Ok Tedi mine, a gold and copper deposit that BHP excavated until 2002. Situated amid forested mountains, the mine has been blamed for a 95% drop in fish numbers in the Ok Tedi River and degrading 2,000 square kilometers (772 square miles) of forest. Researchers figure that Ok Tedi has affected the livelihoods of around 40,000 people who depend on fishing, hunting and gardening.

Hannibal Rhoades, head of communications for the London-based NGO Gaia Foundation, said that companies like BHP often lobby governments for less stringent regulations. In Ok Tedi’s case, BHP persuaded the government to go along with riverine tailings disposal in the early 1980s.

The Ok Tedi mine in western Papua New Guinea. Image by Ok Tedi Mine CMCA Review

Papua New Guinea, like many resource-rich countries, has struggled to develop economically. As a result, leaders are often amenable to legal conditions favored by the company so they don’t lose a possible source of revenue.

While that’s a familiar pattern, said Rhoades, who wrote the Ok Tedi case study, it shows that governments too must be held accountable for protecting their citizens and the environment.

In addition to the companies’ role, he said, “It’s a game of power influence at the state level.”

Across the border in Indonesia’s half of New Guinea Island, the massive Grasberg gold and copper mine sidles up to the flanks of some of the region’s tallest mountains. Nearby, rare (and shrinking) equatorial glaciers cling to the summit of Puncak Jaya, towering 4,884 meters (16,024 feet) above sea level.

Still in operation today, the mine pumps an estimated 200,000 metric tons of waste into the Ajkwa River every day, contaminating a source of drinking water for local communities. Rio Tinto had been involved in the mine from 1996 until 2018, when it sold its stake to Indonesia’s state mining company, PT Indonesia Asahan Aluminium.

The Grasberg mine as seen from space. Image by ISS Crew Earth Observations Experiment and the Image Science & Analysis Group, Johnson Space Center

An investigation by The New York Times in 2005 found that Rio Tinto’s partner, U.S.-based mining company Freeport-McMoRan, had been paying tens of millions of dollars for Indonesian military and police to protect the operation’s employees. Local residents, such as Yosepha Alomang of the indigenous Amungme people, say that these government security forces in fact were there to deter local communities through intimidation from voicing their concerns.

But Rio Tinto says that when it sold its stake for $3.5 billion in 2018, its responsibility to address the problems for the local environment and communities that the mine has created ended as well, according to a case study written by Andrew Hickman, a researcher with the London Mining Network.

Hickman, Boege and Rhoades agree that challenging such contentions by companies that were once involved is an uphill battle. The success of using the courts varies. Several lawsuits against BHP for its operations of Ok Tedi yielded a settlement with the company, but BHP didn’t stop dumping waste in the river. In 1996, Alomang and other leaders sued Freeport unsuccessfully in the United States.

The London Mining Network advocates for the continued development of a United Nations treaty on transnational corporations that would codify protections for human rights.

Boege said that such “globally applicable guidelines” were necessary. But “they are not a panacea,” he said. “The problems can only be solved in the specific local context.”

Another tactic has been to bring local leaders like Alomang to the annual general meetings of companies such as BHP and Rio Tinto so they can speak with executives and shareholders about the problems their communities face.

Requests for comment from Mongabay to BHP and Rio Tinto went unanswered.

The Grasberg mine in 2007. Image by Alfindra Primaldhi

Companies have responded in their approach, however — at least as far as changing the narrative around the impacts of resource extraction. Rio Tinto, for example, says that a future “low-carbon economy” will rely on the minerals it produces, and touts its moves toward carbon neutrality in its operations.

Hickman calls such moves to scrub a company’s image “window dressing.” He also said that, when confronted with the testimony of leaders such as Alomang, these companies “have learned to be polite, but underneath the politeness is a fist of steel.”

That’s because the changes to operations, whether to make them more environmentally friendly or to ensure that communities are better informed, often lag behind the rhetoric put forth, the Gaia Foundation’s Rhoades said.

“It’s great that there’s that narrative and the investors are more active,” he said. But across much of their operations, he said, “their PR still far outstrips the genuine efforts on the ground to change practices.”

Leave a comment

Filed under Corruption, Environmental impact, Human rights, Indonesia, Papua New Guinea

New report names top British companies responsible for toxic mining legacies

Kalimantan, Indonesia. Coal mining operation. Credit: Daniel Beltrá

BHP and Rio Tinto have a long history of extracting minerals then pulling out, leaving devastation in their wake. Climate justice organisation London Mining Network reveals the extent of this in a new report.

