MAC: Mines and Communities

Anger rises in the East

Published by MAC on 2006-02-13

When Aurul Gold's tailings dam at Baie Mare overflowed six years ago, the pollution swept from Romania across neighbouring borders. The Hungarian government declared it the "worst environmental disaster in central Europe in thirty years." Now Eurogold, the company which took over gold mining and processing at Baie Mare , has closed down the operations after a tailings pipeline froze. In an astonishing act of dereliction the highly contaminated pipeline will be dumped in the tailings dam, while Eurogold will probably quit the country. It seems the gold is brighter (if not the grass greener) in the Ukraine.

Anger rises in the East

13th February 2006

Bulgarians Protest Use of Cyanide Leaching

by Michael Werbowski, Prague, Czech Republic ,World Press.Org

5th February 2006

The cyanide "leakage" that killed tons of fish in the Czech river Labe (Elbe) recently has re-focused public attention throughout central and Eastern Europe to the environmental and human dangers associated with this toxic chemical, especially when it spills into a nearby river or tributary. The Czechecological calamity has heightened fears in the region of similar "accidents" involving cyanide re-occurring. For instance, in the future European Union member state of Bulgaria, citizens and environmental organizations are mobilizing protests against the surreptitious plans of a foreign mining company to introduce the cyanide leaching process into the country's gold extraction industry.

Apparently unfazed by the Union's recent tightening up of legislation* related to the management and safe disposal of mining waste known as "tailings," which also often contain cyanide, the Canadian firm Dundee Precious Metals and its Bulgarian branch, Chelopech Mining, are planning nevertheless to proceed with the expansion of the Chelopech gold and copper mine. Nongovernmental organizations suspect the company may be attempting to introduce cyanide leaching into the gold mining processing in a less than transparent manner by not specifically mentioning the chemical in their E.I.A. (Environmental Impact Assessment) report.

As well, locals are concerned their water supply might be contaminated further downstream if an accident happens and are also upset that the planned mine expansion is being carried out without the proper consultations by the company.

Despite the controversy surrounding the project the European Bank for Reconstruction and Development (E.B.R.D.) has already allocated $10 million to assist in the financing of the mine's projected expansion. Yet environmentalists and N.G.O.s in the region such as the CEE Bankwatch Network, which monitors the activities of international financial institutions, are questioning why the European taxpayer is footing the bill for a gold mine that seemingly lacks public support in the region.

When the news that Chelopech Mining planned to use cyanides emerged at the end of last year, it provoked alarm among local people and N.G.O.s and cast doubts about the E.B.R.D.'s justification for its involvement in the project. The mine expansion has also drawn attention to, and even tested the Bulgarian government's commitment to meet the Union's rigorous environmental laws and standards in addition to the stringent democratic credentials it must earn, known as "the Copenhagen criteria," in order to join the Union. The likely target date for Bulgarian and Romanian accession into the Union is 2007.

So far, Bulgarian N.G.O.s assert that the company's recent public information and consultation process was limited to the villages in the immediate environs of the mine, with the cities downstream of the Maritsa River overlooked or left out of the loop entirely. The future of the mine project is in the hands of the Bulgarian Ministry of Environment and Waters.

Konstantin Ditchev of Green Balkans, a local organization in the city of Plovdiv, said: "More than a million people in Bulgaria rely on Maritsa water for drinking and irrigation. If a cyanide spill took place at Chelopech, the Topolnitza water reservoir is the only barrier before the pollution would reach the regions of Pazardjik, Plovdiv and Haskovo, and other populated areas.

The same reservoir overflowed this summer and threatened to flood Plovdiv, the second city of Bulgaria. Chelopech Mining needs to sort out its emergency action plans and present them to the public and to the responsible institutions before any permit is granted."

Fidanka Bacheva, an activist with Za Zemiata/CEE Bankwatch Network, added: "Amazingly the E.B.R.D. considers this to have been an 'extensive public consultation' yet it is hiding behind the commas of Bulgarian law. It's disgraceful that the E.B.R.D. tried to paint this investment as an environmentally positive one by studiously avoiding the mention of cyanides in its project documentation for Chelopech."

