Matilda Koma - PWYP Montreal Conference 2009

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Canadian companies abroad: perspective from Papua New Guinea Matilda Koma, Director, Centre for Environmental Research and Development, Papua New Guinea

Text of Matilda Koma - PWYP Montreal Conference 2009

  • 1.Canadian Mines Overseas in Papua New Guinea
    • PWYP Coalition Conference
  • Montreal, Canada
  • 16-19 November 2009
  • Presented by: Matilda Koma,
  • Centre for Environmental Research & Development

CERD Mining, People& Environment 2. Papua New Guinea 98% of the population is Melanesian Over 800 Indigenous tribal groups About 6 million people 473.189 km - Total land mass.Democratic Government member of the common Wealth 1975 Gained Independence from Australia85% - PNGeans are subsistence farmers 95-97% - Land is customarily owned by local people. CERD Mining, People& Environment 3. Papua New Guinea

  • Famous for its mineral, oil and gas wealth,
  • A very young nation 32 years since independence,
  • Culturally rich country
  • people existed for more than 50,000 years,

CERD Mining, People& Environment 4. Mining in Papua New Guinea

  • Mining began in the late 80s in the Milne Bay Islands and then onto PNG mainland in early 90s.
  • Mining is not a smooth business in a very culturally dominated society where foreign culture is quite new - particularly now with more advanced and sophisticated technologies.
  • Nonetheless, mining and petroleum industries are known to be the economic backbone of Papua New Guinea although the agricultural sector provides 85% of the workforce.
  • About 72% of export earning are from the mining and petroleum sector.

CERD Mining, People& Environment 5. PNG Mining and Petroleum Projects CERD Mining, People& Environment 6. Mines (minerals) in PNG

  • 5 large-scale mines
  • 4 medium scale mines
  • About 6000 small-scale mines
  • About 3 large-scale projects in the pipeline
  • About 5 advanced exploration licences
  • Over 2000 exploration licence holders

CERD Mining, People& Environment 7. Canadian interest in the PNG Mining Industry.

  • In the last decade international mining companies of Canada have moved or increased interest to the South particularly the South American and the Asia Pacific Regions.
  • Some actively participating Canadian mining companies in PNG in the last decade are:
    • Placer Dome, Barrick Gold, Inco, Inmet Canada, Falconbridge, Noranda, Nautilus, etc

CERD Mining, People& Environment 8. Ownership in the mining projects Kainantu Gold Mine (now closed) 100% BarricK Gold Corporation Misima Mines (now closed) 80% Placer Dome Frieda Copper (sold to Xstrata) Exploration Falconbridge Sol wara Project Deep Sea Mining 100% NautilusOk Tedi Mines 18% Inmet CanadaPorgera Mines95% Barrick Gold Corporation Mining Project in PNG % Ownership Canadian Company CERD Mining, People& Environment 9. Canadian Mines and responsibilities.

  • Canadian mining companies seem to now takelead in exploration and mining in PNG than other traditional companies.
  • Although these Canadian mines are world class international mining companies, they have tended to live behind a legacy of irresponsible acts on local communities in the vicinity of their operations.

CERD Mining, People& Environment 10. Porgera Gold Mine - PNG Mine Pit (Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004) CERD Mining, People& Environment 11. Porgera Gold Mine

    • Operated by Placer Dome which owned 65% from 1990-2007 before being acquired by Barrick Gold Corporation. Barrick now owns 95% of the mine.
    • Produces at 210,000 tonnes ore and waste per day (approximately 6 million tonnes per year).
    • Ore grading differ between 4-20 grams of gold per tonne.

