North Coast of Papua New Guinea in a town called Madang also Astrolabe and Basamuk Bay, Madang Province.
Latitude 4°45’45.26″S Longitude 144°44’1.99″E
Type of Mine and Waste Disposal
The Ramu deposit is well suited to conventional open cut mining methods. A number of methods were considered, with the essential criteria being suitability, practicability, economics and reliability. An excavator/truck benching system from aseries of open-cut mine pits will be used. The mine is planned as a low cost operation treating large area of wet tropical laterite ores to produce nickel and cobalt. Ore will be mined and supplied to a refinery located on the adjacent Rai coast. The ore will be processed by acid pressure leach technology producing 32,800 tonnes of nickel and 3,200 tonnes of cobalt annually by solvent extraction and electrowinning. Mine operations are planned for 24 hours per day on 365 days per year over 20 years and utilising 68 million tonnes of reserves. A slurry pipeline approximately 134 kilometers long will transport ore slurry from the Kurumbukari mine site eastwards to the refinery plant at Basamuk Bay. A refinery at Basamuk Bay will produce nickel metal and a cobalt salt product using acid pressure leaching technology. An acid plant, a lime plant, a power station, a wharf, a limestone quarry and an accommodation area will be an integral part of the refinery infrastructure. Tailings disposal is planned to be Submarine Tailings Discharge (STD) at Basamuk Bay into the ocean at a depth of 150 metres.
Not currently in production but the studies suggested an annual output of around 32,000 tonnes of nickel and 3000 tonnes of cobalt contained in high grade concentrate over a 20 year mine life. The project is currently in construction phase with commissioning due to commence by the end of 2009. The mineral resources at Ramu have the potential to increase the mine life by a further 15-20 years.
Ownership and Finance
In 1997 Highlands Pacific was established as a new company to manage the Ramu Nickel Project on behalf of Ramu Nickel Pty Ltd. In January 2000 the Project was operated and managed by Highlands Pacific Limited (68.5%) in joint venture with Orogen (Ramu) Limited (31.5%). On 26th September 2005, the China Metallurgical Construction Company exercised an option to take an 85% interest in the Ramu project as part of an agreement to develop the project. This represents the first significant investment in PNG mining from a company from the People’s Republic of China. The current ownership structure is: 85 % RamuNiCo Limited (a subsidiary of China Metallurgical Construction Company); 3.94 % Mineral Resources Ramu Limited (a subsidiary of MRDC Government of PNG); 8.56 % Ramu Nickel Limited (a subsidiary of Highlands PacificLtd); 2.50 % Mineral Resources Madang Limited (a landowner company).
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 chemicals.
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 19thMarch 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.
Ramu Nickel’s lawyers warn against using DSTP
Focus: Deep sea placement to proceed at PNG’s Ramu Nickel mine
In brief: The National Court in Papua New Guinea has cleared the way for the Ramu Nickel mine to dispose of its tailings using a deep sea placement off the coast of Madang Province. This has potentially important implications for other projects in PNG using similar deep sea placement processes to the Ramu project’s. Partner Allan Mana (view CV) and Senior Associate Rachel Nicolson report.
How does it affect you?
- Projects with current or future deep sea tailings placement (DSTP) processes in PNG should consider whether their operations would withstand judicial scrutiny, in light of the forthright findings in this case regarding likely environmental harm.
- Comprehensive and robust environmental studies into DSTP are essential in demonstrating that these processes will not cause significant environmental harm.
- Extensive and ongoing community consultation regarding proposed DSTP and its likely impact upon the local community may prove relevant if a court considers equitable relief, such as an injunction to stop the proposed tailings disposal.
- This decision has been appealed to the Supreme Court of PNG, which has imposed a temporary injunction restraining the use of DSTP.
Background; Ramu Nickel Management (MCC) Limited (Ramu) operates the Ramu Nickel mine in Madang Province on the north coast of PNG. The environment permits for the mine provide for the disposal of tailings through a process known as DSTP. DSTP involves the discharge of tailings from a pipeline into the sea, so that the tailings flow out of the pipeline and progressively dilute with sea water as it moves towards the deep ocean floor.
Customary landowners, and others with interests in the potential environmental and social effects of the proposed DSTP, instituted proceedings in the National Court of PNG, as WS No. 1192 of 2010. The plaintiffs alleged that the DSTP processes that Ramu proposed would:
- constitute a private and public nuisance;
- breach the Environment Act 2000 (PNG); and
- breach National Goal and Directive Principle (NGDP) No. 4 (natural resources and environment) of the PNG Constitution.
