Summer Field News

The latest MPI Field News [600 kb] is out with; an update on Ramu, Rebellion and Mining in PNG,  a visit to McArthur River, a message from the chair and a new meet the member.

Please make a financial contribution to MPI in support of our work.

Website Overview

Welcome to MPI's new website - still very much a work in progress.

The home page displays upcoming events, latest news or the latest research and reports.  More detailed information about MPI's work will be available under Programs and Issues and Where we work

Support MPI

The Mineral Policy Institute relies on donations and grants to fund our activities.

Donations to MPI of more than $2.00 are tax-deductible. You can make a donation online through Our Communites, a free and secure online donation facility.

Mineral Policy Institute, Perth


Focus: Deep sea placement to proceed at PNG's Ramu Nickel mine

In brief: The National Court in Papua New Guinea has cleared the way for the Ramu Nickel mine to dispose of its tailings using a deep sea placement off the coast of Madang Province. This has potentially important implications for other projects in PNG using similar deep sea placement processes to the Ramu project's. Partner Allan Mana (view CV) and Senior Associate Rachel Nicolson report.

How does it affect you?

  • Projects with current or future deep sea tailings placement (DSTP) processes in PNG should consider whether their operations would withstand judicial scrutiny, in light of the forthright findings in this case regarding likely environmental harm.
  • Comprehensive and robust environmental studies into DSTP are essential in demonstrating that these processes will not cause significant environmental harm.
  • Extensive and ongoing community consultation regarding proposed DSTP and its likely impact upon the local community may prove relevant if a court considers equitable relief, such as an injunction to stop the proposed tailings disposal.
  • This decision has been appealed to the Supreme Court of PNG, which has imposed a temporary injunction restraining the use of DSTP.

Background; Ramu Nickel Management (MCC) Limited (Ramu) operates the Ramu Nickel mine in Madang Province on the north coast of PNG. The environment permits for the mine provide for the disposal of tailings through a process known as DSTP. DSTP involves the discharge of tailings from a pipeline into the sea, so that the tailings flow out of the pipeline and progressively dilute with sea water as it moves towards the deep ocean floor.

Customary landowners, and others with interests in the potential environmental and social effects of the proposed DSTP, instituted proceedings in the National Court of PNG, as WS No. 1192 of 2010. The plaintiffs alleged that the DSTP processes that Ramu proposed would:

  • constitute a private and public nuisance;
  • breach the Environment Act 2000 (PNG); and
  • breach National Goal and Directive Principle (NGDP) No. 4 (natural resources and environment) of the PNG Constitution.

The plaintiffs sought a number of injunctions that would prohibit Ramu from using DSTP, and a declaration that Ramu and the other defendants undertake ongoing consultation with the plaintiffs about the project's tailings and waste disposal operations.

Findings of Fact; The court found there was a reasonable probability that the proposed DSTP processes would cause environmental harm that may have catastrophic consequences, cause irreparable damage to the ecology of coastal waters, and seriously harm the lives and futures of the plaintiffs, and of thousands of other people in Madang Province. In particular, the court made the following findings:

  • it was likely that the tailings would smother benthic organisms over a wide area of the ocean floor (at least 150 km2 ), which would inevitably alter the ecology of that part of the ocean;
  • it was very likely that the tailings would be toxic to marine organisms; and
  • there was a real danger that the tailings would not settle on the ocean floor but be subject to significant upwelling, which meant that substantial quantities of tailings would be transported towards the PNG mainland.
Nuisance;The court held that the proposed DSTP processes would cause both private and public nuisance, by virtue of the plaintiffs' interests in the land along the coastline of Madang Province and the environmental harm described above. This conclusion is notable for two reasons:
  • First, private nuisance is traditionally only available to persons with a proprietary interest that is affected by the relevant activity. In this case, the court awarded nuisance based on proprietary rights (customary land ownership) and non-proprietary rights (a genuine interest in the subject matter of the proceedings based on the effect the potential environmental harm might have on the plaintiffs' lives).
  • Second, the court indicated that an environment permit issued under the Environment Act to conduct an activity is only a defence to a claim in nuisance if the nuisance is 'the inevitable consequence of conducting that activity'.
The Environment Act;The plaintiffs made a number of arguments to the effect that the proposed DSTP was unlawful by virtue of the Environment Act; however, the court did not accept any of them. Some were rejected because they misconceived the effect of the relevant provisions; other arguments, although unsuccessful, were based on stronger legal grounds. The stronger arguments included:
  • The proposed DSTP would cause unlawful environmental harm and so was contrary to section 10(1) of the Environment Act. This argument was rejected because the DSTP is permitted under the mine's environment permits and so is not unlawful.
  • The environment permit authorising the DSTP was invalid under the Environment Act because it was issued under previous, repealed, legislation, and had not commenced by the time the Environment Act came into force. This argument was rejected because the environment permit was, for all intents and purposes, granted under the Environment Act, because it was valid and in force before the commencement of the Environment Act, and had been amended twice after the Act came into force.
National Goals and Development Principle No. 4;The court stated that it was obliged to express a judicial opinion whether the DSTP was likely to be contrary to NGDP No. 4, even though s25 of the Constitution provides that the NGDPs are non-justiciable. It also stated that the DSTP would be contrary to NGDP No. 4 because it amounts to 'an abuse and depletion of Papua New Guinea's natural resources and environment'.

