SUNI RESOURCES S.A. GRAPHITE PROJECT,

MONTEPUEZ, MOZAMBIQUE

DRAFT ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

Prepared for:

SUNI RESOURCES S.A.

Edificio Solar das Acacias, Avenida Julius Nyerere 4000, Loja 05, Cidade de Maputo, Mozambique

Prepared by:

COASTAL & ENVIRONMENTAL SERVICES MOZAMBIQUE LDA

Avenida da Mozal, Porta 2334 Beluluane Celula D. Quarteirao 02, Matola Cidade, Maputo, Mozambique

With offices in Cape Town, East London, Johannesburg, Grahamstown and Port Elizabeth (South Africa) www.cesnet.co.za

Original report drafted in English and translated to Portuguese

23 August 2017 Draft Environmental and Social Impact Assessment – August 2017 SUNI RESOURCES S.A.GRAPHITE PROJECT,

MONTEPUEZ, MOZAMBIQUE

DRAFT ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

Prepared for:

SUNI RESOURCES S.A.

Edificio Solar das Acacias, Avenida Julius Nyerere 4000, Loja 05, Cidade de Maputo, Mozambique

Prepared by:

COASTAL & ENVIRONMENTAL SERVICES MOZAMBIQUE LDA

Avenida da Mozal, Porta 2334 Beluluane Celula D. Quarteirao 02, Matola Cidade, Maputo, Mozambique

With offices in Cape Town, East London, Johannesburg, Grahamstown and Port Elizabeth (South Africa) www.cesnet.co.za

Original report drafted in English and translated to Portuguese

23 August 2017

Coastal & Environmental Services ii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 NON-TECHNICAL SUMMARY

Suni Resources S.A. (“Suni Resources”) is a Mozambican subsidiary company of the Battery Minerals Group (prior to December 2016 it traded as Metals of Africa Limited) and is focused on developing graphite mining projects in Mozambique. Suni Resources S.A. intend to develop a graphite mine at the Montepuez Project area (referred to as the “Project Site” or “site”) located in the district of Montepuez in Cabo Delgado Province, northern Mozambique. The Project Area is located approximately 60km north-west of the town of Montepuez and the license area (Exploration License 6216) covers approximately 12,500 ha within which there are three resources that they intend to exploit. However, only two of the deposits form part of this Environmental and Social Impact Assessment (ESIA) as it is intended for the third deposit to be mined at a later stage and will be subject to a separate ESIA process. Each deposit contains large flake graphite which is ideal for creating cost efficient battery grade anode material which will be sold into the American and Asian markets for primary use in Lithium ion storage batteries. Lithium ion storage batteries are used for clean, renewable energy.

Coastal & Environmental Services Limited Mozambique Lda (CES) was appointed by Suni Resources to complete this Environmental and Social Impact Assessment (ESIA) and ensure that it meets the National Environmental Laws, as well as various international standards. CES is a company registered in Mozambique, with the Ministério da Terra, Ambiente e Desenvolvimento Rural (MITADER) and has solid knowledge and multidisciplinary teams to conduct environmental impact assessments and environmental management programs. The primary objectives of an ESIA process is the identification and assessment of environmental and social impacts and critical risks so that:

 A decision can be made on whether or not to proceed with the project,  Modifications to the project to reduce impacts and risks can be made,  The conditions under which the project can proceed are made known, and  Management strategies can be put forward to reduce the significance of negative impacts and enhance positive ones.

The latter are discussed in detail in the Environmental and Social Management Programme (ESMP) produced as part of the ESIA process.

Below is a list of the key issues that were identified by the ESIA process and the proposed key mitigation and management actions required to reduce the environmental risks to an acceptable level:

Terrestrial habitat loss and fragmentation

The habitats and vegetation communities present within the study area are for the most part undamaged with minimal evidence of harvesting or exploitation by local communities. The vegetation, rivers and rocky outcrops are intact and therefore provide an important habitat for faunal species, including mega herbivores such as elephant. They are also important floristically as there are a number of mature, seed bearing trees that are important for contributing to the continued dispersal of seeds throughout the site. Since these plant communities and faunal habitats are intact, the unmitigated impacts associated with the construction and operation of the mine are anticipated to be high. However, if mitigation measures, such as the siting of ancillary infrastructure outside of sensitive areas are implemented, and a conservation corridor is created and managed to ensure connectivity between the different vegetation types and, the majority of these impacts can be reduced to either moderate or low.

Loss of Biodiversity

Coastal & Environmental Services iii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 The loss of vegetation communities and habitats will result in the loss of both floral and faunal species, as well as species of conservation concern. Plant species will be lost through active clearing for the mine infrastructure, while faunal species will be displaced through a loss of habitat. Further faunal species loss will be experienced due to increased mortalities related to an increase in the number of project vehicles using roads, increased hunting as a result of an influx of job seekers, and associated increase in local community dependence on fauna for both food and cash sale; and lastly persecution of reptiles, specifically snakes - both venomous and non-venomous.

Since there is high floral and faunal biodiversity, the unmitigated impacts associated with the construction and operation of the mine are anticipated to be high. However, if these impacts are mitigated, for example preventing the employees from harvesting indigenous species and hunting for bush meat, and implementing a conservation corridor, most of these impacts can be reduced to either moderate or low.

Invasion of Alien Flora and Fauna Species

Invasive floral and faunal species can displace indigenous species by outcompeting them for resources such as sunlight, nutrients and food etc. Left unmitigated, this can become a problem when plant communities are transformed or faunal species become locally extinct. Given that the site is intact with little evidence of alien plant and animal species, it would be a concern if they were introduced into the area through negligence as a result of the construction and operation activities of the mine. However, these impacts are easy to mitigate and provided the study area is monitored for alien fauna and flora, and that these are eradicated as and when they appear, these impacts will be of low significance.

Human/Wildlife Conflict and the increase in the presence of elephants within the project area

The increase in elephants is likely to increase human-elephant conflict since elephants are known to feed on crops grown in machambas, and the owners of machambas generally report these individual elephants as problem elephants. A consistent water supply in the dry season is likely to attract faunal species including prey species, and hence also predators, which pose a risk to both fauna and humans. The presence of elephants is also likely to attract poachers, given the high elephant poaching rate reported in Mozambique by the Ministry for the Coordination of Environmental Affairs (2014).

The unmitigated impact associated with the general human/wildlife conflict will be high, but this can be mitigated to moderate if precautionary measures, including education and training, are implemented. The potential for the increased presence of elephants at the site, as a result of the introduction of a permanent water source, is uncertain for the following reasons:

 There is uncertainty around the size of the existing population of elephants in the region.  There is uncertainty about the effect of the dam on elephants.  There is uncertainty about the elephant associated pressure on resources within 0-15km of the WSF.  There is uncertainty about the resource impacts on vegetation dynamics, faunal species and other groups.

As such, two impact scenarios have been presented where the unmitigated impacts are either moderate because elephants have a limited impact on the receiving environment, or it is very high because elephants have a significant impact on the environment. With mitigation measures it is anticipated that the impacts can be reduced to a significance of low and moderate respectively, but this will need to be monitored continuously, and an ecologist with in depth knowledge of elephants consulted, if or when, the need arises.

Alteration of Flow Regimes on the Aquatic Habitat

There will be a cumulative impact on the quantity of river water flow resulting from the abstraction of

Coastal & Environmental Services iv Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 water from the Messalo River into a raw water dam (Water Storage Facility - WSF) to be constructed for project use. This may affect the receiving streams and downstream users of these water sources. The uncontrolled discharge of effluent into nearby water courses could also affect flow regimes and water quality in the projects operational phase if not managed appropriately. This will alter stream characteristics, thereby altering stream habitats and consequently species composition of the receiving streams.

The Messalo River is utilised by villagers who are in close proximity to the project area. The river is a source of food (fish), and in a few instances reported as being used for potable (drinking) water by the surrounding community households subject to survey during the ESIA study process.

A specific river system will support a unique assemblage of species (fish, invertebrates and aquatic plants) adapted to the prevailing flow conditions that determine temperature, sediment transport and nutrient flow. A decrease or increase in any of these flow conditions could lead to changes in the community structure within the system, such as loss of a particular species or a population increase in others. The changes may also provide conditions for new or previously scarce species to flourish.

CES does not believe the mine would considerably alter the quality of the river due to the distance of the mine from the Messalo River, the requirement for proactive management of effluent streams that is specified in the ESMP, as well as the limited flow of the tributaries in the project area during the wet season.

Fragmentation of the Aquatic Habitat

The WSF can be expected, in a year of average rainfall and local water catchment runoff, to reduce the flows from the upper part of the catchment of the Mecopeti River by around 35%. This will shorten the duration of the period during which water flows in the river channel downstream of the dam from 4-4½ months to 3 months, and delay the onset of flow in the river channel by 1 month during the rainy season. Seepage through and under the dam wall should maintain moisture levels in the channel bed downstream of the dam wall at a level sufficient to sustain the viability of dormant insect and fish eggs. The dam wall will prevent upstream migration of fish into the upper part of the Mecopeti catchment, unless provision is made for fish passage. This will restrict spawning and nursery habitat to the downstream channels between the dam wall and the Messalo River, and reduce recruitment of young fish into the Messalo River. The species and numbers of fish that use the river, their importance to the ecological functioning of the Mecopeti and the Messalo, and their importance as a food source for the local people who fish for them are not known. The suggested mitigation measures and the assessment of the severity of the impacts, which are premised on the conservative assumption that the fish species that use the Mecopeti are ecologically and socially important at a regional scale (sensu CES’s impact mitigation schema), are tentative.

Contamination of Land and Water Resources

Waste Streams It is recommended that all waste streams should be managed according to the waste management hierarchy, and according to the Regulation on the Management of Municipal Solid Waste (Decree 94/2014 of December 31st) and the Regulation for the Management of Hazardous Waste (Decree 83/2014 of December 31st). This specifies that wherever possible, production of wastes should be prevented or minimised at source. Where prevention or further minimization is not possible, wastes should be re-used, recycled and then disposed of responsibly so as to minimise impacts to the environment. The options of waste minimisation, re-use, recycling and eventual disposal should be explored further during the development of the Integrated Waste Management Plan for the facility.

Coastal & Environmental Services v Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Due to the remote location of the project site, to meet relevant legislation it is recommended that non-hazardous waste landfill be developed. It must be designed and operated to international standards in order to isolate the wastes and prevent environmental contamination, particularly groundwater contamination. The landfill site will require licencing and auditing by MITADER. As such, guidance on the design and site selection of the landfill site should be developed in accordance with Annex I of the Regulations on Waste Management, Mozambique (Decree 83/2014 of December 31st) to guide the construction of the facility. Until such time as this facility is fully operational, all general waste produced during the construction phase must be stored on site in a secure access control area, in a legally-compliant manner that minimises environmental impacts.

Alternative options will need to be considered for the management and disposal of hazardous wastes in the required Integrated Waste Management Plan to be developed by Suni prior to the commencement of construction activities. These would be to either develop a dedicated and specially-designed hazardous waste cell within the new on-site landfill or, alternatively, to construct a bunded and secure facility for temporary storage of hazardous waste on site until such time as it can be transported off-site for safe disposal. Although the only established hazardous waste landfill in Mozambique is located in Maputo, there is an indication that new hazardous waste disposal facilities are in the process of being developed across the country and closer to the project site, including one in Pemba (Cabo Delgado Province), which is approximately 200km away. The disposal of hazardous waste at that facility should be regarded as the preferred option.

Potential for Acid Mine Drainage The results from the geohydrology study that utilised a mass transport model to assess the potential for Acid Mine Drainage (AMD) indicated a slow migration of sulphate from the Tailings Storage Facility (TSF) during the life of the mine - an implied migration rate of 4 to 5cm a day. Monitoring should be implemented in the shallow weathered and deeper fractured rock aquifers to monitor trends. Seepage capturing could be necessary in latter stages of the operations. However, no external receptors (water users) are impacted by the mass transport of sulphate from the TSF.

The Elephant open pit floods to level 370mamsl about 15 years after closure, which is 15m below the lowest pit surface decant level of 385mamsl. The Buffalo open pit floods to level 385mamsl in about 20 years, which is also 15m below the lowest pit surface decant level of 400mamsl.

Fortunately, the development of AMD conditions in the post-closure pit water is unlikely. Groundwater and geochemical modelling of the pit water quality showed that pit water will reach a steady-state equilibrium at a pH value of 5.9, which is mildly acidic, but cannot be considered as AMD. For comparison, natural rainwater has a pH value of 5.5.

Groundwater and geochemical modelling of the post-closure pit water salinity showed that levels will be elevated above baseline conditions, although the concentration is the same order of magnitude as the groundwater baseline concentrations.

The development of Acid Rock Drainage (ARD) conditions is likely to occur in the TSF but is limited to the outer “shell” of the tailings facility, implying that although tailings toe seepage1 is likely to be acidic at a model pH of 3.0, the bulk of the basal seepage is shown by the model to be only slightly acidic at a pH of 5.0.

Due to the likely development of ARD conditions in the TSF, the metal and sulphate concentrations in specifically the tailings outer shell are expected to be elevated. The risk of the development of ARD and leaching of sulphate and metals in the waste rock facility was shown by the assessment to be negligible.

The assessment results indicate that mildly acidic conditions are likely to develop in the low-grade stockpile material. The pH predicted by the model is 4.7.

1 This is water that seeps into the ground and then flows as groundwater under the wall of the TSF. Below the wall this water may reach the surface, or remain as shallow groundwater.

Coastal & Environmental Services vi Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

The unmitigated impacts to groundwater associated with the leaching of pollutants from the TSF are moderate, but this can be mitigated to an impact of low significance. The unmitigated impacts to groundwater from the leaching of pollutants from the waste rock dumps and low grade stockpiles is low.

Lowering of the Groundwater Resources The groundwater exploration phases conducted for the project feasibility study yielded unfavourable results in terms of sourcing the required bulk water supply from groundwater. Surface water from the WSF, and a pipeline that draws surface water from the Messalo River, will be used.

However, pit dewatering could have an impact on the groundwater used by the nearby communities, and the impacts of this were carefully investigated in the groundwater model. It was found that the simulated dewatering rates peak at approximately 4000m³/d and 3500m³/d for Buffalo and Elephant respectively (at year 12 of mining). However, due to the heterogeneity of the aquifer, dewatering rates could differ and the model should be updated once new monitoring data becomes available, to narrow the band of uncertainty and increase the confidence levels associated with the data.

Current mine dewatering should allow for a ramp up program to be able to handle 4000m³/d of dewatering from each pit. This should not be taken into consideration in the bulk water supply as this is not a proven resource (i.e. water from mine dewatering as a source of water for the mine).

The study found that the Zone of Influence indicated that no nearby communities will be influenced by a lowering in water levels due to mine dewatering, as they are located well outside the zone of influence (i.e. the area affected by mine pit dewatering). However, as a precautionary measure, the monitoring program should include external receptors (village boreholes) to record any impacts on water levels and associated yields.

The unmitigated impacts associated with the lowering of the water table are moderate, but this can be easily reduced to an impact of low significance if the proposed mitigation measures are implemented.

Loss of Natural Resources

People living in rural communities such as Nqueuene and Sinhojo village are very reliant on access to clean water, agricultural land and natural resources to support their livelihoods. Developments such as a mine can threaten these livelihoods if not managed properly.

The proposed mine and supporting infrastructure is located more than 5km from both Sinhojo and Nqueuene Village. The field survey and social interviews indicated that the use of the mine area by these villages for agricultural purposes, grazing or the collection of natural resources is fairly limited. This is probably due to the distance of the site from the villages, and because there is suitable fertile land and grazing closer to each of the villages, as well as adequate natural resources to meet the community’s current needs.

Consequently, the direct impacts on the livelihoods derived from these resources is considered to be of low significance as a result of the low utilisation of the proposed site. However, the indirect impacts associated with the influx of job seekers into the communities is a concern. An increase in numbers will place greater pressure on the existing resources, which could have a long term or even permanent negative impact on the community’s access to these resources in the future. For this reason it is crucial that a Labour Recruitment and Influx Management Plan is developed to deal with the issue of in-migration in its entirety.

Land Acquisition

Land acquisition during the construction phase will result in reduced community access to potential agricultural land and possible heightened food insecurity. However, as mentioned above, this area

Coastal & Environmental Services vii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 is over 5km from the two nearest villages and as such it is not used extensively for agriculture, grazing or as a source of natural resources. This unmitigated impact will therefore have a moderate significance. If the recommended mitigation and enhancement measures are implemented, the impact of reduced access to agricultural land and access to natural resources and ecosystem goods and services will be of low significance. The impact on food security may be moderately beneficial due to benefits gained through mitigation and enhancement measures that the project proponent is advised to develop and implement.

Economic Growth and Employment Opportunities

The project has the potential to significantly enhance the standard of living of those directly affected, as well as the population in the project area through the creation of employment opportunities directly (employed by the mine) and indirectly (selling of local goods) by the project,

These impacts are particularly important in an area where poverty is endemic and where employment opportunities are lacking. Expectations of job opportunities and development projects are high amongst local residents. It is very important to instil realistic expectations with regards to benefits from the project, and to develop a strategy of equitable distribution of job opportunities and benefits amongst the affected parties.

The project will also have positive impacts on a national scale by contributing to Mozambique’s Gross Domestic Product (GDP), increasing the contribution to foreign exchange earnings, as well as stimulating the local and provincial economies.

A concerted effort to optimise the local socio-economic benefits of the project will therefore result in positive social and economic impacts of high significance.

It is, however, essential that project-related activities consider the cultures and traditions of the local communities and avoid or minimise impacts on community livelihood practices as far as reasonably possible. It is necessary to maintain engagement with local communities as well as with local and district authorities throughout the project phases, to ensure that communities are aware of project- related activities and the proponent is aware of any community grievances or concerns and can, where feasible, address these timeously and effectively.

Social Development

Improvement to basic infrastructure and social services, as well as the provision of socio-economic development opportunities during both the construction and operational phases, is potentially a considerable benefit of the project. The significance of these benefits can be further heightened through the implementation of enhancement measures such as supporting local schools through educational programs, providing a skills and development program to upgrade the employability of the local community near the mine, and implement an agricultural extension services program that targets increasing the yields of locally grown crops. These interventions to improve local social infrastructure and economic opportunities will only be fully implemented during the operational phase, once the mine has a positive cash flow.

In addition, community development programmes will be developed in the area in conjunction with, and as formulated by, these local communities.

In-migration

Coastal & Environmental Services viii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 In-migration can have far reaching effects on both the local communities living near the project area, on the natural resources they are reliant on and on the terrestrial and aquatic environment. An influx of outsiders can cause tension within the host communities, inflate local food prices, increase the pressure on wildlife from increased poaching, and place additional pressure on the available natural resources. It is therefore of importance that procedures for disseminating employment-related information, recruitment and supply chain procedures, as well as influx management and security arrangements are developed and implemented to avoid this. It is recommended that a local Labour Desk is established, well removed from the mine site. This Labour Desk should also be tasked with establishing and implementing a local Employment Enhancement Plan/Procedure, as well as the required Labour Recruitment and Influx Management Plan.

Community and Employee Health and Safety

Traffic The project is expected to cause a fairly large increase in traffic volume. Approximately 200km of the roads to be used by the project are paved, and for the most part are in good condition. The length of unpaved road from Montepuez to the mine site will undergo upgrading, and the plan is to construct some bypass roads, which will divert heavy mine traffic from the village centres that the roads currently pass through. Further afield the project traffic will pass through numerous settlements between the mine site and Pemba. In these areas, the unmitigated risk of accidents involving mine vehicles and other road-users is seen as high, but these impacts can be reduced to moderate and low by implementing the suggested mitigation measures.

Health A Community Health and Safety Plan, as well as an Occupational Health and Safety Plan, that includes identification and evaluation of risks and impacts of project activities on health, safety and security of employees and local communities is required. This may include the provision of adequate health related information and prevention measures through community engagement, perhaps in collaboration with the local clinic, as well as traffic safety rules and appropriate plans and mitigation measures for demarcating and fencing-off the mining area.

Impacts of Pollution on the Community and Employees

Increased levels of dust, noise and traffic along the roads are likely to affect the communities living alongside the project’s access roads, and will also impact employees living and working within the mine concession. In addition, nuisance impacts such as the production of odours, attraction of pests and vermin, and the visual impact of the mine itself could also negatively affect Nqueuene and Sinhojo villages. These unmitigated impacts will be of moderate significance during the construction and operational phases but can be reduced to low significance with the implementation of mitigation measures. The simplest and most effective ways of mitigating dust impacts is to establish and enforce speed limits or 40 km/hr along all roads, but reduced to 20 or 30 km/hr where the road is close to sensitive receptors. In addition, wetting the road during the dry season also reduces dust levels. Speed limits also reduce the risk of traffic accidents.

Impact Summary

There is the potential for 58 biophysical impacts as a result of the mine. There is one very high, 17 high, 35 moderate and three low unmitigated negative impacts, as well as two beneficial impacts. With the implementation of mitigation measures, this can be reduced to one high negative impact, 19 moderate negative impacts and 33 low negative impacts. Two of the low negative impacts can be enhanced to become beneficial impacts, and the two low beneficial impacts can also be further enhanced if mitigation and enhancement measures are implemented.

Coastal & Environmental Services ix Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 There is the potential for 39 social impacts to result from the mine’s activities over the project lifespan. There have been two very high, eight high, nineteen moderate and three low unmitigated negative impacts identified in the ESIA process to date. In addition there are two positive impacts of low benefit and five impacts of moderate benefit. With the implementation of mitigation and enhancement measures there will be no very high, and no high negative social impacts, with seven moderate and 24 low negative impacts identified. Importantly, appropriate implementation of the required enhancement measures can result in three impacts of moderate benefit, and five impacts of high benefit.

Conclusion

The proposed project has the ability to increase the economic growth and employment opportunities for the local communities and add to livelihood diversification. Furthermore, the project will generate tax and revenue for the government. The implementation of the project will increase the economic productivity of the area through:

 Hiring local resources to both build and work on the mine site;  Aligning project objectives with national legal requirements that will in turn generate tax and royalty revenues for the government; and  Increase household economic dependency through the multiplier effects which will be generated from the proposed project.

However, from a biophysical perspective, if not properly managed, the project could negatively impact the environment through the loss of plant and animal species, habitat fragmentation and the pollution of land and water resources. With the implementation of the suggested mitigation measures and continued monitoring, these impacts can be reduced to acceptable levels.

In conclusion, it is the opinion of the authors of this ESIA that the Montepuez Graphite Mine Project will result in environmental, social and health impacts that can be managed to levels of significance that would be regarded as acceptable to society and the natural environment, provided the recommendations presented in this report and ESMP are implemented. The project will also bring significant economic, education, health care and development benefits to the local populations and provide substantial beneficial wealth to the government of Mozambique and its people.

Coastal & Environmental Services x Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 REVISIONS TRACKING TABLE

This Report should be cited as follows: Coastal & Environmental Services, August 2017, Suni Resources S.A. Montepuez Graphite Project, Draft Environmental and Social Impact Assessment Report, CES, Cape Town.

Coastal and Environmental Services

Report Title: Metals of Africa Montepuez Graphite Project, Draft Environmental and Social Impact Assessment Report Report Version: Draft 1 Project Number: 168 Name Responsibility Ms Tarryn Martin Author Ms Belinda Huddy Author Dr Ted Avis Reviewer Dr Chantel Bezuidenhout Reviewer

Copyright This document contains intellectual property and propriety information that are protected by copyright in favour of Coastal & Environmental Services (CES) and the specialist consultants. The document may therefore not be reproduced, used or distributed to any third party without the prior written consent of CES. This document is prepared exclusively for submission to Metals of Africa Limited the parent company of Suni Resources SA, and is subject to all confidentiality, copyright and trade secrets, rules intellectual property law and practices of Mozambique and South Africa.

Coastal & Environmental Services xi Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 TABLE OF CONTENTS

1. INTRODUCTION ...... 20 1.1. PROJECT OVERVIEW ...... 20 1.1.1. The Proponent ...... 20 1.1.2. The Consultants ...... 21 1.2. PURPOSE OF THIS REPORT ...... 21 1.3. STRUCTURE OF THIS REPORT ...... 22 1.4. ENVIRONMENTAL IMPACT ASSESSMENT TEAM ...... 22 2. THE LEGISLATED ESIA PROCESS IN MOZAMBIQE ...... 24 2.1. THE ENVIRONMENTAL IMPACT ASSESSMENT PROCESS IN MOZAMBIQUE ...... 24 2.1.1. Step 1: Application and Pre-evaluation (screening) process ...... 24 2.1.2. Step 2: Environmental Pre-feasibility Scoping Study and Terms of Reference ...... 24 2.1.3. Step 3: Authority Review of the Environmental Pre-feasibility Scoping Study and Terms of Reference ...... 24 2.1.4. Step 4: The Public Participation Process ...... 24 2.1.5. Step 5: Environmental Impact Study and Environmental Management Programme (EMPr) 25 2.1.6. Step 6: Authority Review of the Environmental Impact Report and Environmental Management Programme ...... 25 2.2. APPLICABLE LEGISLATION ...... 26 2.3. INTERNATIONAL CONVENTIONS ...... 32 3. PROJECT DESCRIPTION ...... 33 3.1. INTRODUCTION ...... 33 3.1.1. Project Background...... 33 3.1.2. Rationale for this Development ...... 34 Employment Multiplier effect ...... 35 Positive Global Impact ...... 35 3.1.3. Location of the proposed mining operations ...... 35 3.2. THE MINING METHOD ...... 37 3.2.1. Mine Pits ...... 37 3.2.2. Site Preparation ...... 39 3.2.3. Excavation, Blasting and Transport ...... 39 3.2.4. Removal of Overburden ...... 39 3.2.5. Processing ...... 40 3.2.6. Product Export ...... 45 3.3. INFRASTRUCTURE REQUIREMENTS ...... 45 3.3.1. Plant Site and Mine Services ...... 45 3.3.2. Water Supply and Distribution ...... 45 3.3.3. Power ...... 49 3.3.4. Haul Roads and Access Roads ...... 50 3.4. ANCILLARY INFRASTRUCTURE ...... 50 3.4.1. Accommodation Village ...... 50 3.4.2. Sewage Treatment ...... 51 3.4.3. Diesel Fuel storage and filling stations ...... 52 3.4.4. Sand Quarry ...... 52 3.4.5. Landfill site ...... 52 3.4.6. Mine Buildings and Facilities ...... 52 4. DESCRIPTION OF THE BIOPHYSICAL ENVIRONMENT...... 54 4.1. INTRODUCTION ...... 54 4.2. PHYSICAL ENVIRONMENT ...... 54 4.2.1. Climate ...... 54 4.2.2. Topography ...... 54

Coastal & Environmental Services xii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.2.3. Geology ...... 56 4.2.4. Soils ...... 56 4.2.5. Surface Water Catchment ...... 58 4.2.6. Rainfall and Surface Water Runoff ...... 58 4.2.7. Surface Water Quality ...... 59 4.2.8. Hydrogeology...... 60 4.2.9. Ground Water Quality ...... 60 4.2.10. Acid Mine Drainage Potential ...... 60 4.2.11. Land Use ...... 61 4.3. VEGETATION ...... 61 4.3.1. Vegetation Descriptions ...... 61 4.3.2. Sensitivity assessment of the study area ...... 66 4.3.3. Conservation Status of plant species ...... 68 4.4. FAUNA ...... 70 4.4.1. Reptiles ...... 70 4.4.2. Amphibians ...... 73 4.4.3. Mammals ...... 75 4.4.4. Birds ...... 76 5. DESCRIPTION OF THE SOCIO-ECONOMIC ENVIRONMENT ...... 81 5.1. OVERVIEW ...... 81 5.2. DEMOGRAPHIC PROFILE OF THE PROJECT-AFFECTED COMMUNITIES ...... 83 5.3. CULTURE AND RELIGION ...... 84 5.4. SOCIO-ECONOMIC LIVING CONDITIONS ...... 86 5.4.1. Social Infrastructure Assets ...... 86 5.5. LIVELIHOOD STRATEGIES ...... 91 5.5.1. Employment Sectors ...... 91 5.5.2. Agriculture and livelihood strategies ...... 91 5.5.3. Income and Expenditure ...... 93 5.5.4. Food Security...... 93 5.6. SOCIOECONOMIC SETTING ...... 94 5.7. SOCIO-ECONOMIC DEVELOPMENT NEEDS ...... 95 6. KEY PROJECT ASPECTS, ISSUES AND RISKS ...... 96 6.1. MINE DEWATERING ...... 96 6.2. ACID MINE DRAINAGE (AMD) ...... 98 6.3. TAILINGS STORAGE FACILITY ...... 99 6.4. WATER STORAGE FACILITY ...... 99 6.5. SEWAGE AND WASH WATER ...... 100 6.6. LANDFILL LEACHATE ...... 101 6.7. STORMWATER AND OTHER RUNOFF ...... 101 6.8. EXPLOSIVES STORAGE ...... 102 6.9. TRANSPORT AND TRAFFIC ...... 102 6.10. TERRESTRIAL ECOLOGY (FAUNA AND FLORA) ...... 102 6.11. HUMAN/WILDLIFE CONFLICT ...... 103 6.12. AQUATIC ECOLOGY, HYDROLOGY AND GEOHYDROLOGY ...... 103 6.13. AIR QUALITY ...... 103 6.14. NOISE AND VIBRATION ...... 103 6.15. SOCIO-ECONOMIC BENEFITS ...... 104 6.16. PUBLIC HEALTH AND SAFETY ...... 104 6.17. POPULATION IN-MIGRATION ...... 104 6.18. GENERAL ACCESS ROUTES AND ACCESS TO NATURAL RESOURCES ...... 105 6.19. CHANGES TO SOCIAL SYSTEMS AND STRUCTURES ...... 105 7. ASSESSMENT OF CURRENT LAND USE IMPACTS ...... 106 7.1. ISSUE 1: LOSS OF PLANT COMMUNITIES ...... 106

Coastal & Environmental Services xiii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 7.2. ISSUE 2: LOSS OF BIODIVERSITY (GENERAL) AS A RESULT OF HABITAT LOSS AND FRAGMENTATION ...... 107 7.3. ISSUE 3: ECOLOGICAL IMPACTS ASSOCIATED WITH COMMUNITY USE OF Natural Resources ...... 107 7.4. ISSUE 4: INCREASED PRESSURE ON NATURAL RESOURCES DUE TO THE In- migration of people into the area ...... 109 7.5. ISSUE 5: RISKS TO SAFETY AND SECURITY DUE TO IN-MIGRATION OF PEOPLE 109 7.6. ISSUE 6: POOR BASIC INFRASTRUCTURE AND SOCIAL SERVICES ...... 109 8. ASSESSMENT OF PROJECT RELATED IMPACTS ON THE BIOPHYSICAL ENVIRONMENT ...... 111 8.1. PLANNING AND DESIGN PHASE IMPACTS ...... 111 8.2. CONSTRUCTION PHASE IMPACTS ...... 111 8.2.1. Issue 1: Terrestrial habitat loss and fragmentation ...... 111 8.2.2. Issue 2: Loss of Biodiversity ...... 113 8.2.3. Issue 3: Alteration of Flow Regimes on the Aquatic Habitat ...... 115 8.2.4. Issue 4: Invasion of Alien Flora and Fauna Species ...... 116 8.2.5. Issue 5: Contamination of Land and Water Resources ...... 117 8.3. OPERATIONAL PHASE IMPACTS ...... 122 8.3.1. Issue 1: Terrestrial habitat loss, alteration and fragmentation ...... 122 8.3.2. Issue 2: Loss of Biodiversity ...... 124 8.3.3. Issue 3: Human/Wildlife Conflict...... 125 8.3.4. Issue 4: Increase in the presence of elephants within the project area ...... 126 8.3.5. Issue 5: Alteration of Flow Regimes on the Aquatic Habitat ...... 128 8.3.6. Issue 6: Fragmentation of the Aquatic Habitat...... 131 8.3.7. Issue 7: Contamination of Land and Water Resources ...... 134 8.3.8. Issue 8: Lowering of the groundwater resources ...... 138 8.4. DECOMMISIONING PHASE IMPACTS ...... 140 8.4.1. Issue 1: Impacts on Flora ...... 140 8.4.2. Issue 2: Impacts on Fauna ...... 141 8.4.3. Issue 3: Fragmentation of the Aquatic Habitat...... 142 8.4.4. Issue 4: Contamination of Land and Water Resources ...... 143 8.4.5. Issue 5: Lowering of the groundwater resources ...... 144 8.5. CUMULATIVE IMPACTS ...... 144 8.5.1. Issue 1: Impacts on Flora ...... 145 8.5.2. Issue 2: Impacts on Fauna ...... 145 8.5.3. Issue 3: Impacts on the aquatic environment ...... 146 9. ASSESSMENT OF IMPACTS ON THE SOCIO-ECONOMIC ENVIRONMENT ...... 147 9.1. PLANNING AND DESIGN PHASE IMPACTS ...... 147 9.2. CONSTRUCTION PHASE IMPACTS ...... 147 9.2.1. Issue 1: Land Acquisition ...... 147 9.2.2. Issue 2: Economic Growth and Employment Opportunities ...... 150 9.2.3. Issue 3: In-migration of job seekers ...... 152 9.2.4. Issue 4: Community and Employee Health and Safety ...... 155 9.2.5. Issue 5: Impacts of Pollution on the Community and Employees ...... 159 9.2.6. Issue 6: Loss of Natural Resources ...... 161 9.3. OPERATIONAL PHASE IMPACTS ...... 163 9.3.1. Issue 1: Economic Growth and Employment Opportunities ...... 163 9.3.2. Issue 2: Social Infrastructure ...... 164 9.3.3. Issue 3: Community and Employee Health and Safety ...... 165 9.3.4. Issue 4: Impacts of Pollution on the Community and Employees ...... 168 9.3.5. Issue 6: Damage to public property ...... 169 9.4. DECOMMISSIONING PHASE IMPACTS ...... 169 9.4.1. Issue 1: Economic decline ...... 169 9.4.2. Issue 2: Impacts of Traffic on Community and Employee Health and Safety ...... 170

