APRIL 2000 VOLUME 21 NUMBER 4


THE FRONT

BHP's Big Mining Mess
It has been a year of reversals for BHP, Australia's largest mining company, and the Ok Tedi gold and copper mine that it operates in Papua New Guinea.

Last June, consultants to Ok Tedi Mining Limited (OTML), the subsidiary that operates the mine for BHP and its partners (the Papua New Guinea government and Inment Corporation of Canada), found that the environmental impacts of the mine were far worse than previously acknowledged.

In March, the World Bank recommended that Ok Tedi be shut down to prevent any further environmental damage downstream of the mine. BHP has indicated its support for the closure option. But first the company is trying to shift responsibility for the damage caused by the mine to the government. And the government, which depends on mine revenues, is resisting a shutdown.

The OTML consultants' report made clear that the millions of tons of silt, sand and other mine waste poured into the Ok Tedi and Fly Rivers over the past decade is likely to make flooding so frequent that by 2010 it will kill the existing trees on 800 square kilometers of floodplain and perhaps kill the trees on another 400 square kilometers. This "dieback" zone will be created even if mining stops tomorrow.

It is the scale of the operation that makes the mine so destructive: Ok Tedi dumps over 80,000 tons of mine tailings waste every day into the Fly River system. That is the equivalent of 200 semi-trailers, each off-loading 40 tons of dirt and rocks, day after day for the past 15 years.

For the 15,000 landowners living downstream of the mine, the "discovery" that there is severe environmental impacts is not news. They have long contended that the mine is destroying the ecosystem and their way of life, and even successfully took BHP to court in Australia, a case which was settled for $115 million in 1996. But in the settlement BHP denied the true impacts of the disaster, instead claiming they could be mitigated  with river dredging and other technological fixes such as a tailings retention system. Until the settlement, BHP had insisted that a tailings retention system was not an option, especially after the first tailings dam constructed for the mine collapsed in 1984.

Following the consultants' findings last year, however, BHP acknowledged the significant environmental damage caused by the mine and said that the mine operation is contrary to the company's current environmental charter. The company has even expressed regret over ever becoming involved in Ok Tedi, which has failed to yield a return on the firm's investment.

In November, BHP started to consider options for the mine's future, including an early closure.  Word of the possibility of closure sparked fear in government circles, because 10 percent of the government's income comes from mine earnings. Government officials asked the World Bank to examine the findings of the OTML consultants and to assess available options. Now that the World Bank has concluded closure is environmentally mandated, the government is caught between that rock and the hard reality of its economic needs.

Earlier this year, Paul Anderson, BHP's managing director, said there is no easy answer: "The best environmental outcome has the highest social cost and the best social outcome has the worst environmental outcome. The final decision on this will be with the  Papua New Guinea government."

But for activists working on this issue, the responsibility lies with BHP. According to Wep Kanawi, spokesperson for Papua New Guinea's Non-governmental Environmental Watchdog Group, "a mine closure plan needs to be put in place immediately. At the mine site, BHP must fund a transition to a sustainable local economy. The communities affected by loss of fish and destruction of riverbank gardens downstream must be compensated and their environment rehabilitated."

If BHP were operating the mine in an industrialized country, it certainly would be required to clean the site, points out Steve D'Esposito of the Mineral Policy Center in Washington, D.C. In 1998, D'Esposito says, when a tailings pile collapsed at BHP's Pinto Valley Mine in Arizona, the company conducted a full clean-up of the pristine Pinto Creek, as required by U.S. law. D'Esposito asks, "Why is the Ok Tedi river any different, except in scale?"

Repeated calls to both BHP and the World Bank's Papua New Guinea Desk Office were not returned.

-- Danny Kennedy
Danny Kennedy works with Project Underground, in Berkeley, California.