Remedies; Although the plaintiffs successfully demonstrated a cause of action in nuisance and that the DSTP would breach NGDP No. 4, the court was required to consider whether granting the requested remedies was just, fair and appropriate. The court indicated that the decision whether to grant the injunction to prohibit the proposed DSTP was 'a borderline case'; however, it ultimately decided not to grant it. This decision was primarily due to two specific considerations:

  • There was an unreasonable delay on the part of the plaintiffs seeking the injunction. Delay suggests acquiescence in the defendant's conduct and, in this case, there was substantial delay, in light of community consultation having commenced in 1999.
  • The economic consequences of granting the injunction would be disastrous, given the implications for Ramu, the provincial and national economy, and for investor confidence in PNG.

With respect to the plaintiffs' request for consultation, the court ordered that they must be consulted at least every three months on tailings and waste disposal issues for the life of the mine.

Decsion's Imapct; This decision has potentially significant ramifications for other projects in PNG that propose to use, or are using, similar DSTP processes to those in the Ramu project. The borderline nature of the injunction decision indicates that projects that are not able to demonstrate plaintiff delay, and/or significant economic consequences from their prohibition, risk being enjoined from using the DSTP processes.

In light of this decision, projects should also consider:

  • seeking broad and comprehensive environment permits, because environmental harm that is beyond the scope of the permit may be the subject of nuisance and other claims;
  • undertaking early and ongoing community consultation; and
  • commissioning comprehensive studies to ensure that the DSTP's effects are fully understood, and implementing effective monitoring to demonstrate that any unexpected environmental consequences will be noted and minimised.

The plaintiffs have appealed the decision to the Supreme Court of PNG and, with Ramu's consent, have successfully sought a temporary injunction to restrain the use of DSTP until the Supreme Court considers the appeal.

from http://www.aar.com.au/pubs/res/fores19aug11.htm

While Judge Cannings did not grant the injunction sought, he made it clear what he thought of DSTP, from page 61.

"I therefore feel obliged to state that my considered opinion as a Judge, having heard extensive evidence on the likely environmental effect of the DSTP and made findings of fact on that subject, is that the approval of the DSTP and its operation has been and will be contrary to National Goal No 4. It amounts to an abuse and depletion of Papua New Guinea’s natural resources and environment – not their conservation – for the collective benefit of the People of Papua New Guinea and for the benefit of future generations, to discharge into a near-pristine sea (a widely recognised hotspot of biodiversity), mine tailings at a rate of 5 million tonnes of solids and 58.9 million cubic metres of tailings liquor per year. It constitutes unwise use of our natural resources and environment, particularly in and on the seabed and in the sea. It amounts to a breach of our duty of trust for future generations for this to happen. It is a course of action that shows deafness to the call of the People through Directive Principle 4(2) to conserve and replenish our sacred and scenic marine environment in Astrolabe Bay. It puts other coastal waters of Madang Province at risk. Inadequate protection has been given to our valued fish and other marine organisms."

PNG landowners shocked by court decision on mine waste disposal

Updated July 26, 2011 17:33:18

The Ramu landowners in PNG are shocked by Judge David Canning's decision after acknowledging the risk of irreversible harm to marine resources.

They say they are going to appeal against the court decision.