Coastal & Environmental Services xiv Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 9.5. CUMULATIVE IMPACTS ...... 171 10. ALTERNATIVES ...... 173 10.1. PROJECT ALTERNATIVES ...... 173 10.2. FUNDAMENTAL ALTERNATIVES ...... 175 10.2.1. Transport Corridors ...... 175 10.3. INCREMENTAL ALTERNATIVES ...... 177 10.3.1. TSF Location ...... 177 10.3.2. Waste Rock Dumps ...... 178 10.3.3. The “No-Go” Alternative ...... 180 11. CONCEPTUAL DECOMMISSIONING AND CLOSURE PLAN ...... 182 11.1. WHY A PRELIMINARY MINE CLOSURE PLAN IS REQUIRED ...... 182 11.2. TARGET CLOSURE OUTCOMES AND OBJECTIVES ...... 182 11.3. SITE SPECIFIC CLOSURE OUTCOMES, OBJECTIVES AND TARGETS ...... 184 11.4. DECOMISSIONING, REHABILITATION AND CLOSURE OF SPECIFIC COMPONENTS ...... 184 11.4.1. Mine void/pit rehabilitation...... 185 11.4.2. Waste Rock Dumps ...... 185 11.4.3. Tailings Storage Facility ...... 186 11.4.4. Roads ...... 187 11.4.5. Processing Plant and Other Infrastructure ...... 187 11.4.6. General Surface Rehabilitation ...... 189 11.5. SOCIAL COMPONENTS OF CLOSURE ...... 189 11.6. POST CLOSURE MINE SITE INSPECTION, ENVIRONMENTAL MONITORING AND REPORTING ...... 190 12. CONCLUSIONS AND RECOMMENDATIONS ...... 193 12.1. SUMMARY OF KEY ISSUES ...... 193 12.1.1. Terrestrial habitat loss and fragmentation ...... 193 12.1.2. Loss of Biodiversity ...... 195 12.1.3. Invasion of Alien Flora and Fauna Species ...... 195 12.1.4. Human/Wildlife Conflict and the increase in the presence of elephants within the project area ...... 195 12.1.5. Alteration of Flow Regimes on the Aquatic Habitat ...... 196 12.1.6. Fragmentation of the Aquatic Habitat ...... 196 12.1.7. Contamination of Land and Water Resources- ...... 197 12.1.8. Lowering of the Groundwater Resources ...... 198 12.1.9. Loss of Natural Resources- ...... 199 12.1.10. Land Acquisition ...... 199 12.1.11. Economic Growth and Employment Opportunities ...... 199 12.1.12. Social Development ...... 200 12.1.13. In-migration ...... 200 12.1.14. Community and Employee Health and Safety ...... 200 12.1.15. Impacts of Pollution on the Community and Employees ...... 201 12.2. IMPACT SIGNIFICANCE BEFORE AND AFTER MITIGATION ...... 201 12.2.1. Biophysical impacts ...... 201 12.2.2. Socio economic impacts ...... 202 12.3. CONCLUSION ...... 202 13. REFERENCE LIST ...... 204

LIST OF FIGURES Figure 2-1: The steps followed during the ESIA process in Mozambique...... 26 Figure 3-1: Locality map indicating the position of the exploration license area 6216 relative to nearby Syrah Resources Balama Project and Gemfields Ruby Mine...... 36 Figure 3-2: Final Infrastructure layout ...... 38

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Figure 3-3: Cross section of the Montepuez Graphite Project waste dump design showing the angles of the slopes rehabilitated progressively with mining operations...... 40 Figure 3-4: 3D model of the processing plant...... 40 Figure 3-5: The proposed position of the process plant site, run-of-mine pad, long term stockpiles and road network...... 41 Figure 3-6: Tailings Storage Facility infrastructure ...... 42 Figure 3-7: General process flow block diagram of graphite including ROM handling, crushing and milling, flotation, concentrate drying and sorting of variable graphite products. (Source: Battery Minerals Study team)...... 44 Figure 3-8: Mecopeti River catchment and related mine infrastructure ...... 47 Figure 3-9: Water Storage Facility on the Mecopeti River ...... 48 Figure 3-10: Phase 3 of the accommodation village ...... 51 Figure 4-1: Elevation profile of the Montepuez site from the northern boundary to just south of the “Lion” deposit ...... 55 Figure 4-2: Soil map showing the distribution of the soil types within the study area...... 57 Figure 4-3: Vegetation map of the Montepuez site showing the extent and range of the vegetation types found around the assessed area...... 65 Figure 4-4: Sensitivity map of the study area ...... 67 Figure 5-1: Indirect and direct PAC...... 82 Figure 5-2: Gravesites and sacred sites found in the villages surrounding the project site and a ceremonial site found within the project site...... 85 Figure 5-3: Local primary schools, the Mirate Clinic and the Mirate Police Post accessible to the villages surrounding the project site...... 86 Figure 5-4: Wells and hand pumps found in Nqeueune Village, Caula Village and Mavala Village...... 90 Figure 5-5: Average duration each PAC cultivates land and subsequently leaves land to lie fallow...... 92 Figure 10-1: The product haul route corridors options. The red line illustrates the route to Pemba port and the black route illustrates the longer route to Nacala port...... 176 Figure 10-2: Figure illustrating how the Buffalo Waste Rock Dump has been moved to the north to avoid the Riparian Woodland, which is of high sensitivity...... 179 Figure 10-3: Figure illustrating how the Elephant Waste Rock Dump has been moved to the south to avoid the Riparian Woodland, which is of high sensitivity...... 180 Figure 11.1: The integrated mine closure planning approach as recommended by the ICMM (2008) ...... 183 Figure 12-1: Proposed conservation corridors for the project area...... 194 Figure 12-2: Pie chart illustrating the number of very high, high, moderate, low negative and positive biophysical impacts pre and post mitigation...... 201 Figure 12-3: Pie chart illustrating the number of very high, high, moderate, low negative and positive social impacts pre and post mitigation...... 202

LIST OF TABLES Table 1-1: The specialist studies conducted for the ESIA study...... 23 Table 2-1: List of Applicable Legislation...... 27 Table 2-2: International conventions applicable to the project...... 32 Table 3.1: Daily truck volumes for product transport ...... 45 Table 4-1: Monthly average weather data ...... 54 Table 4-2: Species of Special Concern ...... 68 Table 4-3: Reptile SCC concern recorded and likely to occur in the study area ...... 73 Table 4-4: SCC likely to occur within the study area...... 80 Table 5-1: Household-level demographics of direct and indirect PAC...... 83 Table 5-2: Facilities available to schools in local villages...... 86 Table 5-3: Basic Social Amenities available to each PAC...... 88 Table 5-4: The components of Food Security...... 93 Table 10-1: Summary of the types of alternatives assessed as part of this ESIA ...... 173 Table 10-2: Assessment of each TSF alternative ...... 177

LIST OF PLATES Plate 4-1: Photograph illustrating the typical topography of the Montepuez site...... 55 Plate 4-2: Fish trap upstream of the WSF ...... 58 Plate 4-3: Water in a hole excavated in the river bed downstream of the WSF dam wall ...... 59 Plate 4-4: Typical Riparian Woodland...... 62 Plate 4-5: Typical Tall Open Undifferentiated Woodland (left) and Bamboo Thicket (right) ...... 62 Plate 4-6: Typical Open Savannah (left) and dark expansive soils found within the Open Savannah that suggest these areas are seasonal wetlands (dambos) during the wet season (right)...... 63

Coastal & Environmental Services xvi Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Plate 4-7: Open Palm Savanna ...... 63 Plate 4-8: Undifferentiated Forest ...... 64 Plate 4-9: Reptiles found on site. Top left to bottom right. Green water snake (Philothamnus hoplogaster); Flap n-necked chameleon (Chamaeleo dilepis); Mozambique sand snake (Psammophis mossambicus); Brown House snake (Lamprophis capensis); Rufous beaked snake (Rhamphiophis rostratus) and Puff adder (Bitis arietans arietans) ...... 71 Plate 4-10: Reptiles found on site. Top left to bottom right. Rainbow skink (Trachylepis margaritifer), Variable skink (Trachylepis varia); Black-lined plated lizard (Gerrhosaurus intermedius) and Mozambique agama (Agama mossambica) male and female...... 72 Plate 4-11: Amphibians found on site. Top left to bottom right. Juv. Guttural toad (Amietophrynus gutteruralis); Common river frog (Ameitia quecketti); East African puddle frog (Phrynobatrachus acridoidies); Flat- backed toad (Amietophrynus maculatus)...... 74 Plate 4-12: Amphibians found on site. Top left to bottom right. Mottled Shovel-nosed Frog (Hemisus marmoratus), Shovel-footed squeaker (Arthroleptis stenodactylus), and dorsal & ventral view Müller’s platanna (Xenopus muelleri)...... 74 Plate 4-13: Mammals found on site. Top left to bottom right: Pouched Mouse (Saccostomus campestris), Bushveld Gerbil (Gerbilliscus leucogaster), Striped Bush Squirrel (Paraxerus flavovittis), Greater Grey- brown Musk Shrew (Crocidura luna), Red Bush Squirrel (Paraxerus palliates), Common Warthog (Phacochoerus africanus), Yellow Baboon (Papio cynocephalus) and African wildcat (Felis silvestris). 75 Plate 4-14: Suni and Yellow baboon hunted within the project area intended for consumption and sale...... 76 Plate 4-15: Elephant carcass ...... 76 Plate 4-16: Bird species recorded in various habitats on site...... 79 Plate 5-1: Examples of gravesites found in the local villages (Nqueuene Village and Caual Village): CES, 2016...... 84 Plate 5-2: Examples of sacred sites located in surrounding villages (Nqueuene Village and Mavala Village): CES, 2016...... 85 Plate 5-3: Local schools in the area (Nqueuene Primary, Caula Primary and Mavanda Primary): CES, 2016...... 87 Plate 5-4: Classrooms of local schools in the area (Caula Primary, Mavala Primary and Mavanda Primary), CES 2016...... 87 Plate 5-5: The Mirate Clinic, wards and medicine supplies: CES, 2016...... 88 Plate 5-6: Key Informant Interview (KII) at the Mirate Police Post: CES, 2016...... 88 Plate 5-7: An example of a well and hand pump, the main sources of water for PAC: CES, 2016...... 89 Plate 5-8: Wood and solar panels used by PAC as energy sources for lighting and cooking: CES, 2016. .... 90 Plate 5-9: Land clearing and preparation of a machamba (left) and an established machamba (right)...... 92 Plate 5-10: Materials are used for construction of houses and toilets, making furniture and baskets: CES, 2016...... 93

Coastal & Environmental Services xvii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 LIST OF ACRONYMS AND ABBREVIATIONS

AfDB African Development Bank AMD Acid Mine Drainage ARD Acid Rock Drainage Asl Above sea level ASX Australian Stock Exchange Bgl Below ground level BPEO Best Practicable Environmental Options CDP Community Development Plan CES Coastal and Environmental Services CHSMP Community Health and Safety Management Plan CITES Convention on International Trade in Endangered Species CLO Community Liaison Officer CMP Conservation Management Plan CSR Corporate Social Responsibility DFS Definitive Feasibility Study DFS Draft Feasibility Study DINAB National Directorate of Environment DIPREME Direcção Provincial de Recursos Minerais e Energia/Provincial Directorate of Mineral Resources and Energy DO Dissolved Oxygen EIR Environmental Impact Report EL Environmental License EMPr Environmental Management Programme EPDA Environmental Pre-feasibility Scoping Study ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FAO Food and Agricultural Organisation FDI Foreign Direct Investment FGD Focus Group Discussion FSL Full Supply Level GDP Gross Domestic Product GIS Geographical Information System GPS Global Positioning System ha Hectare HEC Human Elephant Conflict HIV/AIDS Human Immunodeficiency Virus/ Acquired Immunodeficiency Syndrome I&APs Interested and Affected Parties IFC International Finance Corporation ILO International Labour Organisation INE National Statistics Institute IUCN International Union for Conservation of Nature KII Key Information Interview KPI Key Performance Indicator KVa Kilo volt amps LGSP Low Grade Stockpile LRIMP Labour, Recruitment and Influx Management Procedure LRP Livlihood Restoration Plan

Coastal & Environmental Services xviii Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 LTSP Long-Term Stockpile MAP Mean Annual Precipitation MAR Mean Annual Rainfall MICOA Ministério para a Coordenação da Acção Ambiental MITADER Ministério de Terra, Ambiente e Desenvolvimento Rural MoU Memorandum of Understanding MSDS Material Safety Data Sheet MSL Mean sea level Mtpa Million tonnes per annum MZN Mozambican Metical NGO Non-governmental Organisation OZ Oxidation Zone PAC Project Affected Community PAP Project Affected People PM Particulate Matter PPE Personal Protective Equipment PPP Public Participation Process RAP Resettlement Action Plan ROM Run-of-Mine RPF Resettlement Policy Framework RTI Respiratory Tract Infections RZ Reduction Zone SCC Species of Special Concern SDP Social Development Plan SEP Stakeholder Engagement Plan SIA Social Impact Assessment SMMEs Small, Medium and Micro-sized Enterprises SOLAS Safety of Life at Sea SOP Standard Operating Procedure STD Sexually Transmitted Disease TA Traditional Authority TB Tuberculosis TDS Total dissolved Solids TGC Total Graphitic Carbon ToR Terms of Reference TSF Tailings Storage Facility TSPM Total Suspended Particulate Matter TZ Transition Zone VCT Voluntary Counselling and Testing VIP Ventilated Improved Pit WASH Water, Sanitation and Hygiene WHO World Health Organisation WRD Waste Rock Dump WSF Water Storage Facility ZOI Zone of Influence

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1. INTRODUCTION

1.1. PROJECT OVERVIEW

Suni Resources S.A. is a Mozambican subsidiary company of the Battery Minerals Group (prior to December 2016 traded as Metals of Africa Limited) and is focused on developing graphite mines in Mozambique. Suni Resources S.A. intend to develop a graphite mine at the Montepuez Project area (referred to as the “Project Site” or “site”) located in the district of Montepuez in Cabo Delgado Province, northern Mozambique. The Project Area is located approximately 60km north-west of the town of Montepuez and the license area (Exploration License 6216) covers approximately 12,500 ha within which there are three resources that they intend to exploit. However, only two of the deposits form part of this Environmental and Social Impact Assessment (ESIA) as it is intended for the third deposit to be mined at a later stage in the mine life. Each deposit contains large flake graphite which is ideal for creating cost efficient battery grade anode material which will be sold into the American and Asian markets for primary use in Lithium ion storage batteries. Lithium ion storage batteries are used for clean, renewable energy.

1.1.1. The Proponent As mentioned above, Suni Resources S.A. is a subsidiary of the Battery Minerals Group (BAT) which is an Australian company that is listed on the Australian Securities Exchange (ASX) and has their head office in Perth in Western Australia. Suni Resources S.A. has their head office in Maputo, Mozambique. The Company’s focus towards graphite mining commenced in December 2014 with the discovery of graphite at the Montepuez Central Graphite Project 6216L. Following this, technical studies determined the project had sufficient mineable resource and economics to develop into a viable long term mine via a Concept Study. Suni Resources then completed various technical studies as part of its Definitive Feasibility Study (DFS) and the results were announced publically in February 2017. Suni resources are committed to becoming leaders in the creation of environmentally friendly anode material for global consumption in the lithium ion battery market. Testing to date has determined the Montepuez graphite project is suitable to make batteries for the electric car industry.

The proponent for this project is Suni Resources S.A:

Ms Cherie Leeden (Managing Director) Registered Office and Principle Place of Business: Metals of Africa Limited 945 Wellington Street, West Perth, Western Australia 6005, Australia. T +61 8 9322 7600 or +1 530 563 8886 F +61 8 9322 7602 Email: [email protected]

Mr. Andre Antonio Cardoso (Country Director) Mozambique Office Edifício Solar das Acácias, Avenida Julius Nyerere 4000, Loja 05, Cidade de Maputo, Mozambique T +258 214 937 35 or +258 841 845 574 Email: [email protected]

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1.1.2. The Consultants This document has been prepared by Coastal & Environmental Services Limited Mozambique Lda (CES) to meet the National Environmental Laws, as well as various international standards. CES is a company registered in Mozambique, with the Ministério da Terra, Ambiente e Desenvolvimento Rural (MITADER) (Appendix A) and has solid knowledge and multidisciplinary teams to conduct environmental impact assessments and environmental management programs.

The contact address of CES is:

Mr Marc Hardy Av. Francisco Orlando Magumbwe n.250 R/C, Maputo, Moçambique Email: [email protected] Website: www.cesnet.co.za

In conjunction with:

Ms Tarryn Martin Coastal and Environmental Services (CES) Suite 408, The Point 76 Regent Road Sea Point, 8005 South Africa. Telephone: +27 21 045 0900 Fax: +27 46 622 6564 Website: www.cesnet.co.za Email: [email protected]

1.2. PURPOSE OF THIS REPORT

In accordance with Mozambican regulatory requirements the issuing of an environmental licence requires the preparation of an Environmental and Social Impact Assessment (ESIA). The Ministério da Terra, Ambiente e Desenvolvimento Rural (Minister of Land, Environment and Rural Development, or MITADER is the lead environmental agency in Mozambique, and it is MITADER who is responsible for the review and issuing of an environmental licence. The proposed project is classified as a category A project, requiring a full ESIA (see Chapter 2 of this report for more detail on EIA standards, process and legislation in Mozambique).

The key purpose of this ESIA is to assess the environmental and social impacts of the proposed establishment of the project, and to provide key stakeholders, and affected persons or communities in the study area, an opportunity to comment on the findings of the ESIA. The ESIA process intends to ensure that environmental and social concerns are integrated into the proposed development, and suggests ways of preventing, minimising, mitigating and/or compensating for possible adverse environmental and social impacts which may arise due to the proposed development.

This report provides information about the proposed mine and its associated infrastructure, the legal framework in which this is occurring, a summary of the baseline studies that have been completed to assess this project, and an outline of the ways in which stakeholders are involved in the ESIA process (public participation). It also provides an assessment of impacts on the natural and social environment, and presents recommendations to mitigate these effects and risks. Further detail on these recommendations is presented in an Environmental Management Programme (EMPr) that is a separate report volume.

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1.3. STRUCTURE OF THIS REPORT

The content of the various sections of this Environmental & Social Impact Assessment is summarised below.

Chapter 1 provides an introduction to the proposed project and describes the purpose of this report and its structure.

Chapter 2 outlines the requirements of prevailing Mozambican legislation and describes the process that was followed during the ESIA.

Chapter 3 describes the proposed mining project in detail, including primary infrastructure such as the mining process and processing plants, and secondary infrastructure required for the transportation of materials from the mine site to port and infrastructural requirements for water and power.

Chapter 4 describes the biophysical environment of the proposed project site.

Chapter 5 describes the socio-economic environment and context in which the project is located.

Chapter 6 provides a summary of the key issues, risks and impacts anticipated to result from the projects development.

Chapter 7 provides a description of the alternatives to the proposed development or components of the proposed development.

Chapter 8 provides a description of the potential impacts on the biophysical environment relating to all phases of the proposed development that were identified during the ESIA process. An assessment of the significance of each issue and an indication of the extent to which the issue could be addressed through the adoption of mitigation measures is also provided.

Chapter 9 provides a description of the potential socio-economic impacts relating to all phases of the proposed development that were identified during the ESIA process, an assessment of significance and presentation of mitigation measures.

Chapter 10 provides a description of the conceptual Decommissioning and Closure Plan requirements applicable to the project.

Chapter 11 concludes this report.

1.4. ENVIRONMENTAL IMPACT ASSESSMENT TEAM

CES is a South African and Mozambican based consultancy that specialises in environmental management and impact assessments. For the past 25 years, CES has been involved as lead consultants in large mining EIA processes in southern Africa, including Mozambique, and provides a wide range of environmental advisory services to the extractive industry throughout Africa. CES has extensive experience in environmental and social risk and impact assessments, terrestrial, marine and freshwater ecology, social impact assessments and stakeholder engagement processes, as well as the management and co-ordination of all aspects of the ESIA process.

The specialist assessments conducted for this ESIA are reflected in the table below.

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Table 1-1: The specialist studies conducted for the ESIA study. Specialist Study Affiliation Name of Specialist(s) Vegetation survey CES Dr Anthony (Ted) Avis, Ms Tarryn Martin and Ms Alice Massingue Faunal survey CES Dr Anthony (Ted) Avis, Ms Amber Jackson and Mr Craig Sholto-Douglas Land and Natural Resource Use CES Dr Chantel Bezuidenhout, Ms Tarryn Martin and Ms Amber Jackson Surface Water and Aquatic Assessment CES Mr Bill Rowlston and Mr Justin Green Waste Assessment CES Dr Kevin Whittington-Jones and Dr Eric Igbinigie Traffic Impact Assessment CES Mr Bill Rowlston and Mr Thomas King Social Impact Assessment CES Mr Marc Hardy and Ms Belinda Huddy Geohydrology and Geochemistry Exigo Dr Koos Vivier, Mr Stephan Meyer, Mr George van Dyk and Mr Robert Hansen (AMD specialist)

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2. THE LEGISLATED ESIA PROCESS IN MOZAMBIQE

2.1. THE ENVIRONMENTAL IMPACT ASSESSMENT PROCESS IN MOZAMBIQUE

The ESIA process is regulated by Decree no. 54/2015 of 31 December 2015, applicable to all public and private sectors. The Ministério de terra, Ambiente e Desenvolvimento Rural (MITADER), through the National Directorate of the Environment (DINAB) and Provincial Directorate of Land, Environment and Rural Development (DPTADER) is the authority responsible for reviewing and approving the environmental assessment.

The Mozambican regulations (Article 4) define four project categories and these in turn define the level of environmental assessment required. This project has been classified as a Category A project based on its scale, complexity, nature and location and as such is subject to a full ESIA.

There are effectively six (6) main steps that are followed during the ESIA process:

2.1.1. Step 1: Application and Pre-evaluation (screening) process The applicant is required to present a brief description of the project activities to the authorities and complete the requisite application form. All project activities are screened against Annexure I, II, II and IV as defined in Article 4 of the Environmental Assessment Regulations by the authorities in order to determine which category (A+, A, B or C) the project falls within.

The application form was submitted to MITADER on 12 September 2016 and a categorisation letter issued on 17 October 2016 (Appendix B). The authority has classified this project as a Category A project.

2.1.2. Step 2: Environmental Pre-feasibility Scoping Study and Terms of Reference The Environmental Pre-feasibility Study (EPDA) is mandatory for all category A projects as defined by Article 10 of the Environmental Assessment Regulations. The key objectives of this phase as defined by the ESIA regulations are to:  Determine any fatal flaws or environmental risks associated with the implementation of the activity.  Determine the scope of the ESIA process and develop a Terms of Reference for this phase should no fatal flaws be identified.

The EPDA was submitted to the authorities on the 27 March 2017. The letter of acceptance for the EPDA was received on the 14 June 2017 (Appendix C) and our response to the comments raised included in Appendix D.

2.1.3. Step 3: Authority Review of the Environmental Pre-feasibility Scoping Study and Terms of Reference The EPDA and ToR report is then presented in Portuguese to MITADER for review. The authority may request additional information, and should provide comment and recommendations in terms of the ESIA study within 30 days of receiving the final report.

2.1.4. Step 4: The Public Participation Process The Public Participation Process (PPP) involves consultation with the wider public, to facilitate the dissemination of information about the project and identify Interested and Affected Parties (I&APs).

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The proponent is required to undertake the PPP throughout the ESIA process. This includes advertising meetings and affording I&APs the opportunity to participate in public meetings and must be conducted in the presence of the authorities. The PPP is undertaken based on any directives given by the relevant authority and the results of the process are summarised in a final public participation report. The process includes at least two series of public consultation meetings with the first one being undertaken for the presentation of the draft EPDA and the second one for the presentation of the draft ESIA.

Disclosure of the EPDA to the authorities and affected communities was undertaken on the 7th and 8th of December 2016 and disclosure of this draft ESIA is scheduled for the 3-6 October.

The details of the meetings held to date are included in the Public Participation Report.

2.1.5. Step 5: Environmental Impact Study and Environmental Management Programme (EMPr) The ESIA process is the responsibility of the proponent and the ESIA team, and is undertaken in line with the Terms of Reference set out in the EPDA. To address the issues raised during the EPDA process, the ESIA study includes specialist studies to provide a detailed and thorough examination of key environmental impacts. Once completed, these findings are synthesized into the ESIA report.

Specialist studies include specific recommendations aimed at avoiding, or where this is not possible, reducing negative impacts and maximizing positive impacts during the construction, operation and decommissioning phases of the proposed development. These recommendations are synthesized into an Environmental Management Programme (EMPr).

2.1.6. Step 6: Authority Review of the Environmental Impact Report and Environmental Management Programme The Environmental Impact Report, Specialist Studies Volume and Environmental Management Programme are presented to MITADER for review. According to Decree no. 54/2015 of the 31st December, the review should be undertaken within 45 days of receiving the final reports. Upon completion of the review, MITADER will provide a final decision. This may be one of the following:  Positive decision  Total rejection of the activity based on the outcomes of the reports and the final environmental impact statement  Partial rejection of the activity based on the outcomes of the reports and the final environmental impact statement

In providing an environmental license, the relevant authority may seek to place conditions of approval that are legally binding on the proponent, or may request changes to the project scope or additional ESIA studies.

The steps followed during the ESIA process and the review timeframes for the authorities have been illustrated in Figure 2.1 below.

In the event that the ESIA is rejected, the Authorities make one of the following decisions:  Total rejection of the implementation of the proposed activity with a report stating why the activity may not proceed;  Partial rejection of the proposed activity with a request that further information be submitted or the project changed/redesigned; or  Change of category of the proposed activity (from Category A to Category A+) in which case a new ESIA will need to be conducted. This is an unlikely scenario as the project is already a Category A. In this instance, additional information may be required.

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Figure 2-1: The steps followed during the ESIA process in Mozambique.

2.2. APPLICABLE LEGISLATION

A summary of the legislation applicable to environmental licensing is provided in Table 2-1 below. It should be noted that the list provided below is not exhaustive, and has been restricted to documents that have direct relevance to either the environment and/or communities.

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Table 2-1: List of Applicable Legislation. LEGISLATION DATE OF ENACTMENT APPLICABILITY TO THE PROJECT NATIONAL LEGISLATION

Constitution of the Republic Dictates the right to environment for each citizen in section 7.1: “All citizens shall have the right to live in a balanced 2004 of Mozambique environment and shall have the duty to defend it”. INDUSTRIAL LICENSING AND LABOUR LAW

General Investment Act Law 3/1993 of June 24th Mining Corporations are required to abide by the commercial laws of Mozambique.

Labour Act Law no. 23/2007 of August 1st Mining Corporations are required to abide by the labour regulation of the Mozambique ENVIRONMENTAL FRAMEWORK LAW, EIA, INSPECTIONS AND AUDITS

Law 20/1997 of October 1st (As Environment Act The project will have an environmental impact, and as such will fall under the ambit of the Environmental Act amended by the Decree 42/2008)

Environmental Impact Decree 54/2015 of December 31 The process and rules to be followed when conducting an Environmental Impact Assessment. Assessment Regulations

Addendum to the EIA Ministerial Diploma 198/2005 of Process Regulations no. September 28th The environmental authorization required prior to commencements of this project will be regulated by the EIA 45/2004 legislation General Directive for EIA Ministerial Diploma 129/2006 of July 19th

General Directive for the Public participation forms a crucial part of the ESIA process and is mandatory for category A+, A and B projects. At Public Participation Process Ministerial Diploma 130/2006 of July 19th least two public consultation rounds must take place and a final public participation process report that addresses all in the EIA process questions, concerns and comments raised by I&APs must be submitted with the EIR to the authorities.

Regulations for The Regulation apply to both public and private activities influencing, directly or indirectly, environmental components. Ministerial Decree 11/2006 of June 15th Environmental Inspections In particular, the regulation defines the types and contents of environmental audits, the related necessary competences and auditors’ profiles. Moreover, it regulates environmental audit reports and defines sanctions and penalties for non-compliance. Ministerial Decree 32/2003 of August Environmental Audit Process 12th Auditing and monitoring form crucial parts of the ESHIA process, and as such this act directly impacts upon the regulatory requirements to which the proponent must adhere

Extracts from the Penal 16 September 1886 Code

Norms of application of fines These regulations define the consequences of environmental non-compliance and infringement on the proponent. and other sanctions Ministerial Diploma 1/2006 of January 4th prescribed in the Environmental legislation

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LEGISLATION DATE OF ENACTMENT APPLICABILITY TO THE PROJECT

Law on Crimes against the Environment Ministerial Diploma of 2006/7

SOCIAL The purpose of this law is to protect the tangible and intangible assets of the Mozambican cultural heritage – e.g. monuments, buildings of historical, artistic and scientific sites and natural elements of scientific interest and particular Protection of the aesthetic. This law extends to any cultural assets that may be discovered on Mozambican territory, in particular, in Mozambican Cultural (Law No. 10/88 of December 22) the soil, subsoil, inland bodies of water or the continental shelf. Heritage Heritage Resources may be disturbed and impacted by the mining activities, and as such fall under the ambit of these regulations

Archaeological Heritage Decree 27/1994 of July 20th Heritage Resources may be disturbed and impacted by the mining activities, and as such fall under the ambit of these Regulation on the Protection regulations of the Archaeological Decree 27/97 of July 20th. Heritage, These regulations formulate the procedures for any resettlement in Mozambique, and especially articulate the Regulation of Resettlement assistance required from Government during a resettlement process. These regulations are used during the ESIA Process Resulting from Decree 31/2012 of August 8 process to inform all project affected communities of their rights with regard to economic displacement. The articles Economic Activities in this regulation is used to structure most of the RAP procedures at community level if and when required.

The Land Act provides the legal framework for land ownership, as well as the control of land and natural resources Land Act Law19/97 of October 1st in Mozambique. The process of determining land rights is also explained by this law. The law was created with the intention of encouraging the use and benefit of land, such that it contributes to the development of the national economy. The law establishes the terms under which all activities - relating to the right of land-use and benefits - operate (Article 2). It provides the basis for defining people’s land-use rights, and gives details on these rights based upon customary claims and the procedures for the acquisition of title for use and benefits by communities and individuals. The law recommends a consultation-based process that recognises customary rights as the means for identifying the claims of communities and individual members of communities without title.

