Showing posts with label environmental. Show all posts
Showing posts with label environmental. Show all posts

Sunday, November 25, 2012

Latam miners urged to 'future-proof' operations

Latin America’s ability to attract mining investment remains robust despite current global economic pressure. Even from an exploratory point of view, the region’s potential is vast and its rewards tantalising; great swathes of territory have yet to be subjected to modern exploration.
But while Latin America’s allure remains bright, companies either seeking to invest or already well-established in the region often fail to appreciate regional risk and how to mitigate it. Sadly this can ultimately lead to the loss of a project that has taken years of investment and labour to develop.

“Most of the people you talk to at an early stage of a mining project will tell you how much homework they’ve done. They’ll talk about the tax regime, how stable the country is or how great the regulations are. They might discuss 20- or 30-year scenarios. But they should be doing a lot more on the local side,” Control Risks’ VP global services South America Daniel Linsker told delegates at the Mine Latin America conference on November 7.

“Locally you can have everything from licencing trouble to community trouble,” he said. “And always bear in mind that what a national government says and promises might not necessarily translate into help at the local level.”

“Another major issue revolves around illegal or informal miners. They often let a company prospect an area to discover the high-grade ore and then oppose the operation until the company packs up and leaves, allowing them to mine the ore for themselves,” he said. “Remember too that many social movements, NGOs and unions have members who build their political careers simply by opposing mining.”

Deep-rooted problems may even develop during early-stage prior consultation. “Most counties in the region have instituted or are instituting a format for prior consultation. Unfortunately [the process] is being morphed into a sort of local referendum. This poses all sorts of challenges,” he warned. “If it becomes a local referendum you have to careful of how it is organised, what the campaigning rules are and who gets the right to vote.”

One vital solution was to empower communities by involving them directly with the project. “[Companies should] empower communities rather than simply giving money or building projects. Show them what their rights are and involve them from the onset. Enable them to enforce their own rights; this seems the most effective way,” he said.


Arguments about operational risk in Latin America were expanded on by Norton Rose’s managing partner in Colombia, Glenn Faass and Norton Rose’s co-head for Venezuela mining practice, Rubén Eduardo Luján, in a joint interview with Mining Weekly Online. They stressed the importance of engaging in prior consultation, with Luján highlighting Peruvian legislation and how this might become a framework for Mexico.

On the issue of illegal miners and enforcing company rights both Luján and Faass argued that while the laws to protect mining companies are in place, many of the problems stemmed from ensuring their enforcement.

“The question is not the law itself in any of these jurisdictions, but the enforcement of the law,” Faass said. “For example, in Colombia you will ultimately get the right legal result if you are willing to spend time and money on it. But you then have to make sure it is applied and that can be difficult. Often the authorities that enforce legal rights tend to be part of the community in which the enforcement occurs and they may have more sympathy for the illegal miners rather than the legal miner.”

Clear and specific legislation can be key remedy for this, Luján said. “Peru offers the example of pro-active legislation. The government has stepped in providing specific legislation opposed to generic legislation that governs illegal mining. In some instances illegal mining is penalised through the criminal code.”

In discussing expropriation and nationalisation, both Faass and Luján stressed that there were well-established mechanisms for redress. Often the fact that expropriation is alleged can lead to a resolution. “The simple fact that expropriation is being alleged is a powerful public relations tool that is relevant to all of the countries in the region, because almost all are keen to attract foreign investment,” Faass said.

“The second avenue for a company is to seek arbitration if their investment was made under commercial agreements that have arbitration clauses within them. This may permit or require international or domestic arbitration, with many of the regions jurisdictions credible for dispute resolution,” he added.

“Finally, their rights could extend to international arbitration claims through an international treaty if the country in question is a signatory. When a company has such a claim, it’s often the case that a result will be achieved and for this to be respected by the national government. Sometimes this is because a national government will have assets outside a country that are liable to be seized in satisfaction of the arbitration award.”


Faass and Luján added that companies should think long and hard about future-proofing their operations against risk at local and national levels.

“Mining companies should make protection planning before they get involved in their investments. There might be jurisdictions where this might not be relevant in the immediate future, but there are some others where you might need to plan in case there are future issues with a government,” Luján said.

While Colombia has no history of expropriation or nationalisation, Norton Rose still advises those operating in or seeking to operate in the country to put precautionary measures in place, Faass said. “Remember a country that might not be an expropriating jurisdiction today could become one during a project’s 20 to 30 year timeline,” he added.

