Tag Archives: Watut river

Watut River – Newcrest Mining Sustainability Report 2014

Hidden Valley mine

Hidden Valley mine is causing ongoing environmental problems

Mineral Policy Institute

Newcrest Mining released their 2014 Sustainability Report earlier in April. As a large Australian gold mining company, Newcrest operate a number of mining and exploration sites in Australia, Africa, Asia and the Pacific. These include both the Hidden Valley mine and Wafi-Golpu exploration/development site in the Morobe Province of Papua New Guinea, which are operated with Harmony Gold.

The Mineral Policy Institute (MPI) is a little skeptical of the value of sustainability reports, as they are often a defense of the status quo rather than a tool for improvement. A typical report makes the company sound responsible, but omits any real challenges and uncomfortable truths. Hoping for change, from the company that wants to be seen as the ‘miner of choice’ MPI had a look.

Important background is that in October 2014 at Newcrest’s AGM, MPI formally presented copies of the Hidden Valley documentary and the accompanying report Mining in Morobe, Papua New Guinea: Impacts from mining along the Watut River to Newcrest Board Chair Peter Hay and CEO Sandeep Biswas. Hidden Valley contained strong feedback from communities about the need to change the approach to mining development, giving communities the right to ‘choose their own future’. The Mining in Morobe Report supported this with an assessment and analysis of Newcrest and Harmony Gold’s reporting. Multiple breaches were found in convention of the ICMM Principles, the OCED Guidelines and the Equator Principles with further problems relating to company policies, sustainability reporting and assurance.

We are pleased to acknowledge once again that Newcrest became a member of the Extractive Industries Transparency Initiative (EITI) and the Voluntary Principles on Security and Human Rights during 2014. Both provide opportunities for Newcrest to improve their performance and set a good example for other companies.

We note that Newcrest gave their own work a tick of approval in relation to stakeholder engagement and the International Council of Metals and Mining (ICMM) and Global Reporting Index (GRI) Principles. Unfortunately they never mentioned the Watut River, let alone the ongoing impacts on community and environment caused by sedimentation from the Hidden Valley mine.

It is useful to compare that self-assessment with the number of (unacknowledged in the report) sustainability issues at Hidden Valley and Wafi-Golpu. Table 1, from the Mining in Morobe Report assesses Newcrest and Harmony’s (and the Morobe Mining Joint Venture, MMJV) activities against a number of OECD Guidelines finding numerous breaches. MPI is yet to receive a response to these specific findings or a general response to Hidden Valley and Mining in Morobe Report.

Interestingly, despite being employed by Newcrest and guided by their criteria, the assurer, Ernst and Young made a number of interesting statements (p.52) alongside their limited assurance statement. In brief these included: (1) the benefits from strengthening engagement with NGO’s at a corporate level; (2) additional direct engagement with external stakeholders regarding reporting criteria; (3) additional case studies of interest to specific interest groups to demonstrate Newcrest’s response to challenges (ie Watut River); (4) improving the timeliness of the report as a means of identifying onsite issues and responding to stakeholder interests.

Despite having fundamental concerns about sustainability reporting and largely obscure assurance assessments, MPI supports these observations by Ernst and Young. While not addressing the fundamental power inequality between community and company, or the reducing the impacts on people and place, the recommendations could, if adopted by Newcrest, at least result in some improvements in reporting and acknowledgement of stakeholders concerns.

Table 1. Assessment of MMJV:Newcrest Activities against OCED Guidelines 

Table-1.-Assessment-of-MMJVNewcrest-Activities-against-OCED-Guidelines-747x1024

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Watut Union wants more time for Environment Consultation

DEC only allowing 28 days for community submissions

DEC has not given communities copies of the proposed environmental plan

Previous payments for environmental damage as low as K4 and K11 per family 

Sylvester Gawi | EMTV

The Union of Watut River communities in Morobe province have expressed concerns over the environmental damages that may happen when the Wafi mine comes into operation.

They claimed that damages done by mine tailings from the Hidden Valley mine in previous years were not compensated well by the Morobe Mining Joint Venture.

They are now calling on the Department of Environment and conservation to give enough time for the impacted communities to be consulted before an Environmental permit is approved.

The Union is saying that the 20 days given by the Department of Environment and Conservation to review Wafi mine’s environmental permit is inadequate.

