MAC: Mines and Communities

London Calling - February 26 2005

Published by MAC on 2005-02-26

London Calling! 26 February 2005

Tsunamis and mining: a follow up

John Chadwick, eminence gris of the London-based Mining Magazine (MM) has taken issue with London Calling's coverage of the recent tsunamis in the Indian Ocean region. In MM's February 2005 issue, Chadwick attacks MAC for pointing to the importance of mining as a factor in increasing the huge loss of life resulting from the oceanic upheavals last December. Claims Chadwick: "It is good to report the humanitarian and reconstruction responses of the mining industry in the region even though organisations such as the one that produced [these] rantings [ie MAC] will never acknowledge mining's power for good. Mining often operates, and provides infrastructure, in areas where there is little else, save traditional ways of life. Mining is thus able to come to the rescue when a natural disaster such as this (one far more cataclysmic than any tailings spill or other mining incident, could ever be) occurs."

Judging by Chadwick's figures, in fact little more than two million dollars has been donated towards tsunami relief efforts by mining companies active in the region, with Alcan, Alcoa, Newmont, Placer and Vedanta as the key contributors.

After this petty roll-call of corporate "largesse", Chadwick is relieved to report the "survival" (sic) of most mining operations. He points in particular to that of Archipelago's Toka Tindung operations in North Sulawesi (a project which has long threatened the economy of local fishing comunities)

The MM editor is woefully mistaken on several fronts. MAC's commentary was in fact provided by London Calling, which is explicitly not a mouthpiece for this site but a personal commentary (as noted on every article). But his conflation of "traditional ways of life" with a lack of "development" - and the prescription that mining companies should act as the saviours of what, in fact, they've significantly destroyed - would be vigorously opposed by most MAC editors, based on lengthy personal experience.

Our early coverage of the connections between tsunami impacts and mining has since been followed by other independent analyses, two of which we reproduce below. As for putting the "saving" of mining operations (Freeport is the latest company to breathe such sighs of relief) on a par with the rescue of people's lives and property, many of our readers will find the comparison distinctly distasteful.

[“London Calling” is published by Nostromo Research, London. The opinions expressed do not necessarily reflect those of any other individual, organisation or editors of the MAC web site. Reproduction is encouraged with full acknowledgment]

Coastal follies

By Ashish Kothari and Manju Menon

Over 40% of India's mangroves have been destroyed. Coral reefs have been damaged in the Gulfs of Kutch and Mannar, and the Andamans. In Great Nicobar, 21 beaches have been lost to sand mining. Post-tsunami, we've got to rebuild our natural coastal defences

In the wake of the colossal post-tsunami human tragedy unfolding in South and South-east Asia , the immediate needs of relief and rehabilitation are paramount. Such events however also require us to start working towards more long-term responses. The recurring question is: are there ways to minimise human casualties in the face of such disasters?

Indeed, by intelligently using nature's own defences, can we buffer ourselves against the powerful forces generated by nature?

Most so-called 'natural' disasters today have a major element of human folly. Floods annually cause havoc, not because nature itself is cruel, but because we have encroached on floodplains, destroyed forests that act as sponges, and interfered with natural watercourses. Droughts become killer famines because people no longer have access to emergency food from forests and wetlands, or to traditional crops that could grow even in conditions of rainfall failure.

Earthquakes kill many people quite unnecessarily because of inappropriately built homes that come down like a pack of cards. Nothing could have completely prevented the damage the tsunami caused. However, if India 's natural coastal and marine defences had been intact, the destruction is likely to have been far less. Tropical coastlines are characterised by several natu ral buffers. Coral reefs grow like underwater rainforests, forming a protective shield around the shore, and mangrove forests form a sturdy barrier between the sea and the land. Sand dunes, cliffs, and littoral forests serve as further buffers. In many areas, lagoons and estuaries also act as shock-absorbers. With all these intact, the force of the sea is significantly reduced. When a supercyclone hit the Orissa coast some years ago, observers reported that areas with intact mangroves suffered significantly less than those where such vegetation had been destroyed. Some reports point to the same conclusion from the tsunami-affected areas.