The Land Law also defines that the right to use land may be acquired through occupation by Mozambican individuals who have been using the land in good faith for at least ten years. The law therefore recognises and protects the rights of individuals to land acquired through inheritance or occupation (customary tenure), except in legally defined reserves or areas where land has been legally transferred to another person or body. All citizens have equal rights and duties according to the law. Existing rights to use land may be terminated through revocation of such rights for reasons of public interest, after the payment of fair compensation, in which case the non-removable improvements will revert to the state.

Foreign individuals or corporate persons may be holders of a right to land-use and benefit, provided they have an investment project that is approved under the investment legislation and they are established or registered under the GoM (Article 11). Total and partial protection zones are part of the public domain, and no right of land-use or benefit can be obtained in these areas (Articles 7 and 9). Total protection zones include those areas specifically intended for

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LEGISLATION DATE OF ENACTMENT APPLICABILITY TO THE PROJECT conservation or preservation activities, whilst access to partial protection zones requires special licenses, which may be issued for specified activities. Right to land-use and benefit applications are authorised by provincial governors for areas up to 1,000ha, by the Minister of Agriculture and Rural Development for areas between 1,000 to 10,000ha, and by the Council of Ministers for areas exceeding 10,000ha (Article 22).Provisional authorisation is granted after the submission of an application for land-use and benefit. This provisional authorisation is valid for a maximum of five years in the case of nationals, and two years in the case of foreigners (Article 25). Upon fulfilment of the exploitation plan within the provisional period, final authorisation will be given and the relevant title issued (Article 26).

Land Act Regulations Decree 66/1998 December 8th Land appropriation and ownership rights are pivotal to the project implementation. Relevant aspects of the regulations (Amended by Decree 1/2003 of February include: 18th) Where there is joint title, such title belongs to all the titleholders equally. When one of the titleholders dies, the other holders continue as the rightful titleholders; Consultations between the applicants for land and the local community are mandatory before a decision to grant title use is made by the provincial governor or higher authority; Good faith occupiers and local communities may apply for demarcation and title; and Titleholders are required to pay a tax for authorisation of the right to use land, plus an annual tax. Family businesses and local communities are exempt from such taxes. The Land Planning Act (Law 19/2007 of July 18) creates a legal framework for land planning. The Act defines the mechanisms for preparation, approval, implementation, monitoring and supervision of land-use plans, as well as the Land Planning Act Law 19/2007 of July 18th responsibilities associated. This law applies to the entire national territory and, for purposes of planning, regulating relations between different levels of public administration, its relations with other public and private individuals, representatives of different economic, social and cultural interests, including local communities. This Act sets out measures and regulatory procedures to ensure the occupation and rationale and sustainable use Regulation of the Land Decree no. 23/2008 of natural resources, appreciation of the diverse potential of each region, the infrastructure, urban systems and Planning Act promoting national cohesion and population safety. Protection for Employees This Act establishes the rights and duties of those living with HIV and AIDS and provides measures necessary for and Job Applicants living Decree No. 19/2014 of 27 August pre-vention, protection and treatment related to the pandemic. with HIV/Aids Act WATER Water Act Law 16/1991 of August 3rd The statutory legal framework for water and sanitation

Water License and Decree 43/2007 of October 30th Concessions Regulations A water use license or concession will be required for the construction and operation of this project. Water Policy Decree 46/2007 of August 21th WASTE, EFFLUENT AND EMISSION

Regulation on Environmental Decree No. 67/2010 amending This decree defines air quality and emission standards, water classification according to the uses and related quality Quality and Effluents Decree 18/2004 of June 2nd (As control standards and emission requirements with special regard to potable water. It also provides standards for soil Emission amended by Decree 67/2010) quality and noise emissions.

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LEGISLATION DATE OF ENACTMENT APPLICABILITY TO THE PROJECT

Waste Management Ministerial Decree 13/2006 of June 15th Labour and construction camps, as well as permanent accommodation and lodgings installed during the lifetime of Regulations this project will be subject to these waste regulations.

Regulations on the Decree 94/2014 of December 31st Labour and construction camps, as well as permanent accommodation and lodgings installed during the lifetime of management of municipal this project will be subject to these waste regulations. solid waste

Regulation on management Decree N.83/2014 of December 31 This decree establishes the general rules for the production, management and disposal of hazardous waste in of hazardous waste Mozambique. It applies to all entities involved in the disposal, management, import or distribution of hazardous waste and establishes fees and penalties for non-compliance.

Regulations on the Decree 16/2015 of August 5th Management Regulations and Plastic Bag Control applies to all public and private entities, natural and legal persons management and control of involved in the production, import, sale and use of plastic bags in the country. plastic bags Regulations on Article 16 of Decree No. 18/2004 Present accountability actions in the implementation, monitoring and treatment of sewage Environmental Quality Standards and Effluent and other effluents in an acceptable manner to preserve the water quality, ecosystem Emissions functioning and protection of the river basin. BIODIVERSITY AND WILDLIFE, LAND

Wildlife and Forestry Act Law 10/1999 of July 7th This Regulation applies to protection activities, storage, use, exploitation and production of forest and wildlife resources, and covers the marketing, transportation, storage and primary processing, trade or industrial applications of these resources.

Wildlife and Forestry Decree 10/1999 of July 6th The law is divided into nine chapters. Of relevance to this ESIA are the following chapters: Regulations Chapter 2 on the Protection of Forest and Wildlife Resources; and Chapter 3 on Sustainable Forest Resources, Exploitation Regimes and Sustainable Wildlife Conservation Regimes.

The Regulations on the Law Decree 12/2002 The Regulations on the Law on Forestry and Wildlife (Decree No.12/2002) provide further guidance to The Wildlife of Wildlife and Forestry and Forestry Act (1999).The bush clearing prcedures described in this act must be followed by the proponent.

National Strategy and Action Formulated by MICOA (now MITADER) Plan for the Conservation of and passed by the Council of Ministers in Biodiversity and wildlife management will form part of the mitigation measures for the project Biological Diversity for August 2003 Mozambique

The Regulation aims at guaranteeing the human health and the environmental quality standards are upheld, Regulations on Pesticide Decree No. 6 of 2009 according to environmental legal proceedings approved by Law No. 20/97. The annexes specify offences and Management penalties to be paid for illegal activity.

Control of Exotic Invasive Weed control required throughout the construction and operation phases will be directly regulated by these Law 25/2008 of 01 July Species Act regulations.

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LEGISLATION DATE OF ENACTMENT APPLICABILITY TO THE PROJECT MINING ACTIVITIES Technical Health and Safety The purpose of these regulations is to define measures aimed at ensuring health and safety conditions of employees Regulations of Geological Decree No. 61/2006 of 26 December engaged in mining operations, including the application of technical measures that prevent accidents, lowers risks and Mining Activities and improves hygiene in the workplace in the mining sector.

Establishes the legal framework including the mechanisms and procedures for employing foreign nationals under the Hiring regulations of Foreign Petroleum and Mining Law, as long as those activities have been approved by the competent authority. Decree No. Nationals in the Oil Sector Decree n.º63 / 2011 of 7 December 63/2011 defines, that for short-term activities not exceeding 180 days, hiring of skilled foreign workers can be carried and Mining out without a permit from the Minister of Labour, provided the Ministry of Labour is notified within 15 days of the employee entering in the country.

Mining Act Law 14/2002 of June 26th Repealed

Law No. 20/2014, of 18 August ( "Mining Law"), which entered into force on the same date the Mining Act (Law No. 20/2014 of 18 August 14/2002 of 26 June) was repealed, intends to set the legal framework for the mining sector. It aims to ensure greater The Mining Law competitiveness and transparency, preserve the environment, ensure the protection of the rights and obligations of the holders of mining rights, safeguard national interests and benefit the communities.

Mining Law Regulations Ministerial Decree 28/2003 of June 17th Repealed

Mining Law Regulations Ministerial Decree 20/2014 of 18 August The purpose of this law is to regulate the use and re-use of mineral resources to ensure that the best and safest mining and socio-environmental practices are adhered to, allow for transparency and ensure the sustainable long term development of mineral resources and subsequent raising of revenues in favour of Mozambique.

Environmental Regulations Ministerial Decree 26/2004 of August This law defines the norms for the prevention, control, mitigation and compensation of adverse effects that mining for Mining Activities 20th activities might cause to the environment. It also provides specific environmental protection measures, defines the required environmental management instruments (e.g. the EIA process) and the use of licenses.

The new regulation of mining work addresses a major gap in the legislation on professional work in this area that has generated employment for Mozambican citizens, although there are also a significant number of foreign workers in the sector. To fill the gap in the legislation, the Mozambican Government has approved the Mining Work Regulation Mining Working Regulations Decree 13/2015 of 03 July through Decree 13/2015 of 3 July. The new regulation governs labour relations between mining and oil sector employers, including subcontractor companies, and their employees, whether Mozambican or foreign. It also provides for supervision of employment conditions.

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2.3. INTERNATIONAL CONVENTIONS

Mozambique is a signatory to a number of international conventions. Those applicable to this project are summarised in Table 2-2 below.

Table 2-2: International conventions applicable to the project. INTERNATIONAL CONVENTIONS Basel Convention on the Control of Transboundary Movements of Hazardous 1989 Wastes and their Disposal African Convention on the Conservation of Nature and Natural Resources 1968 (Amended)-Revised African Convention on the Conservation of Nature and Natural Resources (Amended Version) Not yet in force. Mozambique is a party 2003 and would be bound upon entry into force Constitutive Act of the African Union 2000 Bamako Convention on the Ban of the Import into Africa and the Control of 1991 Transboundary Movement and Management of Hazardous Wastes within Africa Convention on Biological Diversity 1992 Convention on International Trade in Endangered Species of Wild Fauna and 1973 Flora (Cites) UN Convention Concerning the Protection of World Cultural and Natural Heritage 1972 Kyoto Protocol to the UN Framework Convention on Climate Change 1998 Convention on Oil Pollution Preparedness, Response and Cooperation 1990 Convention on Wetlands of International Importance Especially as Waterfowl 1971 Habitat (RAMSAR) Stockholm Convention on Persistent Organic Pollutants 2001 UN Framework Convention on Climate Change (read with Kyoto Protocol) 1992 Vienna Convention for the Protection of the Ozone Layer 1985 International Convention on Civil Liability for Oil Pollution Damage 1992 Montreal Protocol on Substances that Deplete the Ozone Layer 1987 United Nations Convention on the Law of the Sea 1982 International Convention to Combat Desertification in Countries Experiencing 1994 Serious Drought and/or Desertification, Particularly in Africa Treaty Establishing the African Economic Community 1991 SADC Protocol on Mining 1997 African Charter on Human and Peoples’ Rights 1981 Convention on Safety of Life at Sea (SOLAS) 1974 Marpol 73/78, International Convention for the Prevention of Pollution From 1973, 1978 Ships, modified by the Protocol of 1978 Convention on the Prevention of Marine Pollution by Dumping of Wastes and 1972, 1996 Other Matter and the 1996 Protocol Thereto

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3. PROJECT DESCRIPTION

3.1. INTRODUCTION

3.1.1. Project Background Battery Minerals are currently working on two graphite projects in the Cabo Delgado Province, Mozambique. These are the Balama Graphite Project next to the Syrah Resources Graphite Mine, and the Montepuez Graphite Project north of Montepuez City. This ESIA, which commenced in June 2016, deals with the Montepuez Graphite Project.

The Montepuez Graphite Project comprises three deposits; Elephant, Buffalo and Lion. This ESIA assesses the impacts of mining the Elephant and Buffalo deposits only, as these are the two deposits that will each take between 10 to 15 years to mine. It is anticipated that the Lion deposit will only be mined in 15 years’ time, at which point updated environmental and social studies will be conducted, and an EIA submitted for a separate environmental licence to mine this deposit at a later time.

The company commenced with a drilling program in 2014. This confirmed the presence of graphite, and more extensive drilling determined that this graphite occurs in sufficient quantity and grade to be classified as a mineable resource2. The company then completed a Conceptual Study in February 2016. This was followed by a Definitive Feasibility Study (DFS) for the Elephant and Buffalo deposits. The DFS commenced in July 2016 and included infill resource drilling at the Elephant deposit to confirm the presence of mineralisation, to undertake additional resource estimations and to classify the Buffalo and Elephant deposits in terms of their JORC ratings. The DFS also included a final ore reserve estimate, and provided details on: life of mine planning; design and scheduling; transport route investigations and design; process plant infrastructure design and testwork; mine cost estimation and financial modelling; hydrogeological and ground magnetic surveys; hydrogeological and geochemical drilling (results of which are included in this ESIA); geotechnical drilling of the water storage dam and tailings storage facility; tailings storage facility and water storage dam design; geochemical estimation of acid mine drainage potential for both pits, waste dumps and stockpiles; graphite flake size assessment; mineralogical characterisation; geometallurgical studies of surface trench and drill core samples and finally ground survey control.

Battery minerals published its updated Mineral Resources and Ore Reserves Estimations from the DFS in February 2017 for the Buffalo and Elephant pits. It is estimated that 100 000 tonnes per annum of 96% total graphitic carbon (TGC) will be sourced from both pits and will produce four graphite flake products separated by size fraction (Table 3-1). The life of the mine for these two pits and the mining of the long term stockpile is estimated to be 25+ years (section 3.2.1 provides additional details on when each component will be mined).

Table 3-1: Graphite flake sizes and estimated annual production Product Size production per size fraction Annual Production +300 micron 8 780 t/a -300+180 micron 21 590 t/a -180+106 micron 31 150 t/a

2 The classification of ore reserves follows the JORC standard. The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ('the JORC Code') is a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves.

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-106+38 micron 38 490 t/a

3.1.2. Rationale for this Development Although only 60 kilometres from the city of Montepuez, the Montepuez Graphite Project area is sparsely populated and under-developed. The proposed project has the ability to increase economic growth via job creation and add to livelihood diversification, which will in turn improve food security and improve livelihoods. Furthermore, the project will generate revenue for the government of Mozambique via taxes and royalties. The implementation of the project will increase the economic growth in the area through:

 Utilising local resources for construction purposes;  Hiring local labour for both the construction and operational phases of the mine;  Aligning objectives with CPI investment law which will generate tax and royalty revenue for the government; and  Increase household economic dependency through the multiplier effects which will be generated from the proposed project.

These and other benefits are more fully assessed in the social impact chapter (section 8).

Utilization of local resources and hiring of local labour The mine will provide between 90 and 160 direct employment opportunities at the start of the construction phase (4 months). This will increase to over 600 opportunities at the peak of construction, which is estimated to last approximately 6 months before being reduced again. The total construction phase from start to finish will last approximately 18 months.

Employment of people from the local nearby villages will be given preference and if the required skill is not found preference will be given to other candidates in Cabo Delgado Province and then from other Mozambique Provinces.

Where specific expert skills and experience is required that is not available within Mozambique, expatriates will need to be recruited to fill these positions to ensure a safe and timely mine start- up. The selection, training and management of these human resources is critical for the successful start-up of the mine. Expatriates play a critical role in maintaining good safe operations due to their level of skill and experience, and also contribute to training and developing industry acceptable standards within Mozambique. Over the medium to longer term the expatriates shall be replaced with Mozambique trained nationals, and this transition is expected to be facilitated as the number of well-trained mining staff within Mozambique increases in response to the expected growth in the Mozambique mining industry. Well trained nationals can easily be attracted to other roles with other companies simply due to their expatriate training.

Locally hired staff will return home every evening using locally serviced transport and will fill positions such as security, assist with catering, site management, transport and laundry. Where relevant skills and qualifications exist, further roles can be offered. However, surveys have indicated that the local population has limited education, due to low employment opportunities, the low number of schools in the area, and the need for children to assist families and support their farming livelihood.

It is estimated that there will be approximately 250 direct employment opportunities during the operational phase.

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The company will advertise all positions locally and will recruit from the local community whenever suitably qualified individuals can be found. Suni Resources and Battery Minerals are Equal Opportunity Employers with respect to gender, race and ethnicity.

Employment Multiplier effect The employment multiplier measures the amount of direct, indirect and induced jobs created in the area. Whenever a new job is created, there is a chance that additional jobs may also be created via increased demand for local goods and services. Direct jobs are related to the specific industry, while indirect jobs are those that support the industry. Induced jobs are those that are a result of direct/indirect employee’s spending money in the community According to the U.S. Bureau of Economic Analysis Industry multiplier data, coal mining has an employment multiplier of 4.4 – meaning that for every mining job, 4.4 other jobs are created (see http://www.triplepundit.com/2011/05/employment-multiplier-green-economy/).

The expected multiplier from direct employment has therefore been conservatively estimated at four. This means that for every directly employed person, four additional employment opportunities are created. These opportunities arise from increases in personal tax revenues, disposable income and the development of a cash economy. Such increases are expected to result in the growth of small to medium sized business enterprises which will be established to support the new cash economy. This means that the 250 direct employment opportunities during the operational phase result in a further 1,000 indirect employment and associated business opportunities.

This multiplier is likely to be increased, as the company plans to create employment opportunities for local community members where it can by outsourcing individual services to the local community in a fair tender process to create entrepreneurialism. These are the indirect employment opportunities referred above and will include supply of goods including consumables and food, transportation arrangements as well as education and agricultural programs.

Positive Global Impact Graphite is a critical component of lithium-ion batteries, which are key components of green technologies for battery energy storage including power for electric vehicles. Since there is a global shift towards cleaner technology there is an increasingly higher demand for graphite of the quality found at this site, and this demand is expected to grow globally by 40% per annum. In addition, Suni Resources, through its parent company Battery Minerals, intend to produce environmentally friendly Lithium Ion Battery anode material, by using thermo techniques instead of acid or harsh chemicals in the formation process. Their aim is to provide full accountability, traceability and transparency from mine to battery.

3.1.3. Location of the proposed mining operations The Montepuez Project, located north-west of the city of Montepuez, lies approximately 200 km west of the port town of Pemba along an asphalt highway suitable for 16 wheel trucks. The road from Montepuez to the project site is a further 60km north-west along a degraded dirt road which will be upgraded as part of the Project’s construction phase. The road passes through a number of small villages en-route to the site (Figure 3-1). The license area (Exploration License 6216) covers approximately 12 500 ha, but the mining license area will be significantly smaller, at an estimated 3 711 ha.

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Figure 3-1: Locality map indicating the position of the exploration license area 6216 relative to nearby Syrah Resources Balama Project and Gemfields Ruby Mine.

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3.2. THE MINING METHOD

3.2.1. Mine Pits The mine layout is illustrated in Figure 3-2. The final surface footprint of the Buffalo pit is designed to be approximately 43ha and the pit is designed to 100m deep. The final surface footprint of the Elephant pit is designed to be approximately 25 ha and the pit is expected to be 135m deep.

A mining schedule for the Buffalo and Elephant deposits has been developed. Mining will commence at the Buffalo pit for the first four years. Conventional open pit mining methods will be used. A nine month pre-strip period is scheduled to provide enough waste for the construction of the Run-of-Mine (ROM) pad. Once the shallow ore from Buffalo has been mined, the mining fleet will move to Elephant in year 5. The strip ratio, which refers to the amount of overburden or waste material that needs to be handled to extract tonnage of ore, will be low (0.2 waste to ore ratio) for the first 7 years of production, and the mining rate will be approximately 1.7Mtpa (including ore and waste).

After 7 years, an additional mining fleet will be mobilised allowing ore to be extracted simultaneously from both deposits. The mining rate will increase from 1.8 Million tonnes per annum (Mtpa) to 3.2Mtpa and the strip ratio for the life of mine is estimated to be 0.6 (waste to ore ratio). Following the depletion and closure of the Buffalo and Elephant pits at the end of the 20 years of mine life, long-term stockpiles built over the mine life will be exclusively processed by the plant for an additional 4 years. Once these stockpiles deplete the mine will close.

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Figure 3-2: Final Infrastructure layout

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3.2.2. Site Preparation Prior to mining, vegetation will be cleared by mechanical means, stockpiled and disposed of. With the exception of the pit, all site vegetation will be removed immediately before construction and the cleared area will be limited to the foot print of the structure only i.e. no unnecessary clearing will be undertaken. The removal of vegetation at the pit will be progressive, with vegetation being cleared as the pit extends over the years of mining.

The means of disposal of cleared vegetation is unknown at this stage. It is likely that the removal of vegetation from site will be via one or a combination of the following: 1. Removal by local communities for natural resource use; 2. on-site wood chipping and mulching; 3. Burning of vegetation. Usually, value added processes are preferred in the disposal of vegetation and burning should be a last resort since this will contribute to the greenhouse gas emissions.

Topsoil will be removed and stockpiled to be used later for rehabilitation, as it contain the majority of the seedbank and is thus vital to the rehabilitation process.

3.2.3. Excavation, Blasting and Transport Conventional open pit mining methods will be employed using 90t excavators and 40t articulated dump trucks. The upper saprolite layer (thoroughly decomposed and porous rock that is produced in tropical and humid conditions) is expected to be freely dug down to an estimated 5-15m depth for the Buffalo and 10-20m depth for the Elephant pit. The fresh rock residing below the saprolite layer will then require blasting and further excavation using the 90t excavators.

Ore will be loaded onto 40t articulated dump trucks and transported to either the Waste Rock Dump (WRD), Long-Term Stockpiles (LTSP) or the ROM pad located centrally to the Buffalo and Elephant pits.

3.2.4. Removal of Overburden The Elephant and Buffalo pits will have a dedicated Waste Rock Dump (WRD) located to the east of each pit. Pit ramps will be orientated to ensure both ore and waste haulage distances are minimised to reduce mine cost (i.e. unnecessary fuel usage). The surface waste rock overburden will be removed from the pit using loaders and trucks and taken to a dedicated storage facility for later use in rehabilitation (as explained above). The amount of waste rock calculated for the Buffalo waste rock dump is 12.5 million broken cubic meters (dry) and for the Elephant waste rock dump is 11.4 million broken cubic meters (dry).

The waste rock dumps design includes the progressive rehabilitation of the waste dumps ongoing with mining operations. The lower slopes of the waste dumps will be rehabilitated as the dump grows in height. The final slope angle is designed with an 18 degree angle in the lower slopes and up to 37 degrees in the upper slopes. This design is considered compliant with Best Practicable Environmental Options (BPEO) as it reduces erosion and enables more effective rehabilitation of plant species on the slopes (Figure 3-3) with progressive development over the mine life, and will not result in lengthy and expensive mine closure.

The waste rock dumps have been designed to divert any run-off to the tailings storage facility to reduce the risk of surface water pollution.

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Figure 3-3: Cross section of the Montepuez Graphite Project waste dump design showing the angles of the slopes rehabilitated progressively with mining operations.

3.2.5. Processing The extracted ore will be processed on site through a number of steps which are described below and illustrated in Figure 3-7. A 3D model of the processing plant has been illustrated in Figure 3- 4 and a detailed map provided in Figure 3-5.

Figure 3-4: 3D model of the processing plant

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Figure 3-5: The proposed position of the process plant site, run-of-mine pad, long term stockpiles and road network.

Run-of-mine (ROM) handling and crushing: Front end loaders will load the ore from the stockpiles and feed the plant via a ROM bin. The ore is then crushed in the primary crusher at a nominal rate of 168 tonnes per hour for fresh ore and 180 tonnes per hour for weathered ore and transported via conveyor into the crushed ore bin.

Milling: Ore is reclaimed from the crushed ore bin and fed by conveyor into the primary mill at a nominal feed rate of 168 tonnes per hour. After primary milling the ore (now in a slurry with water) is passed over classification screens with any oversize particles recycled back to the primary mill for re-feed. The undersize material reports to the flotation circuit. The classification screens size the primary mill graphite product so that feed to the flotation circuit meets the optimum particle size of 850 micron for beneficiation of the graphite. The flotation feed is designed to ensure that all material will be 850 microns or less.

Flotation: Product from the milling circuit is fed into the rougher conditioning tank and then passes through a series of flotation stages (rougher and cleaner stages including regrind). The concentrate is then de-slimed by cyclones to produce a graphite concentrate in solution which reports to the concentrate storage tank. The by-product (or tails) from the flotation circuit is pumped to the tailings thickener.

Dewatering and drying: The concentrate stored in the concentrate storage tank is filtered and moved to a concentrate stockpile by front end loader. The filtered concentrate is then dried and screened to produce a number of graphite size products. Each dry graphite product will be stored in dedicated storage bins before being packaged into 1 tonne bulk bags ready for dispatch by road to port for shipment.

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Tailings: The tailings produced by the rougher and cleaner flotation cells are fed to the tailings thickener where non-biodegradable flocculent3 is added to accelerate the settling and separation of solids from water. The thickened tailings are then pumped via a pipeline and ring main4 to the Tailings Storage Facility (TSF) for disposal. Thickener overflow water gravitates to the process water pond and is recycled within the processing plant.

The TSF is designed to store 38.7 million tonnes of tails. The TSF incorporates an underdrainage system to reduce the pressure head acting on the compacted soil liner to reduce seepage, increase water recovery, increase tailings densities and improve the geotechnical stability of the embankments (Figure 3-6). Tailings will be discharged by sub-aerial deposition methods using spigots located at regularly spaced intervals on the embankment crest and partially around the east and west of the TSF perimeter. Supernatant water will be removed via submersible pumps and pumped back for re-use in the plant process circuit. An emergency spillway is included in the design for 1:100 year major storm event to prevent spillage and nearby contamination of soil and vegetation. A polishing pond has been included downstream of the TSF embankment for monitoring and managing the quality of the surface water discharge downstream of the facility, this water will be periodically sampled. A monitoring program has been included in the mine design including deep and shallow borehole water testing in close to and further away from the TSF (additional information on this is included in the Monitoring Programme that forms part of the EMPr).

Figure 3-6: Tailings Storage Facility infrastructure

3 Flocculent is used as a settling and filtration aid for concentrates and tailings. 4 An arrangement of pipes forming a closed loop into which the thickened tailings will be fed and whose points of draw-off are supplied by flow from two directions.

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Water Reticulation: Overflow from the tailings thickener will gravitate to the process water dam which is then recycled in the processing plant. Tailings dam return water will also be recovered via a decant system to be pumped directly to the process water dam for reuse in the process plant. Unprocessed storm water, plant run-off and a portion of the water used for general washing applications will be collected in a containment dam from where it will be pumped to the process water dam for recycling.

Reagents: Reagents used in the process will include the following:  Flocculent used as a settling and filtration aid for concentrates and tailings  Kerosene used as a collector for graphite (estimated quantity is small 100g/t)  Frother (light alcohol) (estimated 150g/t mill feed equivalent to 32L/h of liquid frother at 100% strength).

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Figure 3-7: General process flow block diagram of graphite including ROM handling, crushing and milling, flotation, concentrate drying and sorting of variable graphite products. (Source: Battery Minerals Study team).

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3.2.6. Product Export The end product of the mine processing will be graphite concentrate with a moisture content of 0.3%. The dried concentrate will be transported to Pemba in 1 tonne bulk bags loaded onto flat-bed trucks. Pemba has been chosen as it is 236 kilometres closer to the mine site than Nacala (Site to Pemba = 260 kilometres and Site to Nacala = 496 kilometres).

A load of 25 tonnes per flat-bed truck has been assumed. The product will be delivered to a storage area at the port of Pemba, prior to shipping. The mine is estimated to produce approximately 100,000 tpa of graphite product. The following relevant figures are anticipated at peak production:

Table 3.1: Daily truck volumes for product transport Item Amount Unit Annual production 100,000 tonnes Product delivery per week (annual production / 313)* 320 tonnes Payload per truck 25 tonnes Deliveries per day (Site - Pemba) 13 n/a Trips per day (Site - Pemba - Site) (Deliveries 2) * 26 n/a * deliveries six days per week.

A “trip” is defined as a one-way journey between the mine and Pemba or back from Pemba to the mine. As trucks will need to return for the next day’s load, the number of trips is double the number of deliveries. Once the graphite products arrive by truck in Pemba, Suni Resources will store the 1 tonne bulk bags filled with graphite product in a shed before shipping. The graphite product will be dried on site and must be kept dry during transit and storage. The graphite product will then be loaded into sea containers which are transported to the port and loaded onto a ship. Shipping frequency is anticipated once a fortnight. It is anticipated each bulk bag of graphite will be stored for approximately two to four weeks at the Pemba storage facility before shipping.

3.3. INFRASTRUCTURE REQUIREMENTS

3.3.1. Plant Site and Mine Services The process plant location is between the two pits and to the south. The mine services facility will be located to the east of the process plant to avoid dust from the ROM pad and ore processing facilities, as the prevailing winds are from the East.

3.3.2. Water Supply and Distribution A site wide water balance has been calculated as part of the Hydrogeological Assessment, in which the mine will require 39L/second of make-up water (3369.6m3 per day), this includes water for mining, process plant, village accommodation, waste rock dump and other uses. The water storage facility is designed with sufficient catchment to provide the year round water supply for the mine. The potable water component of this demand is estimated to be <1L/second of water (62.50m3/day). During early construction it is anticipated some water may need to be extracted from the ground of which total blow yield for the boreholes was calculated at 8.14L/second. This is based on the hydrogeological study which assessed 17 boreholes with a proposed abstraction rate of 2.6L/second.

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Water Storage Facility A Water Storage Facility (WSF) or dam will be used to catch and contain rainfall runoff from a natural catchment of approximately 40 000ha. The WSF will be situated near the downstream end of the catchment of the Mecopeti River, which is a right bank tributary of the much larger Messalo River. The WSF will provide raw water to the process plant. The design of the WSF comprises a multi zoned earth fill embankment with a spillway. The WSF is calculated to fill in a week of normal seasonal rains and will then overflow once filled. Sufficient water will be contained in the WSF for year round mine operations.

Under average climatic conditions, a run-off in the order of 8Mm3/yr is expected to discharge in the WSF, with the peak monthly flow occurring between January and March.

The dam wall is about 11 km upstream of the Messalo / Mecopeti confluence (Figure 3-8). The wall will be an earth-fill embankment with a non-overspill crest approximately 1 500m long and about 17 m high above river bed level. The capacity of the impoundment will be 2 Mm3 at full supply level (FSL), and the area inundated at FSL will be approximately 84 hectares (Figures 3-9 and 3-10).

There will be an uncontrolled spillway on the right bank of the wall, capable of accommodating flow rates of up to 2 600 m3/sec without the dam wall overtopping. A multi-level offtake upstream of the right flank of the wall will facilitate abstracting water for the mineral processing plant.

There is no provision in the design of the dam wall for releases from the impoundment into the river downstream, and water will flow from the WSF into the downstream part of the catchment only when the reservoir overflows via the spillway. However, because of the nature of the foundation materials it is anticipated that that seepage from the WSF into the Mecopêti River, estimated at 10 to 50 litres/sec (0.03 to 0.13 Mm3/month), will occur continuously after first fill (KP 2017b). It is assumed that the range in seepage rates is from a low water level in the impoundment, up to the FSL.

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Figure 3-8: Mecopeti River catchment and related mine infrastructure

Coastal & Environmental Services 47 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

Figure 3-9: Water Storage Facility on the Mecopeti River

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Raw Water Raw water will initially be pumped from the Messalo River along a 6.5km pipeline with a 250mm diameter to a raw water storage tank at the processing plant. A submersible 200kW pump will be placed in the Messalo River and used to draw water from the river. The maximum amount of water will be 300,000 m3/month dropping down to an average of about 60,000 m3/month make up water once the water starts to recirculate. It is expected that this scenario will be used full time for the first year and then remain in place for three years (as a back-up) until the WSF has been fully constructed and is functioning at capacity. Once the WSF has been proven and supplying water full time, the pipeline and pump will be maintained and used as back up if and when required. The pipeline may, in future, become part of a community project to reticulate water to nearby community farmers, etc.

After the first year, the raw water will be piped from the WSF to a raw water storage tank at the process plant. From this point, water will be provided for various distribution points including the processing plant, mine services and mine accommodation village (providing construction and operational phase accommodation to employees).

The raw water tank will also serve as the fire water storage tank with adequate secured capacity reserved at all times for the fire water requirements.

Potable Water A water treatment plant will be installed at the accommodation village to provide potable water to mine employees. Raw water will be pumped to the potable water feed tank from the raw water tank at the process plant. The tank will be insulated to limit temperature rises and will be designed to prevent insects and fauna entering into it.

The lower third of this tank will provide reserve fire water for the accommodation village.

The design of the potable water system for the 250 person accommodation village is based on water use per person of 350 litres per day.

Fire Water Fire water will be reticulated to each of the mine, process plant and village facilities and fire hydrants will be installed to provide coverage to all buildings and facilities.

