MAC: Mines and Communities

Newmont found guilty of major cyanide spill at Ghanian mine

Published by MAC on 2010-01-25
Source: Associated Press (2010-01-21)

US company slapped with US$4.9 million fine

Three months ago, the USA's biggest gold miner, Newmont, was accused by a Ghanian organisation of wilfully causing a cyanide spill at its showpiece Ahafo mine - and trying to cover up the incident. See: http://www.minesandcommunities.org/article.php?a=9597.

At the time Newmont dismissed these charges. However, they have now been upheld by the Ghanian government - which has fined the company just under US$ 5 million.

Although Newmont has "apologised" for its ineptitude in causing the spill, it says there has been "no residual impact to the environment or the health of nearby residents".

In itself this is arguable. What is not, is that the Ahafo operations have already caused significant loss of land and water for local villagers and been associated with grave human rights abuses.

Newmont was the first major gold mining company to claim it followed "best possible practices" and adhered to a code of exemplary social conduct.

But, throughout the 1990s, that claim was severely jolted by many of the company's exploits in Peru and Indonesia. See: http://www.minesandcommunities.org/list.php?r=586

Just where, then, does this most recent failure leave its reputation?

Denver-based Newmont Mining Co. fined millions for cyanide spill at Ghanaian mine

EARTHWORKS / WACAM Press Release

21 January 2010

Panel faults company for failing to prevent accident, delays in notifying authorities

Accra and Washington: Ghanaian authorities are fining Denver-based Newmont Mining millions of dollars for negligently spilling cyanide at its Ahafo gold mine in October 2009, resulting in water contamination and fish kills. A Ghanaian Ministerial Panel that evaluated the spill and its aftermath recommended that the company be fined US$ 4.9 million for failing to prevent the spill or to properly report on and investigate the spill.

For the past three months, community members and Wassa Association of Communities Affected by Mining (WACAM) have raised concerns about the accident and its aftermath. "The incident brings home the fact that Ghana needs very strong laws to regulate mining operations," said Daniel Owusu-Koranteng.

The Ministerial Panel report faulted Newmont on several counts: operating multiple water ponds simultaneously, delays in notifying downstream communities and regulatory authorities, and absence of duplicate sampling, among others. In addition, a Ghanaian Environmental Protection Agency report concluded that the Company could have avoided the spill through preventative measures, and that it violated its permit requirement by having inadequate measures to detect and contain any accidental spill of process effluent.

"The cyanide spill at Ahafo underscores the need for much greater scrutiny and caution before mines are approved," said Scott Cardiff of EARTHWORKS. "The accident and its aftermath are cause for concern, especially given the company's plans to develop additional gold mines in Ghana."

Newmont is seeking to expand its mining operations in Ghana. A proposed expansion of the Ahafo mine to the north would displace thousands of people and threaten a forest reserve. If built, the proposed Akyem mine would destroy a quarter of the forest in the Ajenjua Bepo Forest Reserve, would displace thousands of people, and would pose risks of cyanide contamination as well.

The cyanide spill at Ahafo also underscores concerns about the International Cyanide Management Code. The Ahafo mine where the spill occurred was certified by the Code in March 2008 and auditors claimed that the mine was in full compliance with Code standards related to spills at mine sites.

In 2006, the World Bank's International Finance Corporation (IFC) provided a $125 million loan to Newmont to develop the Ahafo mine project, stating that it would provide expertise and guidance to the company around meeting social and environmental standards.

-- ENDS --

Contacts:
Daniel Owusu-Koranteng, WACAM, Ghana +233-276-965764
Scott Cardiff, EARTHWORKS, USA, +1-202-887-1872x202

For more information:

* No Dirty Gold campaign's Wassa District page (includes selected text from the reports) - http://www.nodirtygold.org/wassa_district_ghana.cfm


Newmont Mining to pay fine for spill at Ghana mine

Associated Press (AP)

20 January 2010

DENVER - Newmont Mining Corp., one of the world's biggest gold producers, said in a regulatory filing Wednesday it will pay a fine tentatively set at $4.9 million for a water-and-cyanide solution spill at a mine in Ghana.

A gauge malfunctioned which caused about 75 cubic meters of the solution to spill over the top of a holding pond in October, killing 800 to 850 fish in a drainage area near the mine site in midwest


Newmont Gold Mine to Pay Ghana Millions for Cyanide Spill

Environmental New Service

22 January 2010

ACCRA, Ghana - The government of Ghana has requested nearly $5 million in compensation from Denver-based Newmont Mining for negligently spilling cyanide at its Ahafo gold mine last October, resulting in water contamination and fish mortality.