CERD Mining, People& Environment 12. Porgera Mine & the Environment

    • Riverine Tailings disposal: 18,000 tons/day (7 million tonnes per year) into the river system. Tailings account for only 20% of total waste into the river.
    • Eroding dumps of overburden material accounts for about 80% of total mine waste dumped each day.
    • Mixing Zone:170 kms along Porgera, and Lagaip riversthat drain into the Strickland River. The company has been allowed to pollute 170km stretch of the 1000km length river which then eventually meets up with the Fly River that is already polluted by the Ok Tedi Mine (18% owned by Inmet Canada).
    • Environmental regulations of heavy metals and cyanide are monitored at this 170km boundary not suspended solids which is the major destroyer of the habitat of the river ecology.

13. Porgera Gold Mine (Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004) Development MapCERD Mining, People& Environment 14.

  • Due to environmental implications and concerns Placer Dome established a Porgera Environmental Advisory Committee (PEAK) with hand-picked NGO representatives which meet frequently throughout the year.
  • A report by CSIRO, an Australian environmental group revealed mine-derived pollution in the flood plains almost 1000km from the mine site in late 1990s. The company hired its own consulting team which of course gave the opposite view and continued to operate normally until the sale of its share to Barrick Gold Corporation.
  • In 2001 the Chairman of PEAK resigned pointing out that the company was using him as a propaganda material and failed to address environmental concerns.
  • In 2007 when Barrick Gold took over from Placer Dome it made no difference.
  • Environmental issues remain the same Barrick Gold continues to dump mine waste at the same rate into the river,

CERD Mining, People& Environment 15. Porgera Mine vs Illegal Mining

  • The company was quick to point fingers at the local people for stealing some part of the ore body in the mining pit area and describing them as illegal miners a term borrowed by the PNG government.
  • In silence company security forces and local people continued their in-fighting where lives had been taken until about 2005-2006 when the Placer dome admitted that their security forces had been responsible for many of these killings.
  • In March 2009 Barrick Gold called on the government for a state of emergency at the mine site in relation to what they describe as lawlessness caused by illegal miners.
  • In no time the PNG Police force took action and about 300 homes of local communities at the mine site went up in flames living many local people homeless.
  • Community leaders are currently discussing the matter with the PNG government.

CERD Mining, People& Environment 16.

  • Some of the things that the PNG government and the mining company/ies forgot to understand was that:
    • Local communities were never relocated to pave way for the mine so it was not their fault to not have been there.
    • Land is not is not a cheap commodity and is not something that can be easily be taken or given away for a bundle of money.
    • The mining activity has destroyed the alluvial miners only source of income along the Porgera and Laigaip river systems.
      • In late 1990s, the company offered a PGK15 million (US$5 million) compensation package for the destruction the alluvial mining site and other environmental damages. This amount was calculated on a formula of PGK0.01 (US$0.003) per tonne of tailings discharged into the river river system. Not sure where the formula came from because this is not definitely from any PNG environmental regulation. The alluvial miners refused to take the money as they felt it was not worth the loss.

CERD Mining, People& Environment 17. Locals mining the waste dump (Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004) CERD Mining, People& Environment 18. Benefits of Porgera Mine

  • The people of Porgera are strong and determined and have strong leaders that negotiate benefits.
  • Local people from the area have a 2.5% equity share of the mine, a stepping stone in the lives of mines (oil & gas) in PNG.
  • People have made the company build a township for them where employees of the mine can stay and work at the mine site rather than work on a Fly-In Fly-Out arrangement of the mine.
  • If there is any be benefits, it is only experienced at the mine site and not so much in other areas affected by the mine and is a result of hard negotiations between the landowners and other stakeholders.

CERD Mining, People& Environment 19. Kainantu and Misima Mines

  • Kainantu gold mine (medium-scale) was shut down only after 9 months of purchase by Barrick.
  • Misima Mine is closed by Placer Dome after exhausting gold and silver.
    • Both mines live no trace of so-called development for communities after exiting.
    • Both sites are abounded with holes in the ground, in hope for nature to take control of the rest.
    • Misima mine was operated by Placer done for about 15 years although emphasized for a 30 year period.
    • The Misima mine was located on a