Waste Water A waste water treatment plant and spray field will be located at the accommodation village. Waste water from the mine and processing areas will gravitate via buried PVC piping to strategically located underground pump stations which will feed a central pump station for final delivery to the treatment plant.

Waste water will be collected in a central holding tank at the treatment plant before being pumped to the water treatment plant for processing. The holding tanks will be enclosed to prevent the release of unpleasant odours.

All waste water will be treated to meet relevant regulatory standards before being discharged into the environment.

3.3.3. Power Power will be generated on-site by six 1.4MW high-speed generators for a total installed continuous capacity of 8.4 MW. It is expected that four generators will run simultaneously with one on standby and one undergoing maintenance at any one time. The engines will be diesel fired and housed in a power station located at the process plant. The electrical output of the power station will be 11kV, 3 phase, 50 Hz. The expected average power draw for the project is 4.2 MW.

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3.3.4. Haul Roads and Access Roads The following road types will be required:

 Haul road –25m wide  Major access road - unsealed, 6m wide carriageways  Minor access road - unsealed, 5m wide carriageways

Haul roads used to transport product from the pits to the Long-Term Stockpile (LTSP) and then on to the processing plant will be 25m wide, with select embankment where required. In addition, the road will have 2m wide V-drains on each side.

Major access roads - Initially existing access roads from Montepuez to the project area will be fully assessed and made safe through appropirate repairs and upgrade works. However, in some instances by-pass roads will need to be constructed to avoid sensitive areas such as village dwellings that are too close to the road or because roads are not appropriate for repairs and upgrading.

Site access roads will comprise of unsealed, 6m wide carriageways with 1m shoulders on either side. Side drainage for all weather access will be constructed. Borrow pits will be required to supplement fill quantities to construct the access roads.

Minor access roads - Minor access roads to the TSF, WSF and powerlines will be 4-5m in width and made from compacted gravel.

Geotechnical investigations carried out on the plant site and within the TSF and WSF during the feasibility study have identified suitable material for road construction within the site. In addition, existing borrow pits will be used along the haul road once the relevant permits have been obtained.

3.4. ANCILLARY INFRASTRUCTURE

3.4.1. Accommodation Village An accommodation village will be constructed approximately 3km east of the processing plant. During the construction phase it is estimated that at its peak, approximately 634 workers will be employed and ~500 of these workers will reside on site at the accommodation village. The accommodation village will be constructed in three stages:

 Stage 1 Fly Camp: comprises the installation of the village office and administration facilities, dining hall and accommodation to house the early construction personnel. This is estimated to take 4 months.  Stage 2 Construction Contractors Camp: comprises the construction of the contractor’s accommodation which will comprise accommodation units, ablutions and laundries as well as installed power, water and sewerage infrastructure. These facilities will be hired out to the contractors for the duration of this phase (estimated to take 12 months) and will be demobilized at the completion of Stage 2.  Stage 3 Accommodation Village: comprises construction of the permanent accommodation village and associated facilities to be used by the operational personnel and contractors working at the mine. The accommodation village to be constructed will consist of a modular form of housing accommodation comprising of sandwich foam panel walls, clad roof, concrete floor pads, air conditioning and steel clad verandas. The facilities will include accommodation rooms, ablutions, recreation areas, mess, laundry and administration buildings (Figure 3-11).

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The Stage 1 Fly Camp, Stage 2 Construction Contractors Camp and Stage 3 accommodation village will all be located within the permanent accommodation village area perimeter fence.

Initial construction accommodation will comprise of low impact, transportable container housing which will be replaced with permanent accommodation within the first 8 months.

Figure 3-10: Phase 3 of the accommodation village

3.4.2. Sewage Treatment During the project life cycle, the proposed facility will not have access to a municipal sewage reticulation network and will thus have to rely on the use of septic tanks during construction. A packaged sewage treatment plant will be built during the construction phase to cater for the sewage emanating from the facilities during the operational phase.

It is intended that the packaged sewage treatment facility will be located at a minimum of 200m from the accommodation village and will be constructed in an earth bunded area located out of sight and downwind of the accommodation. It is proposed that the plant will have a capacity to treat effluent generated from 300 persons at a rate of 310litres (0.31m3) per person per day, and will have a design capacity of 100 m3/day. It will be equipped with an audible and visual alarm system that will be triggered in an event of a malfunction. Sewage from the mine and processing areas will be gravity fed by PVC piping to strategically located underground pump stations, which in turn will feed into a single central pump station before final delivery to the sewage treatment plant at the accommodation village. The sewage treatment plant will typically consist of primary settling, aeration, clarification and irrigation tanks. Effluent will be dosed with chlorine and alum or ferric chloride to allow disposal by spray irrigation. The plant

Coastal & Environmental Services 51 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 and spray areas will be fenced off and chemicals provided in containers will be stored in a secure bunded storage area.

Sewage sludge generated will be disposed in separate sludge drying beds. A lined pond will be provided to capture any emergency overflow from the holding treatment plant. Overflow from the sludge ponds and the emergency overflow pond will be transferred to the inlet works of the sewage treatment plant.

3.4.3. Diesel Fuel storage and filling stations Fuel will be required to supply the power station, generator tanks, processing plant dryer and refuelling of heavy and light vehicles. As such, a bulk storage facility will be provided by a contractor and will comprise of eight 68 000L self-contained diesel storage tanks. This amount of fuel will be sufficient to supply the operational needs of the site for 14 days at a consumption rate of 250 000L per week. To ensure the continuous supply of fuel, ten loads of fuel will be delivered to the site each week and will be supplied by the contractor responsible for maintaining the fuel unloading, storage and delivery systems.

A sludge pit, sump and pump will be provided to recover any minor spillage with contaminated oily water being returned to the Process Plant Tailings Thickener for recycling.

3.4.4. Sand Quarry Sand will be required during the construction phase and this will be sourced from a sand quarry within the concession. It is estimated that approximately 3 500 cubic metres of sand will be extracted from the quarry during the construction phase.

3.4.5. Landfill site Considering the remote nature of the project site, it will be necessary to consider the construction of a landfill facility at the mine site for the disposal of non-recyclable materials. This option is considered to be the Best Practicable Environmental Option (BPEO) over the medium- to long-term and is the preferred alternative when compared against the disposal at an existing landfill site given the remote location of the mine site and apparent challenges associated with management of solid wastes in Mozambique. Further consideration of the landfill option will need to take cognisance of the proximity and potential impacts to local surface and groundwater resources. Guidance on the design and location of an on-site landfill for general waste from the mine is provided in Appendix E of the Waste Specialist Report.

3.4.6. Mine Buildings and Facilities Additional mine buildings and supporting infrastructure are listed below:  Ablution building  Administration office  Bulk lubricant and hydrocarbon storage facility  Change house (toilets and clothes washing facilities)  Control Room and communications building  Core logging facility  Emergency Response area  Explosive storage  Gatehouse and security  Heavy and light vehicle refuelling facility  Heavy vehicle wash down facility  Heavy vehicle workshop  Laboratory  Light mobile equipment workshop  Lunch room

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 Mine contractors medical facilities  Mine office  Oil water separation facility  Plant office  Reagent store  Sample preparation  Site medical facility  Training Room  Tyre change facility  Vehicle wash down facilities  Warehouse  Water truck filling  Workshop including mechanical workshop, boiler maker workshop, electrical workshop, instrument room, tool store, hydraulic store, dirty equipment area and repair equipment area.

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4. DESCRIPTION OF THE BIOPHYSICAL ENVIRONMENT

4.1. INTRODUCTION This chapter provides a description of the natural environment that could potentially be impacted by the proposed development. The descriptions are based on the assessments presented by the various specialists who undertook baseline studies for this project.

4.2. PHYSICAL ENVIRONMENT

4.2.1. Climate Since there is no weather station at the project site, climate data for Montepuez City, the nearest town to the project site (approximately 60km via road) was used.

The climate in the project area is classified “Aw” (Tropical Savanna Climate) by the Köppen Climate Classification subtype (www.weatherbase.com). The climate type is characterized by mean temperatures above 18oC in every month of the year with a pronounced dry season with less than 60mm of rain during the driest month.

The wet season occurs from December to April when approximately 75% of the total annual rainfall occurs, and the dry season extends from May to November. The annual precipitation for Montepuez is 940mm. January usually receives the most precipitation with an average of 240mm. September is usually the driest month receiving little to no precipitation (www.weatherbase.com).

The average temperature for the year in Montepuez is 24.4°C with the warmest month occurring in November with an average temperature of 26.7°C. The coolest month is July, with an average temperature of 21.1°C. Table 4-1 provides a summary of the climate data collected over the previous 30 years.

Table 4-1: Monthly average weather data (Source: www.weatherbase.com).

TEMPERATURE Annual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average Temperature 24°C 25°C 25°C 25°C 23°C 23°C 21°C 21°C 21°C 23°C 24°C 26°C 26°C

Average High Temperature 30°C 30°C 30°C 30°C 30°C 29°C 27°C 27°C 28°C 30°C 32°C 33°C 32°C

Average Low Temperature 18°C 20°C 20°C 20°C 19°C 17°C 15°C 15°C 15°C 16°C 17°C 19°C 20°C

PRECIPITATION

Average Precipitation (mm) 940 240 210 200 60 ------40 150

HUMIDITY

Average Relative Humidity 66 78 79 79 76 70 67 62 56 54 52 56 67 (%)

Average Dew Point 16°C 20°C 21°C 21°C 20°C 16°C 14°C 12°C 11°C 12°C 13°C 16°C 18°C

4.2.2. Topography The general landscape at the Montepuez exploration site consists of a flat to gently undulating topography in the southern region that becomes slightly steeper in the north, and is bisected by a number of drainage lines that open into dambos (seasonal wetlands) in the low lying areas (Plate 4-1). The altitude varies from 418m at the highest point to 381m at the lowest point, showing a small altitudinal variation of 37m (Figure 4-1).

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Plate 4-1: Photograph illustrating the typical topography of the Montepuez site.

Figure 4-1: Elevation profile of the Montepuez site from the northern boundary to just south of the “Lion” deposit

Coastal & Environmental Services Suni Resources S.A, 55 Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.2.3. Geology North-eastern Mozambique is predominantly underlain by Proterozoic rocks that form a number of gneiss complexes that range from Palaeo to Neoproterozoic in age (Boyd et.al., 2010).

The Montepuez project is located within the Xixano Complex, in close proximity to the tectonic contacts of the Nairoto Complex to the north and Montepuez Complex in the east. The Xixano Complex includes a variety of metasupracrustal rocks enveloping predominantly mafic igneous rocks and granulites that form the core of a regional north-northeast to south-southwest trending synform. Local geology comprises dolerite, psammite, meta sediments, amphibolite with graphitic meta sediments. Graphite is hosted within graphitic schist and quartz-feldspar gneiss.

Two deposits comprise the Montepuez project and are referred to as Buffalo and Elephant, respectively .The deposits contain disseminated graphite units dispersed within gneiss, psammite, dolerite and amphibolite units. The graphite forms as a result of high grade metamorphism of organic carbonaceous matter, the protolith in which the graphite is formed. It can form as globular carbon, composite flakes, homogenous flakes or crystalline graphite.

4.2.4. Soils According to the soils map created by the Food and Agriculture Organization (FAO) the study area falls into an area that is characterised by Chromic Luvisols. However, the field survey also indicated that there are Fluvisols present along the river channels and the river banks and Gleysols present in seasonally inundated dambos. Figure 4-2 illustrates the distribution of these soils within the study area.

Luvisols Luvisols are defined as having an argillic (or clay like) sub soil (B Horizon) and the surface soil being depleted of clay. The study area is specifically comprised of Chromic Luvisols, which is the dominant soil type and is characterised as having a strong brown to red B horizon. Luvisols are fertile soils that are considered to be suitable for a wide range of agricultural uses such as the growing of crops and the grazing of animals (FAO, 1998). These soils are the dominant soils within the study area.

Gleysols Gleysols that occur in the subtropics are associated with alluvial soils and show hydromorphic properties. Gleysols are formed by waterlogging at a shallow depth for all or part of the year. The textural component of this soil is often sandy or loamy and sometimes clayey. They have a high potential for growing rice and are suitable for other crops if their water table is lowered by draining. This soil type is located within the seasonally inundated dambos associated with the Open Acacia Savanna vegetation type.

Fluvisols Fluvisols are developed from recent alluvial deposits and typically don’t have any diagnostic horizons. These soils were located along the river channels and drainage lines within the study area. Most Fluvisols are fertile and provide important grazing areas along the narrow strips on either side of the streams.

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Figure 4-2: Soil map showing the distribution of the soil types within the study area.

Coastal & Environmental Services 57 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.2.5. Surface Water Catchment The area of the Mecopeti catchment at its confluence with the Messalo is estimated to be 455 square kilometres (km2), 400 km2 of which – 88% of the total area of the Mecopeti catchment - is commanded by the WSF (KP 2017).

The mainstem channel of the Mecopeti is approximately 59 km long from its confluence with the Messalo to its headwaters, and gains about 165 m in elevation along its course, with an average gradient of about 0.3%.

South of the WSF there is evidence5 of extensive clearance of the natural vegetation for agriculture, the large majority of which is east of the mainstem channel.

Despite the highly seasonal nature of the river there is evidence of fishing in the catchment. Plate 4- 2 shows a fish trap – comprising a fish fence and woven tunnel traps - about 200 m upstream of the upstream limit of the WSF full supply line.

Plate 4-2: Fish trap upstream of the WSF

4.2.6. Rainfall and Surface Water Runoff Mean annual precipitation (MAP) on the Mecopeti catchment is 912mm, synthesised from the 33- year record (1979 to 2012) from the Montepuez weather station (KP 2016), and the mean annual runoff (MAR) from the catchment at the dam wall is conservatively estimated to be 8 million cubic metres (Mm3)6 (KP 2017a). Significant surface runoff is expected to be generated from the catchment only during the wet months of December through March, possibly extending into April.

Rainfall during the 100-year annual return interval dry year could be expected to be reduced to 445mm, and the annual runoff to 3.6 Mm3. Rainfall during the 100-year return interval wet year could be as much as 1 425mm, producing 11.4 Mm3 of runoff.

On the same basis the MAR from the portion of the Mecopeti catchment between the dam wall and the Messalo could reasonably be supposed to be around 1 Mm3, and the runoff from the total catchment at the Mecopeti / Messalo confluence n at its confluence with the Messalo a little less than round 9 Mm3.

5 Google EarthTM images, October 2012. 6 Estimated using a rainfall/runoff ratio of 2%, based on analysis of gauged flow rates in the Messalo River, which indicated a rainfall/runoff coefficient ranging from 4% to 7% (KP 2017b).

Coastal & Environmental Services 58 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Like all the watercourses in the vicinity of the mine site the Mecopeti is highly seasonal. Surface flow is normally only visible during and shortly after the months of significant rainfall, but it is probable that hyporheic flow – flow beneath the surface of the river bed – will continue for at least part of the dry season, and the substrate will remain wet. Maintaining moisture in the substrate of a seasonal river channel, in which here is no surface flow, is important because the eggs of some fish – notably the annual fish of East Africa, which are likely to inhabit the Mecopeti River - can remain viable in the moist substrate for long periods of time in the substrate. Similarly the eggs of some aquatic insects, the larvae of which are a source of food for fish, can also survive for considerable periods of time in the moist substrate. Moisture in the river bed will also assist in maintaining in-channel and riparian vegetation, which provides habitat when the river is flowing.

Plate 4-3 shows water in an excavation in the river bed about 2 km downstream of the dam wall. The purpose of the excavation is not known, but could have been a source of water for hunters.

Plate 4-3: Water in a hole excavated in the river bed downstream of the WSF dam wall

4.2.7. Surface Water Quality There are currently no surface water storage areas in the study area. With the exception of the Messalo River, all of the rivers tributaries within the site are non-perennial in nature. The surface water quality taken from the Messalo River was found to be of better quality than the groundwater samples and is compliant with the South African National Standards (SANS) for drinking water.

Coastal & Environmental Services 59 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.2.8. Hydrogeology The saprolite materials located beneath the surface soil comprises remnant underlying rock which has been weathered when it was exposed to tropical to sub-tropical environmental conditions. The contact between the saprolite and harder underlying bedrock can sometimes yield water seepage and in some cases even sustainable amounts of groundwater depending on the rock permeability and ground water recharge in the area and extent of water supply. This was observed in most of the boreholes that were drilled. Water was encountered in the first 30m meters but once the fresh un- weathered hard rock was intersected, only deeper hard rock fractures yielded additional water. Due to the hard rock nature of the geology in the area weathered zones were difficult to locate. The weathered zones are associated with geological features such as the metamorphosed zones between intrusive rock (dykes) and fault zones between two different geology types (contacts); or where shearing took place within a geological unit.

4.2.9. Ground Water Quality Sixteen (16) water samples were collected and sent to an accredited laboratory in South Africa for micro and macro analyses. The chemistry data serves as baseline dataset for future comparison. The chemistry was compared to World Health Organization (WHO) 2011 4th edition standards and SANS 2011 Edition 1 standards (Refer to Error! Reference source not found. and 18-2 in the Hydrogeological Specialist Investigation). In addition to the initial 16 water samples submitted, an additional sample was sent in for micro and macro analyses by the client for the community donated borehole in Nqueuene in which a hand pump was installed.

All of the samples had certain chemical determinants that did not comply with the potable water standards set by the WHO 2011 guideline and 12 of the 17 samples were non-compliant with the SANS guidelines. Elevated concentrations of fluoride, sulphide, manganese and sodium were detected as primary constituents of the water with chemistry influenced by the local rock types. In addition, some samples had elevated levels of nickel, arsenic and nitrate.

Aquifer vulnerability is defined as the tendency or likelihood of contamination to reach a specified position in the groundwater system after introduction at some location above the uppermost aquifer. Aquifer susceptibility is defined as the qualitative measure of the relative ease with which a groundwater body can be potentially contaminated by anthropogenic activities and includes both aquifer vulnerability and the relative importance of the aquifer in terms of its classification.

With the available information the local aquifer (unconfined) can be classified as a “minor poor fractured rock aquifer” as defined by Parsons (1995). The water quality of the sampled boreholes in the region is in most cases not suitable for human consumption due to high total dissolved solids (TDS) and chloride values, thus the aquifer is classified as a minor poor aquifer.

The low human population and activity in the region contributes to the aquifer systems in the mine lease area being least vulnerable to be contaminated and the susceptibility of the aquifer is low. However it should be noted that the aquifer water quality is already in a moderate to poor state before any disturbance has taken place.

4.2.10. Acid Mine Drainage Potential Geochemical conceptual and numeric modelling of the WRD, TSF and the temporary Low Grade Stockpile (LGSP) found that the potential for the contamination of groundwater from Acid Mine Drainage (AMD) is low provided simple remediation methods are implemented.

The model determined that simple phytoremediation methods are deemed sufficient to limit the leachate from seeping to groundwater surrounding and on top of the TSF upon cessation of mining negating the need for the TSF to be lined.

Coastal & Environmental Services 60 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 The waste rock dump poses a low risk with regards to the production of AMD and associated metal- and sulphate-rich leachate since the rock leachate has a pH 5.6, which is slightly acidic but marginally higher that the pH of rainwater at 5.5. In addition, although the salinity is evaluated to be elevated, mostly due to the presence of dissolved calcium and bicarbonate, the sulphate and dissolved metal concentrations are below regulatory guideline values.

The geochemical impacts from the low grade stockpile are sufficiently low that a liner system would not be required. The model predicts a leachate pH for the ore stockpile of 4.7. This value can be considered mildly acidic. The model indicates that none of the metals are in excess of regulatory guideline values, although the sulphate concentration is shown to be elevated. Simple remediation methods such as phytoremediation are deemed sufficient to limit the leachate from seeping to groundwater. Ground water sampling will be conducted approximate to the WRD, TSF and temporary LGSP to monitor any potential leachate into the groundwater system during mine operations.

4.2.11. Land Use The study area is comprised predominantly of natural vegetation that is used primarily to harvest selective natural resources (such as building materials, wild foods and medicine) and as a place to hunt wild animals such as kudu, elephant, suni and other small mammals and birds.

There are a few machambas (approximately 69) in the south eastern corner of the study area and these are used to grow maize and sesame seeds. Further details on the crops grown and the agricultural practices used in the area are discussed in section 5.5.2.

4.3. VEGETATION

The vegetation present within the study area is a complex mosaic of Tall Open Undifferentiated Woodland, Riparian Woodland, Bamboo Thicket, Undifferentiated Forest, Open Acacia Savanna, Open Palm Savanna and a few small patches of Tall Open Miombo Woodland.

The vegetation is generally considered to be intact and while there is evidence of some harvesting of natural resources by nearby communities, this is generally of low density and has not significantly altered the vegetation types. There is evidence of a large amount of animal activity in the license area, including records of elephant activity recorded by the presence of dung, footprints and digging for water in the drainage line downstream of the potential water storage facility. The presence of elephants within this ecosystem is likely to play an important role in maintaining the open woodland and forest that was observed within the study area. This species, together with the antelope (including Kudu), monkeys and baboons also play an important role in the dispersal of a number of recorded plant species in the study area.

Each vegetation type has been described below and their distribution illustrated in Figure 4-2.

4.3.1. Vegetation Descriptions

Riparian Woodland The Riparian Woodlands within the study area are characterised by a closed canopy of 75-100% cover with a tree canopy of up to 20m and emergents that reach up to 40m (Plate 4-4). The understorey is typically comprised of a herbaceous layer with some grass cover in areas where the canopy is more open. This vegetation type is linear and is typically 5-15m wide on either side of the rivers, streams and drainage lines. It is intact within the study area which is surprising given that in other areas of Mozambique this vegetation is often cleared to plant crops. Common species that occur within this vegetation type include Millettia bussei, Markhamia obtusifolia, Artabotrys brachypetalus, Dalbergia arbutifolia, Hyphaene petersiana, Terminalia stenostachya, Diospyros kirkii, Borassus aethiopum, Ficus sycamorus, Khaya anthoteca, Stereospermum kunthianum, Boscia mossambicensis, Margaritaria dioscoidea var triphosphaera and Garcinia livingstonei.

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Plate 4-4: Typical Riparian Woodland.

Tall Open Undifferentiated Woodland The Tall Open Undifferentiated Woodland is characterised by a canopy cover of 50% with an average tree height of 10m -15m. Emergent trees reach up to 20m (Plate 4-5). The understorey is comprised of a grass layer with a cover of approximately 90%, indicating there is sufficient light penetration through the sparse canopy for grasses to thrive. Although this vegetation type resembles that of Miombo Woodland (described below) it is missing the key Miombo Woodland species such as Brachystegia species and/or Julbernardia globiflora. Common species found within this vegetation type include Millettia stuhlmannii, Markhamia zanzibarica, Combretum zeyheri, Annona senagalensis, Sclerocarya birrea, Lannea schweinfurthii, Sterculia appendiculata, Bauhinia petersiana, Tamarindus indica, Bolusanthus speciosus and Diplorhynchus condylocarpon. This vegetation type is often interspersed with small clumps of bamboo.

Bamboo Thicket There are large, almost impenetrable dense clumps of bamboo (Oxytenanthera abyssinica) thicket within the northern section of the project site near the proposed pits and the waste rock dump locations. These clumps are interspersed with a few small to medium size trees such as Combretum species, Lannea antiscorbutica, Xeroderis stuhlmannii, Sterculia appendiculata and Markhamia zanzibarica shrubs. Within this vegetation type, ground cover is low due to competition for space and light. Plate 4-3 provides an example of what this vegetation type looks like.

Since this vegetation type occurs within the Tall Open Undifferentiated Woodland which forms a mosaic that is difficult to differentiate on the aerial imagery, these two vegetation types have been mapped as a mosaic and called Tall Open Undifferentiated Woodland/Bamboo Thicket on Figure 4- 5.

Plate 4-5: Typical Tall Open Undifferentiated Woodland (left) and Bamboo Thicket (right)

Coastal & Environmental Services 62 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Open Acacia Savannah The Open Savannah is characterised by open, hygrophilous grassland with scattered trees that occur on dark and expansive soils, suggesting they are waterlogged during the wet season and that these areas are possibly seasonal wetlands or dambos (Plate 4-6). The average canopy height of the trees is 10m with a canopy cover of 20% and a groundcover, dominated by grasses, of 100%. Dominant tree species include Bauhinia galpinni, Acacia nigrescens, Diplorhynchus condylocarpon and Terminalia cf boivinii.

Plate 4-6: Typical Open Savannah (left) and dark expansive soils found within the Open Savannah that suggest these areas are seasonal wetlands (dambos) during the wet season (right).

Open Palm Savanna This vegetation type was found along the tributary that runs west of the proposed water storage facility. Although outside of the license area, this vegetation was sampled for comparative purposes. The Palm Savanna is similar to the Acacia Savanna in that it is characterised by open grassland with scattered trees (Plate 4-7). However, in this instance the grassland does not appear to be hygrophyllis during the wet season and the dominant trees are palm trees (Borassus aethiopum and Hyphaene petersiana). Other common species recorded in this vegetation type are Albizia sp. and Boscia sp.

Plate 4-7: Open Palm Savanna

Coastal & Environmental Services 63 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Tall Open Miombo Woodland Tall Open Miombo Woodland occurs as small localised and intact patches within the license area. However, it is more prevalent as secondary woodland, impacted on by anthropogenic activities, especially along the access road between Nquenene Village and Mavale Village. This vegetation type is characterised by the presence of Julbernardia globiflora, Bracchystegia boehmii and Brachystegia spiciformis and has a canopy cover of 50% with an average tree height of 10m -15m. Emergent trees reach between 15 and 20m. As with the Tall Open Undifferentiated Woodland, the understorey is comprised of a grass layer with a cover of approximately 90%, indicating that there is sufficient light penetration through the sparse canopy for grasses to thrive. Other common species present within this vegetation type include Bauhinia petersiana, Bolusanthus speciosus, Diplorhynchus condylocarpon, Pterocarpus rotundiflora, Rourea orientalis, Tamarindus indica and Terminalia cf. sambesiaca.

Undifferentiated Forest There is a small patch of Undifferentiated Forest at the site of the proposed water storage facility. Although there were no species that were unique to this system and that are not found in the surrounding woodlands, its structure (i.e. closed canopy and large, tall trees) does provide an important habitat for faunal species such as baboons, certain bird species and elephants that use the general area. This vegetation type was characterised by a canopy with 90% cover, trees that are 20-25m tall with a 10m sub-canopy and an understory of herbs such as Alchornea laxiflora with a much more sparse grass cover which in some instances was completely absent (Plate 4-8). Common species recorded within the site include Albizia versicolour, Sterculia quinqueloba, Cordia gotezei, Tabernaemontana elegans, Diospyros mespiliformis and Monodora junodii.

Plate 4-8: Undifferentiated Forest

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Figure 4-3: Vegetation map of the Montepuez site showing the extent and range of the vegetation types found around the assessed area.

Coastal & Environmental Services 65 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.3.2. Sensitivity assessment of the study area The sensitivity map was developed by identifying areas of high, medium and low sensitivity using the following to guide the decision making process (Figure 4-4).

Areas of high sensitivity include:  Ecological process areas such as rivers, wetlands and streams that are important for ecosystem functioning, including surface and ground water as well as animal and plant dispersal;  Areas that have a high species richness;  Areas that are not significantly impacted, transformed or degraded by current land use; and  Areas that contain the majority of species of special concern found in the area and may contain high numbers of globally important species, or comprise part of a globally important vegetation type.

Areas of medium sensitivity include:  Areas that are widespread outside of the study area and are not threatened by project activities;  Areas that still provide a valuable contribution to biodiversity and ecosystem functioning despite being degraded;  Degraded areas that still have a relatively high species richness; and  Degraded areas that still contain species of special concern.

Areas of low sensitivity include:  Areas that are highly impacted by current land use and provide little value to the ecosystem; and  Highly degraded areas that are unlikely to harbour any species of special concern.

The Riparian Woodland and Undifferentiated Forest both have a high species diversity and occur as localised patches throughout the study area. In addition, both of these habitats provide important refugia for faunal species and the riparian areas function as natural corridors for the dispersal of seeds and movement of animal species, ranging from amphibians and fish to elephants, antelope and predatory species. As such, these two vegetation types have been classified as areas of High Sensitivity.

The Open Palm Savanna and Open Acacia Savanna are associated with the riparian areas and appear to be inundated during the wet season, creating seasonal wetlands or dambos. Although species diversity for both of these vegetation types is low, they are unique and intact ecosystems within the landscape and it is likely that they provide important breeding grounds for faunal species such as birds and amphibians. As such, they have been classified as areas of Moderate Sensitivity.

Although the Tall Open Undifferentiated Woodland has a high species diversity and is relatively intact, this vegetation type appears to be fairly widespread outside of the study area. As such it was determined to be of Moderate Sensitivity.

Areas that have been cleared for farms (Machambas) have been transformed by the current land use. These areas don’t contribute towards ecosystem functioning and are typically comprised of pioneer and weedy species. These areas have therefore been assigned a Low Sensitivity.

Coastal & Environmental Services 66 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

Figure 4-4: Sensitivity map of the study area

Coastal & Environmental Services 67 Suni Resources Montepuez Graphite Mine Draft Environmental and Social Impact Assessment – August 2017

4.3.3. Conservation Status of plant species The total species list from the site visit was assessed against the International Union for Conservation of Nature (IUCN) Red Data list, the Mozambique, Malawian and Zambian Red Data List and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).The red data lists for surrounding countries were consulted since the Mozambican Red Data List was compiled in 2002 and is therefore outdated and possibly does not reflect the status of all the potential plant species. The results are summarised in Table 4-2 and the full species list appears in Appendix A of the botanical report.

Table 4-2: Species of Special Concern Status Number of Species Species IUCN Red Data List (international) Vulnerable 1 Millettia bussei Lower Risk/Near Threatened 2 Dalbergia melanoxylon, Pterocarpus angolensis, Least Concern 2 Borassus aethiopum, Bombax rhodognaphalon Unknown (no information 126 Refer to Appendix A available) Mozambique Red Data List Vulnerable 2 Sterculia appendiculata Sterculia quinqueloba Lower Risk-Near Threatened 1 Afezelia quanzensis Lower Risk-Least Concern 2 Millettia stuhlmanii, Khaya anthoteca Data Deficient 1 Millettia bussei Zambian Red Data List Vulnerable 1 Dalbergia melanoxylon Lower Risk-Near Threatened 1 Khaya anthoteca Malawian Red Data List Vulnerable 3 Afzelia quanzensis, Dalbergia melanoxylon, Pterocarpus angolensis Lower Risk-Least Concern 2 Pteleopsis myrtifolia, Cordyla africana CITES Appendix I 0 N/A Appendix II 2 Dalbergia melanoxylon, Dalbergia boehmii

Further information on the species listed as Vulnerable or Lower Risk/Near Threatened has been included below:

Afzelia quanzensis This species is found from Somalia down to Kwa Zulu Natal in South Africa and is listed as Lower Risk/Near threatened on the Mozambique Red Data List and as Vulnerable on the Malawian Red Data List. This species is widespread throughout Mozambique and the main threat is the illegal harvesting of wood to make wood carvings and for construction. It is likely that habitat loss is also a threat to this species survival. This species was associated with the Tall Open Undifferentiated Woodland in the study area.

Dalbergia melanoxylon

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This species is listed as Lower Risk/Near Threatened by the IUCN and as Vulnerable by the Zambian Red Data List. It is a fairly widespread species and is found in at least 26 sub-Saharan countries from Angola to Mozambique and Tanzania and up to Uganda, Ethiopia and Chad to name but a few of the countries in which it occurs (World Conservation Monitoring Centre, 1998). This species occurs in a range of woodland habitats and as a species is under no imminent threat of extinction. However, it is widely used in the wood carving industry to make curios as well as to make musical instruments. High levels of exploitation have resulted in large individuals becoming scarce, causing concern over genetic erosion in many populations. This species was associated with the Tall Open Undifferentiated Woodland and Tall Open Miombo Woodland in the study area.

Khaya anthoteca Khaya anthoteca is listed as Lower Risk/Near Threatened on the Zambian Red Data List and as Lower Risk/Least Concern on the Mozambique Red Data List. This species occurs in Tanzania, Malawi, Zimbabwe, Zambia and Mozambique and occurs in riverine and riparian forest. This species was common along the drainage lines within the study area.