London Mining Network | Feb 19, 2020 

London Mining Network has published a new report entitled ‘Cut and run: How Britain’s top two mining companies have wrecked ecosystems without being held to account’. The report includes examples from Southeast Asia of where the British-Australian multinationals BHP and Rio Tinto have left legacies of conflict and environmental destruction, long after they’ve fled the scene.

Recent examples of mining messes include Brumadinho, the tailings (mining waste) dam owned by Brazilian mining company Vale, which collapsed in January 2019 in Minas Gerais, Brazil. Vale executives, along with its German advisors TUV Sud, were recently charged with the homicide of 272 people; 14 people are still missing. Vale, along with BHP, jointly own the Samarco iron ore mine and tailings dam which also collapsed in 2015, causing Brazil’s worst environmental disaster in history and the deaths of 20 people. The trauma due to loss of life, displacement and job loss and the environmental repercussions of contamination of river systems in both catastrophes will be felt for decades to come. The entire mining industry needs to be held to account for such mining messes, and laws made which demand the cleaning up of messes made by mining companies before they pull out of projects.

Despite the best efforts of the industry, particularly BHP, to greenwash the extraction of fossil fuels and metals, the practice of ‘cutting and running’ when companies close mining operations tells us another story. The harm that extraction causes people and the planet doesn’t end once the companies disappear.

On 10th February, BHP became the world’s top copper producer, but this isn’t good news for the communities affected by their copper mines, and the other metals and minerals it extracts. In 2002, the company walked away from the Ok Tedi copper-gold mine it had controlled since 1982 in Papua New Guinea. For years it had dumped waste straight into the local river system. Eventually the company concluded that it should no longer do that and should not have operated the mine after all. But 18 years later the contamination and mess remains.

Rio Tinto was the majority owner of the Panguna mine in Bougainville, operated by Bougainville Copper Ltd (BCL), for 45 years. It dumped toxic mining waste the copper-gold mine in Bougainville (an island off the coast of Papua New Guinea) straight into the local river system between 1972 and 1988. This caused such outrage that it sparked a war for independence from Papua New Guinea, a war in which thousands were killed and independence was not won. The mine was abandoned. In 2016 Rio Tinto gave the mine to the authorities in Bougainville and Papua New Guinea but they do not have the financial or technical means to clean up the waste.

For shareholders in Rio Tinto and BHP, the deadly legacies of these mines make for risky investments, as the report illustrates.

Co-author of the report, Hal Rhoades, from The Gaia Foundation, said:

“This report shows how British multinationals have profited from destroying ecosystems and people’s livelihoods on vast scales in the Global South, while leaving their mess behind for communities to deal with. These are the same companies who are now trying to convince us that they hold the answers to the climate emergency. We cannot continue to pay lip service to tackling climate change while allowing the world’s largest corporations to devastate ecosystems that help regulate the climate and the communities that care for them. Holding these companies accountable and calling out their greenwashing is a crucial part of climate justice.”

Leave a comment

Filed under Environmental impact, Human rights, Papua New Guinea

Fly River affects Ok Tedi mine

Shirley Mauludu | The National aka The Loggers Times | January 3, 2020

THE low water level in the Fly River in Western has forced Ok Tedi Mining Ltd (OTML) to reduce its production by 50 per cent, according to chief executive and managing director Peter Graham.

Graham told The National yesterday that water level was low last month (December), thus, impacting the mine’s operations.

“During December, the water level in the Fly River has been insufficient to allow regular passage of Ok Tedi’s feeder vessels loaded with concentrate out of Kiunga and back from Port Moresby with fuel and food for all but the last days of the year,” he said.

Graham said four vessels were recently cleared but one loaded remained stuck in the shallows.

“As a consequence, Ok Tedi has limited stocks of fuel, diesel, explosives and other vital materials and concentrate storage in Kiunga is approaching capacity,” he said.

“To extend available stocks of vital materials, mine production has been reduced by 50 per cent and some contract personnel have been released.

“In the past week, some fuel and food has been received lifting stocks to 20-30 days at current reduced consumption rates.

“For the community, food stocks are adequate through the supermarkets and an allocation of diesel made available for rationing.”

Graham further noted that the weather forecast was for above average rainfall this month and next. However, he said: “Once river levels rise and sustain, recovery to full production will likely take several weeks.”

Meanwhile, in a recent statement regarding release of the final dividend of K100 million paid to shareholders, OTML chairman Sir Moi Avei said:

“This result has been achieved despite several extended periods of dry weather, including the current month (Dec), during which shipments of supplies in and product out have been severely constrained.”

