MAC: Mines and Communities

Hidden Valley leaves disadvantaged communities 'worse off'

Published by MAC on 2011-02-07
Source: Australian, Ramublog

Court action is being mounted against an Australia-South African gold miner, accused of causing pollution in Papua New Guinea.

Perhaps there's little unusual in that (unfortunately).

Except that - this time - the charge is being led by Sam Basil, a member of Parliament.

Basil is being compared with his fellow countryman, Rex Dagi.

Fifteen years ago, along with Alex Maun, Dagi brought to account BHP Billiton, in the wake of destruction wreaked by the world's largest mining company at its Ok Tedi mine.

** Article updated on 11 February 2011

Mining leaves disadvantaged communities 'worse off'

By Luphert Chilwane and Sibonelo Radebe

Ramu Blog site

29 January 2011

The court action faced by Harmony Gold's subsidiary in Papua New Guinea was not surprising because most mining companies tended to overlook the effect and consequences of their activities on surrounding communities, said John Capel, CEO of a sustainability monitoring NGO, Bench Marks Foundation.

Harmony Gold and its Australian partner seem to have landed in hot water after trying to pay their way out of environmental damages attributed to their operation in Papua New Guinea.

The JSE-listed gold miner released a statement last week saying its mining operation in Morobe Province of Papua New Guinea, faces possible court action over sediment spillage from its Hidden Valley Mine joint venture. The sediment discharge seems to have caused environmental damage for communities along the Watut River. These damages include possible contamination of crops and home gardens.

Led by a parliamentary representative of the Bololo community and a number of land owners, the court action defies an arrangement whereby the operation called Hidden Valley Mine was to settle the matter through financial compensation to members of the affected communities.

Capel said of the effect and consequences of mining on local farmers: "This trend is growing here in South Africa and throughout the world. Disadvantaged communities are always worse off, with their livelihood getting destroyed."

Countries like Papua New Guinea probably had far less mining regulation compared to South Africa and were likely to see such conflicts emerging between prospectors and communities, he said.

"At stake is the communities' way of life, kinship relations, cultural traditions, livelihoods and subsistence and agricultural farming," he said.

Capel said mining companies "need to go beyond reporting and implement ethical standards that govern their relations with communities and ensure measurable local development indicators".

"Much is said about the need to attract foreign investment and the benefits of mining, job creation, contribution to GDP and overall economic benefits associated with the extractive industries. Little is said about the negative impact on communities," he said.

In its statement, Harmony Gold said: "The Hidden Valley Joint Venture denies allegations made against it in a writ, purportedly served upon the PNG Joint Venture companies."

The joint venturers would vigorously defend the litigation should it proceed, said the Harmony statement. "The writ alleges nuisance relating to mine-related sediment and seeks damages and injunctive relief in relation to the Hidden Valley Mine operations," said the statement.

The statement added that the writ was contrary to the agreement reached between the community and the joint venture, to resolve the matter "in a transparent and co-operative forum".

Harmony said: "The issue and purported service of the writ by the member's legal advisor appears to be prompted by voluntary compensation payments the joint venture is making to communities along the Watut River."

The payments were for flood damage to crops and gardens to which mine-related sediment may have contributed, along with natural events like land slips and major rain events, said the statement.

Hidden Valley case raises the spectre of Ok Tedi

By Matthew Stevens

The Australian

8 January 2011

Is Sam Basil the new Rex Dagi?

Sam Basil is the energetic and thoroughly modern member for Bulolo in the Papua New Guinea parliament and he is making a bit of a name for himself right now having launched uncertain legal action against the operators of his country's newest gold mine, Hidden Valley.

Basil is said to be seeking compensation for 110 landowners whose crops were damaged in recent flooding of the Watut River. He claims the river's overflow was amplified by sediment produced by run-off from the construction of the mine.

While not accepting that the spoiling of locals crops and gardens was due to mine waste, the Hidden Valley JV has made a series of what it describes as "voluntary payments" to local communities and established an advisory panel to review the impact of the mine on the Watut river system.

Inevitably, Basil's challenge to the operation of Hidden Valley raises the spectre of Ok Tedi, that extraordinary legal and ethical landmark in the engagement of global mining with resource-rich Third World host nations.

For all the vast differences between the two operations and their potential to pollute the local river systems, Ok Tedi certainly seems to be at the front of Basil's mind.

On his Facebook page, Basil says he intends to sponsor land owners around Hidden Valley and local politicians on a tour of some of the more contentious mining sites around PNG. Basil named Ok Tedi, Lihir and the now closed Misima mines as the three he would like to show his people.

But the difference between any and all of these operations and Hidden Valley is vast.