Reportedly, communities living along the Pichavaram and Muthupet region in Tamil Nadu were protected against the tsunami's impact by intact mangroves. In Alappuzha and Kollam in Kerala, where the impact should have been less due to distance, it was actually greater due to illegal sand mining. On Sri Lanka 's eastern coast, much less damage was seen in Yala National Park 's intact ecosystems, than in the human-altered coastal stretches and tourist resorts. Human folly along the coast Unfortunately, far from protecting the natural ecosystems that protect us, we have dealt recklessly with our coasts and seas.

The Government of India estimates that over 40% of India 's mangroves have already been destroyed. Extensive coral reef damage has taken place in the Gulfs of Kutch and Mannar, and parts of Andaman and Nicobar Islands . Till recently corals were actually mined for industrial use and road-building! Beaches across India have been mined for sand, leaving the coast vulnerable to even normal wave action. In Great Nicobar, 21 beaches have been lost to sand mining between 1981 and 2000. Sensitive coastal stretches have been used for tourist resorts, urban growth and mushrooming settlements.

Reclamation of the sea by ports, harbours, roads, and industries, has greatly increased the coast's vulnerability. Communities too have been pushed into more vulnerable positions. And then there is pollution: in 1998, scientists R Sengupta and S Z Qasim estimated that every year we threw into the sea 1.3 billion tonnes of domestic sewage, 1,000 million tonnes of industrial effluents, 105 million tonnes of solid wastes and garbage, 2.6 million tonnes of chemical fertilisers, and 20,600 tonnes of pesticides! Is it any wonder that our seas are dying, and with them, the natural defences that India once abounded in?

Protection of the coast's protectors?

In 1991, the Government of India notified the Coastal Regulation Zone (CRZ) notification. This revolutionary legislation attempted to regulate development along the coasts, and was applauded by environmentalists, wildlife activists, and traditional fisherfolk. Unfortunately, the CRZ notification has been undermined by the government itself, by turning a blind eye to violations, or giving permission for destructive activities. Worse, the central government has repeatedly diluted the provisions of the CRZ many as a dozen times (see box)! States have been tardy in finalising Coastal Zone Management Plans and setting up Coastal Zone Management Authorities. Only one state ( Goa) committee has an NGO member. It is not a major surprise that CRZ norms are observed more in the breach.

Weakening coastal regulations Over the last decade, the central government has repeatedly amended the CRZ notification, each time diluting the original intent of the notification. These include:

In July 2004, the MoEF set up a high-powered committee to review the CRZ notification. Environmentalists worry whether, given MoEF's past record, such a review would lead to further dilution. Post-tsunami, however, we hope that the committee will recommend a roll-back of all the past dilutions, strengthen the norms for the protection of coastal ecosystems, set up stringent standards for coastal use, and recommend transparent and participatory ways to implement the notification.

What lies ahead?

We are now faced with the task of rebuilding our ravaged coastline and the lives and livelihoods of affected families. A well-thought-out reconstruction plan is vital, with a key focus on rebuilding natural coastal defences, and ecologically friendly settlements. Here are the elements: Revive coral reefs, regenerate mangroves, restore beaches and sand dunes, and prevent pollution. Through this, generate considerable livelihoods for coastal communities. Bring all remaining natural ecosystems under conservation laws, without alienating the communities that have traditionally lived there.

Strengthen the CRZ, allow only environmentally sensitive development in fragile areas. Listen to traditional fisherfolk's demands to prohibit industrial trawling and commercial shrimp-farming. Prepare a comprehensive disaster management plan for each area, with community participation.

Listen also to the animals. Systematic observations of aquatic and land animals could provide as good a warning as sophisticated sensors sunk into the sea. Scientists have repeatedly recorded pre-earthquake patterns of abnormal behaviour in wildlife. On December 4, 2004, scientist Arunachalam Kumar sent out an email about the mass beaching and death of whales in Australia, and predicted that a major quake was likely to hit someplace on earth soon. Three weeks later, it did. Strange behaviour in fish and dolphins was reported in Indonesia just before the quake. Again, can we learn from nature? If we don't take such long-term measures now, we will simply be doing what we are so good at: not learning from our mistakes, and regretting this the next time a tragedy comes our way.