The plaintiffs sought a number of injunctions that would prohibit Ramu from using DSTP, and a declaration that Ramu and the other defendants undertake ongoing consultation with the plaintiffs about the project’s tailings and waste disposal operations.
Findings of Fact; The court found there was a reasonable probability that the proposed DSTP processes would cause environmental harm that may have catastrophic consequences, cause irreparable damage to the ecology of coastal waters, and seriously harm the lives and futures of the plaintiffs, and of thousands of other people in Madang Province. In particular, the court made the following findings:
- it was likely that the tailings would smother benthic organisms over a wide area of the ocean floor (at least 150 km2 ), which would inevitably alter the ecology of that part of the ocean;
- it was very likely that the tailings would be toxic to marine organisms; and
- there was a real danger that the tailings would not settle on the ocean floor but be subject to significant upwelling, which meant that substantial quantities of tailings would be transported towards the PNG mainland.
Nuisance;The court held that the proposed DSTP processes would cause both private and public nuisance, by virtue of the plaintiffs’ interests in the land along the coastline of Madang Province and the environmental harm described above. This conclusion is notable for two reasons:
- First, private nuisance is traditionally only available to persons with a proprietary interest that is affected by the relevant activity. In this case, the court awarded nuisance based on proprietary rights (customary land ownership) and non-proprietary rights (a genuine interest in the subject matter of the proceedings based on the effect the potential environmental harm might have on the plaintiffs’ lives).
- Second, the court indicated that an environment permit issued under the Environment Act to conduct an activity is only a defence to a claim in nuisance if the nuisance is ‘the inevitable consequence of conducting that activity’.
The Environment Act;The plaintiffs made a number of arguments to the effect that the proposed DSTP was unlawful by virtue of the Environment Act; however, the court did not accept any of them. Some were rejected because they misconceived the effect of the relevant provisions; other arguments, although unsuccessful, were based on stronger legal grounds. The stronger arguments included:
- The proposed DSTP would cause unlawful environmental harm and so was contrary to section 10(1) of the Environment Act. This argument was rejected because the DSTP is permitted under the mine’s environment permits and so is not unlawful.
- The environment permit authorising the DSTP was invalid under the Environment Act because it was issued under previous, repealed, legislation, and had not commenced by the time the Environment Act came into force. This argument was rejected because the environment permit was, for all intents and purposes, granted under the Environment Act, because it was valid and in force before the commencement of the Environment Act, and had been amended twice after the Act came into force.
National Goals and Development Principle No. 4;The court stated that it was obliged to express a judicial opinion whether the DSTP was likely to be contrary to NGDP No. 4, even though s25 of the Constitution provides that the NGDPs are non-justiciable. It also stated that the DSTP would be contrary to NGDP No. 4 because it amounts to ‘an abuse and depletion of Papua New Guinea’s natural resources and environment’.
Remedies; Although the plaintiffs successfully demonstrated a cause of action in nuisance and that the DSTP would breach NGDP No. 4, the court was required to consider whether granting the requested remedies was just, fair and appropriate. The court indicated that the decision whether to grant the injunction to prohibit the proposed DSTP was ‘a borderline case’; however, it ultimately decided not to grant it. This decision was primarily due to two specific considerations:
- There was an unreasonable delay on the part of the plaintiffs seeking the injunction. Delay suggests acquiescence in the defendant’s conduct and, in this case, there was substantial delay, in light of community consultation having commenced in 1999.
- The economic consequences of granting the injunction would be disastrous, given the implications for Ramu, the provincial and national economy, and for investor confidence in PNG.
With respect to the plaintiffs’ request for consultation, the court ordered that they must be consulted at least every three months on tailings and waste disposal issues for the life of the mine.
Decsion’s Imapct; This decision has potentially significant ramifications for other projects in PNG that propose to use, or are using, similar DSTP processes to those in the Ramu project. The borderline nature of the injunction decision indicates that projects that are not able to demonstrate plaintiff delay, and/or significant economic consequences from their prohibition, risk being enjoined from using the DSTP processes.
In light of this decision, projects should also consider:
- seeking broad and comprehensive environment permits, because environmental harm that is beyond the scope of the permit may be the subject of nuisance and other claims;
- undertaking early and ongoing community consultation; and
- commissioning comprehensive studies to ensure that the DSTP’s effects are fully understood, and implementing effective monitoring to demonstrate that any unexpected environmental consequences will be noted and minimised.
The plaintiffs have appealed the decision to the Supreme Court of PNG and, with Ramu’s consent, have successfully sought a temporary injunction to restrain the use of DSTP until the Supreme Court considers the appeal.