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Created before Nov 2016
Last update: 2015-11-01 14:53:10 BankTrack
Charles Roche, MPI
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About Ramu nickel mine
An open cut, lateritic nickel mine at Krumbukari [near Madang], with mine waste pumped via a 130km pipeline to the coast at Basamuk Bay for submarine tailings disposal.
General - Since 1998, the Ramu Mine has been the subject of considerable controversy in both Papua New Guinea and internationally, in particular due to concerns that its ocean dumping (submarine tailings disposal or STD) operation will pollute pristine Astrolabe Bay.
In September 1999, Highlands Pacific provided the government of Papua New Guinea with the Ramu Nickel Environmental Plan prepared by Natural Systems Research (NSR) with the aim of securing permits for the project. In March 2001, amid much local and international controversy, and with significant evidence of unacceptable risks associated with the development, the PNG Office of Environment and Conservation (OEC) approved the Ramu Nickel Environmental plan.
The project however failed to attract an investor amongst the major nickel mining companies or international capital markets, believed to be linked to both the problematic economic and technical issues and unpredictable capital costs associated with the exploitation of low grade nickel deposits, as well as the controversy over environmental and social issues surrounding the project.
In 2004, the China Metallurgical Construction Company, a state-owned steel company started negotiations to fully finance the operations, including rights to construct, operate and secure off take arrangements for the proposed Ramu nickel mine. Media reporting outlined that the move was to ease a raw material shortage for stainless-steel makers such as Shanghai Baosteel.
Uncertainty over the environmental and social credentials of the Chinese developer have been raised by local community representatives as well as parliamentarians in the PNG Government. Negative impacts from serious environmental pollution concerns also appear to vastly outway the potential benefits from the mine for local communities and Papuans in general. Community concerns and opposition over the project also pose serious risk for the project.
Financial History - Originally the project was owned by Mount Isa Mines [MIM], under their subsidiary, Highlands Gold which was divested in 1996 before being taken over by Placer Dome in 1997 [subsequently taken over by Barrick Gold].
Placer Dome had adquired Highlands Gold for its Kainantu operations, it subsequently bundled the Ramu and Frieda River projects together and sold them on the 6 June 1997 as "Highlands Gold Ltd-noncore assets" to Highlands Pacific which was at that point a private company.
Highlands Pacific listed on the Australian stock exchange 6 days later, and two years later on the PNG stock exchange [26 October 1999].
Highlands Gold and Highlands Pacific shared projects and staff and the names are used interchangably by news sources. The sale has been described as a "name change' only.
On 9 February 2004 a framework agreement was signed in Beijing by MCC, Ramu Nickel Limited, Mineral Resources Development Company Limited and the Independent State of Papua New Guinea. The landowners were not consulted or involved. The agrement saw the mine ownership divided into 6.3% for the state/people, 8.53% held by Highlands pacific and 85% by the Metallurgical Corporation of China a subsidiary of China Metallurgical Group Corporation (MCC Group).
What must happen
Firstly the banks need to withdraw their support from this and any other project that involves submarine tailings disposal until full, public, independent and scientiffically rigorous studies are conducted into the current state of the environemnt, it's important to the local people and how mine waste might impact on environmental, social and economic values in the area.
Secondly the banks involved need to publicly clarify their positions on environmental harm, free prior and informed consent and human rights.
Four clans within the region signed an agreement with the PNG Government in relation to the mine but the Traditional Owners of the land where the mine is proposed were not consulted. The Traditional Owners placed a claim with the Lands Titles Commission in 1996 but the claim remains unresolved. The Ramu mine will be illegal, breaking local laws, on the basis that the claim is still unresolved in the courts. In August 2008, landowners closed down the mine development seeking a meeting with the PNG Government and mining officials. Police reinforcements were deployed in Madang after violence broke out between locals and some Chinese employees. Landowners are angry about a long delay in reviewing a mining agreement with the PNG Government and MCC.
In March 2006 Indigenous landowners described as "ignorant" by lawyers acting for the mine owners nickel mine secured a temporary court injunction to stop work on the mine's submarine tailings disposal system. On Friday 19th March the National Court granted temporary injunctions forcing MCC "and their Associates, agents and employees to cease all preparatory work on the Ramu Nickel Mine deep sea tailings placement system that involves directly or indirectly damage or disturbance to the offshore environment - including all coral blasting or popping of dead or live coral and laying of pipes - and shall not carry out directly or indirectly any such work, pending determination of the substantive proceedings."
In November 2008 last year, police arrested 104 illegal Chinese workers after immigration and labour raids at the mine. Should Submarine Tailings Discharge go ahead and produce adverse effects on marine life, fish stock than the livelihoods of the community who depend on the ocean for food and income will also be affected. Other social problems have become prevalent during the construction of the mine. The Kurumbukari people of Madang Province have been devastated by their forced removal from their ancestral lands by police operating on behalf of the Chinese Metallurgical Construction company. Gambling, prostitution and alcohol consumption are on the rise in the region according to a report presented to the Madang Provincial administration by the Provincial Mines Office.