Indeed, it would be fair to observe that Hidden Valley (owned equally by Newcrest and South Africa's Harmony Gold) is very much the product of the controversy over the way Ok Tedi and Lihir, in particular, manage their impact on the local environment. Ok Tedi, by infamous necessity, dumps its mine tailings into the Fly River while Lihir pumps its mining waste into the deep ocean off the eponymous island.

Hidden Valley, which was fully commissioned last October, is a far more sustainable proposition with a fully engineered tailings storage system, which means no processing residue or tailings is released into the local river system.

Which all brings us to Rex Dagi, who, along with another Yonggom leader, Alex Maun, sued BHP Billiton on behalf of 30,000 landowners for the damage caused to the lower Fly River by the Ok Tedi copper and gold mine in the rain-drenched heights of the Star Mountains in PNG's Western Highlands.

The legal argument between Dagi, Maun and BHP ran for three years from late 1994, cost $20 million and produced $100m worth of revision to the compensation arrangements for peoples of the lower Fly River. And, ultimately, the dispute over the way Ok Tedi managed (or failed to manage) its impact on the local environment forced BHP to accept that successful mining was more than just working within the host country laws.

BHP's long-established defence of Ok Tedi's tailings management was that the PNG government and the communities concerned had approved the release of waste into the Fly River.

That position was permanently repudiated at the turn of the century when BHP, by then under the management direction of US import Paul Anderson, moved to shut the mine because it could not justify the impact of mining on the river system. Ok Tedi subsequently became the mistake that BHP would never again make. It is now company policy that it will not build or acquire mines that release tailings into river systems or the ocean.

For all that, though, Ok Tedi is still a working mine and it is still running its tailings down the Fly.

BHP told the PNG government in 2000 that it wanted to close the mine. But the fact is that neither the government nor BHP's partner in the mine, Canada's Inmet, wanted that to happen.

In the end BHP came up with an ingenious exit strategy that was built on Anderson's inspired observation to fellow BHP directors that, given the company no longer wanted to own or manage the mine, it should probably stop accepting the revenues and earnings generated by its operation.

BHP transferred its 52 per cent stake in Ok Tedi into a new vehicle, the PNG Sustainable Development Program. The fund would receive all the Ok Tedi dividend payments that would have otherwise accrued to BHP, and would indemnify the PNG government for any liability for claims and damages caused by Ok Tedi's operation and extend that indemnity to BHP. The fund would be operated independently of BHP and the government.

The program's stated mission was to invest the wealth generated by Ok Tedi in short-term community programs and to establish a long-term fund that would support the economic development of the Western Province beyond Ok Tedi's anticipated closure in 2013 and mitigate the environmental damage done by the mine.

The PNGSDP, technically at least, will celebrate its 10th anniversary later this year. And so far it has run exactly as planned.

In the fund's most recent annual report, chairman Ross Garnaut states that the PNGSDP's core long-term fund had a balance of $US817.9m and would likely hit $US1 billion by the end of 2010.

Interestingly, this fund is all about filling the funding gap when Ok Tedi closes its mining operation in 2013.

But Ok Tedi management is looking at extending the life of the mine until at least 2022 by re-configuring the current pit and starting an underground operation.

A feasibility study based on production running at about a third of its current levels was supposed to have been presented to the shareholders just before Christmas.

The PNGSDP's other key arm is its short-term development fund and that, at last report, had a balance of $US237m.

This fund provides a consistent financial support for an amazing suite of initiatives, from schemes to deliver clean water and sanitation facilities at isolated villages across the province to the construction of supermarkets and roads, from providing financial support for a range of micro-finance schemes to the provision of far deeper pools of core capital for a sustainable forestry business and potentially for a renewable energy scheme being investigated with Origin Energy.

From this distance, it looks a lot like the Ok Tedi-funded PNGSDP is in fact financing a range of infrastructure programs and services that we would expect to be provided in Australia by a state government.

And that, according to The Australian's resident PNG expert, Rowan Callick, is what really links Sam Basil and Rex Dagi.

Callick's theory, long expressed, is that where governments either cannot or will not deliver the services people need or expect, then they will look to the next biggest beast in their area to fill the breach.

And for the people of the Morobe Province, that might well be Hidden Valley and its owners.

Hidden Valley mine denies locals vital access to Bulldog track

Ramu Mine Wordpress

10 February 2011

The Hidden Valley gold mine in Morobe Province, Papua New Guinea, has blocked access for local people to a historic track that provides vital access to health, education and other services.

Assisted by their local MP, Sam Basil, the people are promising to fight back against the mine owners, Newcrest Mining and Harmony Gold, and are planning a legal action to reassert their rights to use the route.

