Ok Tedi

OK TEDI 

Location

Mount Fulibanin theStar Mountains Region, the central mountain range of the Western Province

Latitude:  5°12’48.09″S  Longitude: 141° 8’37.56″E

Status

Operating Mine

Type of Mine and Waste Disposal

The OK Tedi mine has been a three stage process: the mining and processing of the gold enriched cap from 1984 to 1986, the extraction of both gold and copper from the copper rich base from 1986 to 1988 and the extraction of largely copper (with small quantities of gold and silver) from 1988 to the present.OK Tedi is an open pit operation where up to 80,000 tonnes of ore and 152,000 tonnes of overburden are mined each day. The mining lease was granted in 1981 for 21 years with the right of renewal for a further 21 years. A small volume of tailings was retained in the Interim Tailings Scheme near the mill in the early years of operations.  Since then, and with approval from the State, tailings have been discharged directly into the Ok Tedi and Fly River systems.  An alternative tailings treatment was not feasible because of the unstable terrain, geological formations and very high rainfall of the region.  Ok Tedi Mining Limited (OTML), the current operators of the mine, is planning for an orderly closure of the mine in 2013.  However OTML is in the process of undertaking a feasibility study to extend the mine life by another 7 years until 2020 by a combination of underground and an open pit mining.

Target Minerals

Gold, Copper

Current Production

Copper 1,600,000 kg (2008), Gold 16,035,324 g (2008)

Past Production

Copper average annual production 199,859,431 g (1989-2008)

Gold average annual production 15,241,333 g (1989-2008)

Silver produced 1989-1990.

Ownership and Finance

The mine is operated by Ok Tedi Mining Limited (OTML) which is majority owned by the PNG Sustainable Development Program Limited (PNGSDPL).  Prior to 2002, it was majority owned by BHP Billiton.  At the commencement of mining in 1984, BHP entered into a partnership with the Papua New Guinea Government and a Canadian company, Inmet Mining Corporation.  BHP maintained a majority share in the mine eventually BHP Billiton Ltd sold their interest in January 2002 when it divested its 52 per cent shareholding in OTML by transfer of its shares to the Papua New Guinea Sustainable Development Program Limited (PNGSDPL).  OTML dividends are paid to PNGSDPL with the purpose of generating sustainable development projects for the benefit of the people of the Western Province and Papua New Guinea.  Current ownership is summarized as PNG Sustainable Development Program Limited (52 per cent), Inmet Mining Ltd (18 per cent) and the PNG Government (30 per cent). The PNG Government holds equity directly (15 per cent) and on behalf of the Western Province (12.5 per cent) and landowners from the mine area (2.5 per cent).

Environmental Setting

Due to its position at the intersection of two tectonic plates, the northern part of the Western Province is characterised by unstable, steep mountains where landslides are common.  The high rainfall and unstable mountain terrain result in high levels of erosion and, consequently, many rivers such as the Strickland carry very high natural silt loads.  There is an abrupt increase in altitude and increasingly rough terrain at about 600 metres above sea level.  Vegetation is highly diverse and comprises a mixture of lowland and lower montane rainforest species.  Above about 1,000 metres the vegetation is predominately montane rainforest.  These are moist forests with many mosses and ferns.  They are also notable for their diversity of mammals having among the highest recorded diversity in PNG.

Environmental Impacts

The mine has had a major impact on the downstream riverine ecosystems, affecting the lives of the traditional subsistence inhabitants of local communities, and substantially altering the appearance and condition of the Ok Tedi and Fly Rivers.  Since the inception of the project the disposal of tailings has been a controversial and contentious issue and consequently the mine has been plagued by environmental issues and conflict.  Previous owners of the mine had consistently argued against the construction of a dam to contain the mine tailings.  However, finally, and at the insistence of the PNG government, work began on a tailings dam in 1983 one year before mining was to begin. From the outset the owner’s lack of commitment toward the dam was evident.  Geological surveys essential to ensure stability and appropriate location for the dam were neglected.  In 1984, whilst construction was still proceeding a landslide smothered the site and collapsed the dam.