Faass and Luján also underlined the critical importance of engaging with local communities as the best means for mitigating risk and threats against a mining operation. “The important thing for companies operating in Colombia and the wider region is to develop community relations that makes them part of the community and allows people to recognise their economic contribution. Then you will generally find these things become easier,” Faass said.

Edited by: Henry Lazenby

Sunday, September 16, 2012

Pebble mine’s problems underline environmental tensions in Alaska

As summer turns to fall in Alaska, mining companies small and large are bringing their primary exploration and development campaigns to a close. They will have also been strengthening community relations and monitoring the environment in which they work. Formulation of plans and feasibility studies that strictly adhere to best environmental practice are, quite rightly, the norm.

That said, environmental scrutiny from various lobby groups, nongovernment organisations and government departments has never been more stringent. At times the debate can become heated.

This is certainly the case for the Pebble project being developed by the Pebble Limited Partnership (PLP) in south-west Alaska. Located near Lake Iliamna, around 200 miles south-west of Anchorage and near Bristol Bay and the Cook Inlet, the scale of the deposit is world class.

At a 0.30% copper-equivalent cut-off, measured and indicated resources stand at 5.94-billion tons, comprising 55-billion pounds copper (2.7-million tons copper), 67-million ounces gold and 3.3-billion pounds molybdenum. Inferred resources contain 26-billion pounds copper, 40-million ounces gold and 2.3-billion pounds molybdenum.

Exploratory work has been extensive and continues, PLP’s CEO John Shively told Mining Weekly Online.

PLP is a 50:50 joint venture between Northern Dynasty Minerals and Anglo-American. In total, capital expenditure on Pebble will reach $6.8-billion, he said.

“We have a large resource [and] will start with an openpit on the Pebble West zone, the focus for most of our resource drilling,” Shively said.

“We hope to get into permitting some time in 2013. We won’t try and permit the whole resource – our aim is to draw up a 20- to 25-year mine plan for a resource that could last from 75 to 100 years,” he added.

The operation will be based on a standard openpit template and use froth flotation. Concentrate is likely to be shipped as slurry in a pipeline, following an 86-mile road that will be built to connect the project with a captive port.

“If we have a slurry pipeline, we’ll also have a line to return the water once the concentrate is dewatered,” Shively said.

“The port will be built to receive handymax-size ships. We’ll also build a dewatering plant, concentrate storage facilities, a tank farm for fuel and housing for the workforce. It will be a fairly significant project,” he added.

PLP is keen to employ local people and utilise their skills.

“Around 1 000 to 1 200 jobs will be needed when operational. The example I like to use is the Red Dog mine [located in north-west Alaska, operated by Teck] where they’ve had over 50% local hire, with strong levels of native hiring,” Shively said.

Environmental objections to Pebble primarily revolve around the size of the project and the possible effects on the eco-system, particularly the waterways that serve as runs for sockeye salmon during their spawning season. Salmon fishing is a vital economic prop in Alaska.

The US Environmental Protection Agency (EPA) was requested by concerned groups, including the Pebble project’s opponents, to investigate the Bristol Bay watershed under Section 404(c) of the US Clean Water Act. This grants the EPA the right to “restrict, prohibit, deny, or withdraw the use of an area as a disposal site for dredged or fill material if the discharge will have unacceptable adverse effects on municipal water supplies, shellfish beds and fishery areas, wildlife, or recreational areas”.

The EPA’s draft Bristol Bay watershed assessment was critical of the Pebble project, dwelling on the threat to fisheries.

PLP responded by arguing that the EPA had rushed its drafting process and failed to take into account the environmental data supplied by the company – over 27 000 pages of analysis. PLP also criticised the EPA’s methodologies and use of a hypothetical mine to model its conclusions.

“Firstly, they didn’t consider any levels of mitigation. If [a miner] took the EPA’s mine plan to the government they’d laugh at you. They’d say ‘you don’t have a mine plan here, go away’. Secondly, the EPA came up with figures for salmon habitat destruction but we’ve no idea where these numbers have come from. They are way, way above the levels of impact we’d even considered,” Shively said.

“Then they came up with a conclusion about the impact on the fisheries without solid analysis for how they reached their conclusions,” he said. “It’s a mess.”

“[The EPA now has] to figure out what they’ll do with this report . . . whether or not [government] use it to make a determination, I don’t know. I think they might be less inclined to use it,” he added.

