Lihir

Location

Lihir Island, New Ireland Province.  925 kilometres directly north-east of Port Moresby.

Latitude 3°7’34.02″S Longitude 152°38’15.70″E

Status

Operating Mine. Opened 1997, expected to operate past 2020.

Type of Mine and Waste Disposal

The Lihir Gold Mine is an open-pit cyanide-leach mine. Because of the instability of the land mass the mine uses Submarine Tailings Disposal (STD) 1.5 kilometres from shore at a depth of 125 meters. Currently the mine is over 150 meters below sea level and more than 30 geothermal wells, plus a number of steam relief and new pumped dewatering wells, have been drilled. This mine pit is planned to reach more than 200 meters below sea level and is being dug into an active geothermal system with some of the area to be mined at boiling point for depth conditions. Cooling and depressurisation of the geothermal resource associated with the gold mineralisation is an essential part of the mining operation. Tailings from this process include cyanide contaminated waste rock as well as heavy metals including copper, lead, mercury, arsenic, cadmium, chromium and other acid producing toxic chemicals. Rock with no recoverable gold is transported by barge and dumped at sea. During its lifetime, the mine is expected to yield approximately 89 million tonnes of tailings and 330 million tonnes of rock and other solid waste (including overburden).

Target Minerals

Gold

Current Production

Production commenced in May 1997 and since then more than seven million ounces of gold has been produced. Gold production in the calendar year 2008 was 846,383 ounces (23,994,564 grams).

Ownership and Finance

The mine is owned and operated by Lihir Gold Ltd (100%). The project was originally given financial guarantee and funded by the Export Finance Investment Corporation (EFIC). Finance was granted despite the US Export Credit and Investment insurance Agency OPIC refusing to insure the Lihir project on environmental grounds. The World Bank’s Multilateral Investment Guarantee Agency (MIGA) insured the mine against political risks. The World Bank’s Extractive Industries Review, visited Lihir in 2003 but the review process was hindered by limited access to independent people in the community. The principal asset of Lihir Gold Ltd, the mine was managed by a subsidiary of Rio Tinto until late 2005, since when it has been operated directly by Lihir Gold.

Environmental Setting

The Lihir Group consists of four islands, of which Lihir (or Niolam) is the largest. Lihir Island is home to five Miocene-Pleistocene volcanic units and regularly experiences seismic activity. The area has registered earthquakes up to 7.5 on the Richter Scale since the early 1900’s. The ore body is very large and rich by global standards and includes 28.8 million ounces of reserves. Lihir experiences high rainfall, averaging about 3.7 metres per annum, with mean relative humidity of 80%.  Air temperature varies between 20 and 35°C. Being situated only 3° south of the equator, Lihir is not subjected to the effects of cyclones. Natural vegetation is predominantly tropical rain forest. Lihir is powered by greenhouse-friendly geothermal power.

Environmental Impacts:

The London Convention bans the dumping of waste from ships with the intention of stopping the pollution of the sea by waste. It is an international convention which obliges the countries that have signed it to stop allowing the dumping of industrial waste by barges or ships into the sea. Signatory countries include Australia, the USA, the UK, and Papua New Guinea. The barge dumping operation at Lihir breaks these sections of the London Convention.

Waste dumping has both direct and indirect environmental impacts. Waste has smothered and directly destroyed over 7 kilometres of coral reef. Waste dumped onto the bottom of the ocean floor also smothers marine organisms living there. These organisms can be the principle food source for fish living at depth and thus depriving them of a food source.

Indirectly, heavy metals can be been absorbed into the food chain making fish and shellfish unfit for consumption. The Lihir Environment plan then claims that no-one fishes at depth on Lihir – a claim which is directly contradicted by islanders. Analyses have confirmed the presence of high concentrations of arsenic and copper, and elevated levels of mercury, in both the clay overburden and rock waste. Between 1997 and 2001, the Lihir gold mine dumped 89 million tonnes of cyanide contaminated tailings and 350 million tonnes of waste rock into Loise harbor.  In 2007 alone, 4.9 million tonnes of tailings were dumped. Over the lifetime of the mine approximately 330 million tonnes are likely to be dumped into the marine environment. This represents a substantial source of contaminants to the marine environment.