This is in the case of the National Court judge rejecting the application for permanent injunction against deep sea waste disposal by the Chinese-owned Ramu Nickel mine, near Madang town.

Their lawyer, Tiffany Nonggor spoke Pacific Beat shortly after the decision was handed down today.

Presenter: Caroline Tiriman
Speaker: Tiffany Nonggor, lawyer for the Ramu landowners in PNG

Court decision could spell the end of DSTP in Papua New Guinea

Although the National Court in Papua New Guinea has today allowed the Ramu nickel mine to proceed with its plans to dump toxic mine tailings into the sea, the decision could prevent any future mine from using the controversial waste disposal system.

This will be unwelcome news from Marengo Mining, which had been hoping to use marine waste dumping, or Deep Sea Tailings Disposal as the industry prefers to call it, for its proposed Yanderra mine just a few kilometers away from the Ramu nickel mine site.

The National Court decision delivered by Justice Canning provides a devastating critique of marine waste dumping which it says will cause inevitable environmental harm and constitutes both a public and private nuisance. The court also found that the waste disposal method breaches the National Goals  and Directive Principles in PNG's Constitution and that local landholders have a right to prevent the destruction of their marine environment and its impacts on their subsistance lifestyles.

The only thing that saved the marine waste dumping plans of the Ramu mine was the fact the mine has already been constructed, at a claimed cost of $1.3 billion, and the landholders were late in bringing their court challenge.

But forewarned is forearmed and landholders in PNG now have a detailed court judgement that provides a legal precedent and a template for future successful court challenges against any mine that proposes to use marine waste dumping or any government decision that tries to authorize such a process.

from http://ramumine.wordpress.com/2011/07/26/court-decision-could-spell-the-end-of-dstp-in-papua-new-guinea/

Decision nears on Papua New Guinea coastal mine waste dumping

Thursday, 24 March 2011
By John Luick1, Gregg Brunskill2, Gavin Mudd3, Amanda Reichelt-Brushett4, and Philip Shearman5

The dumping of mine tailings waste into the shallow coastal marine environment is currently before the National Court of Papua New Guinea, in a case that will have far-reaching implications. At stake are the pristine waters of the Bismarck Sea and the livelihoods of thousands of coastal inhabitants on one hand, and the future of mine waste disposal on the other: a number of other mine operators are reportedly waiting on the result before announcing their own plans for waste disposal.
 
While a decision may come as early as 15 April, the issues raised make the information timely and important regardless.

The newly-constructed Chinese nickel cobalt mine, coastal treatment facility, and submarine waste pipeline are fully constructed. The only thing standing in the way of operation is a temporary injunction, brought on behalf of 1081 local landowners, who fear that the proposed dumping threatens their livelihoods. They seek a permanent injunction against dumping, which would require the mining company to use some form of on-land waste disposal. Specifically, they fear that the pipe will leak waste into the local reef lagoon; that upwelling will carry a suspended fraction back up into the upper mixed layer and thence into the lagoon; or that the local fishery will be impacted by the discharges.

The waste pipe runs 450 metres from the shoreline out to the 150 metre isobath. The bottom slopes are fairly gentle: about 12˚ or less from the shore out to 1300 m, where the slope is less than 1˚. For part of the way, the path is constrained by the walls of a submarine canyon (Basamuk Canyon, located 40 km due SE of Madang, PNG, at the eastern side of Astrolabe Bay).

The dominant large scale oceanic features are: the strong New Guinea Coastal Undercurrent that flows west along the coast at about 200 metres depth; the New Guinea Coastal Current that reverses with the monsoons; and a wind-driven upwelling plume during the SE monsoon that spreads along the PNG coast (Cresswell, 2000). In the vicinity of the mine outfall, none of these appear to drive massive large-scale upwelling (Hasegawa et. al, 2010). However, progressive vector diagrams published in the Environmental Impact Assessments (EIA) (NSR, 1999 and Coffey enesar, 2007) show clear evidence of onshore drift near the seabed above the proposed outfall site at about 1 cm/s (750 metres/day). The drift is persistent; while it occasionally swings alongshore, it was seen most of the time and in all months of the year. If it continued onshore beyond the point of observation, it would advect a suspended fraction up into the base of the mixed layer and possibly beyond. The mixed layer is often as little as 30 metres vertically above the proposed outfall. Thus, the fears of the local landowners are well-founded.

