Gold and Diamonds: The Social and Environmental Impacts of Mining for the Diamond Ring

Performance

The No Dirty Gold Campaign is a good industry watchdog which incorporates all the mining issues that Greenpeace, Earthwatch, the World Wildlife Fund, and others cover in their extensive research of mining companies and their environmental and social impacts. Thus, their compilation is the source for the following environmental and social impacts of Newmont Mining around the world.

Ghana

Several Environmental Impact Assessments on their mining activities in Ghana suggest that they are not adhering to the International Cyanide Management Code, and that there is no evidence of financial backing for mine cleanup and reclamation. Although Newmont is claiming transparency as one of their core values, they are not disclosing potential significant acid generation from mine waste. On the social side, the involuntary displacement of subsistence farmers by mining activities threatens food security in the area.⁴³

Indonesia

In Indonesia, Newmont’s mining activities are near a fishing village, where particular consideration should be paid to the livelihood of the surrounding community and the ecosystem of the waters in the area. Instead, Newmont dumps about 120,000 tonnes of mine tailings a day directly into the ocean—an illegal activity in North America. This activity has caused the relocation of several fishing villages because of all the marine pollution. They have also dammed two rivers, threatening protected forests and causing further displacement of peoples.⁴⁴

Peru

Peru is a serious problem area for Newmont Mines. There are numerous claims that a mercury spill about six years ago still causes problems with child development and the health of the indigenous population that lives around the mining area. Newmont has not responded to these claims, and has not performed an official health investigation.⁴⁵

Romania

Most of the focus on the development of the Romanian mine has been on the social consequences. The operation is to consist of four open-pit mines in the densely-populated Rosia Montana valley, with an unlined cyanide storage pond in the neighbouring Corna Valley. If the project goes ahead despite mass opposition, it would be the largest open-pit mine in Europe, in an area with archaeological value comparable to that of Pompeii. This mine would also require the demolition of 900 homes and the displacement of 2,000 people from the area. Romania and Hungary, the two countries that would also be impacted, have voiced their concerns about pollution from the mine.⁴⁶

Nevada

Finally, one of Newmont’s mines located on the Western Shoshone Nation’s Land of Nevada, has been developed without the approval of the Shoshone Nation. It threatens to leave significant land scarring, and pollution of groundwater. Groundwater depletion is also a major concern in the area, as is the emission of mercury, and air and water pollution caused by Newmont’s mining activities.⁴⁷

Compliance to the initiatives that Newmont Mining has signed is difficult to impose as most of the treaties are non-binding, voluntary, and unenforceable. Also, in the private sector, as long as profits are made—and Newmont’s stock values keep rising—there is very little incentive to change. There is currently no regulatory body besides government, which would keep the industry in line. Public opinion is powerful, but money talks, and in the end, the effect of public opinion on profits will be the one to effectuate change in the industry.

The Leader: BHP Billiton

BHP Billiton is widely considered, within the mining industry and the financial sector, as a leader in sustainability practices and environmental performance. They scored 64 out of 100 on the CERES Climate Change Governance Checklist, where the average for mining sector was 42.2.⁴⁸ Also used as a measure of environmental performance the Roberts Environmental Center developed the Pacific Sustainability Index (PSI), which is based on environmental and social intent, reporting and performance. The overall score from the PSI for BHP Billiton was a B+ (Roberts Environmental Center). The Dow Jones Sustainability Index (DJSI) named BHP Billiton the sustainability leader for the mining sector in 2006 (see Appendix B).⁴⁹

Company Profile

BHP Billiton was formed in 2001 from the merger of BHP and Billiton Resources. Incorporated in 1885, BHP was headquartered in Melbourne, Australia and had three main operations: minerals, petroleum, and steel. Billiton had been an active mining company since 1860, were Headquarters in London with operations that were focused predominantly on minerals and coal.⁵⁰

Currently BHP Billiton employs 38,000 employees and has over 100 operations in 25 countries. Their operations are spread across a wide array of mining activities, including: aluminum, coal, copper, manganese, iron ore, uranium, nickel, silver, titanium, oil and gas, liquid natural gas, and diamonds. Their after tax profit in 2006 was calculated at US $10.2 billion.⁵¹ BHP Billiton is a global company, with extremely diverse interests.

BHP Billiton’s operation of greatest interest to the Canadian diamond industry is the EKATI mine in the Northwest Territories of Canada. The EKATI diamond mine has two open pits (Koala and Misery) currently in production, two in development (Beartooth and Fox) and seven pits in total planned.⁵²

Environmental and Sustainability Initiatives

BHP Billiton has been ranked as a leader in the mining industry because of their clearly defined sustainability development policy and goals; transparency in environmental impact reporting; support of numerous international environmental initiatives; and leadership on new proactive eco-certification programs.