Millettia bussei This species occurs in Mozambique and Tanzania and is described by the IUCN as being restricted to areas of dry coastal forest and is listed by the IUCN as Vulnerable (Lovett and Clarke, 1998). However, this species was present within the study area and was found along drainage lines and rivers. According to the IUCN categorisation, species that are vulnerable face a high risk of extinction in the wild in the medium term. This species was associated with the Riparian Woodland found along the drainage lines in the study area.

Pterocarpus angolensis Pterocarpus angolensis is distributed in woodland areas throughout East and Southern Africa in countries such as Mozambique, Botswana, Malawi, South Africa, Zambia and Zimbabwe (World Conservation Monitoring Centre, 1998). The major threat facing this species is over harvesting for timber. In most parts of its range there is no control over the rate of harvesting, including Mozambique where this species is widely used for construction purposes. This species is listed by the IUCN as Lower Risk/Near Threatened and as Vulnerable on the Malawian Red Data List. Although not listed on the Mozambique Red Data List it should be considered as a species of conservation concern given its IUCN status. This species was associated with the Tall Open Undifferentiated Woodland and Tall Open Miombo Woodland in the study area.

Sterculia appendiculata This species occurs in Malawi, Tanzania, Mozambique and Zimbabwe and is associated with Riparian Woodland and is listed as Vulnerable on the Mozambique Red Data List as it is under pressure for firewood, timber and local construction, and regeneration of this species is difficult (Izidine and Bandeira, 2002). This species was found in the Riparian Woodland and the Tall Open Undifferentiated Woodland.

Sterculia quinqueloba This species is found to occur in Angola, Namibia, Zimbabwe, Mozambique, Tanzania and the Democratic Republic of the Congo (DRC). It is listed as Vulnerable on the Mozambique Red Data List for the same reasons described above for Sterculia appendiculata (Izidine and Bandeira, 2002). This species was found in the Undifferentiated Forest and the Tall Open Undifferentiated Woodland.

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4.4. FAUNA

Mozambique has approximately 1196 terrestrial vertebrate faunal species of which 726 species are birds (61%), 214 species are mammals (18%), 171 species are reptiles (14%) and 85 species are amphibians (7%) (MITADER, 2015).

4.4.1. Reptiles

Recorded Reptiles from the Project Area A total of 88 reptile species have distribution ranges that include the study area and are likely to be present on site. Of the 88 reptile species likely to occur in the study area, 15 were observed during the field survey and include snakes, skinks, lizards, and agama and chameleons (Plate 4- 9 and 4-10) (see Appendix A of the Faunal Impact Assessment Report for full species list).

Although not observed due to the time of year of the survey, interviews with the Sinhojo and Nqueune Villages indicate crocodiles are found in the Mesallo River during the wet season and pose a threat to those living near or crossing the river. Villagers use the river for bathing, washing and water collection and cross the river in dugout canoes.

Reptile Species of Conservation Concern Out of a possible five reptile SCC, two were recorded on site. One Flap necked Chameleon (Chamaeleo dilepis) and one Water monitor (Varanus niloticus), both of which are listed on CITES II. Although not recorded on site during the survey period, one Near Threatened species is likely to be found within the study area, namely: the Zambezi Soft-shelled Terrapin (Cycloderma frenatum). No other threatened species listed by the IUCN were recorded on site. See Table 4-3: List all possible and recorded reptile SCC for the project area.

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Plate 4-9: Reptiles found on site. Top left to bottom right. Green water snake (Philothamnus hoplogaster); Flap n-necked chameleon (Chamaeleo dilepis); Mozambique sand snake (Psammophis mossambicus); Brown House snake (Lamprophis capensis); Rufous beaked snake (Rhamphiophis rostratus) and Puff adder (Bitis arietans arietans)

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Plate 4-10: Reptiles found on site. Top left to bottom right. Rainbow skink (Trachylepis margaritifer), Variable skink (Trachylepis varia); Black-lined plated lizard (Gerrhosaurus intermedius) and Mozambique agama (Agama mossambica) male and female.

Coastal & Environmental Services 72 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Table 4-3: Reptile SCC concern recorded and likely to occur in the study area Common Name Scientific Name Red List CITES Recorded Status on site Lizards Flap-necked chameleon Chamaeleo dilepis LC 2 X Tropical Girdled Lizard Cordylus LC 2 - tropidosternum Rock monitor Varanus albigularis LC 2 - Water monitor Varanus niloticus LC 2 X Terrapins Zambezi Soft-shelled Cycloderma frenatum NT - Terrapin

4.4.2. Amphibians

Amphibians recorded in the Study Area Of the possible 43 species known to occur in the region 8 species (Guttural toad (Amietophrynus gutteruralis); Common river frog (Ameitia quecketti); East African puddle frog (Phrynobatrachus acridoidies); Flat-backed toad (Amietophrynus maculatus), Mottled Shovel-nosed Frog (Hemisus marmoratus), Shovel-footed squeaker (Arthroleptis stenodactylus), Southern Foam Nest Frog (Chiromantis xerampelina) and Müller’s platanna (Xenopus muelleri)) were recorded (Plate 4-11). No known amphibians are endemic or of conservation concern in the area. Most of the observed amphibian fauna are characteristic species of forested areas and wetlands in the lowlands of northern Mozambique and likely to occur in areas surrounding the project site.

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Plate 4-11: Amphibians found on site. Top left to bottom right. Juv. Guttural toad (Amietophrynus gutteruralis); Common river frog (Ameitia quecketti); East African puddle frog (Phrynobatrachus acridoidies); Flat-backed toad (Amietophrynus maculatus).

Plate 4-12: Amphibians found on site. Top left to bottom right. Mottled Shovel-nosed Frog (Hemisus marmoratus), Shovel-footed squeaker (Arthroleptis stenodactylus), and dorsal & ventral view Müller’s platanna (Xenopus muelleri).

Coastal & Environmental Services 74 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 4.4.3. Mammals

Mammals Recorded in the Study Area Of the possible 148 mammal species that could occur on site, only 19 species were recorded from the project area including rodents, primates, hares, carnivores, bats, antelopes and even-toed ungulates (Refer to Appendix C of the Faunal Impact Assessment Report for the full list) (Plate 4- 13). However, interviews with the Sinhojo and Nqueune Villages revealed that the following species are present on site and are hunted for food and the sale of bush meat: antelope (sable, roan, kudu, impala and Suni), buffalo, warthog, bushpig, yellow baboon, vervet monkey and in particular porcupines, which are considered a favourite in the villager’s diet. Some, such as porcupines are caught twice a month, antelope and bushpigs/warthogs once a week. Other animals are hunted for their skins including badgers, lions and leopards. None of the villagers eat rats and mice, and the reasons attributed to this by the villagers is that it’s against their Muslim belief. Shrews are used medicinally in black magic and believed to offer protection.

Plate 4-13: Mammals found on site. Top left to bottom right: Pouched Mouse (Saccostomus campestris), Bushveld Gerbil (Gerbilliscus leucogaster), Striped Bush Squirrel (Paraxerus flavovittis), Greater Grey-brown Musk Shrew (Crocidura luna), Red Bush Squirrel (Paraxerus palliates), Common Warthog (Phacochoerus africanus), Yellow Baboon (Papio cynocephalus) and African wildcat (Felis silvestris).

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Plate 4-14: Suni and Yellow baboon hunted within the project area intended for consumption and sale.

Mammal Species of Conservation Concern Four Species of Conservation Concern (SCC) occur on site: elephant, pangolins, lion and leopard. All three are listed as vulnerable and as CITES 1. Interviews with the Sinhojo and Nqueune Villages revealed that lions were seen two weeks prior to the interview conducted early in December 2016, but are mainly present in the wet season. Lion and leopard are hunted for their skins which are sold. Pangolins when found are caught and sold alive in Montepuez to foreigners (non-Mozambicans).

The villagers stated that many elephants move through the area and eat their crops. Elephants are killed once a year, the meat is eaten and sold, the skin either used by the villagers or sold and the ivory is given to the district chief. Throughout the field study the presence of elephants on site was very evident: dung was present at nearly all sample sites, spoor was present within the dry river beds and previously muddy sections of the acacia savanna, and a carcass was found near the exploration camp (Plate 4-15).

Plate 4-15: Elephant carcass

4.4.4. Birds

Recorded Birds from the Project Area A total of 449 bird species have distribution ranges which coincide with the project area (Sinclair & Ryan, 2010; Lepage, 2016). Based on habitats found on site, 396 species of bird are likely to occur within the study area. Of the bird species which are likely to occur in the study area, 168 were

Coastal & Environmental Services 76 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 observed during the field survey (see Appendix C of the Faunal Impact Assessment Report for full species list).

The greatest diversity of avifauna was recorded in Riparian Woodland (n = 67). Species found in abundance within the habitat type include: Little Bee-eater (Merops pusillus); Livingstone’s Flycatcher (Erythrocerus livingstonii); African Emerald Cuckoo (Chrysococcyz cupreus); Emerald- spotted Wood Dove (Turtur chalcospilos); Tropical Boubou (Laniarius major); Dark-capped Bulbul (Pycnonotus tricolor), and numerous Hamerkop (Scopus umbretta) nests. Woolly-necked Stork (Ciconia episcopus), Kittlitz’s Plover (Charadrius pecuarius) and Green-backed Heron (Butorides striata) were recorded at one of the few ponds which was still holding water on site.

Sixty-four (64) species were recorded in Tall Open Miombo Woodland, including frequent observations of Woodland Kingfisher (Halcyon senegalensis), Mozambique Batis (Batis soror), Arrow-marked Babbler (Turdoides jardineii), Crowned Hornbill (Tockus alboterminatus), Green- winged Pytilia (Pytilia melba), and Black-backed Puffback (Dryoscopus cubla). Rattling Cisticola (Cisticola chiniana), Neddicky (Cisticola fulvicapilla), and Orange-breasted Bush-shrike (Telophorus sulfureopectus) were frequently heard within Miombo Woodland.

Fifty-five (55) species were recorded in Tall Open Undifferentiated Woodland. Species which were recorded in abundance within this vegetation type include: Klaas's Cuckoo (Chrysococcyz klaas); Hildebrandt’s Spurfowl (Pternistis hildebranti); Grey-headed Kingfisher (Halcyon leucocephala); Purple-crested Turaco (Tauraco porphyreolophus); Lilac-breasted Roller (Coracias caudatus); Crested Guineafowl (Guttera pucherani); Grey-backed Camaroptera (Camaroptera brachyura); Tawny-flanked Prinia (Prinia subflava); and Black-headed Oriole (Oriolus larvatus).

Forty-eight (48) species of bird were identified in Undifferentiated Forest. Bar-throated Apalis (Apalis thoracica), Red-chested Cuckoo (Cuculus solitaries), Dark-backed Weaver (Ploceus bicolor), and Sombre Greenbul (Andropadus importunus) were amongst species which were frequently heard within the vegetation type. Bird parties including Red-throated Twinspot (Hypargos niveoguttatus), African Firefinch (Lagonosticta rubticata), and Common Waxbill (Estrilda astrild) were often found foraging at the forest edge. Other species noted on multiple occasions within the vegetation type include: Terrestrial Brownbul (Phyllastrephus terrestris); African Paradise Flycatcher (Terpsiphone viridis); Bronze Mannikin (Spermestes cucullatus); and Golden-tailed Woodpecker (Campethera abingoni).

The diversity of avifauna recorded in the remaining vegetation types decreased significantly. Twenty- four (24) species were identified in Open Savanna/Dambo vegetation types, 22 species in Palm Savanna, 20 in Machambas, and only 19 species in Savanna. These vegetation types covered a small surface area of the study site (see vegetation map in section 5.1). Species composition in these less densely vegetated areas were similar, with species such as Violet-backed Starling (Cinnyricinclus leucogaster), Black-crowned Tchagra (Tchagra senegalus), Fork-tailed Drongo (Dicrurus adsimilis), Lilac-breasted Roller (Coracias caudatus), Zitting Cisticola (Cisticola juncidis), Familiar Chat (Cercomela familiaris), Broad-billed Roller (Eurystomus glaucurus), and Red-backed Shrike (Lanius collurio) occurring abundantly.

The number of birds recorded was lower than expected for the surveying period, mainly due to delayed seasonal rainfall. No running water bodies were observed on site, with water only being found in isolated pools in otherwise dry river beds. Numerous guilds of water birds were absent or very rare in the study area during the survey period. Photographs of selected species which were recorded on site are illustrated in Plate 4-16.

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Little Bee-eater (Merops pusillus) Woodland Kingfisher (Halcyon senegalensis)

Mozambique (Pale) Batis (Batis soror) Livingstone’s Flycatcher (Erythrocerus livingstonii)

Hildebrandt’s Spurfowl (Pternistis hildebranti) Grey-headed Kingfisher (Halcyon leucocephala)

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Woolly-necked Stork (Ciconia episcopus) Green-backed Heron (Butorides striata)

Purple-crested Turaco (Tauraco porphyreolophus) Lilac-breasted Roller (Coracias caudatus) Plate 4-16: Bird species recorded in various habitats on site.

Bird Species of Conservation Concern Out of a possible 69 bird SCC, 18 were recorded on site. One Martial Eagle (Polemaetus bellicosus) and one carcass of a Southern Ground Hornbill (Bucorvus leadbeateri), both of which are listed as Vulnerable by the IUCN, were recorded on site. No other threatened species listed by the IUCN were recorded on site. However, the Near Threatened Bateleur (Terathopius ecaudatus) and European Roller (Coracias garrulous) were both recorded.

Although not recorded on site during the surveying period, three Critically Endangered Vulture species are likely to be found within the project area, namely: the White-headed Vulture (Trigonoceps occipitalis); the White-backed Vulture (Gyps africanus); and the Hooded Vulture (Necrosyrtes monachus). One Vulture species was observed in flight from a great distance and hence no positive identification was possible.

The recorded SCC include mainly the Accipitriformes species (e.g. eagles, kites, buzzards, etc), and Strigiformes species (owls). Sixteen (16) CITES listed species were recorded. Of the Tauraco species that fall under CITES legislation, only the Purple-crested Turaco (Tauraco porphyreolophus) was recoded on site. Table 4-4 lists the recorded bird SCC for the project area and their status.

Coastal & Environmental Services 79 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Table 4-4: SCC likely to occur within the study area. Common Name Scientific Name Red List CITES Possible Recorded Status Bateleur Terathopius NT ii 1 1 ecaudatus Common Buzzard Buteo LC ii 1 1 Martial Eagle Polemaetus VU ii 1 1 bellicosus Wahlberg's Eagle Aquila wahlbergi LC ii 1 1 Spotted Eagle-owl Bubo africanus LC ii 1 1 Giant Eagle-owl Bubo lacteus LC ii 1 1 African Harrier-hawk Polyboroides typus LC ii 1 1 European Honey- Pernis apivorus LC ii 1 1 buzzard Southern Ground Bucorvus leadbeateri VU ii 1 1 Hornbill Dickinson's Kestrel Falco dickinsoni LC ii 1 1 Black-shouldered Kite Elanus caeruleus LC ii 1 1 Yellow-billed Kite Milvus aegyptus LC ii 1 1 European Roller Coracias garrulus NT ii 1 1 African Scops-owl Otus senegalensis LC ii 1 1 Brown Snake-eagle Circaetus cinereus LC ii 1 1 Little Sparrowhawk Accipiter minullus LC ii 1 1 Purple-crested Turaco Tauraco LC ii 1 1 porphyreolophus African Wood-owl Strix woodfordii LC ii 1 1

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5. DESCRIPTION OF THE SOCIO-ECONOMIC ENVIRONMENT

5.1. OVERVIEW

The following chapter provides a summary description of the socio-economic environment. Project Affected Communities (PAC) refers to communities that are affected by the proposed project through either primary (direct) or secondary (indirect) effects. The distinction between direct and indirect PAC is a function of the extent and severity of the anticipated positive or negative impacts induced by the project on the particular communities.

Direct PAC refers to communities within, or adjacent to, a project development area that will be affected by the primary project-related social and economic impacts. It also refers to communities that are likely to face physical or economic displacement due to project land take requirements. Currently there are no villages situated within the Exploration License (EL) area and therefore no physical resettlement (loss of houses) is anticipated at this time. There are, however, agricultural fields (or “machambas”, as these are locally referred to) located close to and co-inciding with the third deposit (Lion) deposit area. PAC farming these areas may be subject to economic displacement (a form of resettlement), that if not appropriately managed and compensated for, may impact on individual households’ livelihood strategy. There are three villages that are considered direct PAC; namely:

 Nqueuene Village;  Pilane Village; and  Sinhojo Village.

The Nqueuene Village is the closest village to the project site, approximately 5km from the proposed infrastructure associated with the mine. Pilane Village, a much smaller village that falls under the Nqueuene Village, is situated approximately 9km south-east of the project site. Sinhojo Village is located along the Messalo River, roughly 5km north-west of the project site.

An indirect PAC refers to communities in the area surrounding the proposed project site that are not impacted to the same extent or severity as direct PAC and are not proximate to the site. The town of Montepuez, the main economic hub in the area, is considered an indirect PAC in addition to several villages in the area, including, but not limited to:

 Mirate Village;  Caula Village;  Mavala Village;  Mavanada Village;  Machava Village; and  Namarecua Village.

The direct and indirect PAC in relation to the proposed project site is shown in Figure 5-1 below.

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Figure 5-1: Indirect and direct PAC.

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5.2. DEMOGRAPHIC PROFILE OF THE PROJECT-AFFECTED COMMUNITIES

The proposed project is located within the Montepuez District, which falls within the Cabo Delgado Province of Mozambique. According to the 2007 Mozambique Census, the population of the Cabo Delgado Province stood at around 1,605,649 (Republic of Mozambique, 2007). This figure rose from 1,287,814 in 1997, which indicates a population growth of around 2.5% per year (ibid).

The Montepuez District is approximately 17,721km2 in size with an estimated population of 186,476. The population density of the district is 10.5 inhabitants/km2, which is substantially less than the population density of the province estimated at around 20.64 inhabitants/km2.

According to the 2007 Census, approximately 52% of the area’s population are female, with an estimated male-to-female ratio of 1:1.1, according to the 2007 census (Republic of Mozambique, 2007). In the Cabo Delgado Province as a whole, there are slightly more females than males at 51.6% of the district population (Knoema, 2007). The province has a large youth population with just under half the population (44.6%) under the age of 15 and 53.2% of the population are within the working-age of between 15 and 64 (Republic of Mozambique).

Primary data collected through Focus Group Discussions (FGDs) and Key Information Interviews (KIIs) indicated that, on average, there are more females (53.65% of the village population) than males (46.35% of the village population), which is in line with district and provincial gender ratios. Furthermore, there are approximately 4 household members per household, which is in accordance with the average national households size of 4.2 in rural areas. The household-level demographics for each village are provided in Table 5-1 below.

Table 5-1: Household-level demographics of direct and indirect PAC. Village Nqueuene Pilane Sinhojo Mavala Mavanda Caula Machava Namarecua Total 2065 45 66 2293 3309 1502 256 2850 population % of men 51.57% 20.00% 54.55% 49.89% 42.43% 47.07% 55.47% 49.82% % women 48.43% 80.00% 45.45% 50.11% 57.57% 52.93% 44.53% 50.18% No. of 1000 8 20 1092 670 387 79 468 households Household 2.07 5.63 3.30 2.10 4.94 3.88 3.24 6.09 size

Gender-related roles and responsibilities are clearly defined and culturally implicit. Men are considered the head of the household and the decision-makers. Their roles and responsibilities include hunting, fishing, construction of houses and farming. Women are responsible for child bearing and household chores, such as cooking, cleaning and collecting wood and water. Women assist with thatching and placing mud on houses while farming activities are undertaken by all household members (men, women, the youth and the elderly). The roles of the youth include playing sport, making crafts, fishing, charcoaling, small business-related tasks and assisting with child care.

The closest village to the project site, Nqueune Village, has a relatively large population of 2065. The second closest village, Pilane Village, is a much smaller village with a total population of 45 people. Pilane Village was established 13 years ago (in 2003) and currently falls under the Nqueuene Village. Sinhojo Village, located north-west of the project site, along the Mesallo River, was established 15 years ago (in 2001) and has a population of 66. The villages further from the project site have relatively larger population sizes, as shown in Table 5-1.

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The villagers confirmed that there are migration patterns and an influx of people into the area over recent years. The reasons for this migration may be in search of work and/or employment opportunities or due to social or political disruptions in areas migrated from.

The main language spoken by the communities is Emakhuwa (Macua), while a few villagers also speak Portuguese. The district-level data indicated that Macua is spoken by 70.78% of households while 3.82% of households speak Portuguese (2007 Mozambique Census).

5.3. CULTURE AND RELIGION

Religion practiced in the villages includes Christianity and Islam, with six churches and nine mosques found across the eight villages. The majority of households practice polygamy, a traditional system where husbands have more than one wife. Polygamy is often believed to enhance productivity as those who have a greater number of children who survive to productive years will have more children to work on machambas and therefore increased support through inter-generational transfers (Adu et al., 2008).

There are several graves and sacred sites within each village that have significant cultural and spiritual significance. Sacred sites are places within the landscape, often trees or houses that have a special meaning and significance to the villagers. Plate 5-1 and Plate 5-2 provide examples of gravesites and sacred sites found in the villages. There are no grave sites located in the project area however there is one ceremonial site that was established during a prosperity ceremony conducted by the local villagers on behalf of the proponent for the proposed project in 2014.

G Plate 5-1: Examples of gravesites found in the local villages (Nqueuene Village and Caual Village): CES, 2016.

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Plate 5-2: Examples of sacred sites located in surrounding villages (Nqueuene Village and Mavala Village): CES, 2016.

The gravesites, sacred sites and ceremonial sites found in Sinhojo Village, Nqueuene Village, Caula Village and Mavala Village, are shown in Figure 5-2 below. It should be noted that not all gravesites and sacred sites found in the villages were recorded, as some sites were not presented to the SIA team. The gravesites and sacred sites hold significant cultural and archaeological value and should not be disturbed by project-related activities if possible.

Figure 5-2: Gravesites and sacred sites found in the villages surrounding the project site and a ceremonial site found within the project site.

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5.4. SOCIO-ECONOMIC LIVING CONDITIONS

5.4.1. Social Infrastructure Assets Social infrastructure assets available to villages in the area are limited to primary schools, a clinic and a police post. The locations of these facilities available to the villages surrounding the project site are provided in Figure 5-3 below.

Figure 5-3: Local primary schools, the Mirate Clinic and the Mirate Police Post accessible to the villages surrounding the project site.

Six of the eight villages have primary schools located in the village, one of which has classes from grade 1 to grade 5 and five of which have classes for grade 1 to grade 7. The facilities available to these schools are provided in Table 5-2 below. All of the schools have black- boards and five of the six schools have desks and chairs, however the conditions of these are fairly poor. The school buildings are either brick or mud and thatch structures.

Table 5-2: Facilities available to schools in local villages. Nqueuene Mavala Mavanda Caula Mirate Namarecua

Primary Primary Primary Primary Primary Primary Grades Gr 1 – Gr 5 Gr 1 – Gr 7 Gr 1 – Gr 5 Gr 1 – Gr 7 Gr 1 – Gr 7 Gr 1 – Gr 7 No. of 3 4 5 7 4 3 classrooms No. of teachers 3 6 117 7 7 8 No. of students 313 460 556 303 252 413 Students / class 50 52 70 43 27 - 35 / Blackboard Yes Yes Yes Yes Yes Yes Desks and No Yes Yes Yes Yes Yes

7 9 of the teachers are for day school and 2 for night school, where adults attend classes.

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chairs Football field Yes Yes Yes Yes Yes Yes

Plate 5-3: Local schools in the area (Nqueuene Primary, Caula Primary and Mavanda Primary): CES, 2016.

The literacy rate of the Cabo Delgado Province is significantly low, largely as a result of very few household members older than 18 having completed secondary school. The closest secondary school and university are situated in Montepuez. Most of the children from the villages do not attend secondary school or university due to high fees and the distance from the villages to Montepuez.

The local schools face several challenges including a lack of classroom capacity, a shortage of teachers, classrooms, desk and chairs as well as stationery and other materials. These contribute to a significant number of children not attending school. It is often the case that the children work on farms instead of attending the local schools.

Plate 5-4: Classrooms of local schools in the area (Caula Primary, Mavala Primary and Mavanda Primary), CES 2016.

The main hospital situated in Montepuez is currently undergoing construction to increase its bed and treatment capacity. There is a clinic in close proximity to the villages surrounding the project area; namely the Mirate Clinic. The clinic has ten staff members and seven beds, insufficient for patients from approximately twenty-seven villages in the area. Villagers often travel far distances on foot, bicycle or motorbike to reach the clinic. There is no ambulance and the medication is donated to the clinic through government initiatives. It is not costly to be admitted to the clinic 1 Mozambican Metical (MZN 1), however the lack of bed capacity, limited staff members, absence of electricity and limited water supply, distance to the clinic and lack of medical supplies and equipment are challenges facing villagers’ access to healthcare. Vector-related diseases such as malaria, soil- and water-related diseases as well as HIV/AIDS and malnutrition are prevalent in the area.

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Plate 5-5: The Mirate Clinic, wards and medicine supplies: CES, 2016.

There is a police post in Mirate that governs twenty-seven established villages and eighteen additional smaller villages. The police post comprises of three police officers, however there are representative police within each village that report to the police post. Social conflict is otherwise reported to the village chief by one of the elders. Petty theft and violence are the main crimes reported in the area. There are no prisons or holding cells in the area and those arrested are either released, or taken to the main police station in Montepuez.

Plate 5-6: Key Informant Interview (KII) at the Mirate Police Post: CES, 2016.

There are football fields in most of the villages, with most of the villages also offering a dance club for recreation. There are also women’s, men’s and youth organisations in most villages with water and famer’s associations in some of the villages. These recreational activities and associations create a sense of belonging, community pride and cohesiveness.

Basic Infrastructure The sanitation infrastructure in the villages in the area comprise of self-constructed pit latrines with bamboo or thatch coverings, as there is no water borne sanitation systems. The pit latrines are shared between 1 to 3 households. Sinhojo Village, located by the Messalo River, does not have any sanitation facilities.

There is no access to piped water and villagers depend on water points. The majority of the villages use wells, hand pumps or draw water from the river as water sources for drinking, bathing, washing clothes and for livestock. The wells do, however, dry up in winter and several hand pumps found in the villages are not functioning. The sanitation and water facilities available to each village is summarised in Table 5-3 below, examples of which are provided in Plate 5-7. Figure 5-4 provides the locations of boreholes and wells available to Nqueuene Village, Caula Village and Mavala Village.

Table 5-3: Basic Social Amenities available to each PAC. Village Nqueuene Pilane Sinhojo Mavala Mavanda Caula Machava Namarecua Population 2065 45 66 2293 3309 1502 256 2850 No. of pit 500 7 0 991 445 251 24 329

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latrines No. of 5 3 0 4 30 8 7 0 wells No. of 3 hand 2 0 0 4 2 0 3

pumps No. of drawing 8 2 2 2 4 1 1 2 points from rivers

Plate 5-7: An example of a well and hand pump, the main sources of water for PAC: CES, 2016.

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Figure 5-4: Wells and hand pumps found in Nqeueune Village, Caula Village and Mavala Village.

There are limited energy sources in the area and therefore most households are reliant on wood and/or charcoal for cooking and wood and/or torches for lighting. Very few households or shops use electricity from generators or solar panels.

Plate 5-8: Wood and solar panels used by PAC as energy sources for lighting and cooking: CES, 2016.

The waste disposal comprises of hand-dug pits where waste is buried and/or burnt. There were no centralised landfill sites observed in any of the villages.

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The villages have access to a single-track dirt road that runs from Montepuez to the project site. The road is not in good condition and most villagers hope the proposed project will improve the quality of the road. The primary modes of transport include bicycles and motorbikes, while most villagers travel by foot.

5.5. LIVELIHOOD STRATEGIES

5.5.1. Employment Sectors There are limited employment opportunities in rural Mozambican villages and very few villagers are formally employed. Most households in the villages in close proximity to the project site are subsistence farmers, some of whom may sell produce locally.

It is likely that very few households have members that are formally employed as local construction workers (such as road upgrades) or by the Government such as employees in the educational and/or health sectors. Other non-regular employment opportunities include craftsmanship, artisanal mining, charcoaling, fishing, small business endeavours or self- employment, such as local shop owners.

Labour exchange is commonly practiced in rural areas in Mozambique, where labour from the villages work on machambas owned by other households and receive payment in kind, such as a prepared meal. This is a cultural practice driven by moral obligation or reciprocity (Osbahr et al. 2008), often as a response to labour shortages.

Employment in mining and exploration has steadily increased in some of the districts, with several mines being constructed in the province. The mining sector is expanding in the region and will provide a range of employment opportunities in the future.

5.5.2. Agriculture and livelihood strategies In Mozambique land is normally held by the Government, although the Government recognises the role of customary tenure. The land in rural areas is largely regulated and controlled by local chiefs and elders. In the area studied the land is regulated and allocated by the local chiefs under the custodianship of the Macua Traditional Authority (TA) while the local Government provides title deeds. Land that has a homestead or other infrastructure is purchased while open land is given free of charge. Land and houses can be rented by temporary occupants.

Agriculture is the largest source of income and the backbone of the area’s informal economy. The 2010 Vaccine Coverage Survey estimated that 88.6% of families in the province are engaged in farming practices (VillageReach, 2010). Most households use their land predominantly for subsistence purposes, as many are constrained by a lack of market access, unimproved agricultural technology, limited or no access to chemicals and fertilisers, and crucially, no capital for investment.

A study conducted by Strasberg and Kloeck-Jenson (2002) in the Cabo Delgado Province found that crops such as cotton and cashew nuts accounted for around 70% of all the income generated by households interviewed in the province throughout the year. The farmers in the areas surrounding the project site consider maize, cassava and sesame to be the most productive crop in the area.

Most households within villages have machambas and some households have smaller food gardens around their homesteads. Most households have more than one machamba (ranging from 2 to 5 machambas per household), on which the most popular crops are sesame, millet, cassava, pumpkin, ground nuts, sweet potatoes and maize. Other crops not as commonly grown include cotton, sugar cane and rice. The crops are intercropped, the agricultural fields are rain-fed and a rotational slash and burn agricultural system is implemented. Shifting

Coastal & Environmental Services 91 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 cultivation is practiced where land is cleared of natural vegetation, often cultivated for a few years (3 to 4) and left to lie fallow for one or more seasons to allow the land to become fertile again, as shown in Figure 5-5 below.

Most crops are planted during the wet season between December and March and harvested during the dry season (April to June).

Plate 5-9: Land clearing and preparation of a machamba (left) and an established machamba (right).

7

6

5

4 No of years cultivating 3 land 2 No of years land is left to lie fallow 1

0

Figure 5-5: Average duration each PAC cultivates land and subsequently leaves land to lie fallow.

The main tools used on the machambas include axes and machetes to clear land and hoes to plough the land prior to planting. No fertilisers or chemicals are used (except if they are growing cotton) and fields are burnt after harvesting to restore land’s fertility. Land preparation and planting usually occurs in November to March, harvesting in April to June and land clearance in July to October, although these dates are crop dependent.

The agricultural challenges faced include erratic rainfalls (droughts and/or floods); lack of access to seeds, fertilisers or chemicals as well as farming equipment; agricultural disease; limited access to markets and lack of agricultural assistance or services.

Most households also supplement their diets by planting fruit bearing trees (mostly around their homesteads), which include cashew, banana, coconut, papaya, mango and orange trees.

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Income from fruit can be significant, with fruit sold in local markets or alongside the road, together with some of their other agricultural produce.

Lastly, some households also practice animal husbandry. Common livestock kept usually for subsistence purposes are chickens, ducks, pigs, pigeons, goats and sheep. Bees are additionally kept for honey, which is eaten, used for spiritual rituals, for medicinal purposes and sold at local markets or alongside the road.

Most households also use the area’s natural resources for subsistence purposes. This usually includes collecting wood, mud, thatch and bamboo for construction, but also collecting wild fruits, vegetables and bulbs either for medicinal purposes or for food. Most of the households also make charcoal from felled wood, which many sell next to the road. Most households are engaged in hunting and fishing activities, which is usually primarily a subsistence strategy.