The remote Tekadu people have used the Bulldog Track for many years to bring their market goods like buai (betelnut), tobacco, dried river fish, galip nuts and gold for sale into Kaindi (Eddie Creek) and Wau, and also to access to health centres and to bring children for school. The closure of Tekadu people's only access into Kaindi and Wau town has left them with no option but to trek from Tekadu and overnight in Nukeva, then catch banana boat for Yopoi Bridge and then catch a PMV to Port Moresby - a total of three or four days of travel.

Many using the alternative route have fallen victims of criminal hold ups on PMVs and banana boats, while the economics of transporting their produce from Tekadu into Port Moresby has proven uneconomical ever since the closure of their only access into Wau by Newcrest of Australia and Harmony Gold of South Africa.

Councillor Henry stressed that the cost of travelling to Port Moresby markets had made it very difficult for the locals to earn a living, and many had given up their ways of earning cash by returning to a subsistent way of life, which meant they would not be able to afford salt, cooking oil, school fees, rice, soap and even cloth themselves.

Trekking into Hidden Valley and Eddie Creek has been their traditional route and the councillor wants their local MP Sam Basil to fight the developer of Hidden Valley for their rights to use the Bulldog Track again.

Mr Basil assured Councillor Henry that the traditional rights of the people to have access to the Bulldog Track that runs into Hidden Valley Mine would be challenged in court.

Before the mining company arrived, the Tekadu people have been using the Bulldog Track, even long before World War 2, and know that they still have their rights.

In 2006 and again in 2009, the Tekadu people tried to protest at the entrance of the company in Hidden Valley to ask for their access rights, but were ignored. The first attempt resulted in several arrests.

Councillor Henry said the victims were Peter Yaku and Sonagi Elimas and their wives, who were arrested and detained in Bulolo cells and were later released on bail.

When the Hidden Valley mining operations commenced, it prohibited access by the Tekadu people to the Bulldog Track by placing locked gates and security guards with guns at the points where the track enters and exits the mining lease area.

The mining company's have unlawfully terminated the access to the Bulldog track for these people.

The Bull Dog track was constructed by Australian Army engineers and Papua New Guineans over nine months in 1943.

More than 2, 000 Australians and 2, 000 Papua New Guineas cut the road with pickaxes and dynamite for the purpose of providing a supply line for future military operations in the Markham Valley and on the North Coast of Papua New Guinea.

The Chief Engineer, W. J. Reinhold, was later to write "Every foot of progress made on this road exacted the ultimate in courage, endurance, skill and toil. Its construction took a toll from surveyor, engineer, laborer and native carrier alike."

Mr Basil said the people now have to walk around, in much more-difficult terrain that added three days onto their journeys.

The people of Yanina, Anandea, Yanawe, Tekadu 1 and Tekadu 2 cannot bring store goods back to their homes because of the rough terrain and have to cross into Gulf and Central provinces to sell their betelnut and raise funds for their basic needs and to get treatment at health centres.

The lengthy walk means the people cannot carry their market goods into Wau nor get emergency case to medical treatment into Wau in time.

There was an aid post and a school in the Tekadu area but both closed due to the blocking of the track.

Last year a woman who had complications from child birth was carried for seven days on the diverted route and she died 50m from the health centre.

Had she and her carriers been allowed access to the Bulldog track, she would have reached the health centre days earlier, and probably would have survived.

The closure of Bulldog Track has also affected the tourism industry, because unlike the Black Cat Track villagers, people from Tekadu cannot build guest houses or participate in the tourism business spin-offs.

By blocking access to this track, Hidden Valley has infringed on the people's customary land use rights contrary to the Mining Act and breached their Constitutional rights

Hidden Valley has neither provided an alternate route for the Tekadu people, nor compensated them for their loss of land use and breach of their rights.

The Bulolo District has determined that it will assist these people to take redress against Hidden Valley and enforce these people's rights and hold the miners accountable for their actions.

Satellite image shows toxic pollution from Hidden Valley mine

Ramu Mine Wordpress

8 February 2011

A stunning satellite image graphically shows the toxic pollution of the Watut river system caused by the Hidden Valley mine in Papua New Guinea. Local landowners are suing the mine's owners, Harmony Gold and Newcrest Mining, for alleged negligence in allowing the pollution of the rivers with material containing heavy metals and acid forming rocks.

Hidden Valley mine pollution in PNG
Pollution in Hidden Valley Mine in PNG - Source: Ramu Wordpress

The landowners say Harmony and Newcrest were fully aware of the problems that have caused the pollution and could have prevented it if they were not so determined to get into production as soon as possible.