BHP Billiton’s policy on health, safety, the environment and the community (HSEC) clearly states the goals, principles and guidelines for future sustainable development of the company and its operations. Under the HSEC they have set numerous benchmarks for sustainability with the ultimate goal of “Zero Harm” to the environment and affected communities.

[BHP Billiton aspires to the principle of] to Zero Harm to people, host communities and the environment, and strives to achieve leading industry practice. Sound principles to govern safety, business conduct, social, environmental and economic activities are integral to the way we do business.⁵³
BHP Billiton is involved in a number of international initiatives for sustainability in the mining industry. BHP Billiton is a signatory to the United Nations Global Compact, a member on the World Business Council for Sustainable Development and a founding member of the Global Mining Initiative. They are also active in the International Council on Mining and Minerals and have endorsed the recently developed Sustainable Development Framework.⁵⁴

BHP Billiton is also working on some pro-active programs on eco-certification like the Mine Certification Evaluation Project, and the Green Lead project, which are attempting to develop certification frameworks for mine sites and lead producers.⁵⁵

Performance

According to the HSEC targets scorecard, BHP Billiton has achieved or exceeded all of their short term goals set for environmental performance, with regard to greenhouse gas emissions, water consumption, waste management and product stewardship. All of the benchmarks set for the goal of “Zero Harm” have not been achieved or are behind schedule.⁵⁶

The Roberts Environmental Center Pacific Sustainability Index (PSI) ranked BHP Billiton very high in intent, moderately high in reporting but graded them very poorly for performance in both the environmental and social categories.

Upon further investigation there is a discrepancy in BHP Billiton’s reporting and self assessment, as well as other environmental non-governmental organization (ENGO) reports. This discrepancy calls into doubt the veracity of the company’s environmental reports and assessment. The following selected issues are currently being reported:

Liability for the ongoing environmental devastation at Ok Tedi will return to haunt BHP Billiton. A court case is currently underway in Melbourne regarding BHP Billiton’s failure to live up to its obligations under a settlement agreement with the affected landowners of the infamous mine that destroyed a river system. BHP Billiton cleverly attempted to limit its liability for the ecological disaster caused by its Ok Tedi mine by placing its shares of the mine in a trust fund from which compensation payments to landowners would be made, and succeeded in gaining indemnity for any damages that will exceed the amounts in this trust fund.

…efforts by BHP Billiton to pressure the Indonesian government to allow it to mine in protected forests where open cut mining is currently banned. BHP Billiton had committed internationally not to attempt to undermine laws of countries in which it operated...
Dumping Mine Tailings and Wastes into the Oceans At Gag Island (Indonesia), BHP Billiton is considering submarine tailings disposal- the disposal of mine wastes and tailings into the ocean – currently operations are suspended.⁵⁷

The Canadian Mining Experience
Diavik Mines
Diavik is a Canadian diamond mine located 300 km northeast of Yellowknife, Northwest Territories in the Lac De Gras area. Diavik is a subsidiary of Rio Tinto plc of London, England. The lake is now part of the mining operation, as diamonds are located below the lake. Diavik is unique in that it is ISO 14001 certified, and maintains high ecological protection standards in its industry. Diavik is also a joint venture between Aber Diamond Limited Partnership which owns 40percent of the operations, and Diavik Diamond Mines Inc. which is responsible for 60percent of mining operations. The Diavik mine holds a relatively small amount of diamonds by global mine standards, however, the diamonds that originate in the Diavik mine are of the highest quality, with “some of the world’s highest per tonne ore value”.⁵⁸ Mining started in 2003, and is expected to last for 16-22 years.
Corporate Social Responsibility
Diavik recognizes that it is located in a pristine area in northern Canada. They also recognize that they are located on a lake, and in the middle of the caribou migration route. As such, with local partnerships and consultations with local stakeholders and interest groups, Diavik has developed a sustainable development policy, and has attained ISO 14001 certification. These environmental sustainability initiatives set out a long term goal of treating all water re-released into the environment, ensuring that toxins are not introduced into the area, and that mine restoration will take place to restore the area to as natural a state as possible⁵⁹. Although mining operations will remove fish habitat temporarily to access the ore through rockfill dike construction in 0.5percent of the lake area, full restoration of the lake will take place after mine operations shut down. In the meantime, the other side of the dike will form new fish habitat to compensate for the temporary loss. “As per Canadian Fisheries Regulation, there will be no net loss of fish habitat.”⁶⁰ Also during mining operations, the end of mine-life will be kept in sight. The recreation of fish habitat is such an example, as is the “contouring of country rock piles to create smooth hills that allow caribou safe access” (Diavik). In 2000 prior to mining activities, Diavik entered into an Environmental Agreement with local Aboriginal groups, and can therefore be help accountable for their activities in the mine area.
Ekati
Ekati is another Diamond mine also located 300km northeast of Yellowknife, in the Northwest Territories. Ekati, unlike Diavik, performs open-pit mining, as well as underground mining operations.⁶¹ There is little evidence to suggest that they are proactively working to protect the fragile environment in which they conduct their operations.
Sullivan Mine, Kimberley BC
Located near the Alberta border in Kimberley, British Colombia, the Sullivan Mine deposit was rich in resources with zinc, lead, and iron. After 92 years of activity, the Sullivan mine closed its production in 2001 totalling over $20 billion in revenue during its operations. Teck Cominco is currently overseeing the extensive decommissioning and reclamation process of the mine. Tasks that have been undertaken by Teck Cominco include reclaiming disturbed lands, a property wide human health and ecological risk assessment, contaminated site assessments, and the demolition of operational/building structures no longer in use. Also being undertaken is the establishment of an underground mine dewatering system that will collect contaminated waters for delivery to the Drainage Water Treatment Plant (DWTP) for final processing before being discharged into the St. Mary River.⁶²