In a related mining development, Dundee Precious Metals is also seeking a loan from the E.B.R.D. to develop an open-pit gold mine near Krumovgrad in the East Rhodopi Mountains, an area in Bulgaria known for its unique landscape. The project, which is expected to cost 50 million euros, recently received a "silent denial" from the Ministry of Environment and Water due to strong public opposition.

*The European Parliament recently approved a strict new environmental directive covering the licensing, operation and after-care of mining waste. The directive applies to mining in Bulgaria.

The capital of the republic of North Ossetia is - according to many residents - still blanketed in poisonous emissions from a zinc plant - Pollution Fears Surround Ossetian Zinc Factory

by Viktor Buividas

Environmental News Service (ENS)

23 January 2006

"It's difficult to breathe, especially in bad weather," said 20 year old Alina. "It's poison, like a gas attack!" added Galina, 42. "You can't take your child out for a walk. You have to keep the doors and windows shut tight - it's the only way to escape."

Residents of Vladikavkaz, the capital of North Ossetia, say the air they breathe is badly polluted, and they blame a zinc plant in the city even though managers say huge improvements have been made and most of the eco-problems are a thing of the past.

North Ossetia is one of the sovereign republics of Russian Federation. The highly developed industrial republic is situated on the northern slopes of the central Caucasus between two of the highest mountain peaks in Europe, Elbrous and Kazbeck.

The Elektrozinc plant plays a major role in the local economy, and with 3,500 people on its payroll, is the biggest employer in Vladikavkaz. When the plant was built in 1904, it was on the outskirts of the city, but it was swallowed up by urban sprawl and now stands in the middle of a residential area.

Ivan Alborov, professor of ecology at Vladikavkaz's mining and metallurgy institute, said he believes the plant accounts for most of the industrial pollution in the city.

There seems to be general agreement that in past years, before the present management took over, Elektrozinc was a fairly dirty plant.

According to Alborov, when doctors tested hair samples from children at a nearby kindergarten eight years ago, they found 10 times the permitted concentration of lead. That gives some indication, he says, of the lead many local people must now still be carrying inside them.

Biology professor Lidia Chopikashvili said that in the period from 1990 to 2000, between 40 and 45 out every 1,000 newborn babies in Vladikavkaz had some defect, and more than a quarter of pregnancies ended in miscarriages. She too blames Elektrozinc, although she accepts that traffic pollution and other factors such as poor diet also contributed to these figures.

In 2003, a court ordered the zinc plant to close, following a lawsuit by government agencies and environmental groups. The company was then taken over by one of Russia's largest companies, UMMC-Holding, and it was agreed that the new management would resolve all the environmental problems before 2007.

Sergei Golomzik, the plant's deputy director, says that UMMC had done much more than it was required to, so that pollution had been cut by 90 percent since the takeover.

"We have spent 156 million roubles (US$5.5 million) on dealing with environmental problems. This is an unprecedented move, especially as according to the agreement we only had to spend 90 million," he said. "I'm not saying our factory doesn't harm the environment - but we are making immense progress."

Taimuraz Tsogoyev, spokesman for the North Ossetian government's environmental protection committee, agreed that Elektrozinc's record is far better than it used to be.

"In July 2005, there was an emission of sulphur anhydride from the sulphuric acid workshop and the company was fined around 30,000 roubles," Tsogoyev said. "But I should say that there are no longer the large-scale accidents that there were in 2003."

One gauge of this improvement, said Tsogoyev, is the fall in the number of complaints from local residents. "We get alerts by our phone hotline. People ring in from the streets nearby. In 2003, we were getting about 70 calls a day. Now it's changed - in the last three months, there have only been three calls, I think."

Some observers are less sanguine about the progress made to date. Natalya Merkulova, a Russian federal-level official responsible for consumer rights, said that untreated water was pouring into the nearby Sobachya Balka river and that the topsoil near the factory was heavily contaminated with lead. "Elektrozinc is greatly damaging the health of Vladikavkaz's population, even under the new UMMC management," said Merkulova.

Golomzik denied all her allegations.