A Ghanaian Ministerial Panel that assessed the spill has recommended that the company be asked to pay US$4.9 million for failing to prevent the spill and for failing to properly report and investigate it.

The company has agreed to pay the requested amount. Newmont's Senior Vice President for African Operations Jeff Huspeni said, "The company accepts responsibility for any failure to meet its standards, and we reiterate our regret and apologies for the overflow and for any anxiety caused in the local community over the safety of their drinking water supplies and fish."

On October 8, 2009, an overflow of process solution containing sodium cyanide occurred within the processing plant site at Newmont Ghana's open pit Ahafo Mine.

The overflow occurred due to a pond-level instrument malfunction, the company explains. The operations pond containing process water overflowed into another pond that was filled to capacity for planned maintenance. The spill within the plant site was contained and neutralized, and the company says that on October 10 it was discovered that some of the cyanide-laden process solution had flowed through a diversion channel to environmental control dams. During the rainy season there are depressions along the way that become swampy areas where the fish kill occurred.

"Employees, local communities, regulatory agencies and other key stakeholders were notified and updated about the overflow beginning Saturday October 10 when this condition was discovered," the company says in a statement on its website. "Water quality samples collected after October 11 indicated residual process solution levels were below laboratory detection limits."

"Since the time of the overflow, water sampling has continued to confirm that there is no threat from cyanide to human health or residual environmental impact," the company said this week. "NGGL [Newmont Ghana Gold Ltd.] remains engaged with the local hamlets to ensure their wellbeing and to provide fresh water. In addition, Newmont Ghana implemented a number of corrective measures to ensure an accidental release of this nature does not happen again."

The Ghanaian Ministerial Panel report finalized December 31, 2009 faults Newmont for operating multiple water ponds simultaneously, for delays in notifying downstream communities and regulatory authorities of the spilled cyanide, and for the absence of duplicate sampling.

A separate report on the incident by the Ghanaian Environmental Protection Agency concludes, "The company violated section 13.0(b) and 19.0 of the environmental permits issued on 25th April 2005."

The Ghana EPA faults Newmont for "inappropriate" failure to inform the company's environmental manager, EM. As a result, the agency said, the manager did not give directions and the company did not follow sampling protocols immediately after the incident. "The results of the sampling analysis cannot be used as a measure of the extent of damage," the agency states.

"The activities leading to the incidents were poorly managed and occurrence of the incident could have been avoided," states the Ghana EPA report. "Furthermore, the immediate management and investigations conducted and disclosure of information to the regulatory institutions and communities were inappropriate and NGGL could be said to have been negligent in all aspects."

"The company's inability to inform the regulatory bodies and the downstream communities immediately after the incident was inappropriate, unacceptable, and is tantamount to a cover-up irrespective of the claim by the company that the incident did not qualify to be reported as per its Internal Incident Classification Criteria," the Ghana EPA states.

After receiving a copy of the Ministerial Panel's report and a letter from the Minister of Environment, Science & Technology Hani Sherry Ayittey, the company issued a statement this week saying it is reviewing the report and pledging to work with the ministry to resolve all concerns.

"The report concludes that there were a number of factors including operational supervision failures, along with numerous systems and mechanical failures, that were the primary causes of the accidental release," says the company statement. "Similarly, those failures resulted in regulatory agencies not being immediately notified, which may have inadvertently created an appearance of an alleged 'cover-up.'"

"Newmont Ghana reaffirms that there was no intention to behave in any manner other than being fully transparent and cooperative with the government and the communities."

"We are committed to improving our processes and to reassuring local communities of Newmont Ghana's ongoing commitment to their safety, while re-establishing confidence in our environmental controls and reporting mechanisms," said Huspeni. "Newmont's first priority remains the safety of our neighbors, employees and the environment."

For the past three months, community members and Wassa Association of Communities Affected by Mining have raised concerns about the incident and the behavior of the company after the spill occurred.

"The incident brings home the fact that Ghana needs very strong laws to regulate mining operations," said WACAM's Daniel Owusu-Koranteng.

WACAM says the Ahafo gold mine, Newmont's first mine in Ghana, has been implicated in human rights abuses and irresponsible practices since before it began operating in 2006.

The first phase of the mine, Ahafo South where the cyanide spill occurred, displaced roughly 9,500 people, at least 95 percent of whom are subsistence farmers.