Plate 5-10: Materials are used for construction of houses and toilets, making furniture and baskets: CES, 2016.

5.5.3. Income and Expenditure The majority of the households in the study area receive some form of income from their household agricultural efforts. This is a limited source of income, though, and is mainly obtained by selling either some of the surplus crops, economic tree fruits, fish, hunted meat or livestock at markets or next to the roads. Many households also receive an income from selling charcoal, whilst some also receive remittances and land rent incomes. With such a limited cash economy, daily expenditures remain high. The most common expenditure sources in the region are food, clothes and school registration fees and schooling materials such as books and uniforms.

There are markets in most of the larger villages where food, agricultural produce and other basic goods are sold. The village closest to the project area (Nqueuene Village) sell goods from Montepuez or Pemba, as well as local produce. These markets offer clothing, bicycle and motorbike parts, medicine and other goods. The market owners did not rely on the market as their sole income generation strategy, as most were also farmers.

5.5.4. Food Security Food security is a complex and multifaceted concept for which a specific assessment is often required, but will not be undertaken for this assessment process as it is usually only undertaken when a natural disaster, conflict or an economic shock impacts food security. There are several components by which food security can be measured, including food availability, accessibility to food sources, food stability, food utilisation and food consumption, as defined in the table below with a list of indicators for each component.

Table 5-4: The components of Food Security. Component Definition Indicators This refers to the degree to which food is  Food transport; physically available to the local  Food production systems; Food availability population, either through subsistence  Weather (droughts/floods etc.); farming, natural resources, hunting and  Use of food stock (subsistence or fishing or in shops and markets. commercial);

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Component Definition Indicators  Conversion from food to cash crops; and  Changes in import and export tariffs. This is the way in which different people  Location of farms (distance to walk are able to have access to food. In rural etc.); areas, a variety of means are usually  Housing income and distribution; Food access and employed in order to access food, such  Food prices; and stability as own using subsistence or left-over  Sudden shocks or events (such a stocks, purchasing, bartering, borrowing, physical insecurity or weather sharing gifts or welfare systems. events).  Food quality;  Method or preparation (do people The quality of food consumed and the have cooking utensils, for example); Food utilisation ability of the local population to prepare  Storage facilities; and their food.  Health status of individuals consuming food (endemic diseases, poor sanitation etc.). This refers to how food is consumed  Number of meals per day; within a household, which is generally Food consumption  Average meal consumption; and indicated by the amount of meals eaten  Household expenditure on food. per day and the total expenditure on food

The PACs have various levels of access to markets, farmland, hunting areas, rivers for fishing or natural resources due to the distances to these potential food sources. Most PACs have limited access to markets along poor quality roads, although some food is bought and sold on roadsides or at smaller local markets. There are very few households receiving a formal income and therefore tend to borrow, barter, share or rely on food stocks and existing livelihood strategies, resulting in instability of food sources.

The quality and availability of water sources is relatively poor in the area, with wells and rivers drying up in the dry season. Limited water sources, poor sanitation facilities and poor hygiene contribute to diseases and illnesses spread by food preparation and/or utilisation. Storage facilities are also limited as very few households are connected to the national energy grid, restricting the ability to keep fresh foods. Household diets are therefore restricted to food types that can be stored or dried.

The food security and stability of surrounding communities is vulnerable and changes to livelihood strategies and access to natural resources may have detrimental effects.

5.6. SOCIOECONOMIC SETTING

The project site is characterised by limited observable human activity. The Elephant and Buffalo deposits consist of no agricultural activity, however the larger portion of the southern Lion deposit consists of agricultural fields of predominantly sesame plants for the production and sale of sesame seeds. The local farmer indicated that the field has been cropped for 5 years, having cleared the area after a logging road was established through it in approximately 2010. There are disturbed woodlands present to the south of these machambas, with signs of previous cultivation in evidence.

The Buffalo site to the north currently does not have any machambas; however there is a machamba approximately 2km south of the Elephant site. There were limited signs of cultivation of rice in the seasonal wetlands that constitute a portion of the study area, and based on site observations the impression is that the dominant bamboo thicket vegetation type covers the majority of the study area, however it is difficult to ascertain whether bamboo thicket dominates areas previously disturbed by logging and subsistence agriculture.

The use of land within the proposed project site for agriculture is therefore limited. The project

Coastal & Environmental Services 94 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 area is mainly utilised for natural resources and ecosystem services, including fuel wood, medicinal and edible wild plant harvesting and hunting. It does appear that the harvesting of wood for charcoal production within the project area is limited.

5.7. SOCIO-ECONOMIC DEVELOPMENT NEEDS

The objectives of an SIA include establishing socio-economic development needs of the PACs to identify how the project can contribute to community development. The ways by which the community feels the project may assist include the following:

 Providing support to primary schools through provision of more desks, chairs, schooling materials, toilets and improved water supply.  Offering support with local football activities or football clubs.  Construction of more wells or upgrading of existing ones.  Providing alternative sources of energy (such as solar energy) to needing households or buildings (such as some schools or clinics, for example).  Offering direct employment and skills development opportunities and indirect economic opportunities through increased demand for goods and services, support of Small, Medium and Micro-sized Enterprises (SMMEs) and indirect improvement of skills base in the area.

The proponent has indicated an interest in providing the following support to these communities:

 Skills development and Training. Conduct a survey of the local village people to establish the level of education and provide training and skills development courses to upgrade the employability of the local community near the mine.  Agricultural Program. Implement an agricultural program which will target increasing the yield of grain from the local machambas. o Teach various farming methods which are proven successful in other parts of Mozambique to increase crop yields; o Target farm methodologies which increase crop yield per hectare thereby decreasing the risk of food security issues; and o The mine accommodation village will prioritise local purchase of food.  Education. Educational programs that will target children, adults and women by o Supporting the local schools with construction of buildings and infrastructure; o Implement University and post university bursary programs for local high achieving children and adults over the mine life; and o Support programs that increase the retention rates of girls in school.  Water Supply. Investigate and implement water management and supply programs where feasible.  Sporting Clubs and programs. Continue to support established local sporting groups.  Community health. Investigate sustainable health and well being programs for the benefit of the local community.

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6. KEY PROJECT ASPECTS, ISSUES AND RISKS

This section discusses the proposed project aspects and activities that could potentially lead to significant negative impacts on the ecological systems and socio-economic context of the study area. This is followed by a more detailed assessment of environmental (Section 7) and socio- economic (Section 8) impacts using defined impact assessment rating scales.

6.1. MINE DEWATERING

Mine dewatering was modelled for a 12 year period with each pit (Elephant and Buffalo) culminating at an elevation of 220m above sea level (asl). This elevation indicates a pit depth of 100m below ground level (bgl) for Buffalo and 135mbgl for Elephant. These depths include the entire mineral resource and are not limited to the mine ore reserve. The open pits were simulated as drains in the numerical groundwater flow model, increasing over time as the mining progresses. The simulation indicated a maximum Zone of Influence (ZOI) depth located at the open pits of approximately 125m in depth. The maximum lateral extent of the ZOI at Elephant is approximately 700m and at Buffalo 550m from the centre positions of the pits.

The model has determined that dewatering at Buffalo will commence within approximately 1.3 years of mining, and at Elephant after approximately 2.7 years. Dewatering is required as mainly groundwater, and some surface water, will flow into the pit, and the amount that flows into the pit will increase as the pit becomes deeper. Simply put, the pit is a large hole in the landscape, and water flows and seeps into it. The dewatering rates will therefore increase gradually as the pits increase in depth and size, thus exposing larger areas. The simulated dewatering rates peak at approximately 4,000m³/d for Buffalo and 3,500m³/d for Elephant (at year 12 of mining). Due to the heterogeneity of the aquifer, dewatering rates could differ and the model should be updated once new monitoring data becomes available, to narrow the band of uncertainty and increase the confidence levels associated with the data. Current mine dewatering should allow for a ramp up program to be able to handle 4,000m³/d of dewatering from each pit. The water obtained from pit dewatering should not be taken into consideration in the bulk water supply, as this water is not a proven resource. The groundwater budget indicated 5,250m³/d will be released from storage due to the mine dewatering process (Table 6-1).

Table 6-1: Mine dewatering groundwater budget Mine dewatering over 12 years of mining Inflow Outflow Balance Component (m3/d) (m3/d) (m3/d) 1 Recharge from precipitation 3336 0 3336 Inflow from fluxes of the waste rock and tailings 2 2462 0 2462 facilities 3 Losses to drains and rivers 0 -2270 -2270

4 Losses from groundwater abstraction 0 -735 -735 Losses to current mine dewatering from both 5 0 -8050 -8050 open pits 6 Groundwater from storage 5250 0 5250 11048 -11055 -7 Balance Error (%) -0.10%

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Mine dewatering is not a function of the volumes abstracted, but should be focussed on successfully lowering water levels to produce a dry and safe mine environment. Mine dewatering is expected to be effective using a combination of dewatering boreholes surrounding the pit, and horizontal drains within the pit to collect residual seepage (Figure 6.1). The majority of groundwater flow toward the mine pit will originate from the higher yielding preferential flow paths, such as along geological contact zones and faults. These could contribute volume in the early phases of dewatering as they are highly conductive, but are low storage features.

Figure 6-1: Conceptual model showing the proposed mine dewatering design

Due to high pore pressures and groundwater system compartmentalization, slope stability and failure of the pit walls is a possibility. This could be addressed by two possible options as shown in Error! Reference source not found.:

1. Design and implement vertical dewatering boreholes both in the pit and outside of the pit perimeter to capture and remove the majority of the groundwater (>95% of total flow) before it flows into the pit. This water is classified as clean water, so it can be discharged to the natural environment should it contribute to excess water in the bulk water supply system. It is proposed that water from the water storage dam be substituted by pit dewatering volumes where permissible. 2. Implement horizontal drains within the pit where possible seepage is likely to occur through the pit face. This will assist in depressurizing the pit slope and will reduce safety concerns of bench failure. The groundwater captured by these drains should be collected in an in-pit sump. As this water has been in contact with material in the pit, the water is considered to be contact (or dirty) water and therefore should be used in the mine process where possible. Any excess pit water should be treated to an acceptable limit and then discharged.

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6.2. ACID MINE DRAINAGE (AMD)

Acid Mine Drainage (AMD) refers to the outflow of acidic water from mining operations. Acid rock drainage occurs naturally within some environments as part of the rock weathering process, but it is exacerbated by large-scale disturbances characteristic of mining and other large construction activities, usually within rocks containing an abundance of sulfide minerals. These rocks, previously buried at depth in anaerobic conditions, become exposed to oxygen and the erosive forces of water when brought to the surface, and sulphur is released. This sulphur ends up being washed away into surface and groundwater, and reduces the pH of the water in the receiving environment as the wash water is acidic. This is referred to as acid mine drainage.

Numeric geochemical modelling is used as a risk assessment tool to quantify geochemical risks from each rock mining stream facility where AMD has the potential to be produced acidic leachate, these facilities include processed rock deposited into the tailings storage facility, unprocessed rock deposited onto the waste rock dumps and temporary ore stockpile facilities (pre-processing). The numeric models are developed in an equilibrium thermodynamic and reaction kinetic framework using site specific data from laboratory analysis of geological material specific to each facility. The results of the models are qualified using the laboratory analysis data, e.g. the presence of specific mineral phases, to determine whether the models are realistic in terms of the objectives of the study.

Three facilities were evaluated:  Tailings facility  Waste rock facility  Low grade ore stockpile facility

The material representing the residue for each of the facilities above for the Buffalo and Elephant pits were assessed.

It was determined that the pH of the leachate for the Oxidation Zone (OZ) is 3 (which is acidic) and for the Transition Zone (TZ) and Reduction Zone (RZ) it is 5. This is due to the decrease in sulphide oxidation rate, which is in turn a consequence of the lower oxygen content in the tailings. Therefore, the metal concentrations also decrease in the tailings leachate, although the sulphate concentration remains elevated. This is due to the fact that sulphate tends to remain in solution. The seepage from the TZ and RZ represents the bulk of the basal seepage and indicates that the final basal seepage is predicted by the geochemical models to be slightly acidic with elevated sulphate content. The small part of the oxidation zone in contact with the ground surface during construction of the facility is expected to leach ARD into the subsurface, with associated elevated concentration of dissolved metals and sulphate. The geochemical impacts from the TSF stockpile are sufficiently low that a liner system would not be required. Simple remediation methods such as phytoremediation are deemed sufficient to limit the leachate from seeping to groundwater surrounding and on top of the TSF after mining. Simple remediation methods such as phytoremediation are deemed sufficient to limit the leachate from seeping to groundwater surrounding and on top of the TSF after mining.

The rock leachate is 5.6, and this is slightly acidic, being marginally higher than the pH of rainwater, which is 5.5, due to the presence of dissolved carbon dioxide. It cannot be considered to be AMD. In addition, although the salinity is evaluated to be elevated, mostly due to the presence of dissolved calcium and bicarbonate, the sulphate and dissolved metal concentrations are below regulatory guideline values. This indicates that the waste rock poses a low risk with regards to the production of AMD and associated metal- and sulphate-rich leachate.

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The model results of the leachate quality of the low grade stockpile predicts a leachate pH for the ore stockpile of 4.7. This value can be considered mildly acidic. The model indicates that none of the metals are in excess of regulatory guideline values, although the sulphate concentration is shown to be elevated. The geochemical impacts from the low grade stockpile are sufficiently low that a liner system would not be required. Simple remediation methods such as phytoremediation are deemed sufficient to limit the leachate from seeping to groundwater.

6.3. TAILINGS STORAGE FACILITY

The following general hazards associated with a TSF could occur:

 Release of contaminated surface water/effluent from the top of the TSF as a result of direct spillage.  Release of contaminated seepage water from the base of the dam into the groundwater and/or manifesting itself as a downstream surface seep.  Release of contaminated residue (silt) from the TSF as a result of erosion due to rain runoff, spillage etc.  Release of contaminated residue (dust) from the TSF as a result of surface drying and strong winds.  Positioning of the TSF resulting in visual intrusion.

The various consequences associated with the hazards mentioned above, that relate to the mine site and its surrounding area, include:

 Loss of mine property (infrastructure).  Environmental damage, which includes damage to natural flora and fauna and destruction of aquatic systems.  Visual intrusion.

Possible loss of life to people in the event of a failure is only likely to affect mine employees in the area and not community members, as there are no houses in the immediate vicinity.

The TSF is a valley storage facility to prevent wall failure (only downstream risk remains) and use natural topography to encapsulate and reduce the AMD potential. The siting of the TSF is critical so that the risks associated with a partial or full failure event of the dam structure can be avoided. The location alternatives presented in this report are likely to hold more risk to the ecological environment than being a risk to residents of Nqueuene village, or the eventual accommodation village and work areas, which will be located uphill of the TSF. Thus, the TSF engineered location has minimised social risks and impacts, at the expense of some limited ecological impacts. However, any impacts are mitigated by the fact that the raw water dam is located below the TSF which will enable early warning detection via routine monitoring should any seepage occur downstream of the TSF (see section 6.4 below).

6.4. WATER STORAGE FACILITY

The water storage facility is purposefully downstream of the TSF. This was designed so that if there was any seepage, leaks or spills from the TSF, these would be caught downstream in the WSF and could be detected early via routine water sampling and appropriately mitigated rather than flowing directly into the environment where the impacts on the water users downstream and ecology could be catastrophic.

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However, the introduction of an artificial permanent water source (the water storage facility, and also so a lesser extent the TSF) may attract a greater number elephants and encourage them to reside in the project area for longer periods of time than in previous years when there is no permanent water source, especially in the dry season. Increased elephant abundance will result in increased pressure on the vegetation surrounding the water source, as the role of elephant as ecosystem engineers is well documented (Valeix et al., 2011; Holling et al.,1996 etc.). Depending on the population size of elephants within the region, resources within 10-15km of the permanent water source could experience increased pressure. The impacts that elephants could have on vegetation dynamics may subsequently impact other faunal species and groups which utilize resources within the project area, as well as result in impacts at the landscape level.

In addition, the presence of the permanent water source could increase human/wildlife interactions and conflict. This is discussed further in section 6.11.

6.5. SEWAGE AND WASH WATER

Domestic sewage is characterised by a high concentration of nutrients, organic matter and a variety of pathogens. As such, it must be properly treated prior to discharge to avoid negative impacts on human and environmental health. The presence of hazardous chemical contaminants is unlikely when the domestic sewage is not combined with industrial effluents, machine wash water or with effluent from the laboratory, which should be prohibited.

The construction workforce of up to 636 individuals (at peak construction) will generate sewage and wash water that needs to be managed. Sewage and other effluent (grey water) from ablution facilities will be disposed of using a packaged sewage plant, as described in Chapter 3. However, although the intention is to establish this facility early in the construction phase, until such time as it has been commissioned, alternative arrangements for disposal of sewage will need to be made. The most practical option would be septic tanks.

Once the package sewage treatment plant is fully operational and able to consistently produce an effluent that meets the requisite discharge limits, the treated effluent can then be discharged directly to the environment or used as process water. If the treated effluent water is discharged into the environment, it must meet national discharge standards. There are a number of different package plant options on the market, each with their own advantages and disadvantages. Based on experience from other remote sites, it is recommended that the preferred options should incorporate the following characteristics:

 Proven ability to consistently produce treated effluent that meets the required discharge limits in a remote context with limited supervision is essential;  No requirement for a fulltime skilled operator  Minimal input of chemical agents  Minimal monitoring and chemical analysis required for correct operation  Minimal and / or infrequent management of sludge  Rapid and reliable on-site technical assistance and availability of spare parts

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Occasionally, sludge from the sewage treatment plants may have to be removed and this material, which should be regarded as hazardous due to the potential pathogen content, must be disposed of in accordance with Decree 83/2014 of December 31st (Management of Hazardous Waste). Within the urban context the sewage sludge could be transferred to a municipal treatment plant for final treatment to a permissible quality for disposal. However, in the current context, this is not practical due remote location and no available disposal facility. As such, the sludge would need to be stabilized by drying in purpose-built beds, or it must be composted.

Composting requires mixing the sludge with additional sources of carbon such as sawdust, straw or wood chips in the presence of oxygen to enable the indigenous bacteria to digest both the sludge and the added carbon source. The stabilized sludge can then be dried and either disposed at the proposed landfill or alternatively, applied as a soil conditioner during rehabilitation of the mine, provided that levels of toxic constituents is sufficiently low. In the absence of soil standards in Mozambique, should soil application of treated sewage sludge be adopted, soil contamination should be avoided and the soil standard prescribed by the African Development Bank (AfDB) (Appendix C of the waste report) should be adhered to.

The total quantity of effluent requiring disposal during the construction phase will be increased further due to washing equipment such as machinery and vehicles - although the exact quantities produced by these activities cannot be determined. Wash water from vehicles frequently contains at least small quantities of hydrocarbons (oil, grease etc.) and, as such, the washing of vehicles and machinery should be conducted only at permitted and well selected designated wash bays; where wash water is collected and routed through a grease trap/oil-water separator prior to discharge.

6.6. LANDFILL LEACHATE

Leachate from a landfill facility is likely to contain a variety of pollutants including heavy metals and complex organic compounds. If allowed to escape into the environment, the potential negative impacts on human and ecological health could be significant.

This report does not address the characterisation of the proposed landfill, including the design, classification, siting, construction and operation of the landfill site in terms of Decree 83/2014. Nor does it cover the application for permit(s) that may be required to operate the landfill site. As such, key impacts associated with the establishment of a landfill site within or outside the project boundary that are likely to relate primarily to ground water resources and air quality are not considered in this report. A separate detailed Landfill Site Assessment will be required in support of an application for a landfill site.

6.7. STORMWATER AND OTHER RUNOFF

It is important to consider the potential environmental impacts associated with storm water and other run-off. This will include run-off from the stockpiles, waste rock dumps, the ROM pad, other infrastructure and all hard surfaces. The primary threat is that storm water has the ability to pick up contaminants, including hydrocarbons, heavy metals and nutrients as it moves across a project area. If not managed correctly, these contaminants may then be transported, via the storm water, into areas where they could pose a threat to human and environmental health.

Generally, storm water will be managed by cutoff drains which will collect and divert water around facilities and along roads. Water runoff from the Rock Waste Dumps is designed to maximize flow into the respective pits for Buffalo and Elephant. Within the process area all runoff water will be

Coastal & Environmental Services 101 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 diverted to the tailings storage facility where it will be reclaimed for use in the process plant during operation. All storm water from the accommodation village would be treated by use of oil-water separators and then channeled for storage at the storm water dam.

The exact quantity of contaminated water requiring careful management and treatment prior to release from the site is likely to be highly variable and largely dependent on seasonal rainfall. Storm water and machine wash water should be kept separate from sewage water. This would need to be addressed in the design of the storm water system for the site which should take into consideration the use of sealed manhole covers. Prior to discharge, storm water must meet national standards related to effluent.

6.8. EXPLOSIVES STORAGE

A dedicated explosives storage magazine is required. This requires a safety perimeter of 700 metres between the storage magazine and any other areas on the mine site that are inhabited or staffed by mine personnel during the course of the working day. This is necessary as an uncontrolled explosion or catastrophic event at the magazine – although rare - could lead to significant loss of life and damage to the natural environment as well as mine infrastructure and equipment.

6.9. TRANSPORT AND TRAFFIC

Developing and upgrading the roads to service the mine, as well as a significant increase in heavy vehicle traffic, will increase risks to local residents’ health and safety. Roads in the area are currently used by large numbers of pedestrians, bicycles and motorbikes. There will be an increase in the amount of vehicle movements in proximity to the mining operation. Although local communities are not unfamiliar with vehicles, the risk of traffic accidents, particularly at night, is still very real. Villages situated along existing roads will be especially at risk. A significant increase in vehicular traffic has road safety implications not only for residents in the study area, but also along the entire logistics corridor.

Vehicle related dust pollution (PM10) may also be a significant issue if not mitigated.

6.10. TERRESTRIAL ECOLOGY (FAUNA AND FLORA)

Removal of the vegetation during the mining process will result in the loss of existing populations of the plant species coinciding with the mine area and areas directly affected by infrastructure (e.g. the TSF and process plant). The study area as a whole is rich in plant species, with much of the species richness of the area being due to the intact vegetation found within the site.

In addition, fragmentation of habitats can lead to the loss of viable populations, especially in animals requiring large home ranges. Mining operations may well have an impact on terrestrial flora and faunal habitats, as well as potentially impacting breeding or foraging habitats of faunal species (birds, amphibians, reptiles and mammals).

The impact on these areas is likely to increase in the near future as an in-migration of job seekers results in more land being cleared for subsistence agriculture and charcoal for energy next to the mine and along the transport route. The introduction of the mine, despite the footprint of the mine being relatively small, will still be significant due to the indirect impacts of people seeking jobs as part of inward migration.

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6.11. HUMAN/WILDLIFE CONFLICT

Elephant, buffalo, lion, leopard, and a number of highly venomous snake species are likely to either permanently or periodically occur within the project area. The increase in the number of people on site associated with the operation of the mine, as well as the immigration of job seekers will result in an increase in the number of interactions between people and dangerous animals, which could pose a safety risk to mine employees and community members.

6.12. AQUATIC ECOLOGY, HYDROLOGY AND GEOHYDROLOGY

Watercourses – Non-perennial streams and drainage lines will be impacted through road construction activities, as well as the valley in which the TSF and WSF are located. The pre- existing hydrological functions of watercourses impacted by these activities are likely to be altered, including those areas downstream of these structures. Although it is possible that final landform rehabilitation can replicate its basic function successfully, it will be difficult to do so.

Surface water and storm water contamination – as noted in 6.6 above, surface and storm water can become contaminated through contact with pollutants associated with mining activities. Surface water must be protected from coming into contact with any pollutants and any storm water runoff that passes through potentially contaminated areas must be captured and treated appropriately prior to release.

Groundwater quantity - Mine dewatering activities could affect local groundwater flow due to minor groundwater abstraction activities which could lower the water table. This is unlikely to affect the communities as the groundwater simulation model showed that the effects of mine dewatering due to the proposed open pit does not reach any of the villages situated nearby. However, mine dewatering may have an impact on the ecological systems (e.g. wetlands) as the groundwater levels will be lowered.

6.13. AIR QUALITY

Dust generation could potentially impact on community and worker health due to elevated concentrations of dust (PM10 and PM2.5), especially along roads and cleared areas. The impact of elevated levels of dust could be significant, especially when roads are located in close proximity to villages. A reduction in the amount of dust generated through vehicles and during mining operation can be effectively mitigated by simply reducing the speed of vehicles, and or by wetting road surfaces when roads are in use.

In addition, dust could be generated once the tailings have dried out, since the fine particles will be susceptible to wind-erosion. Covering the dried tailings with topsoil and re-vegetating the area can successfully mitigate against wind-blown tailings.

6.14. NOISE AND VIBRATION

The mining operation will cause an increase in ambient noise levels in the surrounding areas. The residents living close to the project area will be most affected by noise, both during the construction and operation phases. These are likely to be impacts of low significance for the Nqueuene community, and can be mitigated by using standard industry practice to reduce noise and vibration levels. Of particular concern is the noise and vibrations generated from blasting activities. The effect of this on adjacent communities and safety considerations for the workforce need to receive careful attention during the detailed design phase of the project.

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6.15. SOCIO-ECONOMIC BENEFITS

Both direct and indirect economic opportunities will be created as a result of the project. Should services from the surrounding area be used, the project will contribute to increased cash-flow in and around the affected villages and smaller settlements within the greater project area. This will create opportunities for the direct and indirect sale of goods and services to the mine and mine employees. Upgraded services and additional road infrastructure can potentially improve access to basic services for residents in the project area. The following benefits are anticipated:

1. Economic opportunities: direct and indirect benefits include improved access to, and increase in cash inflow to villages in the immediate vicinity of the mine; upgraded services; the expansion of road infrastructure; potential improvements in access to basic services by residents; direct economic benefits from employment); 2. Employment benefits: increased skills base in the area. However, the general lack of skills in the study area reduces the benefits of permanent employment to local residents as literacy is a mine employee requirement however the company will focus on creating indirect employment for those not employed by the mine for goods and services supplied to the mine. 3. Social development: The surrounding communities are uneducated and lack the skills required in the workplace, specifically for projects that require a high degree of literacy. These community members will benefit greatly from skills development and training opportunities, such as on-the-job training, training workshops or other education initiatives in the construction phase of the proposed project.

The project will result in direct economic benefits at both provincial and national levels - any income generated from the project will significantly increase the country’s and province’s tax- base, will increase the diversity of the economy, will increase Mozambique’s export of graphite, and will increase foreign direct investment (FDI) into the country.

6.16. PUBLIC HEALTH AND SAFETY

General safety issues will be of importance owing to the proximity of the settlements to existing and potential future access routes for mining operations. The mining operation can pose severe safety risks to individuals who enter the site without authorisation, appropriate safety information and PPE, as well as adjacent communities living close to the site. Community members might be tempted to cross the mine area, exposing themselves to safety risks or even (in the worst cases) harassment from security personnel. Accidents involving local residents carry a high risk and can become a source of conflict for the mine operation with the local community.

Inward migration and increases in the labour force employed in the area may impact negatively on the health standards of people in villages in the mine expansion area. This, however, needs to be understood within the context of a number of issues. Malaria rates are high in the area and it is unlikely that inward migration will increase these levels. An increase in levels of HIV/AIDS and other Sexually Transmitted Diseases (STD’s) is also a concern. Current infection rates for the villages in the project area are not known, but inward migration may increase rates of infection.

6.17. POPULATION IN-MIGRATION

There is a strong possibility that the prospective mining operation will draw migrant labour in search of employment opportunities. The study area residents are largely poor and uneducated, which means that more educated and skilled labour will certainly be needed from areas such as

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Montepuez, Pemba and Maputo. Such an influx can either cause some of these villages (especially Nqueuene) to expand significantly, or cause a temporary oversupply of labour. As with most social impacts, in-migration may also have a positive impact in terms of providing local community members with small business opportunities due to an increased demand for local produce and other goods, as well as opportunities for cultural exchange. Although influx is considered outside the control of project developers, literature on project-induced in-migration suggest that influx can threaten ‘project security’ and that it should be managed as a project threat.

The direct and indirect impacts associated with an influx of labourers and expatriates are likely to have significant impacts on these villages, as it usually results in many social, cultural, economic and political changes.

6.18. GENERAL ACCESS ROUTES AND ACCESS TO NATURAL RESOURCES

The mining operation might limit access to particular areas due to the presence of fences and infrastructure, as well as the mine infrastructure. This may affect existing access routes, particularly the road between Sinhojo village on the Messalo River and Nqueuene village, that local communities rely on, and could make access to natural resources and access between villages difficult or more time consuming. This road will need to be diverted around the mine infrastructure to ensure that these communities are not cut off from each other.

The proposed access road will also allow for much easier access to the mine site. Increased access to what was previously a more remote area for larger settlements outside the study area will now be possible. It is anticipated that this could lead to an increase in bush meat hunting, poaching (particularly elephant tusks for the ivory trade) deforestation for charcoaling purposes and possibly commercial logging by external parties. While Suni Resources needs to ensure ongoing access to natural resources for community residents, it will also have to develop mechanisms, together with relevant authorities such as MITADER, to ensure that reckless overexploitation of the natural resources does not occur.

6.19. CHANGES TO SOCIAL SYSTEMS AND STRUCTURES

Social systems and structures have evolved in the study area over generations and are not static, but have responded dynamically to the changing social environment. Any development of the scale of the proposed project will result in significant social change; the influence of the project on the various village social systems and structures is likely to be experienced in a number of ways – both positive and negative. The mining activity, increase in vehicular traffic, intensification of economic activity and improved linkages are all likely to alter the prevailing rural nature of the settlements in their totality. Developments of this magnitude are frequently associated with changes to social structures and social dynamics, with associated tensions. These may be related to a variety of factors, including the influx of outsiders in search of employment, increased wealth, or reliance on cash income, the introduction or increase of communicable diseases, increased crime, disturbance of traditional hierarchies, etc.

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To contextualise the potential impacts of the mining activities and associated infrastructure proposed by Suni Resources, the status quo (the ecological condition) of the affected environment, and the impacts associated with current land use need to be described. This baseline should be used as the comparison against which project impacts are assessed. The main issues identified from the existing land use are discussed below. Only impact ratings without mitigation are shown, as it is not the responsibility of the proponent to mitigate these impacts.

7.1. ISSUE 1: LOSS OF PLANT COMMUNITIES

Although there is some clearing in the south eastern portion of the study area for machambas, and there is evidence that the communities are harvesting some natural resources, the vegetation types within the study area are generally intact. However, areas closer to villages are more heavily used by the nearby communities than areas further away. Since each vegetation type has a different sensitivity, the impacts on each type are considered separately.

Significance Statement: Impact 1a: Continued creation of Cultivated Land The Cultivated land (locally referred to as “Machambas”) is limited to areas surrounding the nearby village of Nqueuene, although there was evidence of additional clearing by community members who were hoping to receive compensation from the mine. Suni Resources will implement a moratorium in the hope of reducing additional and unnecessary clearing (including large trees) and if this is successful no additional clearing is anticipated. Since the area that has been cleared is relatively small compared to the extent of the natural vegetation types in the study area, the impact associated with the continued clearing of cultivated land is Low Negative.

Impact 1b: Loss of Riparian Woodland The loss of Riparian Woodland within the site, as a result of anthropogenic activities, is limited and only scattered evidence of harvesting for wood was observed within this area. However, the impact from local communities on riparian woodland that occurs close to the villages was more evident, but fortunately on a relatively small scale. For example, Sinhojo Village has cleared small pieces of land on the Messalo River to plant crops, but there was no evidence of clearing further upstream or downstream by members of this village. Impacts associated with the clearing of this vegetation type are therefore Low Negative.

Impact 1c & d: Loss of Tall Open Undifferentiated Woodland and Tall Open Miombo Woodland There was evidence of selective harvesting of tree species for construction purposes in the Tall Undifferentiated Woodland and Tall Open Miombo Woodland. Selective harvesting of certain tree species could result in a lowered biodiversity. The use of large tree specimens may also impact on the long-term persistence of species through the removal of individual seed-bearing trees. However, since the harvesting was on a small scale and within localised areas, and since there was no evidence of hardwood tree harvesting for commercial purposes (which is a well-recognised problem in Mozambique – see for example http://cases.open.ubc.ca/illegal-logging-in-mozambique), it is anticipated that this impact is Low Negative.