Upwelling is not the only matter of concern in this case. The lateritic Ni and Co ore refinery solid tailings are predicted to form a sedimentary apron within the submarine canyon and seaward between the 500 and 1500 metre depth contours, over an area of at least 150 km2 of ocean floor, to a thickness of tens of meters. The area in which this occurs is within the “Coral Triangle”, an area described by marine biologists as having the highest diversity of corals, fish, crustaceans, molluscs and marine plant species in the world (Veron et al., 2009). SE Asian countries (including PNG) have vowed to protect and conserve this region of exceptional biodiversity. This region is also the location of one of the few healthy tuna fisheries in the ocean (Lehodey et al., 1997). Aside from a few scattered bottom samples, virtually nothing is known about the deep area that will be buried in Fe/Mn rich silty clay refinery tailings, that are enriched in a chemical soup of trace elements and refinery reagents. Submarine canyons are thought to be “hotspots” of poorly known biodiversity and biomass (DeLeo et al., 2010). It should be added that nearby larger mines are being developed; their owners are waiting on the outcome of this case before deciding on whether to use the same method of waste disposal, in the same submarine canyon. Finally, it has been suggested that the coastal treatment facility be expanded to process ore barged in from distant mines. Thus, quite a significant fraction of the continental slope of the Astrolabe Bay/Vitiaz Basin would be buried deeply in tailings waste. Regrettably, this method of deep sea tailing placement has already happened at Lihir and Misima Island, where significant areas of surface water and deep seafloor have been deleteriously impacted (SAMS 2010).

The mining company and its consultants have argued before the Court that, because the site is located in a seismically active and high rainfall zone with sharp topography, a conventional land-based tailings storage facility (TSF) is too expensive. This is due to the heavy engineering which is required for site investigations, design, construction, operations and then decommissioning a TSF in these conditions. The fact, however, that they readily acknowledge that TSFs have been built in similar contexts around the world - and safely - is proof that the primary driver for preferring marine waste dumping is cost - certainly not any alleged environmental risks of marine dumping versus land-based TSFs (which can be addressed by a good TSF engineer). With an above-ground, land-based TSF, the waste remains above ground and can be easily monitored - and, if deemed necessary, remedial action readily taken. If tailings are dumped into the marine environment, it is inconceivable that any remediation could ever be undertaken practically. Put simply, a land-based TSF would be close to a hundred times as expensive (or more) to build than marine dumping - yet marine tailings disposal has been approved without any understanding of its long-term costs.

The ecotoxicity testing upon which the EIA was based contained a number of flaws and deficiencies that seriously under-estimated risk.  Early toxicity tests were completed on temperate species using 0.45µm filtered tailings water.  Other tests completed after proposed changes to the ore processing included the use of some tropical marine species using 22µm filtered tailing water.  In the real world no organism will be exposed to filtered tailing waters. No tests exposed organisms to tailing filtrates for longer than 96 hours.  No tests were completed to investigate trophic transfer to contaminants. No mesocosm studies were completed. All toxicity tests were conducted in static water as opposed to flow through conditions. No tests were completed on whole tailing toxicity (i.e. equivalent to sediment toxicity tests) even though this was a recommendation made in a sub-consultants report. Furthermore consultants recommended safe dilution rates of tailings water to protect 95 per cent of species.  However these calculations had only 50 per cent confidence in their prediction – an  enormous uncertainty that does not give confidence in ensuring that species will not be harmed.

The PNG Department of Environment and Conservation, by their own admission are short on capacity, to either critically review Environmental Plans or to monitor the environmental performance of the mining industry.  Indeed the department has been treated somewhat as a ‘rubber-stamping’ agency by the small number of environmental consulting firms that monopolise the sector.  Despite warnings from both the Department of Fisheries and the Department of Mining about the problems in the miner’s EIA relating to adverse currents and the toxicity of tailings as far back as 1999, and despite several peer reviews and external assessments calling for substantial modifications and new data (mostly unheeded), the project remains essentially unchanged from that proposed a decade ago.  In a rather sad indictment of the parliamentary government response, the Environmental Act of Papua New Guinea was then revised implicitly to facilitate the dumping.