(The authors work with Kalpavriksh Environmental Action Group, Pune/Delhi)

InfoChange News & Features, January 2005

Tsunamis and Reckless Resource Extraction - The Unknown Link

Salimah Valiani

January 2005

Northern American consumers - whether in coastal cities in the winter or prairie towns far from the sea - have in the past ten years enjoyed affordable frozen shrimp, no matter the season. Few of these consumers know that this has been due to the rise of shrimp farming in mangrove forests of Asian and Latin American countries, where governments have opted for quick export industry development. Even fewer know the link between this type of intensified resource extraction and the immense impact of recent tsunamis in Asia.

According to the Mangrove Action Project (MAP), which has been opposing unsustainable development since 1992, great losses in human life and suffering could have been averted had healthy mangrove forests, coral reefs, sea grass beds and peatlands been conserved along the tsunami-devastated coastlines of Southeast Asia and Sri Lanka.

Scientific simulations show that the destructive force of a 15 meter tsunami is greatly dissipated if it passes through coastal zones containing coral, sea grass and mangroves. These zones act as natural buffers protecting land, coastal communities and wildlife from the brunt of storms and waves.

Corroborating this scientific evidence are the tsunami experiences in India. About 300 km south of Chennai, in the southeast Indian state of Tamil Nadu, six village hamlets located within 100 to 1000 metres of the Pichavaram mangrove wetlands did not face any tsunami damage due to the physical protection offered by the mangrove. As a fisherman of the hamlets explains, "We saved the mangrove by restoring it and it saved our life and property by protecting us."

A report of the M. S. Swaminathan Research Foundation of Chennai further explains that the velocity of the tsunami water was greatly reduced due to friction created by the thickness of the mangrove forest. Additionally, the tsunami water was distributed to canals and creeks throughout the mangrove, thus reducing its impact. The experience of the six hamlets protected by the mangrove - comprising a population of about 6191 - differs significantly from that of the five hamlets located on or near to the open beach, which were totally devastated. A total of 17 hamlets were making use of the resources of the Pichavaram mangrove wetlands, which occupies an area of some 1400 hectares.

Besides being 'greenbelts of protection', mangroves play a vital role in reducing sedimentation and shoreline erosion. They also enhance fishing and farming communities with wild fisheries, marine life, medicines, fruit, honey, lumber, fuel wood, tannins and aesthetic beauty. But unlike the Pichavaram mangrove in India, mangrove forests in Southeast Asia have been lost, along with over half of the world's mangroves.

MAP's co-founder Pisit Charnsnah, of Thailand's Yadfon Association explains, "The mangrove is the supermarket for the coastal poor, and that market has been replaced by another man-made enterprise whereby the goods produced are earmarked for export, and the local communities suffer the consequences of reduced wild fisheries and increased threats from natural disasters." In addition to industrial shrimp aquaculture, mangrove forests and corral reefs have been destroyed or diminished through the expansion of tourism, mining and logging industries - all of which has been encouraged by international financial institutions like the World Bank and the Asian Development Bank.

"Mining is one major reason for coastal degradation in the Philippines" says Clemente Bautista of Kalikasan, the People's Network for the Environment. Denuding of mangrove forests has been caused by soil erosion and heavy siltation (i.e. fine earth and sand carried by water), which in turn are occurring due to intensified mining and logging since the early 1990s.

Similarly in Aceh, Indonesia - the area closest to the epicentre of the earthquake which caused the recent tsunamis - where over 100,000 have been killed, petroleum and shrimp exploitation for export have been central to government development policies.

Just prior to the earthquake in late December, the Indonesian Ministry of Forestry increased the annual allowable cut for Indonesia's forests by 400 per cent, without providing any ecological justification. Policy makers and advocates in Indonesia and around the world would do better to demonstrate they have learned from the recent catastrophe by incorporating the analysis of WALHI-Friends of the Earth Indonesia. Given that inappropriate development made the impact of the tsunami worse in areas where coral reefs and mangrove forests were destroyed, WALHI points-out, "it is essential that reconstruction plans and activities do not repeat these patterns, or create other negative environmental impacts."