Submarine Tailings Disposal -The mine has been under intense scrutiny principally because of the use of Submarine Tailings Disposal (STD) of mine waste. It is projected that 5 million tonnes of hot slurry tailings annually will be pumped into Basamuk Bay to a depth of 150 metres for a period of 20 years. Government agencies, non-government organisations and local groups have environmental concerns about 100 million tonnes of waste slurry tailings to be pumped into the province's pristine Astrolabe Bay. There can be no doubt that disturbance on the scale of a STD operation will have significant biological impacts. The Environmental Plan prepared by Natural Systems Research (NSR) gave no indication of the likely impacts or risks associated with the proposal and did not thoroughly examine alternatives to marine discharge. Consequently, The Mineral Policy Institute was commissioned by the Evangelical Lutheran Church of Papua New Guinea to research the risks of the Ramu Nickel project on the ecology of Astrolabe Bay. Accordingly a team of independent scientists prepared a report on behalf of MPI.
The report concluded that environmental plan was deficient due to inadequate data collection, faulty methodology, models that are contradictory, highly optimistic scenario development and inconsistencies with regard the presentation of the evidence. The report described the possible impacts of STD as contamination of coral, the local reef system and parts of Astrolabe through tailings accumulation at two points in Basamuk Bay. There is the potential for the accumulation of tailings and waste rock in the bay to contribute to a tsunami, increase the risks of earthquakes, seabed landslides and volcanic eruptions. Potential environmental impacts from STD include heavy metal contamination of fish, animal and plant life within the bay through bioaccumulation with an overall impact on the bay's ecological health and diversity. There have also been inadequate studies of fish stocks and species in both shallow and deep water and thus insufficient information on which to base predictions of impact.
The mine owners claim that the waste will not be toxic despite known chemicals and heavy metals that will be present in submarine tailings. There are legitimate concerns about the distance that tailings plumes will spread. Based on the characteristics of the local currents plumes could travel at 1 metre per second and would therefore be distributed over a number of the coastal canyons. Deep-sea currents are predicted to carry waste north west towards Madang.
It is likely that fish stocks and species will decline due to the spread of waste and there have been inadequate investigations into the ecology of the animals and plants on the seabed (the most vulnerable area to damage from STD), the shallow-water environment and also the deepwater fauna. Therefore, it is not possible to predict with any accuracy the severity of impacts of STD on the marine environment. In the mine's Environmental Plan, NSR dismissed concerns that fish stocks will be contaminated claiming that fish will swim away ("avoidance behavior") from pollutants and tailings plumes, therefore not ingesting heavy metals or
Impacts on the Ramu River - A preliminary assessment of the impacts along the Ramu River system17 highlights the absence of reliable data or modelling based on the environmental conditions in the region and thus an inability to rely upon the prediction of impacts in the existing environmental plan.
The proposal for the Ramu mine also fails to properly model the settling ponds (the primary management strategy for ensuring excessive sediments do not enter the river system) based on conditions during peak rainfall periods and aknowledges that the estimated functioning is not realistic and that ponds will not function as predicted. On this basis it is expected that a much greater proportion of sediments and metals will be carried into the river system. The region has an extensive wet season, and as such this failure represents a major and significant flaw in the environmental management regime.
The NSR report for the Ramu Environmental Plan also stated that further consideration of the impacts of trace metals should be undertaken, but it is unclear whether this has been done.20 The existence of heavy metals in fish tested in the creeks in close proximity to the mine site area indicates that trace metals present are mobile and will be absorbed into the environment21, and that bioaccumulation of metals in plants and animals (including humans) poses significant risks22.
There has also been minimal investigation of the leaching of metals into the groundwater in the region and how this may affect ecosystem functions or the food The lack of detailed study into the impacts of these trace metals, and the absence of any management strategy to remove the metals from mine waste rock or water entering the environment poses serious potential risks to both ecosystem and human health of the Ramu Catchment.
It is likely there will be greater than predicted sedimentation and (TSS) Total Suspended Solids in the river system and unpredicted and more extensive impacts upon the river's ecosystem including decreased fish breeding and fish catch rates. Sedimentation will lead to alterations in the river system, including shallowing
and braiding, with likely effects of increased flooding in areas along the Ramu River that have not previously experienced flooding, and dieback of vegetation along the river.
Greater than predicted loads of dissolved metals in the hydrology of both the Ramu River system, and in groundwater in the region of the mine is likely with mine sediments and eroded materials deposited along the river system containing high concentrations of trace metals and these will impact both natural ecosystems and cultivation taking place on the floodplains of the river.
The mine is nearing commissioning but construction of submarine tailings disposal system has been stopped due to a court action by local landholders opposed to the dumping of mine waste at sea.
The court hearing was listed to start on Tuesday 21st September but was delayed due to concerns about the plaintiffs saftey and rumors they had abondoned the case.
Unconfirmed reports from Wednesday 22nd Sept, indicate that the while the three plaintiffs have withdrawn, an application was filed by Ms Tiffany Nonggorr to allow a fresh motion. This was supported by Justice Cannings on ther grounds the new plaintiffs had the same interest.
The original plaintiffs are yet to explain they sudden decision to abandon the case, though stories of intimitadion, kidnapping and bribery have been circulting in the media.