Effluent discharge of water from the DWTP that removes contaminated water associated with acid rock drainage has met all BC Ministry of Water, Land, and Air Protection (MWLAP) permit requirements. This includes 0percent mortality to fish exposed to 100percent effluent water over a period of 96 hours. The underground mine dewatering system uses the mine’s underground workings to store contaminated water and progress will continue to be made in this area with ongoing ecological assessments.⁶³

In 2004, 162 hectares of land were prepared for reclamation and 18 hectares were seeded. No woody species seedlings were planted in 2004 but 54,000 seedlings representing 17 woody species were planted in 2005. An additional 115 hectares of tailings ponds were covered with glacial till, the second layer of the soil cover system. Seventeen hectares of miscellaneous linear disturbances (rail beds and launder routes) were reclaimed and 30 hectares, which made up the open pit waste dump, were prepared for grass and woody species planting in 2005. Reclamation work which started at the site over 12 years ago is revealing a degree of success as evidenced by the wildlife migrating to the reclaimed areas.⁶⁴

Teck Cominco continues to engage and participate with the community in the City of Kimberley, aiding the transitional development from mining community to a more diversified economic and social city. Teck Cominco has also offered to make land available for a light industrial park and has worked with the city to turn over the remaining portions of the main water system to the city. An agreement was also finalized with the city to utilize portions of Teck Cominco lands under a license of occupation, for the purpose of establishing an integrated walking, biking and skiing trail system.⁶⁵

The Teck Cominco example with the decommissioning of the Sullivan Mine reveals the corporate responsibility that a corporation is undertaking after the lifespan of its resources to make a community more sustainable as well as environmentally safer. Other companies need to build upon success stories such as this case study.
Holloway Mine
In Ontario, the Holloway Mine operated by the gold giant Newmont Mining is another case study where corporations are striving to be more socially and environmentally responsible to the community and surrounding environment. Located east of Timmins, Holloway’s environmental strategy is to remain compliant with government regulations and industry standards especially in the case of emissions, while maintaining effective monitoring and control programs to protect the environment. In 2004 the acquisition of the nearby Barrick’s Holt-McDermott mill required Holloway to incorporate new disciplines into its environmental management system, such as cyanide and tailings (waste rock) management.⁶⁶

The tailings are placed into confined ponds to allow the metals to settle out and for diluted cyanide to be broken down before the water is discharged into the environment by using natural degradation. The natural degradation process involves retaining the discharged mill process water for a period of time sufficient to allow for the natural breakdown of cyanide, and for the associated precipitation of heavy metals previously forming complex cyanide compounds.⁶⁷

The Holloway mine has also pursued other means of recycling waste water in order to reduce the amount of dependency on the nearby Magusi River. Until October 2004, Holloway had an agreement with the amalgamated Barrick’s Holt-McDermott mill to reuse all of Holloway’s underground water during the milling process. As a result, there is no effluent discharge into the environment by Holloway and the amount of fresh water used has been reduced. Sampling and monitoring of the mine’s water continues according to the certificate of approval.⁶⁸
The mine is not expected to close for another several years but the site has been identifying areas of contamination or potential contamination that needs to be addressed before further environmental damage can occur. The mine has an approved environmental closure and reclamation plan that outlines environmental activities that will occur after the mine closes. The plan will cover public health and safety issues, land rehabilitation, and minimal environmental impact.⁶⁹