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

Papua New Guinea

98% of the population is MelanesianOver 800 Indigenous tribal groupsAbout 6 million people473.189 km² - Total land mass. Democratic Government – member of the common Wealth1975 – Gained Independence from Australia 85% - PNGeans are subsistence farmers95-97% - Land is customarily owned by local people.

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,

Mining in Papua New Guinea

• Mining began in the late 80’s in the Milne Bay Islands and then onto PNG mainland in early 90’s.

• 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.

PNG Mining and Petroleum Projects

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

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

Ownership in the mining projects

Canadian Company

% Ownership Mining Project in PNG

Barrick Gold Corporation

95% Porgera Mines

Inmet Canada 18% Ok Tedi Mines

Nautilus 100% Sol wara Project – Deep Sea Mining

Falconbridge Exploration Frieda Copper (sold to Xstrata)

BarricK Gold Corporation

100% Kainantu Gold Mine (now closed)

Placer Dome 80% Misima Mines (now closed)

Canadian Mines and responsibilities.

• Canadian mining companies seem to now take lead 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.

Porgera Gold Mine - PNG

Mine Pit(Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004)

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.

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 rivers that 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.

Porgera Gold Mine

(Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004)

Development Map

• 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 1990’s. 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,

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.

• 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 1990’s, 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.

Locals mining the waste dump

(Source: 2004 PNG Mining & Petroleum Seminar, Pogera Joint Venture, May 2004)

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.

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 small atoll in the Mine Bay Province.– Misima was the first mine in PNG to dispose of mine waste into the sea. The

pipeline ruptured twice during the operation of the mine. Little was done about it and the operations continued for some days while waiting for a solution.

– Placer Dome did not admit and take responsibility when nearby villages creeks for their daily domestic use dried out once the Misima mill process water was taken from bore water. An investigation indicated a drastic drop in the water table that made it hard for the creeks to run again. The drying of the creeks for a prolong period was not normal for the islands.

The Ok Tedi Mine

• Inmet Canada has held an 18% of the Ok Tedi mine shares since operation began in 1984.

• As other mining companies exited because of the environmental catastrophe imposed on one of PNG’s greatest rivers (Fly River System) and its impact on the 50,000 local people, Inmet Canada and BHP remained. BHP was forced to exit due to international pressure but prior to its exit, BHP together with the PNG government established another entity “the PNG Sustainable Development Program” company which now invests in Singapore by trustees equally nominated by both.

Source: PNG Sustainable Development program, David Winsink Source: OTML PNGSDP

The Ok Tedi Mine - PNG

Overburden waste Management

Erodable dump sites

Environmental Destruction

Irreversible Environmental damage and ecological collapse in PNG waters

Source: OTML

ACID MINE DRAINAGEOk Tedi River

Effects of Mining on Food Security

Local food sources at risk

Environment created for more mosquitoes and therefore increase in mosquito related illnesses.

Flooding due to rise of riverbed caused by deposition of sediments

Source: OTML Community Relations officeSource: CERD

Sedimentation & Navigation

Nautilus in PNG and the Pacific

• Deep sea Mining exploration in the waters of the Pacific is currently driven my Nautilus

• Nautilus is exploring for minerals in the water of PNG, Tonga, New Zealand, Fiji perhaps others.

• In PNG there is no white paper policy on Deep Sea mining yet but Nautilus may be the first to have a mine soon anyway.

• PNG will be the first to use a newly built equipment made purposely for this activity.

• If done so, PNG will be the guinea pig to be experimented on.

Effects of Mining outweighs the impact caused.

• Although a major income generating industry, extractive industries and particularly mining is a very environmental and socially destructive industry.– Little benefits have been experienced from mining by

those living in or nearby.– In Papua New Guinea where 85% of people live a

subsistence lives, people have suffered at the ruthless behaviour of mining companies at the mercy of the host government and at the expense of the local communities.

Environmental Concerns

• Environmental issues are the major concern of the people of PNG and many other indigenous communities in the world. It affects their lives – way of life, health, food sources (quantity and quality) and their local economy.

• In PNG almost all mines discharge mine tailings and overburden waste into rivers directly.

• The impacts of this act is devastating.

The confluence of Auga/Angabanga

Rivers(Koma & Wolfe, 1996

Auga 20kM from the mine

“It would be really good if this river never flowed this way again. Or I’d rather have a dry riverbed than a dirty flowing river that only hurts all the time I see it. It is not the fault of the river but those that have made it this way should keep it for themselves.” Words of a youth from Yumu village, Tolukuma.

What is irresponsible Mining?• Double standards – Doing what you are

not allowed to do in your own country.• Taking cheap and shortcut routes to fulfill

own interest.• Ill-informing decision-makers and

manipulating the justice system to fulfill own needs.

• Avoiding full community consent,• Avoiding multi-stakeholder engagement,• Hiding the truth by using science to cover

up.

Concluding remarks

• As Canadian mines flock into the Pacific and amongst indigenous people we have only these to ask for. That:-– You respect our way of life and deal business

responsibly.– That hosts governments should not be forced

to undertake liabilities for your doing,– That you do business without rushing so that

all parties benefit.

Thank you!