The mine is located in the Brong Ahafo farming region northwest of the country's capital Accra. Known as Ghana's breadbasket, the region supplies about 30 percent of the nation's food.

A possible expansion of the mine, Ahafo North, would displace another 10,000 people, WACAM warns.

"The accident and its aftermath are cause for concern, especially given the company's plans to develop additional gold mines in Ghana, warns Scott Cardiff of EARTHWORKS, an environmental advocacy group based in Washington, DC. He is calling for "much greater scrutiny and caution before mines are approved."

The cyanide spill at Ahafo also raises concerns about the International Cyanide Management Code, Cardiff says. The Ahafo mine where the spill occurred was certified by the Code in March 2008 - the first Newmont site and the first mine in Africa to be certified.

As part of Newmont's commitment to following international best practices, a safer bulk cyanide transportation system has been adopted. Ahafo is the first mine in Ghana to adopt this method and in accordance with the code, a community communication program was carried out before initial transport of cyanide to the site. Auditors claimed that the mine was in full compliance with Code standards related to spills at mine sites, yet the spill occurred.

In 2006, the World Bank's International Finance Corporation provided a $125 million loan to Newmont to develop the Ahafo mine project, stating that it would provide expertise and guidance to the company around meeting social and environmental standards.

Still, local communities claim that compensation for lost houses, land, access to the town of Kenyasi, water access, fish ponds, and crops was inadequate. Public pressure forced the company to allow a review of compensation rates in 2008 by representatives of the civil society, the government, and the company.

Security forces associated with the mine have been implicated in human rights abuses, WACAM reports, saying, "Activists were arrested because of a Newmont complaint that they were allegedly using the company name to hold a meeting. They were then remanded in prison custody for two weeks for organizing a community meeting without police permission, even though the Ghanaian Public Order Law does not require such permission."

"Security forces have beaten and arrested protesters who were demonstrating over unfair Newmont practices," says WACAM. "On one occasion protesting workers were shot. Some residents who were displaced have been assaulted by security forces for allegedly trespassing on company property."

Environmental concerns continue to plague the mine. An independent technical review of the mine's Environmental Impact Assessment conducted in 2005 by the Center for Science and Public Participation in Bozeman, Montana indicated that Newmont did not adequately assess risks of serious water contamination by acid mine drainage.

The mine has had at least one cyanide leak before the one in October 2009. Activists and community groups warn that Newmont has not provided a meaningful financial guarantee to ensure cleanup and reclamation of the site.

There was no residual impact to the environment or the health of nearby residents, Newmont spokesman Omar Jabara said Wednesday.

The mixture - mostly water with some sodium cyanide - is used to process gold, he said.

The amount of the fine will be finalized after a meeting with Ghana officials, he said.

Newmont workers gave fresh water to residents in the area and are continuing to monitor the site.

Shares of Newmont Mining declined $2.86, or 6 percent, to $45.58 in midday trading. The stock has ranged from $34.40 to $56.45 over the past year.


Gov't justifies disbursement of Newmont penalty

http://news.myjoyonline.com/business/201001/40754.asp

19 January 2010

The government has justified the disbursement of a GH¢7 million penalty slapped on Newmont Ghana Ltd for negligently spilling cyanide at its Ahafo Mine.

Deputy Minister of Environment Science and Technology Edward Omane Boamah says the disbursement is geared towards improving infrastructure in the affected communities and to strengthen the capacity of institutions whose responsibility it is to regulate the activities of the mining industry in the country.

45 per cent representing GH¢3.1 million is expected to go to the affected communities with GH¢2.8 million and GH¢1.05 million going to the Environmental Protection Agency and the Inspectorate Division of the Minerals Commission respectively.

Dr. Boamah told Joy News' Stephen Anti on Tuesday that district assemblies within the affected communities will be tasked to provide potable water and other developmental facilities for the people.

No physical cash, he said, will be handed to the people within the communities except in instances where an individual can prove beyond doubt that he or she was directly affected by the spillage.

According to the deputy minister, 800,000 pieces of fish were killed by the spillage, adding that the spillage had devastating effect on biodiversity in the community.

He stressed that the penalty will serve as a deterrent to other mining companies in order to be more careful in their future activities.

With Ghana increasingly becoming an oil hub, the deputy minister indicated that institutions like the EPA will have to be strengthened and empowered to carry out their institutional responsibilities as expected.

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