Since then mine tailings and waste rock have been discharged directly into the Ok Tedi and Fly River system at an average rate of 165 000 tonnes per day about 115 tonnes per minute.  The mine’s tailing waste contains high levels of copper, cadmium, lead, and zinc.  The environmental impacts on the Fly River system are devastating, indisputable and have been well documented.  Impacts are predicted to occur for at least 50 years due to the sheer volume of tailings already in the river and by on-going erosion from waste rock dumps.  By this time as much as 2,000 square kilometres of rainforest is likely to have been destroyed by sediment inundation.  Aquatic species diversity is already dramatically reduced and unlikely to recover as the floodplain wetlands, which act as off-river refuges, are contaminated by copper. Forest dieback caused by the mine exceeds a thousand square kilometres.  Sediment deposition, over-bank flooding and the appearance of acid rock drainage are adding to the environmental woes.

There are serious concerns about about heavy metal toxicity within the river’s food web: from algae to fruit bats and marsupials.  There are also legitimate concerns about the human health risks of exposure to copper, lead and cadmium.  While company sponsored reports have routinely dismissed such risks, the necessary research into dietary habits and intake is yet to be done and no meaningful health impact assessments have been conducted.

In 1996, OTML set up the Mine Waste Management Project (MWMP) and brought together international experts from a wide range of disciplines to undertake an extensive two-year study of the engineering, environmental, social and risk components involved in mitigating the environmental impacts of the mine waste.  The MWMP also included a dredging trial in the lower Ok Tedi to investigate the effectiveness of dredging as a measure to reduce sediment build up in the river system.  After considering a range of mine waste management possibilities the situation remained much the same.  A tailings dam was not installed and the mine was not closed. The mine continues to dump its waste into the river.  Dredging does take place in the lower Ok Tedi River but this removes less than one quarter of mine derived sediment leaving 53.7 million tonnes per year to wash further downstream.  Dredging was implemented prior to formal examination of tailings containment options, largely to ensure that the ships transporting copper from Kiunga could continue to navigate the increasingly silted river.

The stockpiling of the dredge spoils on the river bank has increased the potential for acid drainage which would have serious impacts including mobilizing additional heavy metals into the river system. OTML itself has confirmed the existence of acid drainage from the dredge spoils stockpiles and has highlighted the need for research into long term mitigation options.

Social Impacts:

Significant social impacts associated with the operation of the mine have been experienced.  The rapid introduction of a cash economy, formal education, consumer goods and alcohol have rapidly altered the way of life and expectations of the communities surrounding the mine.  Villages downstream of the mine are struggling to adapt to a dramatically altered riverine environment with disruptions to horticulture, fishing, drinking water supply, forest ecosystems and river transport.  Women experience a disproportionate burden in the face of the increasing difficulty of finding clean food and water for their families.  The mine development has resulted in increasing rates of domestic violence and sexually transmitted diseases.

As a result of the impacts of the mine on their livelihoods, approximately 30,000 landowners fought a landmark legal battle in the Supreme Court of Victoria (Australia) with BHP Billiton.  In 1996, after two years of legal wrangling, BHP conceded an out of court settlement.  The settlement committed BHP to reducing the environmental impact of the mine tailings, including obligations for OTML to pay compensation and to implement a practicable form of tailings containment. PNG landowners were led to understand that the company would stop mine waste from entering the river.

In April 2000, the landowners returned to the Victorian Supreme Court charging BHP-Billiton and Ok Tedi Mining Ltd with breaching the terms of the 1996 settlement.  OTML offered landowners immediate payment in return for leaving the court case and signing agreements that annul their right to lodge future claims for damages. These agreements claimed to represent consent of downstream communities to the continued dumping of mine wastes into the river without any obligation to undertake environmental remediation.  Ensure about the future individuals decided to accept these agreements on behalf of their villages.  However, there were concerns about the manner in which the agreement of landowners was sought, whether they were adequately informed and how representative the few hundred of signatories were of 50,000 landowners.  The agreements were criticised because they failed to meet the legal threshold for informed consent . In exchange for nominal compensation packages, this settlement also requires landowners to give up their rights to lodge any future claims against the company and to endorse the mine’s business as usual operation. Several communities along the river vehemently rejected the settlement.  They believed that they could obtain justice, even if the Australian court system had failed to deliver it.