They are now asking for the timeframe to be extended until the end of this month, to give enough time for them to consult the communities in the impacted areas of the mine.

President of the Union of Watut River communities, Reuben Mete, says they cant allow the permit to be approved without consulting the people.

“We want an expension of time so that the people of Upper Watut, Mumeng, Wampar and Salamaua LLGs be given ample time for discussions on issues that will be affecting them regarding the Wafi gold mine,” says Mete.

The union claimed that in previous years, communities affected by tailings from the Hidden Valley mine were not compensated well.

Payment documents from previous incidents revealed that locals were paid as low as K4 and K11 for damages done to their plants and food gardens.

What the union wants to see is impacted areas; especially riverine communities are consulted and fully informed on compensation methods before a permit is approved.

Chairman of Mining in the Morobe Provincial Executive Council, Okam Paton, has denied being consulted by the Department of Environment and Conservation.

He is expected to bring this matter to Tutumang’s attention when they convene this Thursday.

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Industrial mining, investment and impact in Morobe

One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on…

Charles Roche | MPI 

Industrial, large-scale mining has a massive impact on people and place. The more connected you are to country for food, shelter, culture, community and opportunity, the more vulnerable you are to adverse impacts.  This fact was demonstrated to me once again, very powerfully, in recent weeks.  Following an engaging, inspiring and challenging trip up the lower Watut in late September, I attended the AGM for Newcrest on the 31st October.  The difference between the stakeholders; the community on one side and the managers and directors on the other, could not have been more stark. One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on to another project, board or company. It’s striking to move between the groups, seeing the different realities from either side of the divide.

watutOn first impressions, life on the Watut seems simple. It’s slow and connected to the environment, the seasons, and to cultures and practices from millennia past. In that sense, it’s complicated, with elaborate connections between country and community – past, present and future. Connections that industrial mining, multinational big business and far-away investors seem unable to comprehend, let alone respect and value.  Although, if you accepted literally the mantra of corporate social responsibility, then you might believe big business care, or even understand the issues, and are rolling out solutions in the same way they dig ore.  Unfortunately, the drama of industrial mining is more a tragedy than a fairytale, with different languages spoken, one focused on profit, the other on people and place.  Never getting anywhere, like incompatible computer languages – imagine OSX and Windows trying to talk about solutions.

A week along the Watut left me tired. Nightly meetings and presentations, trying to understand the concerns of communities expressed in pidgin, then getting my English answers translated.  I’m not romanticising it, but the unfamiliar diet of taro and boiled green bananas, combined with dirt floors, pit toilets and river baths left me refreshed and inspired. Asked and challenged to help communities respond to mining, to identify and pursue their dreams and plans, to control their own destiny. This is why MPI exists, why we do what we do. The imbalance of power, the inequity of benefits and the injustice of outcomes must be challenged and overcome.

Alternatively, two hours in the Newcrest AGM made me angry, despairing at the lack humanity in industrial mining and in need of a long hot shower. A board and directors saying the right words, the words they say without conviction or understanding, the same words as years before, as at other AGM’s, different names, different faces but the same words. A roomful of retail shareholders, people who have lost up to 75% of the value of their investment. Small investors with few rights and, for the most, little interest in the impacts of the business they invested in.  But the majority of Newcrest is owned by large institutional investors  – were they there? do they care? The tragedy of industrial mining comes from institutions without conscience, mining companies and investors who care little about life along the Watut, all promoted by an unquestioning investment media that can only focus on the dollars.

We are making progress, however, and together with the communities along the Watut have the opportunity to effect change. MPI’s decision to pre-empt a new mine, rather than just focus on what has gone before, has and will continue to provide opportunities to influence the way mining is, or not done in Papua New Guinea.

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Development continues at Harmony Gold’s Hidden Valley, despite setbacks

 Zandile Mavuso | Mining Weekly

Development at JSE-listed gold mining major Harmony Gold’s first offshore greenfield project, Hidden Valley, continues to present challenges because of its remote location and lack of infrastructure, according to the company’s yearly integrated report for 2013; however, Harmony notes that major capital projects are under way to increase mill throughput at Hidden Valley to an initial 4.7-million tons a year.