1 Comment

Filed under Financial returns, Papua New Guinea

Shining a light on corporate human rights abuses in the Pacific

Business & Human Rights Resource Centre’s Amy Sinclair introduces a new portal that focuses attention on a resource-rich area remote from the rest of the world

Amy Sinclair | Ethical Corp | December 9, 2019

In recent months, damaging spills caused by foreign miners operating in the Solomon Islands and Papua New Guinea have wreaked havoc with the safety and livelihoods of coastal communities.

At the same time, with the independence referendum under way in the Bougainville region of Papua New Guinea, mining companies are jostling for new licenses. This is in a region where tensions over the infamous Panguna mine sparked a bloody decade-long civil war in the 1990s. Memories fade fast, particularly when there are profits to be made.

The Pacific region is intensely resource-rich, but with great distances separating Pacific nations – not only from one another, but also from much of the rest of the world – human rights abuses by companies have too often occurred in the shadows.

Mining companies are seeking licences amid Bougainville’s referendum for independence. (Credit: Melvin Levongo/Reuters)

With inward-investment growing, Pacific communities face increasing challenges to fair and informed engagement and run the risk of exposure to higher levels of abuse and environmental harm by global companies. This is particularly true for those on the frontline of deforestation, irresponsible mining, fishing, tourism and seabed exploitation.

Local activists and communities fighting these abuses are hindered by being far away from foreign company headquarters located in Canada, Australia or China. Distances may be great, but Pacific voices deserve to be heard. With greater visibility on global platforms, communities and advocates can be supported in their efforts to achieve stable, sustainable growth that will protect future generations.

The need for this increased visibility is great. Business-related human rights harms in the Pacific are, increasingly, being documented. Yet severe human rights abuses, including forced labour, slavery, human trafficking and child labour, persist.

In June, the Business & Human Rights Resource Centre (BHRRC) published a report on modern slavery in the Pacific tuna sector, which provides almost 60% of the world’s tuna catch in a growing industry currently worth $22 billion. The report surveyed 35 canned tuna companies and supermarkets, representing 80 of the world’s largest retail canned tuna brands, and found that, outside a small cluster of leading companies, the sector is not translating human rights policies into practice. Without urgent and decisive action in the Pacific fishing sector, and by those sourcing from it, there is a danger that company policy will provide a fig-leaf for abuse, while slavery continues unabated.

Deep-dives such as this yield invaluable insights into sector-specific questions, but more is required. There is a pressing need to raise awareness of the human rights responsibilities of companies operating in all sectors in the Pacific, and to bring to light the true nature and scale of human rights abuses being committed across the region.

The Solomon Islands, and Fiji in particular, are experiencing high levels of mining activity, and there is a danger that the mistakes of the past – seen in Papua New Guinea with the abuses and environmental degradation at Panguna, Ok Tedi and Porgera – will be replicated there and beyond. Community consultation must form the cornerstone of human rights due diligence by companies seeking to invest in the region, and profits should be fairly shared.

The Pacific tuna sector provides almost 60% of the world’s tuna catch and is worth $22bn. (Credit: Erik de Castro/Reuters)

 Fortunately, a nascent business and human rights movement is emerging in the Pacific. The first-ever dedicated Pacific session, Advancing the Business and Human Rights Agenda in the Pacific, was held during the annual UN Forum on Business and Human Rights in Geneva last month, a testament to the progress that has been made in the region recently.

To support and chart the growth of this emerging movement, BHRRC has launched a new web portal dedicated to the region. The Pacific portal brings the broad range of local business and human rights issues into sharper focus and amplifies local and community voices.

It’s hoped the portal will be a crucial tool for human rights and environmental rights advocates, both in civil society and in businesses themselves, seeking to prevent abuse and improve company human rights practices in the region. It will do this by highlighting research on key issues, identifying allegations of business-related abuse and calling attention to emerging cases.

Stability in the Pacific region requires urgent action to ensure human rights are embedded in investments from inception. Without regard for international rules requiring respect for human rights in business, the sustainability of life in the Pacific for future generations is under threat.

Efforts like this web portal are needed to shine a light into the shadows and improve awareness of Pacific business and human rights issues on the global stage.

To visit BHRRC’s Pacific portal click here: Pacific Business & Human Rights

Leave a comment

Filed under Human rights, Pacific region

PNG’s Ok Tedi mine disaster money locked in new legal fight

Alex Maun, a landowner who sued BHP in the 1990s, in the dying forest near the Ok Tedi River. CREDIT: ALEX DE LA RUE

Nick Toscano | Sydney Morning Herald | November 3, 2019

A fresh legal dispute has erupted over control of a fund set up to benefit the tens of thousands of villagers affected by mining giant BHP’s environmental disaster at the Ok Tedi mine in Papua New Guinea more than 20 years ago.