The following article ignores the fact that West Papua is very much in an earthquake zone. In late November 2004, Nabire experienced its second large quake (6.4 on the Richter scale) within 9 months. 32 died and hundreds were injured. US$55 million damage was done. A hundred and fifrty or so government buildings, schools etc., were badly damaged. The Indonesian president was visiting the Nabire earthquake victims at Christmas when the Aceh quake-tsunami struck. Although the Grasberg mine is around 200km inland from Nabire, Freeport should surely not be so complacent.

Freeport Chairman: Grasberg Not In Harm's Way In Indonesia

By Heather Draper

Dow Jones Newswires

January 18, 2005

DENVER -- Freeport-McMoRan Copper & Gold Inc.'s (FCX) large Grasberg mining operations in Indonesia are east of the active tectonic plates in the region, the company's chairman told analysts Tuesday.

"There is very little reason to be concerned" about the Grasberg pit, Freeport Chairman James "Jim Bob" Moffett said during the company's fourth-quarter call.

Moffett said in light of the devastating earthquake and tsunami that hit southern Asia in late December, he wanted to assure shareholders that Freeport's Indonesian operations weren't in an active fault zone.

Freeport operates the giant Grasberg copper and gold mine in the politically sensitive Papua region of Indonesia. The Grasberg complex is about 3,000 miles from the fault line of recent earthquake off the coast of Banda Aceh, Indonesia.

Freeport Chief Executive Richard Adkerson told analysts that none of the company's January copper and gold shipments have been affected by the tsunami or its aftermath.

Freeport has donated cash and helped deliver medical supplies to the areas of Indonesia affected by the tsunami, Adkerson noted.

Freeport-McMoRan shares traded recently up $1.57, or 4.3%, to $38.18.

CEO Adkerson said even though the Grasberg mine is considered "mature," it continues to boost the company's copper and gold reserves.

"Today we have more copper reserves than we did five years ago and 92% of the gold reserves we had," Adkerson said. "That's remarkable...for a mine that is as mature as the Grasberg."

Freeport discovered the Grasberg copper and gold deposit in 1988.

Adkerson said the company expects to sell 1.5 billion pounds of copper in 2005 - 50% more than in 2004 - and to sell 2.9 million ounces of gold this year, double its 2004 sales.

At the company's average forecast price of $1.35 per pound of copper and $420 per ounce of gold, Freeport's operating cash flows should exceed $1.1 billion in 2005, he said.

"We expect to have a good year operationally, and the markets look very good for us," Adkerson said.

The company spent much of 2004 recovering from a mine wall accident at Grasberg in October 2003.

The collapse of a wall in the open pit mine killed eight workers. The Indonesian government then forced Freeport to suspend operations at part of the mine as restoration work was done.

Since the accident, Freeport achieved its primary goal for 2004 to restore the mine wall and resume full production of the higher-grade ores at the bottom of the pit, Adkerson said.

It was also able to speed up the processing of its insurance claim over the Grasberg accident, he said. The insurance proceeds added $48.8 million to the company's net income in the fourth quarter.

Freeport early Tuesday reported fourth-quarter net income of $227 million, or $1.08 a share, compared with net income of $2.39 million, or less than a penny a share, a year ago.

This year's results were boosted by the ability to resume full production of high-grade ores at Grasberg, the one-time insurance proceeds and high commodity prices, the company said.

Freeport Indonesia Posts Fall in Net Profit

Asia Pulse/Antara

February 21 2005

Jakarta - U.S. copper and gold mining company Freeport Indonesia (FI) said it posted a decline in net profit to US$446 million in 2004, down from US$485 million in 2003.

FI President Adrianto Machribie attributed the decline to an 8% fall in its gold ore production to 185,000 tons per day in 2004, compared with 203,000 tons in the previous year.

Machribie said in a written statement to Commission VII of the House of Representatives that the gold peak production of the company was 238,000 tons per day in 2000.

In 2004, its gold concentrate production was 1.8 million tons, with content of 26.9 grams of gold, 82.1 grams of silver and copper making up 28.8%.

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