Situated in Papua New Guinea’s Morobe province, Hidden Valley is a joint venture (JV) between Harmony Gold and exploration and gold development company Newcrest Mining, with both companies having a 50% stake in the operation.

Hidden Valley comprises two openpits, within 5 km of each other, that are currently in production. The first exploits the Hamata gold orebody while the larger second pit exploits the Hidden Valley and Kaveroi gold and silver orebodies.

“These major projects include installing an upgraded crusher and an upgraded oxygen plant, reconfiguring tankage, and increasing interstage screen capacity and raw water filtration. These enhancements will increase production at an incremental cost,” says the report.

Harmony Gold further notes that the JV partners are actively exploring according to the stipulations of the mining lease, and that the life of the operation could be extended if additional resources are identified. “There is ongoing resource definition drilling throughout the year and this is expected to continue in the normal course of business,” highlights the company.

Hidden Valley generated a revenue of R1.163-billion for the 2012/13 financial year, with total cash operating costs, after silver credits, of R309 230/kg. Attributable capital expenditure by Harmony during that financial year was R296-million, which included work on approved mine development, or sustaining capital, projects, process plant projects and new mobile equipment.

In 2012, 3.5-million tons was processed to yield 177 602 oz of gold and 1.7-million ounces of silver, 50% of which was attributable to Harmony.

The company says that a decrease in production for the year reflects a combination of factors, largely outside management’s control, but which will have to be considered when operating in remote areas. It adds that Harmony management’s ability to mitigate the impact of unexpected events reflects the benefit of an experienced team on site and on hand.

Infrastructural Developments

After an overland conveyor was recommissioned in September 2011, which increased capacity of the materials handling system, Hidden Valley raised milled tons by 14% in the second quarter of that year. However, production in the ensuing months was severely curtailed by an earthquake in December and exceptionally high rainfall in January and February of 2012, among other natural disturbances, which impeded access to high-grade ore.

This was exacerbated by infrastructural constraints, which included a six-day shutdown mainly due to the lack of grid power, the decision to reduce throughput to remediate large quantities of water on the tailings storage facility, fuel shortages caused by flooding and a 24-hour shutdown to check for damage after the earthquake.

Hidden Valley mine was connected to the national electricity grid in 2011 and is receiving up to 10 MW of grid power at night – which is 100% of its total requirements – and 5 MW during the day. “We are working with the national utility to increase the daytime supply,” says the gold major.

Grid power has reduced the operational costs of trucking diesel to site, with concomitant environmental benefits, and lowered demand of the site’s diesel-fired power station. In terms of the offtake agreement currently in place, the State-owned power utility benefits from securing a substantial customer, which, in turn, will support its infrastructural development and rural electrification programme, says the report.

Community Engagement

Hidden Valley’s policy of community engagement and local employment and training continued throughout 2013.

This year’s sustainability report highlights that constructing the Hidden Valley mine has contributed to sedimentation in the Watut river system and raised concern among downstream communities living on the riverbanks.

Two years ago, Harmony Gold and Newcrest JV company Morobe Mining Joint Ventures commissioned studies to assess current and future impacts on this river system. These sediment, biology and acid mine drainage characterisation studies confirmed the impact on the Watut river, as a result of activities at Hidden Valley and human activity along the river.

“Since 2010, we have been making significant progress in reducing mine-related sediment in the Watut river, as initiatives during the review period included the scheduled water-quality monitoring at all local and operational Hidden Valley sites, which continued throughout the year, in line with commitments in the environmental management plan,” says Harmony Gold CEO Graham Briggs.

There is also ongoing implementation of an erosion control and sediment reduction plan; the Hidden Valley pit dewatering and sediment reduction programme, initiated late in 2011; and the removal of large volumes of ponded water from the tailings storage facility – which aims to reduce pond size according to design parameters.

Briggs adds that the lime-dosing system and cyanide destruction plant, which aim to ensure acceptable water quality at the Nauti compliance point, are still operational, while the completion of gap analysis for the creation of a working closure plan is also still ongoing.

The report further highlights that several parallel studies are under way to manage Harmony Gold’s impact on the Watut river, including a technical workshop on acid mine drainage (AMD), which began in March 2012. However, there are no serious AMD issues in the river system at present.

“To prevent any possible occurrence in future, the team is developing a strategy for properly engineered waste-rock dumps, combined with an acid mine drainage treatment system,” states the report.