The landowners say that according to the mine Environmental Plan, the mine was to construct stable waste dumps using fresh rock, but when sufficient rock could not be sourced on site, rather than delaying construction and importing suitable material the mine just carried on regardless, knowing the waste dump facilities would not be stable.

This failure was then compounded when greater than expected amounts of overburden had to be removed to get access to the gold ore. This meant much more waste rock and overburden, which was contaminated with heavy metals, iron pyrites and other acid forming compounds, had to be stored on site.

Again, instead of delaying construction and the start of production so the waste dumps could be properly constructed and then expanded to take the additional material, the landowners say the mine company carried on regardless.

The landowners say the inadequately constructed and overloaded waste facilities failed on several occasions, leading to massive amounts of waste rock and overburden escaping into the Watut river.

To make matters even worse, the landowners say the mine failed to construct two promised retaining dams as also set out in its environmental plan. This exacerbated the sedimentation problems even further as there was nothing to stop run-off caused by heavy rainfall entering the river system.

The landowners say they rely on the river for water for their livelihoods, for alluvial gold, for washing, drinking, cooking, irrigation, and cleaning, for fish and crustaceans for protein, for plant life for eating, for transportation, for its aesthetic value, for traditional agricultural practices and for cultural needs.

But despite knowing the importance of the river to the landowners and the implications of not constructing the waste dumps correctly and removing massive amounts of overburden, the landowners claim "the defendants attitude was to get into production as soon as possible to contain costs rather than remedying the dumping and erosion problems".

As a result of the heavy sedimentation in the river and the contamination with heavy metals and acid forming rocks, the landowners say there have been "gross impacts on the Watut river system".

These impacts include: a massive build up of sediment causing pollution; dieback of vegetation throughout the river system; acid forming compounds entering the river and causing damage to all life in the river including plant life, fish and crustaceans and humans; changes in the course of the river; the death of fish and prawns; widespread destruction of benthic macroinvertebrate communities; severe aquatic habitat degradation; deprivation of the Watut River water for bathing, washing, cooking or drinking; deprivation of access to alluvial gold; skin diseases and sores; loss of transport on the river; loss of houses and village areas; loss of gardens and cash crops; and loss of the ability to use gardens in the future

The Hidden Valley mine began operations in 2009 and reached commercial levels production in May 2010, once the overburden had been removed. Ore was initially stockpiled until the processing plant was commissioned in September this year.

Hidden Valley has tailings dam

By Yehiura Hriehwazi


15 February 2011

Hidden Valley is the only operating mine in PNG with a tailings dam which contains all its wastes from the mill.

The dam is an engineered tailings storage facility which holds all the processing residue and none of it is discharged into the Watut River catchment as previously thought. The mine operator, Morobe Mining Joint Venture, is committed to spend up to K100m on the dam and its associated activities.

The Hidden Valley waste management system is unlike Ok Tedi mine which pumps its treated tailings directly into the Fly River system and the Porgera mine which discharges its wastes into the Strickland River.

A team of PNG media representatives visited the Hidden Valley mine at the weekend and observed that all the waste from the mill through-put is pumped into the tailings dam where toxic substances like mercury and cyanide are neutralised and the water is re-cycled back into the milling process.

Hidden Valley and its nearby Hamata mine recorded a combined production of 53,000 ounces of gold and 382,000 ounces of silver in the December quarter of 2010.

The processing mill is at Hamata and ore from Hidden Valley, which is on a higher elevation, is transported to the mill via a 4.5km over-land pipe conveyor which reduces reliance on diesel-powered truck haulage in the mountainous terrain. Hidden Valley mine manager Mark Mitchell admitted to dumping waste rock (not tailings) into the river system in the early stages of construction, which increased the sedimentation in the Watut River.

This, is combined with earth from natural land slips and the high number of alluvial miners using water-pumps and pipes and excavators, caused flooding that destroyed food gardens.

The company admitted to the increased level of non-toxic sediment (suspended solids) and had been paying compensation to the affected people.

Mr Mitchell noted some complaints from the social media regarding agreements signed by villagers who collected compensation money.

He said this would not be the first and last time villages collected compensation and genuine complaints would be investigated and appropriate payments would be made.

He said surface rock that is stripped before mining would be not be dumped in the river system anymore as in the early days but would be placed in engineered waste dumps which had greatly reduced sediment levels in the Watut River.

He said a number of sampling devices have been stationed along the Watut River which provides real time readings on metal contents in the water through satellite and were being monitored by three independent analysts simultaneously in Brisbane, Canberra and Melbourne.

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