Alborov was sceptical of talk of improvement, saying, "Twenty-two months have gone by, and what do we have? Three million tonnes of clinker still lies within the factory's grounds. It belches out smoke and dust and contaminates the environment with noxious substances. And the waste that is left over from re-smelting the scrap metal is very toxic."

According to Alborov, dioxins have been found to be present in central Vladikavkaz.

But Golomzik denied that any dioxins are present on the factory's premises. On Alborov's claim that huge amounts of clinker are still lying around, he said substantial amounts of worked out ore are now being re-processed at the plant, and half the total amount has now gone.

In theory, Russian law says there should be a kilometer wide safety zone around a plant like Elektrozinc, and all residents and schools should be moved out of it.

That has never been the case, and according to Merkulova, acceptable levels of pollution are currently being exceeded two or threefold within a one kilometer radius of the plant. Golomzik argues that once harmful emissions of the factory have been substantially reduced, any barrier zone could be narrower than one kilometer. Critics like Alborov argue the reverse - that a kilometer is not enough.

In October 2005, a large cloud of bright red dust issued from the factory. According to factory official Yevdokiya Irzhakovskaya, the cloud came from a breakage in a workshop, and the dust did not pose a serious threat to health. Whether or not the current emission levels still pose any health risk, residents say the smell alone makes life unpleasant for them.

"I'm no longer young, so I go out onto the balcony to get some air, but very often I have to go back in and close everything up, even the ventilation window," said Zhanna, a 62 year old woman who lives just a few hundred meters from the factory.

"The wind blows a strong chemical stink this way from the direction of Elektrozinc. It's literally impossible to breathe!"

Alborov says he too suffers, "I have to cover my nose with a handkerchief when I go out onto the balcony or else I can't breathe. And I don't live near the factory, but right over on the other side of the river Terek."

{Published in cooperation with the Institute for War and Peace Reporting (IWPR). Viktor Buividas is a correspondent with the "Puls Ossetii" newspaper in Vladikavkaz. IWPR's North Caucasus editor Valery Dzutsev contributed to this article.}

Romania looking finished as Eurogold eyes Ukraine

by Ben Sharples


9 February 2006

EUROGOLD looks likely to cut its ties with Romania to concentrate on its Ukrainian assets after damage to a tailings pipeline rendered the future of the its Transgold project uncertain.

The Romanian business is operated by Eurogold's 50% owned subsidiary Transgold, which is jointly owned with the Romanian Government.

Eurogold said the current extreme weather coupled with the ongoing low production levels at the Transgold CIL processing plant caused a section of the tailings pipeline to freeze.

Consequently the entire pipeline is being dismantled and transported to the tailings dam for drainage and storage.

Eurogold said the reinstallation of the pipeline and re-start of production would only be warranted when a sustainable higher level of feed is available for the plant.

"Previously we've been operating it at 15% capacity which is what we had been able to toll treat from state mining operations and our own hard rock resources," Eurogold executive chairman Peter Gunzburg told

To make matters worse, Transgold is indebted to its Australian parent to the tune of $US2.9 million and Eurogold said it doesn't intend to provide any further funding support to Transgold.

"Given these circumstances, Eurogold believes that Transgold will not be able to continue trading without further immediate support from its bank UniCredit, the Romanian government or other third parties," Eurogold said.

The message from Gunzburg is blunt.

"We're not going to put any more money into Romania, we think we might have upward of a million ounces in our deposit in the Ukraine and we're far better concentrating on that," he said.

"It's not a question of losing patience with Romania; it's just what's best for shareholders.

"Our shareholders are better served by us concentrating on what looks to be genuinely
unheralded discovery by the marketplace."

Gunzburg said the Soviets had completed nearly 10km of underground tunnelling proving up around 578,000 ounces in the Soviet C1, C2 category.

"We've just started a drilling program, and we're using that program to put the resource into a JORC category, but also to increase the size of deposit," Gunzburg said.

"What we did last year was a few large step out drill holes which indicated the ore body extends along strike for another upwards of a kilometre, so it could be a very big system."

Eurogold expects to have the JORC compliant estimate completed by the end of the June quarter. Cannon Drilling of the UK is conducting the drill campaign.

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