A scoping study was also completed when Harmony Gold installed a river titration system in the upper Watut river to provide an exact measure of river acidity under various conditions, including rainfall flush events. This will enable the mine to determine the efficacy of waste-rock-dump liming strategies.

Further, studies on the forest dieback in the lower Watut river – from flooding caused by sediment deposition, only as a result of Hidden Valley’s operations – were completed at the end of 2012.

Harmony Gold’s report further notes that there is an ongoing hydrobiology monitoring programme on ecosystem recovery in the upper Watut river.

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Documentary on Hidden Valley mine to screen at Melbourne festival

A 22 minute documentary about the Hidden Valley mine in Papua New Guinea will be screened at the Environmental Film Festival Melbourne on September 5, before going on general release.

In the film, produced by the Mineral Policy Institute, a people speak out for their river, and for their future.

The Hidden Valley gold and silver mine in the Morobe Province is affecting communities living along the Watut River, a long and fast-flowing river in a lush mountain region.  In the evocative and beautifully shot short documentary we hear how indigenous models of development are clashing with those imposed by mining companies and government when they are not listening to local landowners.

“Is this investment for the local people or for the shareholders in Australia and Africa?” – Howard Sindana in Hidden Valley.

We hear from a diverse range of local community representatives, community workers and landowners including Reuben Mete from the Union of Watut River Communities and from Dr. Gavin Mudd, an environmental engineer, as they describe the impacts of this jointly Australian – South African owned mine as well as the way forward to a more sustainable future.

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New plan on mining laws

Haiveta Kivia | Post Courier

Mining Minister Byron Chan told Nakuwi landowners of the Hidden Valley gold mine and Morobe Provincial Government leaders that the mining laws of Papua New Guinea will be changed.

Mr Chan said the law would be changed to reflect the land ownership rights of Papua New Guineans so that they did not miss out on benefits derived from such projects in their areas.

However, he qualified his statement by saying that the changes in the law would not take place tomorrow but over a period of time and would reflect the economy of the world and the country.

Mr Chan and Harmony Gold executives Johannes van Heerden, chief executive officer for South East Asia based in Australia; Mashego Mashego, executive director of Harmony Gold, South Africa; and Jaco Bosholf, executive of Harmony Gold South Africa, who were in Winima village on Monday to witness the hand over of Benefit Sharing Agreement and Special Support Grant projects.

They were put to task by Nakuwi landowner group chairman Rex Mauri and Morobe’s Deputy Governor Morokoi Gaiwata on behalf of the landowners.

The Minister said the law would be changed over time and would reflect the needs of the landowners but would also take into consideration the prevailing conditions of the world economy and especially the status of the Asia Pacific economy.
Mr Chan said this would ensure that the developers of oil, gas and mineral projects were not disadvantaged.

Mr Mauri asked Mr Chan, the State of PNG and the developers for an increase in their royalties from two percent to five percent so that the landowners could meaningfully participate in the project and spinoff business activities.

He also asked for the mining lease at Hidden Valley to be changed to Special Mining Lease (SML) which had broader benefits for landowners.

Mr Gaiwata asked for amendments to be made to the relevant laws regarding landowners only owning what was on top of the soil and down to six feet and not anywhere else under the land or sea.

He asked Mr Chan to change the law so that landowners could own everything from the top of the soil right down and across to where the ore body ended.

Mr Mauri also asked Mr Chan to inform all mining companies to respect landowners and ensure that they did not unnecessarily miss out on opportunities that would have positive impact in their lives and that of their children.

Mashego Mashego, a black South African and the Executive Director of Harmony Gold in South Africa, who flew all the way from there to witness the BSA and SSG projects, said Harmony Gold had a social obligation to ensure that landowners in places they did business in did benefit from the project.

Mr Mashego said from the boardroom in South Africa, they were constantly asking whether they were making a difference in the lives of landowners where they did business and he came to Winima at Wau, Bulolo District in Morobe Province to see firsthand if benefits were flowing to the landowners.

“We are here to understand the dynamics and not only understand it but to deliver,” he said.

He said MMJV was here to stay in Morobe Province and they were committed.

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The Pacific paradox

Andrew Pascoe | Australia’s Paydirt

 

 

 

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