MAC: Mines and Communities

BHP unties a reef knot; questions remain

Published by MAC on 2009-08-03

The world's biggest mining company is selling a nickel refinery whose ore has come from an allegedly highly-polluting Indonesian mine.

A Queensland University research study claims that the mine's tailings are smothering one of the world's most vital coral reefs.

Despite this, BHP Billiton denies the mine is damaging; or that it would be down to the company, even if it the pollution was confirmed.

So much for maintaining a "chain of custody"- one of the pretended hallmarks of BHP Billiton's observance of corporate social responsibility.

BHP hits reef fallout

Felicity Williams and Nicole Lindsay, Herald Sun (Australia)

29 July 2009

AN INDONESIAN mine supplying nickel to BHP Billiton's Yabulu refinery in Queensland has been accused of causing severe damage to one of the world's most precious coral reefs.

The claims come just days before BHP finalises the estimated $120 million sale of Yabulu to mining magnate Clive Palmer on Friday.

BHP has sourced nickel laterite from the Indonesian owned and operated mine on Manuran Island in the Raja Ampat archipelago in West Papua since 2007.

According to a University of Queensland draft report, a wholly-owned BHP subsidiary, Queensland Nickel, shipped ore from Manuran Island to Townsville for processing at the Yabulu plant as recently as last month.

The report accuses the owner of the Manuran Island mine, PT Anugrah Surya Pratama, of allowing tonnes of sediment to run off into the nearby ocean, turning the coastal waters a rusty blood red.

The mine tailings are believed to be causing grave harm to the reefs of Raja Ampat, which has been shortlisted for World Heritage protection, because they block out life-giving sunlight and "smother" the coral.

The report also claims ships carrying ore destined for Yabulu sail through the Raja Ampat archipelago on their way to Townsville, even though other multinationals operating in the area such as BP take a 200km detour around the island group to protect the reefs.

BHP spokesman Peter Ogden told BusinessDaily that the operation at Manuran Island was the responsibility of its owner.

He rejected the allegations that the mine was polluting the surrounding waters and also that the shipping route from Raja Ampat to Townsville cut across the reef.

"BHP Billiton typically has a representative on-site at Manuran prior to and during loading of ore purchased for Yabulu Refinery (i.e every other month) and there have been no reports of tailings landslides into the ocean," he said.

"Our Freight Service Provider is Daiichi. Its vessels do not transit the area in question when loading from Manuran Load Port."

Mr Palmer did not respond to telephone and e-mail messages from BusinessDaily seeking information on whether he planned to continue processing nickel from Manuran Island at Yabulu.

It is believed the deal between BHP and Mr Palmer for the sale of Yabulu includes the Queensland Nickel subsidiary that buys the ore from Manuran Island.

Jason MacLeod, lead author of the Queensland University report, called on Mr Palmer's company, Gladstone Pacific Nickel, to stop buying ore mined at Manuran Island.

"Gladstone Pacific Nickel can protect the environment and support local communities in Raja Ampat by ceasing to buy nickel from Raja Ampat," he said.

"A greater emphasis on environmental protection and social responsibility throughout its supply chain and the nickel lifecycle is something BHP should have done long ago."

Buying Yabulu Comes with Risks and Opportunities for Gladstone Pacific Nickel: UQ study

Media Release

20 July 2009

"When BHP Billiton sells its Yabulu refinery this month to Gladstone Pacific Nickel, owned by Australian Mining magnate Clive Palmer, it will be relieving itself of considerable reputational and financial risk tied up with nickel operations in West Papua" says Jason MacLeod, lead author of the forthcoming monograph, Environmental governance, mining and conflict in Raja Ampat, West Papua.

The monograph has been authored by a team of Australian and West Papuan researchers and is soon to be published by the Australian Centre for Peace and Conflict Studies at the University of Queensland. It exposes the considerable risks facing Gladstone Pacific Nickel should it proceed with the purchase of Yabulu Refinery.

Under the helm of BHP Billiton, Yabulu refinery buys and processes nickel mined in the Philippines, New Caledonia and Manuran Island in West Papua, a province of Indonesia.

Manuran Island mine lies in the heart of the Raja Ampat archipelago, a group of islands that tops UNESCO's global list of World Heritage marine sites most deserving of protection. It is widely accepted that the Raja Ampat archipelago is the most diverse marine environment on the planet, surpassing even the Great Barrier Reef. The archipelago contains over 75% of the world's known coral species and scores of endemic and vulnerable marine and terrestrial species. Mining on Manuran Island is already damaging the ecosystem and putting all of this at risk. Gladstone Pacific Nickel's purchasing of Yabulu could contribute to this further.

Run-off from the mine, which is owned and operated by PT Anugrah Surya Pratama, sends tonnes of sediment into the ocean, turning the water a deep blood red and destroying local food supplies. Following Asian Development Bank project evaluation recommendations, Beyond Petroleum now ensures the ships used by their nearby BP Tangguh LNG operation minimize potential environmental risks by avoiding travelling through Raja Ampat's fragile network of reef systems. However, large tankers loading nickel laterite ore at Manuran pass through the reef systems, seriously risking significant harm to the marine environment which local people depend on so heavily.

Many local community members are in despair. "The company just makes promises but there is never any evidence of these promises. In the two years since the survey and the extraction of nickel sent to Hong Kong and Australia, we the local people don't feel like our rights are respected by the company. So its better that this company stops, we will speak first and if in the end that doesn't work it is better that the mine is just closed" said a local church leader.

A change in ownership at Yabulu refinery presents an opportunity to help protect this important and fragile environment. GPN would not condone mining in the Barrier Reef. They can now help end mining in Raja Ampat.

There are also additional risks for Gladstone Pacific Nickel if they continue purchasing ore from Raja Ampat. The mine has been embroiled in a corruption scandal after the local Bupati responsible for issuing the Manuran mine license was investigated by police for a misuse of authority. There has also been conflict between the Indonesian security forces and those who oppose mining in Raja Ampat.

Gladstone Pacific Nickel can protect the environment and support local communities in Raja Ampat by ceasing to buy nickel from Raja Ampat. A greater emphasis on environmental protection and social responsibility throughout its supply chain and the nickel lifecycle is something that BHP Billiton should have done long ago.

For more information contact Jason MacLeod, on 0402 746 002 or 07 3879 6121

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