Sixty-four percent of all ore from the mine will not be processed immediately, but will be stockpiled for later use. Therefore, as well as the direct marine disposal of waste rock and tailings the long-term of ore stockpiling period will generate runoff containing iron, copper, arsenic, zinc, aluminium, manganese, cadmium, lead, and possibly mercury and chromium. This will be also discharged into the ocean.

Studies have shown excessive concentrations of at least one of four heavy metals, arsenic, cadmium, lead and mercury, in local fish species. These have occurred by bioaccumulation, a process where bottom-dwelling fish become contaminated by metal uptake through the guts and gills, these fish then die and or enter the food chain. Cumulative metals such as cadmium, lead, mercury and arsenic can be transferred in higher quantities to higher order predatory fish. This has been largely due to ‘smothering’ of the seafloor by tailings. The CSIRO suggest further studies were needed to assess the potential risk on human health.

Social Impacts:

The mine has had major social effects, largely due to a massive influx of workers from other areas. The population of Lihir Island has swelled from 6,000 before the mine opened to over 11,000 by 2001. The project will create about 1200 jobs, of which one third to one half are supposed to go to local people. Prior to the mine operation, the island was relatively isolated from the rest of Papua New Guinea, with only a few roads and a small airstrip. Today, however, the island has a major airport and a ring road built jointly by the mine and the government. The mining at Lihir has damaged culturally significant hot springs and graveyards. Landslides in 2005 severely disrupted water supply and production.  Two Papuan New Guinea workers were killed.

Inhabitants of Lihir Island, Papua New Guinea, have traditionally relied on reef fishing and rotational farming of slash-burn forest plots for a subsistence diet. Lihir mine has introduced a cash economy to the island’s socio-economic system and impacted the fringing coral reef through sedimentation from the near-shore dumping of mine wastes. Studies of the island’s human population have revealed changes in population size, local customs, education and rates of forest clearing.  The majority of landowners have abandoned their traditional subsistence farming and their children have lost interest in growing crops. For some of those who left their beach side villages and agricultural crops, they feel they have nothing to offer their children as they struggle in the new cash economy village. In Lihir land ownership is matrilineal yet through the mine negotiations and decision making processes women were not given space to be heard.

The direct affects of the cash flow into the islands socio-economic system include substance abuse, domestic violence, changes in gender roles and an unequal distribution of economic development. In 1995, after six years of extensive negotiations, the mining consortium and the Lihir Landowner’s Association concluded a so-called “integrated benefits package.” As a condition of this package, landowners in turn had to sign a contract not to bring future claims against the mining company.

Those who stayed in communities have witnessed the affects of submarine tailings being dumped into the ocean. The people in Putput have witnessed fish kills. People from the Lihir village have noticed a decline in fish stocks from an abundance of fish to almost nothing. Fish caught in Lihir are reported to have strange tastes. Some people will no longer eat the fish caught there. Pigs are reported to have died after eating things on the beach. There’s been an increase in dead fish and shellfish and there are a least two cases of whales dying close by, since the mine opened.

There has been continuous dissent over many aspects of the Lihir mine by Landowners. In July 1998, angry landowners from Putput-a village near the mine-temporarily shut down the project’s operations. They were concerned about gas leaking from autoclaves and about the mine’s general environmental impacts. Approximately 300 people were moved from Putput village by the sea, and were moved up into the hills to a local Lihir township developed by the mine, with 500 new houses built there. A number of different clan groups co-exist in this village with some land division into clan groups. For many of those who left their homes to make way for the mine were re-settled said that they feel like they had no choice, bound by decisions of clan leaders. In April 2008, landowners blocked workers from entering mining operations at the Lihir Mine over water issues, which Lihir Gold failed to address. The airport was also closed down in April 2008 by landowners highlighting their frustration with the mining operations at Lihir and lack of transparency from the Company.

To some degree development and service provision has been delivered by the mine but has also created some dependence. Landowners are still concerned by the calling out for independent review of STD and environmental impacts from the mine.

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