The Ok Tedi mine – which BHP co-owned with the PNG government until selling its stake in 2002 – discharged tens of millions of tonnes of mine waste into the local river system during the 1980s and 1990s, contaminating fish and trees and devastating the area’s economy.

A special trust account was created by the mine owners in the late 1990s to accumulate dividends from the Ok Tedi copper and gold mine’s ongoing profits to compensate the 30,000 landowners of the worst-affected communities living downstream of the mine.

Estimated to contain 250 million kina ($106 million), the Western Province People’s Dividend Trust Fund had been managed by PNG government officials until September last year when the Ok Tedi and Fly River Development Foundation, a regional representative group, raised allegations the funds were being “misapplied … causing a diminishment” and won a legal bid to become its trustees.

The newly-formed foundation headed by local leaders claiming to represent 30,000 residents of the villages most immediately impacted by the Ok Tedi mine disaster obtained National Court orders to replace the government as trustees.

But control of the trust is again under a cloud with the PNG government, represented by prominent Australian law firm Corrs Chambers Westgarth, last month obtaining further court orders blocking the ANZ Bank from dispensing the funds.

The Ok Tedi and Fly River Development Foundation has applied to have the injunction set aside, alleging an abuse of process, including claims the PNG government is a vexatious litigant and that Corrs Chambers Westgarth had failed to obtain the necessary certification with PNG’s Investment Promotion Authority to be practising in PNG. The case will be heard in the country’s National Court in December.

A spokesman for Corrs Chambers Westgarth said the firm was “not in a position to comment” as the matter was before the court.

An ANZ spokesman said it would be inappropriate to comment as the matter was before the courts in Papua New Guinea.

BHP, Australia’s biggest mining company, completed its withdrawal from the Ok Tedi mine in 2002, transferring its 52 per cent equity stake to a development fund designed to operate for the benefit of PNG residents, known as the PNG Sustainable Development Program Limited. The fund was to use dividend payments from BHP’s transferred shareholding in Ok Tedi to finance long-term sustainable development projects in PNG, particularly the western province.

The miner also reached an out-of-court settlement with 30,000 landowners represented by Slater & Gordon in a landmark lawsuit in Victoria’s Supreme Court in 1996, which included $110 million in compensation for the affected villagers.

Leave a comment

Filed under Environmental impact, Financial returns, Papua New Guinea

AG Tasked To Look Into Use Of Ok Tedi Funds

A mother and her malnourished child, Bimadbn Village, Morehead, Western Province, Papua New Guinea. Photo: Penny Johnson

Gorethy Kenneth | Post Courier |  August 30, 2019

Prime Minister James Marape has instructed the deputy Prime Minister and Attorney General Davies Steven to seek a restraining order to protect more than K500 million of OK Tedi CMCA and non CMCA funds from being abused.

North Fly MP James Donald took the PM to task to explain why there were a certain group of people now drawing down K58 million from the CMCA funds parked at a commercial bank in Port Moresby.

An irate PM Marape demanded the inquiry report done by former prime minister Peter O’Neill to be released.

“It saddens me that we continue to have people with interest outside of the main stream, outside of everyone, to use institutions of our democracy to access funds run-ning in and out of Vulupindi Haus, running in and out of Court Houses and access funds under the auspices or pretext of being better for our people.

Western Province like many other provinces with entitlements from resources continues to remain backward in so far as development indexes and indicators are concerned,” Mr Marape said.

“Let me call on the Attorney General and our Deputy Prime Minister to firstly furnish to us the enquiry that was made on the use of CMCA and non CMCA earlier, this Parliament deserves to have the benefit of that report.

“Let me advise the leaders of Western Province, that I also ask the State Solicitor to intervene and that this matter is put on hold until we ascertain exactly what is being pursued or what is being accessed and whether they are in compliance with the Trust Instruments we have and whether they have legal entitlements to those funds,” he said.

“As we speak, it is immoral to have Western Province still backward over K500million in funds that are entitled for development sitting in banks and government institutions, legal firms, many of the so called educated people, we are fighting over money that is meant to fix Western Province.

“They have their own funds sitting there, yet educated Western Provinces with a combination of other Papua New Guineans over time have been feasting on this funds outside of what these funds are meant for.

“It is about time we put to shame people who continue to access these funds and I propose AG to establish a pathway, with legitimate bodies on the ground like government, districts and CMCA agencies on the ground so that Daru town does not have black buckets anymore.

“The National Government will add in their ex-gratia component and their own funds and we will work in partnership to ensure that this province is moving on the right spot.

“Let’s find a way to help the Western Province leaders and the people,” he said.

1 Comment

Filed under Financial returns, Human rights, Papua New Guinea