The case took a dramatic twist when Dr Tracy Shimmield, of the Scottish Academy of Marine Sciences (SAMS), took the stand on behalf of the mine owners, to testify that the best way to test for upwelling would be to start dumping as soon as instruments could be placed in the field to observe the effect. This, she suggested, would proceed for some months, after which instruments would be retrieved and upwelling and tailings dispersion assessed. It emerged that SAMS itself had been contracted to perform the fieldwork and analysis. Dr Shimmield’s affidavit further proposes that SAMS continue to monitor the behaviour of the tailings plume on the assumption that the tailings dumping continues indefinitely. The Shimmield affidavit strongly supports marine tailings dumping as an alternative to on-land storage, repeatedly stressing that the majority of the waste ends up in deep water. (This logic has an interesting history. About a decade ago, in the face of a series of submarine tailings pipe breakages resulting in ecological and human health catastrophes, the proponents of marine tailings dumping began insisting that the practice be referred to as “Deep Sea Tailings Placement” (DSTP) in order to emphasise the final “deep and still” resting place of the majority of the waste. While the new title may detract attention from the pipe breaks and upwelling issues, it ignores the fact that abundant, and almost completely unexplored, life exists on and within the deep sea bed that is destroyed by burial.)

Dr Shimmield revealed under cross-examination that SAMS will also be paid by the World Bank to produce a set of guidelines to assist governments in setting conditions for marine dumping of mine waste.

The timing of the proposed guidelines, and their announcement before the Court, also has an interesting history. In 2003, the World Bank produced the “Extractive Industries Review” (World Bank, 2003), which concluded that:

  • Submarine tailings disposal (STD) is currently the waste disposal procedure preferred by many mining companies planning large-scale operations in mountainous areas of active seismicity, particularly in Southeast Asia and the Pacific. If major projects proposed for the region receive permission to use STD, there could be a significant increase in its use in the next 10 years for already approved and proposed large-scale mining operations. This is also a critical region of maximum marine biodiversity and thus of global marine conservation significance. The effects of STD (if any) on tropical marine life, marine resource use, and ecosystem function are not well understood, and there is an urgent need to address the major gap in biological data on the possible effects of STD on tropical marine ecosystems, particularly in the Indo-Pacific deep sea. On the basis of the precautionary principle, since marine biodiversity has global conservation significance and since the possible effects of STD on the tropical marine ecosystem are not well understood, STD should be avoided especially in island regions where this method of disposal may not assure people’s sustainable livelihoods.

  • Almost all STD operations worldwide, whether disposing at shallow depths or in the deep sea, have had problems, including pipe breaks, wider than expected dispersal of tailings in the sea, smothering of the benthic organisms (although this is predicted) and loss of biodiversity, increased turbidity, introduction to the sea and marine biota of metals and milling agents (chemicals, such as cyanide, detergents, and frothing agents), and loss of potentially re-mine-able metals from tailings in the deep sea.

  • The EIR heard numerous other concerns about current as well as anticipated environmental and socioeconomic impacts of submarine tailings disposal in Southeast Asia. STD presents an inherent economic risk to local and export fisheries, for example, because of real or perceived contamination of marine resources. It may affect large and often endangered marine life, including whales, dolphins, and marine turtles, and it may raise the risks to human health through direct or indirect exposure to mining wastes. Mining procedures such as STD may have a negative impact on numerous other important socioeconomic and environmental factors, ranging from reduced marine tourism potential to additional, often illegal small-scale mining activities by opportunistic individuals. Environmental impact assessments of mining operations with STD as their main mechanism for waste management do not adequately assess any adverse effects in the deep sea and marine food web, and such potential impacts should be included in the scope and terms of reference for such studies.

The timing of the Shimmield guideline-drafting contract is concerning, because its announcement (before the Court) maximizes the degree to which it undermines the landowners’ case. While the Review does not completely reject the option of “Submarine Tailings Disposal” as they call it, there is a big leap between leaving a door open a crack (as in the Review) and flinging it open with an effective endorsement, which in a country like PNG, with very weak regulatory controls, is precisely the effect of a new set of guidelines issued by a world body. 

In response to queries from the authors, the World Bank has stated:

“This (support for the new guidelines) does not imply any form of approval (of  STD) by the World Bank, but demonstrates that should the Government go down this path, then the Bank supports the establishment of a regulatory framework which minimizes any potential environmental impacts from whatever tailings management system which is adopted by the Sovereign State of Papua New Guinea.  The Bank’s assistance is motivated by a desire to see that permits issued through that 'normal' process are then also subjected to further site-specific stringent requirements, to strengthen ability to hold industry accountable and responsible in discharging their permitted activities.”