Impact 1e: Loss of Bamboo Thicket Although bamboo from the Bamboo Thicket is harvested and used extensively for construction purposes, this species is very resilient and can regenerate within one wet season. As such, the current removal of this vegetation type is considered to be Low Negative.

Impact 1f & g: Loss of Open Acacia Savanna and Open Palm Savanna Both of these vegetation types are comprised primarily of grass species, some of which are likely to be harvested for thatching. Since the roots of these species are not disturbed as a result of thatch harvesting, the impact of the current land use on these two vegetation type is considered to be nil.

Coastal & Environmental Services 106 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 1h: Loss of Undifferentiated Forest This vegetation type was intact with no evidence of harvesting or human traffic i.e. there were no evident footpaths. The current impact on this vegetation type is therefore Low Negative.

IMPACTS WITHOUT MITIGATION Severity Significance

Impact 1a: Continued creation of Cultivated Land Slight LOW-

Impact 1b, c, d, e,f, g & h: Loss of Riparian Woodland, Tall open Undifferentiated Woodland, Tall Open Miombo Woodland, Bamboo Thicket Slight LOW- and Undifferentiated Forest, Open Acacia Savanna and Open Palm Savanna

7.2. ISSUE 2: LOSS OF BIODIVERSITY (GENERAL) AS A RESULT OF HABITAT LOSS AND FRAGMENTATION

The clearing of land for agriculture and harvesting of plant materials for construction and charcoaling is currently resulting in the loss of plant species in the area and the displacement and loss of faunal groups due to disturbance and habitat loss within the project area.

In addition, subsistence hunting of certain faunal species, including rare and endangered game, by local communities was confirmed on site. Large bodied birds-of-prey, such as Martial and Crowned Eagles (both of which are SCC) are known to prey on livestock, making them susceptible to targeted hunting or even poisoning. The carcass of an Elephant was found on site, and villagers admit to wildlife hunting to contribute to food security, and more recently for commercial gain.

IMPACTS WITHOUT MITIGATION Severity Significance Impact 2a: Loss of Biodiversity (general) as a result of habitat loss and Slight LOW- fragmentation (flora) Impact 2b: Loss of Biodiversity (general) as a result of habitat loss and Moderate MODERATE- fragmentation (fauna)

Impact 2c: Loss of faunal biodiversity as a result of hunting Moderate HIGH-

7.3. ISSUE 3: ECOLOGICAL IMPACTS ASSOCIATED WITH COMMUNITY USE OF NATURAL RESOURCES

The existing land use practices of the communities within the project area currently impact the environment, as they rely heavily on the resources offered by the natural environment for their livelihoods and survival. Demand for natural resources is limited, as population numbers are sparse. Consequently, ecological systems are not stressed and are not over utilized in the area. These resources include food, potable water, construction materials, medicinal plants and species harvested and sold locally for income, and the use of these natural resources results in ecological impacts.

Impact 3.1: Removal of natural resources for agricultural land The dominant form of shifting cultivation within the study area is slash and burn. This method involves the felling of all trees and shrubs (except very large trees). Suitable wood is harvested for construction and fire wood, and the remainder is left to dry and rot. Prior to the rainy season the dried timber is set alight and left to burn, as the ash provides nutrient to the soil. These areas are then cultivated with various crops, but maize and sesame seed plants are the dominant crops planted in the study area. The land is cultivated until it no longer yields sufficient produce (usually 3 to 4 years), at which time it is abandoned to naturally regenerate and cultivated again within approximately 3 to 5 years. This agricultural use removes trees, shrubs and forbs which would have been used for fuelwood, food or for medicinal purposes, resulting in a loss of these natural resources.

Coastal & Environmental Services 107 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

Impact 3.2: Erosion and loss of topsoil due to cultivation The removal of indigenous vegetation that binds the soils could result in the loss of topsoil due to wind, and erosion during high rainfall events if clearing is done ahead of the rainy season and no crops are planted. Heavy rains and associated flooding could also result in erosion and loss of topsoil in areas planted near the rivers and on steep slopes.

Impact 3.3: Pollution of surface and ground water Current water quality tests indicate that 13 of the 17 water samples tested from both surface water and groundwater do not meet the standards for clean potable water. Elevated concentrations of fluoride, sulphide, manganese and sodium were detected in the water samples, and the water from Nqueuene village had elevated levels of nitrates and ammonia. Anthropogenic influences such as pit latrines are suspected to be contributing to the pollution of groundwater, while the use of rivers as ablution facilities and to wash clothes could contribute to the pollution of the river systems in this area. High levels of certain elements (e.g. manganese) is, however, thought to be a result of the geological formations in the area.

Impact 3.4: Over exploitation of natural resources (plant based products) All villagers are currently reliant on their immediate environment as a source of building materials. The areas immediately around the two villages (which are both located outside of the study area) comprise of secondary woodland, indicating that these areas have been used as a source of building material (among other things). However, there is limited activity further afield, with only a few tree species being felled throughout the site.

Impact 3.5: Loss of fauna due to hunting for bush meat Both villages rely on bush meat to supplement their own food resources and as a form of income. Both villages confirmed they hunt and consume large species such as elephants, buffalo and kudu as well as smaller species such as bush pigs, scrub hares and suni, in addition to trapping, eating and selling various bird species. The study area has a relatively high abundance of wild faunal species compared to other areas of Mozambique, and it is likely that these are being exploited in an unsustainable manner like many other areas within the province and country as a whole.

Impact 3.6: Over exploitation of fish Both villages supplement their diet and income by catching fish from the rivers during the wet and early dry season. Since the period in which fish can be caught is limited to the time of year when the rivers are flowing, this impact is not considered to be as high as impact 3.5 above.

IMPACTS WITHOUT MITIGATION Severity Significance Impact 3.1: Removal of natural resources for agricultural land Slight LOW-

Impact 3.2: Erosion and loss of topsoil due to cultivation Slight LOW-

Impact 3.3: Pollution of surface and ground water Moderate MODERATE-

Impact 3.4: Over exploitation of natural resources (plant based products) Slight LOW-

Impact 3.5: Loss of fauna due to hunting for bush meat Moderate HIGH

Impact 3.6: Over exploitation of fish Slight LOW-

Coastal & Environmental Services 108 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 7.4. ISSUE 4: INCREASED PRESSURE ON NATURAL RESOURCES DUE TO THE IN- MIGRATION OF PEOPLE INTO THE AREA

The villagers confirmed that there has been a change in migration patterns, with an influx of people into the area over recent years. The reasons for this migration may be due to people moving about in search of employment opportunities, or due to social or political disruptions in the areas people have migrated from. More people in the area will increase the demand on natural resources and land for machambas, resulting in ecological impacts. As there has been a low number of people moving into the area, the impact of this on the natural resource base is regarded as low.

IMPACTS WITHOUT MITIGATION Severity Significance Impact 4: Increased pressure on natural resources due to the in- Slight LOW- migration of people into the area

7.5. ISSUE 5: RISKS TO SAFETY AND SECURITY DUE TO IN-MIGRATION OF PEOPLE

There is a police post in Mirate that governs twenty-seven established villages and eighteen additional smaller villages. The police post comprises of three police officers. However, there are representative police within each village that report to the police post. Social conflict is otherwise reported to the village chief or one of the elders. Petty theft and violence are the main crimes reported in the area. There are no prisons or holding cells in the area and those arrested are either released, or taken to the main police station in Montepuez.

IMPACTS WITHOUT MITIGATION Severity Significance

Impact 5: Risks to safety and security due to in-migration of people Slight LOW-

7.6. ISSUE 6: POOR BASIC INFRASTRUCTURE AND SOCIAL SERVICES

Impact 6.1: Inadequate sanitation facilities The sanitation infrastructure in the villages in the area comprise of self-constructed pit latrines with bamboo or thatch coverings, as there are no water borne sanitation systems. The pit latrines are shared between 1 to 3 households. Sinhojo Village, located by the Messalo River, does not have any sanitation facilities.

Impact 6.2: Inadequate access to clean, potable water There is no access to piped water and villagers depend on water points. The majority of the villages use wells, hand pumps or draw water from the river as water sources for drinking, bathing, washing clothes and for livestock. The wells do, however, dry up in winter and several hand pumps found in the villages are not functioning.

Impact 6.3: Poor access roads The villages have access to a single-track dirt road that runs from Montepuez to the project site. The road is in poor condition, has numerous potholes and is often washed away during the rainy season. Most villagers hope the proposed project will improve the road quality. The primary modes of transport include bicycles and motorbikes, while most villagers travel by foot.

Impact 6.4: Understaffed and underequipped medical facilities The main hospital situated in Montepuez is currently undergoing construction to increase its bed and treatment capacity. There is a clinic in close proximity to the villages surrounding the project area; namely the Mirate Clinic. The clinic has ten staff members and seven beds which is insufficient to treat patients from approximately twenty-seven villages in the area. Villagers often travel far distances on foot, bicycle or motorbike to reach the clinic. There is no ambulance and the medication

Coastal & Environmental Services 109 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 is donated to the clinic through government initiatives. It is not costly to be admitted to the clinic (MZN 1), however the lack of bed capacity, limited staff members, absence of electricity and limited water supply, distance to the clinic and lack of medical supplies and equipment are challenges facing villagers’ access to healthcare. Vector-related diseases such as malaria, soil- and water-related diseases as well as HIV/AIDS and malnutrition are prevalent in the area.

Impact 6.5: Inadequate education facilities The literacy rate of the Cabo Delgado Province is significantly low, largely as a result of very few household members older than 18 having completed secondary school. The closest secondary school and university are situated in Montepuez. Most of the children from the villages do not attend secondary school or university due to high fees and the distance from the villages to Montepuez.

The local schools face several challenges including a lack of classroom capacity, a shortage of teachers, classrooms, desk and chairs as well as stationery and other materials. These contribute to a significant number of children not attending school. It is often the case that the children work on farms instead of attending the local schools.

IMPACTS WITHOUT MITIGATION Severity Significance

Impact 6.1: Inadequate sanitation facilities High HIGH-

Impact 6.2: Inadequate access to clean, potable water Medium MODERATE-

Impact 6.3: Poor access roads Medium MODERATE-

Impact 6.4: Understaffed and underequipped medical facilities High HIGH-

Impact 6.3: Inadequate education facilities Medium HIGH-

Coastal & Environmental Services 110 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 8. ASSESSMENT OF PROJECT RELATED IMPACTS ON THE BIOPHYSICAL ENVIRONMENT

This chapter presents an assessment of the potential biophysical impacts associated with the project during its construction, operational and decommissioning phases. These impacts are drawn from the various specialist reports detailed in Table 1.1 of this report. The chapter also highlights the mitigation measures applicable for each impact that are detailed in the project EMPr.

8.1. PLANNING AND DESIGN PHASE IMPACTS

Activities associated with the design and pre construction phase pertain mostly to exploration. As the project has a mining concession, impacts associated with exploration and the mitigation of these impacts were included in the Exploration EMP compiled to obtain the concession, and will therefore not be repeated in this section. Other activities associated with the design and pre construction phase will not have impacts on the biophysical environment as this phase consists of planning and design of the proposed development, and is done at a desktop level. In some cases site visits need to take place but the impact of these visits is negligible, if any, e.g. photographs, borehole pump testing, botanical and other field surveys, etc.

8.2. CONSTRUCTION PHASE IMPACTS

This section presents the issues arising from the construction of the mine, including its associated infrastructure. These issues will directly, as well as indirectly, affect the natural environment of the project area, as discussed below.

8.2.1. Issue 1: Terrestrial habitat loss and fragmentation

The environmental impacts on habitats are evaluated in this issue. The main project action causing these impacts is the clearing and subsequent loss of the vegetation and associated habitats, as well removal or disruption to abiotic habitats such as rock outcrops. The development of road linkages and related infrastructure will encourage human settlement and further development in the area, resulting in additional secondary habitat loss and fragmentation.

Impact 1.1: Loss of Plant Communities Natural plant communities are the most important biotic (living) component of ecosystems, and provide habitats that support all forms of life. The different types of communities (and habitats), as described in this report, have also been observed beyond the boundaries of the study area.

The mine and associated project infrastructure will result in the clearance of approximately 511.5 ha of natural vegetation, resulting in the loss of plant communities. The impact of the loss of portions of these different habitats will differ, and these have therefore been considered and assessed separately. A total of six impacts were identified; namely:

i. Loss of Riparian Woodland - Direct mining impacts on this vegetation type include localised clearing of vegetation for the building of bridges and crossings at rivers and streams, and more extensive loss from the flooding of the TSF and WSF, which are both located in drainage lines. It is anticipated that approximately 79ha will be permanently lost, as 15% of the infrastructure footprint is located in this habitat. ii. Loss of Tall Open Undifferentiated Woodland and Bamboo Thicket Mosaic - It is anticipated that 398ha of this vegetation will be cleared, as 78% of the infrastructure footprint occurs in this vegetation, which will be cleared for the construction of the accommodation village, waste rock dumps, tailings storage facility, water storage dam and the excavation of the two pits. However, this vegetation type is widespread throughout the study area and regionally.

Coastal & Environmental Services 111 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 iii. Loss of Tall Open Miombo Woodland - Tall Open Miombo Woodland occurs as relatively small patches within the Tall Open Undifferentiated woodland, and hence only 4 ha will be directly impacted, as only 0.8% of the infrastructure footprint is located in this habitat. iv. Loss of Open Acacia Savanna - Open Acacia Savanna is located next to the riparian areas and appears to be inundated during the wet season, forming a seasonal wetland or dambo. It is anticipated that 25 ha of this vegetation type will be lost during the construction phase, to make way for 5% of the infrastructure footprint. v. Loss of Open Palm Savanna - The Open Palm Savanna will not be directly impacted by the mining activities vi. Loss of Undifferentiated Forest - The inundation of the storage water dam will result in the loss of 5.5ha (1% of the infrastructure footprint) of this vegetation type.

Impact 1.2: Fragmentation of vegetation and edge effects Fragmentation is one of the most important impacts on vegetation as it creates breaks in previously continuous vegetation, causing a reduction in the gene pool and a decrease in species richness and diversity. This impact occurs when large areas are cleared, as this results in the isolation of functional ecosystems, and results in reduced biodiversity and reduced movement due to the absence of ecological corridors.

Edge effects may occur along the boundary of where mining activities and roads are, which may further compound the impacts associated with fragmentation and further reduce population numbers to below sustainable thresholds, potentially causing local extinctions.

Mitigation and Management: The following mitigation actions must be implemented:  Areas impacted by construction activities that are no longer required during the operation phase must be rehabilitated and re-vegetated;  Rehabilitation of impacted areas during the decommissioning phase must occur;  The width of the haul road and subsequent clearing during construction must be kept to a minimum;  Where feasible, existing access roads must be used;  Align roads and pipelines within a single corridor;  Access roads should ideally be located in the Tall Open Undifferentiated Woodland/Bamboo Mosaic and should avoid areas of high sensitivity; and  Design and implement a Rehabilitation and Restoration Management Plan.

The following mitigation actions should be considered:  Key representative portions of existing Tall Open Miombo Woodland, Tall Open Undifferentiated Woodland/Bamboo Mosaic, Undifferentiated Forest and Riparian Woodland must be set aside as conservation area and ecological corridor within the study area (but outside of the infrastructure footprint) and demarcated as such, so that they can continue to provide important sources of seed banks in addition to refugia for birds, reptiles, amphibians and mammals, which are all important in pollination and seed dispersal;  Where feasible, river crossings must be kept to a minimum, and where possible located in already degraded areas; and  Avoid locating linear infrastructure (such as roads and pipelines) through areas of high sensitivity.

Impact Statement Provided that the mitigation measures are implemented, this impact will be limited to the construction phase. The majority of the infrastructure footprint will impact the Tall Open Undifferentiated Woodland/Bamboo Mosaic which is widespread inside and outside of the project boundary and of moderate sensitivity.

Coastal & Environmental Services 112 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 1.1a: Loss of 79ha (15% of infrastructure Severe HIGH- Moderate MODERATE- footprint) of Riparian Woodland Impact 1.1b: Loss of 398 ha (78% of infrastructure footprint) of Tall Open Severe HIGH- Moderate MODERATE- Undifferentiated Woodland/Bamboo Thicket Mosaic Impact 1.1c: Loss of 4ha (0.8% of infrastructure Moderate LOW- Moderate LOW- footprint) of Tall Open Miombo Woodland Impact 1.1d: Loss of 25ha (5% of infrastructure Moderate MODERATE- Moderate MODERATE- footprint) of Open Acacia Savanna

Impact 1.1e: Loss of Open Palm Savanna No Impact

Impact 1.1f: Loss of 5.5ha (1% of infrastructure Severe HIGH- Moderate MODERATE- footprint) of Undifferentiated Forest Impact 1.2: Fragmentation of vegetation and Moderate HIGH- Slight MODERATE- edge effects

8.2.2. Issue 2: Loss of Biodiversity

The loss/alteration of habitats, introduction of alien species, over exploitation of resources and pollution all contribute to biodiversity loss. This occurs at a general level and can also result in the loss of species of special concern.

Impacts 2.1: Loss of Floral Biodiversity and Species of Conservation Concern Mining activities, the inundation of the dam and the construction of associated infrastructure will result in the removal of 511.5 ha of vegetation, resulting in the permanent loss of faunal habitats, biodiversity (fauna and flora), species of conservation concern (fauna and flora) and other species that are important to ecosystem functioning. Given that the study area is intact and the biodiversity of indigenous species is consequently high, this impact will be higher than in areas that are currently under cultivation.

Impact 2.2a: Loss of Amphibian Diversity and Species of Conservation Concern Amphibian mortalities will result from the construction of project infrastructure. Amphibians are motile species, but populations will be displaced due to habitat loss and fragmentation. The mobility of frogs will further make them susceptible to road mortalities related to an increase in the number of project vehicles using roads. Increased noise and motor vibrations in wetlands/dambos and riparian areas may also impact amphibian breeding choruses, but these impacts will be localised and many amphibian species are surprisingly tolerant of vehicle noise. Amphibians are likely to be the most impacted from an increase in dust levels. Dust can increase the turbidity of streams and wetlands/dambos which may in turn inhibit amphibian ability to feed and breed. Spillages of hydrocarbons and other pollutants may lead to development abnormalities and fatalities of amphibian species.

In addition, riparian zones and associated wetlands/dambos provide important habitats for many frog species. Many species will find logs, rocks, cracks or crevices within riparian areas to either hibernate or estivate. Estivation is a prolonged state of dormancy or torpor which many frog species within the project area will enter during the dry season. The inundation of the storage water dam and TSF will undoubtedly result in the most significant impact on amphibian diversity. Frog species in a state of estivation are likely to either be killed or displaced. Furthermore, the construction of the dam and TSF will alter flow dynamics of river systems, negatively impacting amphibian communities downstream.

Coastal & Environmental Services 113 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 2.2b: Loss of Reptile Diversity and Species of Conservation Concern Reptile mortalities will result from the construction of project infrastructure. Habitat loss and fragmentation lead to the displacement of reptile species. Increased human numbers associated with the construction phase of the project will result in increased mortalities from road collisions as well as from persecution. Snakes will not attack a human unless they feel threatened and provoked, but some people find the mere presence of snakes/lizards threatening, due to myths, superstitions and anecdotes, and will kill them (persecution) even if no threat is posed. As the majority of reptiles are fairly mobile, the construction of the dam and TSF will not impact reptiles to the same extent as amphibians. Fossorial reptiles (such as burrowing snake species) and motile reptiles (such as tortoises) have the ability to swim, reducing the likelihood of excessive mortalities due to the inundation of habitats required for the storage water dam and TSF.

Impact 2.3c: Loss of Bird Diversity and Species of Conservation Concern Some birds, particularly nocturnal species such as owls and night-jars will be killed on the roads if there is an increase in the number of project vehicles using roads at night. The construction of the water storage facility and TSF will result in large areas of Riparian Woodland and some Undifferentiated Forest becoming inundated. These vegetation types harbour a high diversity of bird species, and provide nesting habitats for a number of birds, including SCC. For these reasons impacts from these project actions are regarded as more significant.

Impact 2.4d: Loss of Mammal Diversity and Species of Conservation Concern Mammal mortalities will result from the construction of project infrastructure. Habitat loss and fragmentation will result in the displacement of numerous mammal species, ranging from small rodents to elephants. Increased human numbers will result in increased mortalities from road collisions as well as increased hunting pressures. Most mammals are highly mobile, however, high mortalities of fossorial species such as moles can be expected, due to earth works associated with construction activities as well as the inundation of the dam and TSF. No fossorial species have been recorded in the project area, but are likely to occur.

Mitigation and Management: In addition to the mitigation measures listed under impact 1.1 above, the following additional mitigation actions must be implemented:  Prevent mining employees from harvesting plants for personal use, firewood or charcoal within the study area;  Prevent employees from hunting birds, mammals, amphibians and reptiles by raising awareness through environmental training;  Speed restrictions for all project vehicles (40km/h is recommended) on non-public roads (mine site and internal access roads) must be in place to reduce the impact of fauna being killed on the project roads;  Dust suppression techniques, such as the watering of project roads, must be implemented during the dry season;  A search and rescue plan must form part of the Ecological Management and Monitoring plan and should be developed for faunal species that fall into construction pits;  Storage facilities for chemicals should be bunded, and situated in high lying areas, to avoid spillages and damage from flood events. Employees should be trained on how to deal with spillages; and  Prevent employees from killing snakes by raising awareness through environmental training and awareness programmes.

The following mitigation actions should be considered:  Undertake habitat clearing during winter, when birds are not breeding, for the water storage dam and TSF. However, the plant and pits are likely to be cleared at varying times, but should ideally be undertaken in winter where practical to do so;  As far as possible, protect abiotic habitats, such as rocky outcrops, which provide shelter for many reptile species;  Road kill monitoring should form part of the monitoring programme;

Coastal & Environmental Services 114 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

 Implement an environmental education program that educates adult community members and employees on the sustainable use of natural vegetation and explain the importance of looking after the species of conservation concern rather than using them all; and  Provide assistance with the implementation of an educational program aimed at the primary schools that encourages the learners to use their natural environment sustainably.

Impact Statement The loss of biodiversity and species of conservation concern can be mitigated to impacts of low and moderate significance if the mitigation measures listed above are implemented.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 2.1: Loss of Floral Biodiversity Moderate HIGH- Slight MODERATE- and Species of Conservation Concern Impact 2.1a: Loss of amphibian diversity Severe HIGH- Severe MODERATE- and SCC Impact 2.2b: Loss of reptile diversity and Moderate MODERATE- Slight LOW- SCC Impact 2.3c: Loss of bird diversity and Very HIGH- Severe MODERATE- SCC Severe Impact 2.4d: Loss of mammal diversity Severe MODERATE- Moderate MODERATE- and SCC

8.2.3. Issue 3: Alteration of Flow Regimes on the Aquatic Habitat

Impact 3.1: Habitat Modification During both of these project phases earthworks associated with mining could alter the natural topography. This could destroy drainage lines or alter natural flow patterns within the project area, and consequently drainage to adjacent streams.

The hydrogeological study has shown that the lowering of the water table during dewatering of mine pits has a maximum Zone of Influence (ZOI) depth located at the open pits of approximately 125m in depth. The maximum lateral extent of the ZOI at Elephant pit is approximately 700m and at Buffalo pit 550m from the centre positions of the pits. The overall impacts were regarded as low on adjacent water supply, but moderate on ecological systems, as groundwater levels will be lowered. Changes in local drainage patterns and flow regimes will take place, with impacts during the operational phase regarded by the hydrologists as being of moderate significance

Mitigation and management: The following mitigation actions must be implemented:  Where appropriate, slash and debris should be stockpiled above the high water mark to prevent materials from entering streams and dambos during maintenance activities. This should NEVER be disposed of in stream/river courses or in riparian zones;  Avoid soil exposure and compaction to protect ground vegetation by avoiding the operation of wheeled or tracked equipment in proximity to the ordinary high-water mark for perennial streams, except on roads or at stream crossings;  Minimise the number and size of stream crossings for vehicle movement within the riparian zones. Where crossings are necessary, international best practice in the use of bridges, hardened fords, pipes and culverts should be adopted. Recommended stream crossing measures should include: o Minimise vehicular movement over perennial and intermittent streams and dambo areas. Where crossing is necessary, a right angle approach should be used in addition to use of bridges, fords, pipe culverts, and other techniques to minimize impacts to stream banks, flow, water quality. o Crossing structures such as bridges, culverts and fords should be designed to withstand

Coastal & Environmental Services 115 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 peak flows of high intensity storms, and ensure that movement of aquatic species is not impaired. o Vehicle movement over unprotected streambeds should be prevented. If crossing is necessary, a hard rock stream bottom is preferable. o Road drainage should be diverted to vegetation and not into the stream. o Approaches to crossing should be stabilized with aggregate to avoid increased sediment entering the stream.

Impact Statement The alteration of flow regimes and the changes to habitat are easily mitigated to reduce impacts from moderate to low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance

Impact 3.1: Habitat Modification Severe MODERATE- Slight LOW-

8.2.4. Issue 4: Invasion of Alien Flora and Fauna Species

Impact 4.1a: Invasion of alien plant species The removal of existing vegetation creates ‘open’ habitats that will inevitably be colonised by pioneer plant species. While this is part of a natural process of regeneration, which ultimately leads to the re-establishment of a secondary vegetation cover, it favours the establishment of undesirable species in the disturbed area, such as Ricinus communis (Castor Oil Bush) and Mucuna pruriens. These species are introduced along transport lines, and by human and animal movements in the area. Once established, they are typically very difficult to eradicate and may then invade undisturbed areas, posing a threat to the neighbouring ecosystem. This impact is likely to be exacerbated if the site and management of the facilities are poorly managed.

Impact 4.1b: Invasion of alien fauna species Introduced urban rodent pests such as the house mouse (Mus musculus), house rat (Rattus rattus) and the Norwegian rat (Rattus norvegicus) are likely to occur in populated areas such as the mine village. These species generally tend to survive alongside human habitation, and don’t spread in natural areas. The most widespread and common alien bird is the House Sparrow (Passer domesticus) and the Pied Crow (Corvus albus) which is now distributed almost worldwide and was recorded on site.

Mitigation and management: The following mitigation actions must be implemented:  Prepare an Alien Invasive Management standard operating procedure (SOP) for both animal and plant species. This should for part of the Ecological Management and Monitoring Plan;  Put in place environmentally acceptable procedures for solid waste management, to reduce the risk of encouraging invasive vermin;  The deliberate introduction of alien species must be prohibited, unless a full environmental assessment is undertaken and control methods for escapees detailed; and

Impact Statement Provided the mitigation measures are adhered to, the invasion of alien invasive plant and animal species can be managed to ensure that their impact is of low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.1a: Invasion of alien plant Severe MODERATE- Low LOW- species Impact 4.1b: Invasion of alien faunal Slight MODERATE- Slight LOW- species

Coastal & Environmental Services 116 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 8.2.5. Issue 5: Contamination of Land and Water Resources

The construction phase of the project will result in the generation of dust and noise from heavy machinery, clearing of vegetation and increased traffic. In addition, other sources of waste such as chemicals and diesel, sewage, waste water and solid waste may also pollute the land and water resources if not managed.

Impact 5.1: Smothering of vegetation as a result of increased dust levels Construction activities will result in the removal of vegetation cover which binds the soil, resulting in increased dust levels. This will be more prevalent during the dry season. In addition, any earth moving activities and the expected large number of vehicle movements also cause increased dust levels.

An increase in dust will smother the vegetation in the nearby vicinity, especially adjacent to roads, which impairs a plants ability to photosynthesise (make food) and respire. This in turn reduces the productivity and the growth of the vegetation, making it more susceptible to disease and predation.

Impact 5.2: Sedimentation and elevated turbidities in rivers Mining infrastructure is situated at the lower end of the relatively large catchment of the Mecopeti River, and at the head of two other smaller catchments to the north. All the watercourse in the mining area drain into the much larger Messalo River. The Mecopeti and its tributaries are seasonal, and cease to flow in the seven or eight dry months of the year. About 90% of the 900mm annual rainfall occurs in the four months from December to March, and this results in the rivers flowing strongly, with considerable energy to pick up and transport sediment, most of which will be carried into the perennial Messalo River. Water quality data indicates that the Messalo carries higher sediment loads during the high flows of the wet season than during the dry season. Introducing additional sediment loads due to mining activities is to be avoided. However, the Messalo River is approximately 6km from site and this, coupled with low to no flows in the dry season, reduces the potential for contaminated water reaching this system.

Exposed soils can lead to a number of impacts such as erosion, sediment production and loss of topsoil. This may result in an accumulation of sediment and organic debris in watercourses, increased nutrient loads and changes to stream flows, which may affect fish and other aquatic populations. Mining activities during the construction phase may impact on water quality resulting in the loss of existing aquatic habitat diversity.

Vegetation clearing results in the soils on the land becoming more prone to erosion, by reducing the number of stabilising structures in and on the surface of the soils, such as root systems and plant cover that reduce the velocity of runoff and bind the soil. This results in a net increase of surface water runoff, which can lead to increased erosion. A secondary, linked impact is the loss of topsoil. Topsoil is critical to successful plant growth and must be conserved at all times. Once lost, topsoil is extremely difficult to restore.

Increased erosion can lead to increased sedimentation of the watercourses into which surface runoff flows. Sedimentation can have severe negative impacts on surrounding aquatic environments including increased turbidity (which decreases light penetration into water, thereby reducing photosynthetic activities in the water column), reduced oxygen concentration in the water column and benthic environment, smothering of benthic biota resulting in loss of food and smothering of spawning beds. This can have severe long-term negative impacts on aquatic habitats.

Coastal & Environmental Services 117 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 5.3 a and b: Pollution of land and water resources from non-ore pollutants (general non-hazardous wastes and hazardous waste) Inappropriate storage of wastes, particularly those exhibiting harmful properties (i.e. hazardous wastes), can result in the contamination of land and water resources. As a result of rainfall events, leachate may be formed as water percolates through the solid waste, and this leachate may contain nutrients and a variety of toxic compounds, including metals. As such, it could result in the contamination of water and land. In extreme cases, release of large quantities of nutrients to a water body can result in eutrophication. The presence of certain toxic compounds in water as a result of pollution by wastes may have significant long-term negative impacts on the aquatic ecosystems and render the water unsuitable for certain applications including human consumption.

Impact 5.4c: Pollution of land and water resources from domestic waste water and sewage sludge Another source of pollution can come from domestic sewage, which is characterised by a high concentration of nutrients, high organic matter and a variety of pathogens. As such, it must be properly treated prior to discharge to the environment to avoid negative impacts to human health and the environment. If untreated sewage is discharged to the environment, the high nutrient concentration could lead to eutrophication of surface water resources and subsequent disruption of ecological function within the aquatic environment. The sewage sludge from sanitary treatment facilities would have to be removed periodically. The sludge would have to be treated and disposed of as described in section 5.3.4 of the waste report. Sewage sludge also contains high concentrations of nutrients and may have a similar impact on surface water resources if not stored and disposed of in a manner that minimises the likelihood of migration of contaminants from the sludge to water resources.

Impact 5.5d: Pollution of land and water resources from run-off and storm water Run-off water is likely to be generated on site as a result of the high rainfall, washing of machinery (including vehicles) and, possibly, dust suppression activities. As this water migrates across the site it has the potential to pick up various pollutants such as hydrocarbons and small solid particles. Furthermore, the run-off from machine washing activities is also likely to contain hydrocarbons. If this water is discharged without treatment, chemicals (hydrocarbons, pesticides etc.) and sediment could be transported into surface and sub-surface water bodies, resulting in ecological disruption.