Other arguments against the mine centre on the threat of seismic disturbance and the fear of a resultant tailings dam failure.

“Alaska is a seismic area and there is a fault that runs near the prospect. But the most recent US Geological Survey report on the area said it was last active around 1.8-million years ago,” Shively said.

“[And] look at Chile; in 2010 they had an 8.8 magnitude earthquake and aftershocks. Their tailings facilities all held . . . the technology is available as is the understanding among engineers,” he said.

The Pebble project illustrates many of the dichotomies in modern mine development. To understand the effects their projects will have on wildlife, mining companies are rightly asked to accept the costs of delineating, modelling and monitoring how their presence could disturb the environment.

At the same time, it must also be recognised that mines and mining deliver valuable work and create vital revenue streams. This is major boon, particularly for Alaska’s rural regions.

Government agencies, both local and national, must, therefore, carefully weigh the positives and negatives of mining projects and carefully evaluate all available data.

Shively worries that Alaska’s enormous potential could become increasingly overlooked as major mining companies start to question whether economies of scale, which mitigate the time, effort and risk of investment, are possible in Alaska.

“Alaska is hugely underexplored area. There are several major mines in planning and under development . . . there’s a lot potential; I think the prospects are very good,” he said. “[But] you’ve got to wonder how expensive these projects are getting. People might not like the size of Pebble, but if you don’t have a large prospect, who would pay $120-million on environmental issues?”

Edited by: Henry Lazenby

Monday, June 25, 2012

Newmont accepts stricter conditions for Peru mine

Newmont Mining said on Friday it has accepted a stricter environmental mitigation plan for its $4.8-billion Conga gold mine and could resume work on the massive project.

Conga, the biggest mining project ever proposed in Peru, has been stalled since November because of ongoing protests by community groups who say it would hurt water supplies and cause pollution.

Newmont said that before the mine is built it will first build reservoirs that will guarantee year-round water supplies in towns that currently suffer shortages.

In an attempt to quell protests, the government had hired outside experts to recommend improvements to the company's own environmental impact plan.

President Ollanta Humala said on Thursday that Newmont had "finally identified" with the recommended changes that urged the company to build larger reservoirs that would replace two or more in a string of alpine lakes..

Humala is slated to address the issue on Saturday in a nationwide address where he is expected to call for more mediation to calm dozens of social conflicts over the spoils of natural resources.

"We have ratified our decision to implement the recommendations international auditors made to the environmental impact study for the Conga project," Newmont's head of South America, Carlos Santa Cruz, said in a statement.

"We share the government's call for dialogue, for the vast majority of civil society in Peru," Santa Cruz said in reference to local political leaders in the northern Andean region of Cajamarca who are leading protests to halt the mine. Gregorio Santos, the president of Cajamarca, did not immediately react to Newmont's announcement.

Conga, which is partly owned by local miner Buenaventura , would produce between 580 000 oz/y and 680 000 oz/y of gold.

Peru, which has vast mineral resources, is the second largest producer of copper and sixth of gold, but many mining communities suffer from widespread poverty and complain Peru's decade-long economic boom has passed them by.

Source: Reuters


Minas Conga Project:

Conga Project - Water First, mine later

Monday, April 30, 2012

Supreme court demands environmental reports used to approve Pascua Lama

The Argentine supreme court has ordered the national and the San Juan provincial governments to submit the environmental reports that were used to approve Canadian miner Barrick Gold's (NYSE: ABX) bi-national Pascua Lama gold-silver project, a source from the court confirmed to BNamericas.

The request is the result of a lawsuit submitted by a local community that is accusing the company of contamination on the Argentine side of the project.

Pascua Lama straddles the border between Argentina and Chile, with most of the designed open pit mine located on the Chilean side and the processing plants on the Argentine side.

The San Juan provincial government has been given 10 days to comply with the court order and submit the complete file of the environmental evaluation approval process.

The national government has also been given 10 days to inform the court if the environmental impact studies, set as a condition for its development as part of the agreement between Chile and Argentina to jointly host the project, were actually carried out.

Pascua Lama, currently under construction, involves pre-production capital cost of US$4.7bn-5bn, up from a previous estimate of US$3.3bn-3.6bn, as a result of inflationary pressures.

The project remains on track to start operating in mid-2013 and average annual gold production is put at 800,000-850,000oz in the first five years at negative total cash costs of US$225-US$275/oz.