It may be that in certain future circumstances the guidelines will have a positive impact. For example, in a developed country, in which there exists the capacity and political will to enforce them, they might make a useful framework to deny permission to dump wastes in coastal seas. However, nearly all developed countries have either explicitly or effectively banned the practice of shallow marine dumping of mine tailings waste (STD/DSTP). Even in countries like PNG, a generally-excellent set of laws exists. The only problem is that they are not enforced, or enforced poorly. So however lofty the stated goals of the World Bank, their effect will be to simply facilitate a practice that – like many early forms of industrial pollution  – should be consigned to the dustbin of history.

The situation, as it currently stands, is that a state-funded European institution is being paid by a foreign mining company and/or a foreign national government agency to not just monitor but to actively advocate in Court marine pollution on a massive scale (covering perhaps hundreds of square kilometres of seabed with potentially toxic waste), a practice which almost certainly would not be tolerated in their home country, while at the same time being paid by the World Bank to produce guidelines to govern when and how the dumping should be done – guidelines which (if followed) would have disallowed the particular mine outfall they hope to monitor.

While scientific institutions increasingly have to chase the dollar to survive, as scientists we have to be able to say no when profitable consultancies become ethically questionable, or when our actions in faraway places can leave a poisonous legacy for generations to come.

The authors of this report were called by the landowners to provide unpaid “expert witness” testimony in their case to get a permanent injunction against the shallow marine dumping at Astrolabe Bay.  

1South Australian Research and Development Institute, Adelaide, SA, Australia
284 Alligator Creek Road, Alligator Creek, QLD 4816, Australia
3Environmental Engineering, Monash University, Clayton, Australia
4School of Environmental Science and Management, Southern Cross University, Lismore, NSW, Australia
5Australian National University, Canberra, ACT, Australia and University of Papua New Guinea, Port Moresby, PNG

References

Cresswell, G. (2000) Coastal currents of northern Papua New Guinea, and the Sepik River outflow. Mar. Freshwater Res., 2000, 51, 553–64.

Coffey enesar (2007) Environmental Baseline Report, Ramu Nickel Project. CR 161_33_v2., pp1-63, plus Appendices 1-14.

De Leo, Fabio C., Craig R. Smith, Ashley A. Rowden, David A. Bowden and Malcolm R. Clark (2010) Submarine canyons: hotspots of benthic biomass and productivity in the deep sea. Proc. R. Soc. B 2010 277:2783-2792. doi: 10.1098/rspb.2010.0462.

Hasegawa, T., A. Kentaro, K. Mizuno, R. Lukas, B. Taguchi, and H. Sasaki (2010) Coastal upwelling along the north coast of Papua New Guinea and El Niño events during 1981–2005. Ocean Dynamics, DOI 10.1007/s10236-010-0334-y.

Lehodey, P., M. Bertignac, J. Hampton, A. Lewis, and J. Picaut (1997) El Nino Southern Oscillation and tuna in the western Pacific. Nature 389:715-718.

NSR (1999) Ramu Nickel Project Environmental Plan, Volume A: Executive Summary. CR 161/9/v4 plus Appendices 1-25.

SAMS (2010) Independent Evaluation of Deep-Sea Mine Tailings Placement (DSTP) in PNG. Scottish Academy of Marine Science, Project Number: 8.ACP.PNG.18-B/15. http://www.mpi.org.au/submarine-tailings-disposal.aspx

Striking a Better Balance: Volume I. The World Bank Group and Extractive Industries. The Final Report of the Extractive Industries Review, December, 2003.

Veron, J., L. Devantier, E. Turak, A. Green, S. Kininmonth, M. Stafford-Smith, and N. Peterson (2009) Delineating the Coral Triangle. Galaxea, Journal of Coral Reef Studies 11: 91-100.


This is an updated article originally published on Papua New Guinea Mine Watch - this updated version is from Science Alert

Xstrata wants to double zinc-lead output at McArthur mine

* Says $900 mln plan will require revamping smelters in Europe, Canada

* Demand for current McArthur concentrate in decline (Adds details, chief operating officer comments)

SYDNEY, March 11 (Reuters) - Global miner Xstrata said it must spend $900 million to double productivity at its McArthur River zinc and lead mine in Australia, as it tries to maintain the viability of one of the world's largest operations of its kind.

