ENVIRONMENT-SOUTH PACIFIC: Gold Mining Plans At Volcano Denounced

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

SAN FRANCISCO, Apr 11 1996 (IPS) - Environmentalists are taking issue with a British company’s plans to extract gold from beneath a volcano crater on a remote South Pacific island.

The project involves Luise Caldera, the youngest of five extinct volcanoes on the rugged, 200-sq-km island of Lihir, some 700 kms north-east of the island of New Guinea. The 5,500 inhabitants of the island are governed by Papua New Guinea (PNG).

Rio Tinto Zinc (RTZ), one of the world’s largest mining companies, has designed a complex engineering scheme which would involve digging under the volcano’s crater.

Environmentalists are especially concerned about the “tailings” — massive volumes of acidic waste generated after the ore has been treated with sodium cyanide to extract the gold. They say the waste poses a grave danger to the area which has one of the highest marine biodiversities in the world.

Groups both in the region and as far away as Switzerland — where the money for the project was raised — say the safety measures for the project are skimpy at best.

“Miners would not be allowed to dump this material in the Rhine or four miles off the coast of California,” argues Max Henderson of the Pacific Heritage Foundation in PNG. “Why expect to do it in PNG?”

But a spokesman for RTZ in London told IPS that the project “has been designed in accordance with procedures that would have applied, for example, in California.”

The company says that it will initially dump the waste near the volcano but that eventually, it plans to create “submarine” tailings. Barges will take as much as 4,600 tonnes of waste rock an hour to a spot 1.5 kms from the coast to be pumped into the ocean.

RTZ’s environmental plan for the project says that the waste will be “partly detoxified” before discharge into the ocean. The plan also points out that sea water, which is alkaline, will neutralise the acidic tailings.

The Union Bank of Switzerland has lent RTZ 300 million dollars for this project to complement the 850 million dollars put up by the company itself. Other international and government agencies have provided backing.

The Australian government’s Export Finance and Insurance Corporation (EFIC) has guaranteed 250 million dollars of the Union Bank of Switzerland loan. The Multilateral Investment Guarantee Agency (MIGA) — an affiliate of the World Bank — has provided 76.6 million dollars in political risk insurance for the project. And the Canadian government Export Development Corporation (EDC) has reinsured 26.6 million dollars of the MIGA policy.

All the backers say that they are satisfied with RTZ’s plans for the mine.

A spokesman for RTZ in London said that “no unacceptable effects” have been reported from submarine disposal of tailings in countries from Canada to Turkey.

But there have been complaints of similar schemes elsewhere.

Filipino fish workers, who live near Calancan Bay, some 170 kms south of Manila, say that marine disposal of mine wastes resulted in the killing of marine life in what used to be a rich fishing ground.

Health problems have also been reported at another submarine tailings dump on Misima island in PNG. The Misima mine is run by the Canadian company Placer Dome.

The RTZ official, however, dismissed reports of the health problems, saying there were “no reported adverse effects.” at the Misima mine.

The company’s prospectus does say that “runoff from construction and operations will result in sedimentation effects to coral reefs” and will “reduce the diversity of coral species and fish” as a result of increased turbidity.

The runoff is likely to contain trace amounts of arsenic, aluminium, cadmium, copper, iron, lead, manganese, and zinc, as well as chromium and mercury. But the RTZ spokesman declined to disclose the company’s estimates of the concentration of these metals. In the case of copper, levels as low as one part per million are considered toxic to human beings and animals.

The spokesman assured IPS that an “expert independent reviewer” had reported that the company’s estimates were “reasonably conservative, clear, logical, and reasonably accurate.”

The prospectus also points out that there is a 10 percent risk of an earthquake in the region which would have a “severe environmental impact” if vessels and pipelines were damaged.

Local landowners were required to sign an agreement with the mining company, giving up the right bring any future claims against RTZ.

But in the meantime, groups in the area say the displacement of local people and the arrival of job-seekers from other islands have caused tension. Frustrated landowners disrupted construction work four months ago.

The company spokesman, however, dismissed the work disruptions as “minor” incidents that were “related to the unfulfilled business aspirations of various groups.”