The plan involves an increase in mine production and also installation of proprietary hydrometallurgy technology at the company's San Juan de Nieva smelter in Spain and Nordenham smelter in Germany, and potentially improvements to its lead smelter in Brunswick, Canada, according to Xstrata.

Xstrata's Australia zinc division chief operating officer, Brian Hearne, said Xstrata was facing a decline in the traditional international markets for the unique bulk zinc-lead concentrate produced by the mine, prompting the changes.

At present, the material from the mine can only be processed at a falling number of smelters employing what's called Imperial technology, limiting marketing outlets, according to Hearne.

"They (Imperial smelters) have been dropping off for some time," Hearne said by telephone from Brisbane on Friday.

Zinc is widely used in steel galvanising, while lead is a key ingredient in auto batteries.

Hearne estimated that zinc and lead-bearing concentrate produces less than 6 percent of the world's primary zinc.

By changing the way the concentrate is smelted, the zinc and lead can be segregated, proving wider markets for the material.

"We've done fairly extensive work on this so far," Hearne said. "It's only by increasing production at MRM (Macarthur River) and reducing unit costs that the overall project is financially viable."

 

  

 

"We can increase smelter capacity and create a new, guaranteed market for MRM bulk concentrate and extend the life of mine by six years to 2033," Hearne said.

The idea is to roughly double mine production to 5 million tonnes per year resulting in an increase in zinc-lead concentrate output to 800,000 tonnes a year versus 384,000 last year.

The mine, located 900 kms (550 miles) southeast of Darwin, started as an underground mine in 1995 before converting to open pit mining in 2009 in order to extend its operational life.

The plan is subject to findings of feasibility studies linked to technology trials in Europe and also an environmental assessment, the company said. (Reporting by Jim Regan; Editing by Himani Sarkar)

http://af.reuters.com/article/energyOilNews/idAFL3E7EB01N20110311

 

  

PNG Mine Watch

Saturday, January 28, 2012 4:33:47 AM
Prime Minister Voreqe Bainimarama today had a successful meeting with landowners from Tikina Namosi (Province of Namosi) and Tikina Waidina (Province of Naitasiri), who presented their views on the current exploration being carried out by Namosi Joint Venture (NJV) in … Continue reading
Saturday, January 28, 2012 4:30:30 AM
Friday, January 27, 2012 7:48:49 PM
Mining giant Freeport-McMoRan dug up a heap of trouble in Indonesia’s most tenuous territory, and it won’t get better soon. Investors beware: Forbes Magazine   By Simon Montlake Sitting on a concrete floor just before the holiday at a modest … Continue reading
Friday, January 27, 2012 3:34:42 PM
THE people of Lower Watut, Labu and Huon Gulf areas are still waiting for a German scientific report their MP Sasa Zibe promised he would commission into the effects of the Hidden Valley gold mine on their lives, reports the … Continue reading
Friday, January 27, 2012 3:27:44 PM
THE operator of Lihir Gold Mine and the world’s third largest gold producer Newcrest Mining Ltd (Newcrest) has reported that its gold production fell 20 per cent, reports the Post Courier The Australia’s largest mining giant in statement on Tuesday … Continue reading
Friday, January 27, 2012 2:02:57 AM
Friday, January 27, 2012 1:47:35 AM
Friday, January 27, 2012 1:44:14 AM
A PAPUA New Guinea student studying in an Australian university has praised the government for repealing amendments to the Environment Act 2000, reports The National. James Cook University student Raymond Unasi said: “It is very encouraging and timely to read … Continue reading
Thursday, January 26, 2012 4:45:01 AM
By Catherine Wilson Although Papua New Guinea is known as a resource-rich country, 85 percent of the population depends on the informal economy for a living. The need for a grassroots-led economic enterprise to aid equitable and sustainable development is … Continue reading
Wednesday, January 25, 2012 9:27:25 PM
Bismarck Ramu Group So Arnold Amet (aka as Double A on the streets of Madang (and it doesn’t stand for Arnold Amet!) says the Deep Sea Tailings System (DSTP) is safe at Ramu (yea right Double A) and that he … Continue reading