Mitigation and Management: Impact 5.1: Smothering of vegetation as a result of increased dust levels The following mitigation actions must be implemented:  Vehicle speed limits should be implemented as slower speeds result in lower dust levels, 40km/h is recommended;  Rehabilitate road verges and laydown areas impacted on during construction. This vegetation needs to be maintained during the operational phase of the mine;  Dust emissions from outdoor stockpiles must be minimised by rehabilitation of the waste dump progressive with mining to minimise dust;  Emission and ambient dust concentrations must be monitored regularly and measures employed to ensure that the concentrations do not exceed the limits imposed by national legislation;  Employ dust suppression measures on the project’s roads during dry, windy periods. There are three types of measures that can be taken to reduce emissions from unpaved roads: (a) measures aimed at reducing the extent of unpaved roads, e.g. paving, (b) traffic control measures aimed at reducing the entrainment of material by restricting traffic volumes and reducing vehicle speeds, and (c) measures aimed at binding the surface material or enhancing moisture retention, such as wet suppression and chemical stabilization (Cowhert et al., 1988; APCD, 1995);  Develop an Air Quality Management Plan, the implementation and monitoring should be continuous;  Implement a community training and awareness programme, focusing particularly on the impacts resulting from: large-scale bush clearance, selective logging of hardwoods for charcoal production, excessive use of fire in the dry season; and

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 Source based performance indicators for the unpaved roads would be acceptable levels of visible dust when trucks/vehicles drive on the roads. Dust fallout in the immediate vicinity of the road perimeter should be less than 1,200 mg/m2-day and less than 600 mg/m2-day at the sensitive receptors8.

Impact 5.2: Sedimentation and elevated turbidity in rivers The following mitigation actions must be implemented:  The Riparian Zone must be managed under the Ecological Management and Monitoring Plan with the aim being to maintain the integrity of vegetation in the riparian zones of watercourses, including along the shores of the water storage facility, to assist in intercepting silt laden surface runoff;  Develop and implement a Surface Water Monitoring Plan that will incorporate both water quality and quantity measures. The proposed Exigo monitoring plan should be followed as best as possible;  Prevent or limit disturbance to water resources during the planning phase;  Top soil should be removed and stockpiled for rehabilitation, to a maximum height of 5m, and in the event of long-term stockpiling (more than 4 months) covered with vegetation to avoid erosion during the high rainfall events that occur in the wet season;  Site infrastructure such as roads and fences should be aligned with the natural drainage lines to minimise additional erosion;  Maximum vegetation cover should be maintained outside the mine infrastructure, particularly in riparian areas, to act as silt traps;  During construction natural drainage lines that will not be directly affected by infrastructure must not be impeded or otherwise interfered with; and  Erosion should be monitored over the entire site and, where initial indications of erosion are detected, appropriate remedial measures must be taken as soon as possible.

Impact 5.3.a: General non-hazardous wastes  All wastes must be managed according to the requirements of Mozambican legislation;  As far as practicable, the philosophy of the waste management hierarchy should be applied to the management of all waste streams;  All general wastes that cannot be reused or recycled should be stored temporarily in a dedicated area and then transported regularly to the proposed landfill for disposal;  The proposed general landfill site must be sited, designed and operated in accordance with the requirement of the Mozambican legislation (Decree 83/2014 of December 31st) in order to isolate the wastes and prevent environmental contamination, particularly groundwater contamination and must be licenced by the developer early in the construction phase. Until such time as this facility is fully operational, all general waste produced during the construction phase must be stored on site in a secure access controlled area, in a legally- compliant manner that minimises environmental impacts;  It will be essential to implement a ground water monitoring system in the vicinity of the constructed landfill site in order to detect any changes to the quality of sub-surface water;  All bins for temporary storage of waste that are located outdoors should be covered to prevent ingress of water and access by animals;  A comprehensive Integrated Waste Management Plan should be developed for the site and it should include Key Performance Indicators (KPIs) against which the management of wastes can be audited;  All employees, contractors and visitors to the site must be informed of correct waste management procedures, including separation of general and hazardous waste at source; and  Waste storage and disposal areas must be located at least 100m from surface water resources or important drainage lines.

8 Mozambique does not have dust control regulations. Figures from the South African National Dust Control Regulations have therefore been used.

Coastal & Environmental Services 119 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 5.3 b: Hazardous wastes  The Integrated Waste Management Plan for the facility must cover the management of hazardous wastes;  Prior to safe disposal, all hazardous wastes must be temporarily stored at the temporary hazardous waste storage facility. This facility should be designed to include secondary containment lined and covered to protect the contents from weather (sunlight and rain). If wastes are corrosive, the base of the storage facility should be lined with an acid-resistant coating;  Where possible, empty containers for hazardous chemicals will be returned to suppliers. Where empty containers for hazardous chemicals (hydrocarbons, pesticides, laboratory chemicals, degreasing agents etc.) cannot be returned to the suppliers, they must be triple- rinsed, punctured and stored in a secure area until such time as they can be disposed of safely. Rinse water may not be discharged directly to the environment;  Empty pesticide containers should be disposed of according to the Regulation for the Management of Hazardous Waste (Decree 83/2014 of December 31st) and the burning of empty pesticide containers should be strongly discouraged;  The Integrated Waste Management Plan must include details on the management of hazardous waste. Copies of the hazardous waste SOP should be made available at designated facilities where hydrocarbons are stored, dispensed and used. The purpose of this procedure is to provide for the proper storage and handling of hydrocarbons and other hazardous chemicals, including waste hydrocarbons, on site and hence prevent any form of contamination;  It is recommended that soil contaminated with hydrocarbon should be immediately removed and disposed of at a soil bioremediation facility on site, or else disposed of as hazardous waste;  Materials Safety Data Sheets (MSDS) for all chemicals must be readily available on site and the precautions stipulated in these must be adhered to at all times. All staff must be trained on the correct management of bunded facilities, including the discharge of collected liquids;  Spill kits must be readily available at strategic points throughout the site and staff must be trained on the correct use of these kits;  No hazardous wastes should be disposed of into drains as this may impact negatively on the performance of the waste water treatment works; and  There are two potential disposal options for medical waste which must be managed according to the management procedure described in Annex 3 of ICRC Medical Waste Management (2011) and the requirements of the Mozambican legislation (Bio-medical waste Decree No.8/2003). Medical waste generated at the site should be incinerated and residues disposed of at the proposed landfill site. Alternatively, the medical waste can be stored temporarily at a designated and clearly demarcated facility prior to its transportation to the Hospital Rural De Montepuez for disposal or the Pemba facility.

Impact 5.3c: Domestic wastewater and sludge  All domestic wash water and sewage from all sites must be diverted to the septic tanks (during construction) and or packaged sewage treatment plants (during operation) for treatment. Effluent discharge from these facilities must meet the Mozambique discharge standards as indicated in Appendix A of the Waste Specialist Report prior to release into the environmental should it become necessary to do so;  It is recommended that effluent from the packaged sewage treatment plant be recycled to the process water pond, where it will be diluted and can be used as process water;  Sewage sludge, which is regarded as hazardous, must be disposed in separate sludge drying beds and composted. The stabilized sludge can then be dried and either disposed at the proposed landfill or alternatively, applied as a soil conditioner during rehabilitation of the mine, provided that levels of toxic constituents is sufficiently low;  An emergency overflow pond is required to contain any emergency overflow from the processing plant. The emergency overflow pond must be designed to then overflow into the TSF;

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 The pre-treatment of oil and grease containing effluents from fuel bays and mechanical vehicle workshops will be collected in a sludge pit sump and will be pumped to the process plant tailing thickener for recycling;  Chemical toilets should not be used during the construction period unless the contents can be disposed of in a manner that does not pose a threat to the environment. Instead, alternatives such as VIPs, composting toilets or similar should be considered as preferred alternatives. If VIPs are used, they must be lined, maintained and sited in a way that minimises the risk of contamination of surface and sub-surface water resources;  All sewage treatment facilities should be well maintained. To this end, at least one employee on site must be trained to maintain the system(s);  The performance of the sewage treatment systems and water recycling depots (Process Plant Tailing Thickener) must be monitored regularly. Where a system is found to be performing poorly, the cause of the poor performance must be investigated timeously and remediation measures put in place to restore performance; and  The environmental monitoring programme for the facility must incorporate monitoring points that are able to detect a negative impact on the environment associated with the discharge of treated sewage.

Impact 5.3d: Run-off and Stormwater  The management of all run-off must comply, as a minimum, with the requirements of Mozambican legislation (Decree No. 18/2004 as amended by Decree No. 67/2010);  A Storm Water Management Plan must be developed for the mine and it should incorporate measures to divert clean storm water away from stockpiles, waste storage and disposal areas and other operation areas;  Mitigation measures should be aimed at reducing contact between storm water and hazardous chemicals. This needs to be considered during the planning of the storm water drainage system for the mine facilities;  In terms of minimising discharge of pollutants and reducing storm water run-off quantity, resulting in it requiring treatment, where possible storm water run-off must be properly segregated and clean water run-off diverted to prevent it mixing with water containing a high solids content, to minimize the volume of water to be treated prior to release. For example, roof run-off can be harvested in rainwater tanks for re-use;  All run-off from machine wash areas must pass through an oil trap and should be treated as hazardous due to the presence of hydrocarbon;  All other run-off water must pass through a sediment trap to remove the majority of suspended solids prior to discharge to the environment. All settled material must be disposed of at the landfill;  The quality of all liquid waste streams discharged from the site, including storm water, must be monitored regularly to ensure compliance with the requirements of relevant legislation and standards; and  The mine design has incorporated a number of environmental considerations including;  separation of contact (contaminated) water and fresh water,  recycling of contact water in the mine processing plant,  recycling of all water from workshops and buildings

Impact Statement Provided the mitigation and management measures listed above are implemented, the impacts that result in the pollution of land and water resources will be of moderate and low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 5.1: Smothering of vegetation as Moderate MODERATE- Slight LOW- a result of increased dust levels Impact 5.2: Sedimentation and elevated Severe MODERATE- Slight LOW- turbidity in rivers

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IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 5.3a: Pollution of land and water Moderately resources - general (Non-hazardous) MODERATE- Slight LOW- Severe wastes Impact 5.3b: Pollution of land and water Very HIGH- Moderate MODERATE- resources - Hazardous wastes Severe Impact 5.3c: Pollution of land and water Moderately resources – domestic wastewater and MODERATE- Slight LOW- Severe sewage sludge Impact 5.3d: Pollution of land and water Moderately MODERATE- Slight LOW- resources – run-off and stormwater Severe

8.3. OPERATIONAL PHASE IMPACTS

The invasion of alien flora and fauna species could occur during the operational phase. This impact will be the same as for the construction phase and has therefore not been repeated here.

8.3.1. Issue 1: Terrestrial habitat loss, alteration and fragmentation

Impact 1.1: Loss of intact plant communities (as an indirect impact) resulting from an influx of job seekers There is likely to be an influx of people into the nearby villages as people arrive in search of job opportunities and establish small businesses that provide services to the mine’s employees. Even with very good management, influx is likely. An influx of outsiders will place additional pressure on the natural resources and may result in the additional clearing of land to establish machambas for subsistence purposes. This will result in additional loss of various plant communities. This indirect impact could be higher than the impacts associated with the direct loss of vegetation communities, as the mine will have limited control over clearing associated with such an influx.

Impact 1.2: Increased access to previously inaccessible areas The new and upgraded access roads will provide increased and/or easier access for the local communities to previously inaccessible areas, or areas that were difficult to access. Left uncontrolled, this could result in further removal and degradation of the surrounding vegetation, in hitherto un-cleared areas.

Impact 1.3: Impact of altered habitats on fauna Habitat alterations as a result of the operation of permanent water storage dam, and to a lesser extent the TSF, will have an impact on fauna. Since the impact on each faunal group will differ, these have been assessed separately:

 Amphibians: Following the establishment of perennial riparian vegetation (mainly reeds and sedges) around the introduced permanent water bodies, suitable habitat for a number of frog species and communities will be created. Amphibian abundance is likely to increase following inundation of the storage water dam and, to a lesser extent, the TSF. However, the modification to the natural system may also create conditions suitable to the establishment of invasive species. The construction of the dam and TSF will alter permanently flow dynamics of river and drainage systems, which may negatively impact on amphibian communities downstream.  Reptiles: The introduction of an artificial permanent water source, and to a lesser extent the TSF and river and drainage line crossings where culverts are installed, will generate artificial habitats. These include embankments and crevices on the dam and TSF walls, and concrete structures such as culverts and pipelines. These will attract a host of reptile species. Crocodiles and monitor lizards are likely to inhabit the permanent water bodies, especially during the dry months. Numerous other reptile species (e.g. snakes and lizards) are likely to remain within close proximity of the water sources during dry spells, and use the other areas as habitat. Although the concentration of reptiles around the introduced water source will

Coastal & Environmental Services 122 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 make many species (especially snakes) susceptible to persecution due to the increased human numbers associated with the operational phase of the project, habitat creation for reptiles is seen as a positive impact after mitigation.  Birds: Avian diversity and abundance will increase following inundation of the storage water dam and TSF, as there are currently no substantial permanent water bodies within the project area. Following the establishment of riparian vegetation around this infrastructure, suitable habitat for a number of indigenous water bird guilds, which are currently not present within the project area, will be created. Increases in water bird densities is likely to attract numerous birds-of-prey. The addition of water bird populations will exacerbate the likelihood of local communities and project associated employees targeting and hunting these species, but despite this the impact of additional waterfowl and other birds is seen as a positive impact.  Mammals: The loss of mammal diversity has already been assessed as part of the construction phase, when clearing and habitat loss cause these impacts. During the operational phase the introduction of a permanent water source will create a new habitat, albeit within a disturbed area, that will nonetheless still attract numerous mammal species, especially during the dry months when alternative water sources are large distances apart. Although the concentration of game within the area surrounding the water source(s) will result in increased hunting pressures, mitigation is easy, and the impact is positive.

Mitigation Measures: The following mitigation actions must be implemented:  Develop a Labour, Recruitment and Influx Management Procedure to manage the secondary impacts associated with influx. This must cover the following: o Information dissemination: Employment opportunities should be advertised and made available to the local public through regular briefings; o Recruitment and supply chain transparency: Recruitment and procurement processes should be transparent and accessible to the public; o Influx management and security arrangements: Any security measures associated with the project should restrict uncontrolled influx of job-seekers while allowing free and safe access and mobility for local communities; and o Regular engagement with local communities and security personnel, such as workshops and/or meetings, could be undertaken to gain an understanding of communities’ needs and the safety and security measures required for the project.

 Develop an Ecological Management and Monitoring Programme in consultation with conservation authorities;  Ensure the Alien Invasive Management Plan developed as part of the Ecological Management and Monitoring Plan during the construction phase is implemented during the operational phase;  Create ecological corridors to link the dam buffer area with other undisturbed areas within the project site;  Establish a 30 to 50m buffer around the water dam, where project vehicles are not allowed to drive, and where access by staff who require access as part of their work responsibility e.g. Staff who need to access the water pump-house for maintenance purposes;  Educate staff which snakes are venomous/nonvenomous and differentiate between defensive and aggressive behaviour. Posters of venomous and non-venomous snakes should be used and selected staff members must be trained in snake handling so they can remove snakes safely from site. Employees must not kill snakes;  Prevent employees from hunting birds and mammal species by raising awareness through environmental training;  Implement speed restrictions for all project vehicles (40km/h is recommended to reduce the impact of mammals being killed on the project roads; and  Where possible, limit project vehicles from driving on project roads during the hours of darkness.

The following mitigation actions should be implemented:

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 A labour desk / employment committee should be established to ensure that recruitment is fair and transparent and that job opportunities are maximised, and to ensure that labour is not employed at site offices or the entry point to the mine. This could help reduce the in- migration of people seeking work opportunistically;  Where feasible, restrict access on private roads;  Consider establishing a recreational facility (pub or restaurant) at a suitable location on the edge of the dam, where access to what will be an attractive feature can be regulated. Swimming however must not be permitted as crocodiles are likely to inhabit the dam;  Incentivise local community members to implement the Ecological Management and Monitoring Programme (including monitoring of amphibian species compositions at permanent water bodies);  Ensure that areas not disturbed by mining are patrolled to collect snares, and establish an enforcement presence in an effort to prevent poaching. Incorporate these activities into the Ecological Management and Monitoring Plan.; and  Develop a community based natural resource management strategy as part of the Ecological Management and Monitoring Plan.

Impact Statement Impacts 1.1 and 1.2 - Increased access and the resultant in-migration of job seekers are likely to result in habitat loss and fragmentation, due to improved access to previously inaccessible areas. If the proponent implements and manages the mitigation measures listed above, these impacts can only be reduced to moderate significance, as this induced secondary impact is difficult to manage.

Impacts 1.3a-d - The alteration of existing habitat due to the establishment of a permanent water source will have a low negative impact on amphibians. However, it results in positive impacts on the other faunal groups. The benefits of this can be further enhanced by implementing the strategies listed above.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 1.1: Loss of intact plant communities (as an indirect impact) as a Severe HIGH- Moderate MODERATE- result of an influx of job seekers. Impact 1.2: Impacts associated with increased access to previously Severe MODERATE- Slight MODERATE- inaccessible areas Impact 1.3a: Impact of altered habitats Moderate MODERATE- Slight LOW- on amphibian diversity Impact 1.3b: Impact of altered habitats Slightly Slight LOW- LOW+ on reptile diversity beneficial Impact 1.3c: Impact of an altered habitat Slightly Moderately LOW + MODERATE+ on Bird Diversity Beneficial Beneficial Impact 1.3d: Impact of an altered habitat Moderately Slight LOW+ MODERATE+ on Mammal Diversity Beneficial

8.3.2. Issue 2: Loss of Biodiversity

Impact 2.1: Reduction in Faunal Diversity The loss of diversity will differ for each faunal group and this has therefore been assessed separately:

 Amphibians: Amphibian mortalities will result from mining operations. The mobility of frogs will make them susceptible to road mortalities related to an increase in the number of project vehicles using roads. Increased noise and motor vibrations in wetlands/dambos and riparian areas may also impact amphibian breeding choruses, but these impacts will be localised and many amphibian species are surprisingly tolerant of vehicle noise. Amphibians are likely to

Coastal & Environmental Services 124 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 be the most impacted by an increase in dust levels, which can increase the turbidity of streams and wetlands/dambos which may in turn inhibit amphibian’s ability to feed and breed. Amphibians are also very susceptible to various pollutants, to the extent that they are good bio-indicators for water quality.  Reptiles: Reptile mortalities will result from mining operations. Increased human numbers associated with the operational phase of the project will result in increased mortalities from road collisions as well as persecution, especially of snake species. Increased levels of dust and noise, the spillage of hydrocarbons, and other pollutants associated with operational phase activities will impact reptilian species.  Birds: The mining operations and associated activities (e.g. increased traffic) will result in noise and dust which will encourage the displacement of many bird species. Although most birds are highly mobile, the majority of birds are sensitive to disturbance and will migrate away from mining activities. Some birds, particularly nocturnal species such as owls and night-jars may be killed on the project roads, as there will be an increase in the number of vehicles using roads at night. The increase in human population numbers in the project area associated with mining activities will increase hunting pressure on numerous bird species.  Mammals: Mammal mortalities will result from mining operations. Increased human numbers associated with the operational phase of the project will result in increased mortalities from road collisions as well as increased hunting pressures. Most mammals are highly mobile, however, high mortalities of fossorial species such as moles can be expected, due to earth works associated with mining activities.

Mitigation Measures: Refer to project mitigation measures listed under Issue 1 above (Terrestrial habitat loss, alteration and fragmentation). In addition, the following mitigation measures must be implemented;  Manage the water storage dam as an ecological habitat, and ensure that suitable fringing vegetation is established to provide additional habitat for frogs; and  All stationary machinery that store or use hydrocarbons (excluding vehicles) must have drip trays to prevent hydrocarbon spillages.

Impact Statement The loss of faunal diversity as a result of the mining operations, as described above, will occur. Impacts on amphibians are most significant, and rated as high, whereas impacts on the other faunal groups are rated as low. However, the severity of these impacts can be reduced to moderate and low, by implementing the mitigation measures listed above.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 2.1a: Loss of amphibian diversity and SCC associated with the operation of Severe HIGH- Moderate MODERATE- the mine. Impact 2.2b: Loss of reptile diversity Slight MODERATE- Slight LOW- associated with the operation phase Impact 2.3c: Loss of bird diversity and Slight MODERATE- Slight LOW- SCC associated with mining operations. Impact 2.4d: Loss of mammal diversity Moderate MODERATE- Slight MODERATE- associated with operation phase activities

8.3.3. Issue 3: Human/Wildlife Conflict

The presence of the mine, mine employees and the influx of job seekers into the project area during the construction and operational phase of the mine is likely to increase the number of interactions between humans and dangerous faunal species. The interaction between wild animals and people can have a negative impact on people and their resources, as well as on wild animals and their habitats.

Coastal & Environmental Services 125 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 3.1: Increases in human and wildlife interactions Elephant, buffalo, lion, leopard, and a number of highly venomous snake species are likely to either permanently or periodically occur within the project area. The increase in the number of people on site associated with the operation of the mine, as well as the in-migration of job seekers, will result in an increase in the number of interactions between people and dangerous animals. The construction of a permanent water body will provide habitat suitable for hippopotamus and crocodile, both of which are responsible for approximately 3000 human deaths in Africa annually.

Mitigation Measures: The following mitigation actions must be implemented:  The Ecological Management and Monitoring Plan must include human/wildlife conflict management protocols and a Snake Relocation Action Plan for snakes encountered during the operational phase;  Project employees must be made aware of the risks associated with working in areas containing dangerous game;  Project employees must be trained on how to react when encountering dangerous species.  The must include  Local communities must be made aware of the threats of hippopotamus and crocodiles in still water bodies; and  Areas not affected by mining should be managed by applying conservation principles and must be regarded as natural areas where access by people is restricted or prevented.  Game guards should be employed to ensure access is restricted, to clear snares and to police poaching.

Impact Statement The implementation of a Conservation Action Plan that includes educating employees and local communities about the dangers of certain species (e.g. crocodiles and elephants) will reduce the significance of the impact from high to moderate.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 3.1: Increases in human and wildlife interactions associated with the Severe HIGH- Moderate MODERATE- operation of the mine.

8.3.4. Issue 4: Increase in the presence of elephants within the project area

The introduction of an artificial permanent water sources (storage water dam or water supply alternatives and the TSF) may attract a greater number of elephants and encourage them to reside in the project area for longer periods of time than in previous years, especially in the dry season, due to the permanent water source. This will have significant ecological impacts, as well as contribute to further increasing human elephant conflicts (HEC).

Surface water is a primary determinant of the distribution of elephants and other water-dependent herbivores in semi-arid environments (Owen-Smith 1996). Elephant family units are most water dependent as calves require water more frequently (every one-and-half to two days) than adults, restricting their foraging ranges (Leggett 2006). The introduction of a permanent water source is likely to disrupt elephant movement patterns, particularly during the driest part of the dry season, increasing local elephant density around water sources (Barnes 2001; Leggett 2006; Chamaille- Jammes et al. 2007; Loarie et al. 2009). Elephants are known to restrict their movement within 4- 20km of a permanent water source and in the dry season elephants will concentrate near permanent water sources, and disperse away from these permanent water sources in the wet season at the onset of rains, as seasonal water sources are widely available (Loarie et al. 2009; de Beer et al. 2006).

The distribution and density of permanent water sources in a landscape is important as this will determine where the vegetation will be impacted (Owen-Smith 1996). Water sources are associated

Coastal & Environmental Services 126 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 with increased localised activity patterns and focused grazing (Owen-Smith 1996; Smit 2007; Egeru et al. 2015). A utilization or disturbance gradient occurs around the water source, creating a radiating zone from the source. This disturbance gradient is known as ‘a piosphere’ and is an indicator of the localized impact of herbivores on soil and vegetation (Owen-Smith 1996; Egeru et al. 2015). Large herbivores are particularly important in the creation of piospheres. The African elephant (Loxodonta africana) is a bulk feeder and water-dependent species (Chamaille-Jammes et al. 2007). Elephants are known as ‘ecosystem engineers’, and are believed to be the primary modifiers of ecosystems due to their ability to modify the structure and composition of the vegetation, converting woodlands into shrublands (de Beer et al. 2006; Chamaille-Jammes et al. 2007).

The implications of piospheres manifest in soil nutrient cycling and are associated with landscape degradation, soil compaction and erosion (Egeru et al. 2015). Vegetation dynamics and composition is also heavily impacted by both foraging and trampling (de Beer et al. 2006; Shannon et al. 2009). Observed changes include perennial plant species being replaced by annual species and unpalatable perennial shrubs (Smit 2007; Egeru et al. 2015), and localised damage and reduction in established woody plant species surrounding water sources. This effect is heightened in the dry season (Ben-Shahar 1993; de Beer et al. 2006; Chamaille-Jammes et al. 2007). The introduction of a permanent water source may destabilize ecosystem dynamics which may threaten productivity, resilience, stability, resistance to change and biodiversity (Smit et al. 2007). It is expected that areas and resources within 10-15km of the permanent water source will experience increased pressure (Loarie et al. 2009). According to a study conducted by Loarie et al. (2009) 71% of dry season elephant movements are within 5km of a known water source, 84% are within 10km, and 93% within 15km.

Should the elephant population be managed so as to avoid high pressure on the vegetation communities, which will establish and/or recover around the permanent water body, the introduction of an artificial water source could have significantly beneficial impacts on other faunal species and assemblages.

Impact 4.1: Inundation of the dam will provide a permanent water source that will attract elephants which could alter the vegetation (as an indirect impact) in the immediate area and surrounds.

Cause and comment: The introduction of a permanent water source is likely to cause elephants to remain closer to the project area during the dry season than they currently do. Increased elephant abundance will result in increased pressure on the vegetation surrounding the water source, as the role of elephant as ecosystem engineers is well documented (Valeix et al., 2011; Holling et al.,1996 etc.). Depending on the population size of elephants within the region, resources within 10-15km of the permanent water source could experience increased pressure. The impacts that elephants could have on vegetation dynamics may subsequently impact other faunal species and groups which utilize resources within the project area as well as the landscape.

The likelihood of the following occurring is uncertain and affects the impact rating:  Existing population size of elephants in the region  The effect of the dam on elephants  Elephant associated pressure on resources within 0-15km  Resource impacts on vegetation dynamics, faunal species and other groups

Given the above, two impact scenarios are presented based on likelihood and effect of the impact occurring.

Mitigation Measures: The following mitigation actions are required to determine which scenario will occur:

 Map the presence of Elephants using spoor, scat and sightings over o One dry season prior to the development of the dam.

Coastal & Environmental Services 127 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 o Several dry seasons once the dam is built. o This information must be sent to the relevant authorities that govern the Strategy and Action Plan for the Conservation of Elephants in Mozambique.

In the event that Scenario 2 occurs, which will be determined based on an interpretation of the results by an expert, examples of mitigation measures that will be required are listed below:

 An Elephant Management Plan must form part of the Ecological Management Plan  The Ecological Management Plan must include, but is not limited to, the following: o An Elephant Specialist must develop a thresholds (e.g. the amount of elephants the area can accommodate without causing severe adverse ecological impacts) at the relevant spatial scale determined by the specialist. . If the threshold is likely to be exceeded, a game fence will need to be erected around the storage dam and/or the TSF for the operational phase of the mine; and . If the threshold is unlikely to be exceeded, a suitably qualified ecologist must monitor the elephant utilization of the water body (and surrounding vegetation types) throughout the operational phase of the mine. o Should the monitoring find, at any stage of the operational phase, that the threshold determined by the census has been exceeded (i.e. more elephants utilize the permanent water body than the ecosystem can cope with) for the remainder of the operational phase: . A game fence will need to be erected around the storage dam and/or the TSF it is important that the fence starts a minimum of 30cm above the ground so allow access to smaller faunal groups; and . Artificial watering holes will need to be created at eight (8) axis points from the mine and must operate under a two (2) year rotation to allow vegetation sufficient time to recover.

Impact Statement Due to limited information on the elephant populations in this region it is unclear whether scenario 1 or 2 will play out and therefore both impacts have been assessed. The proponent will need to monitor the elephant situation throughout the life of the project and implement mitigation measures as and when required to manage the possible impacts.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.1a: Very limited increase in abundance of elephants due to the introduction of an artificial permanent Severe MODERATE- Moderate LOW- water source (Low probability of event occurring). (SCENARIO 1) Impact 4.1b: Marked increase in abundance of elephants due to the Very introduction of an artificial permanent VERY HIGH- Severe MODERATE- Severe water source. (High probability of event occurring). (SCENARIO 2)

8.3.5. Issue 5: Alteration of Flow Regimes on the Aquatic Habitat

Impact 5.1: Habitat Modification

The blocking of drainage lines as a result of the WSF could cause issues downstream, resulting in an alteration in the streams in the northern areas of the project site. The discharge of effluent into water courses will also alter flow regimes. A change in flow (whether it is an increase or decrease or change from continuous to sporadic) alters the physical habitat of the water course and this alters species composition.

Coastal & Environmental Services 128 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

During operation, earthworks associated with mining could alter the natural topography. This could destroy drainage lines and/or alter natural flow patterns within the project area.

Impact 5.2.: Impacts downstream of the WSF Abstraction of water from the WSF for mineral processing will reduce the volume of water flowing between the dam wall and the Messalo River. Figures 8-1 and 8-2 illustrate the patterns of monthly flows entering the impoundment and spilling over the spillway, as well as the variation in the volume of water stored in the reservoir, for two 4-year scenarios.

The figures were compiled using data from Knight Piésold’s water balance model (KP 2016b), in which a 25-year period was assessed. Years 3 to 25 are essentially identical for both scenarios, because after the first filling and for the year immediately following the inflows into and the abstractions from the WSF remain substantially unchanged for each subsequent year.

Water Storage Facility: Inflow & Outflow - 4 Years of Average Runoff

2.5 2.5

Year 1 Year 2 Year 3 Year 4

2.0 2.0

) 3

1.5 1.5

/month) 3

1.0 1.0

Volumein Storage (Mm Inflow / Spill (MmSpill/ Inflow

0.5 0.5

0.0 0.0

Spill Inflow Volumr in Storage

Figure 8-1: WSF: Inflow, outflow and volume in storage for four years of average runoff

This scenario assumes average rainfall and runoff for a your-year period, with first filling commencing in October of Year 1. Observations are as follows:  Storage in the impoundment reaches FSL in January of Year 2.  The first spill occurs in January of Year 2, when 49% of the volume of pre-dam flows spills into the river downstream.  Spills in February and March of Year 2 are 85 and 84% respectively of pre-dam volumes.  There are no further spills until January of Year 3, when 56% of pre-dam volume spill, followed by spills of 86%, 85% and 6% of pre-dam volumes in February, March and April respectively.  The Year 3 pattern of spills is repeated for subsequent years, except that the January to April spills increase marginally to 58%, 86%, 85% and 9%.

Coastal & Environmental Services 129 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 As a result, in all years, including the first-fill year, the period during which visible surface flow could be expected before the construction of the dam will be reduced from 4-4½months to 3, because:  At the start of the wet season the onset of visible surface flow in the river is delayed from December to January.  In April, a transitional month between the wet and dry seasons, there is no surface flow in the river with the dam in place, when some residual surface flow could be expected before the dam was constructed.

Seepage beneath the dam wall, estimated to vary between 10 and 50 litres/second (assumed to refer to the lowest water level in the impoundment and FSL respectively) will be sufficient to maintain the wetness of the hyporheus downstream of the wall.

Water Storage Facility: Inflow & Outflow - 2 Years of Dry-Year Runoff followed by 2 Years of Average Runoff 2.5 2.50

Year 1 Year 2 Year 3 Year 4

2.0 2.00

)

3 /month)

3 1.5 1.50

1.0 1.00

Inflow/Spill (Mm Inflow/Spill Volume in Storage (MmStoragein Volume

0.5 0.50

0.0 0.00

Spill Inflow Volume in Storage

Figure 8-2: WSF: Inflow, outflow and volume in storage for two very dry years followed by two years of average runoff.

This scenario assumes very dry conditions for the first two years, with first filling commencing in October of Year 1, followed by average rainfall and runoff for a further two years. Observations are as follows:  The impoundment is at FSL in February of Year 2.  The first spill occurs in February of Year 2, when 36% of the volume of pre-dam (dry year) flows spills into the river downstream.  Spills in March of Year 2 are 60% of pre-dam (dry Year) volumes.  There are no further spills until January of Year 3, when 30% of pre-dam (dry year) volumes spill, followed by spills of 86%, 85% and 6% of pre-dam volumes in February, March and April respectively.  In Years 3 and 4 the January spill increases to 58% of the pre-dam (dry year) volume, followed by spills of 86%, 85% and 9% in February, March and April respectively

As a result:  The impact of the dam in Years 1 & 2 is significantly higher than the Average Year scenario described previously, because the total volume of flow that would normally occur between

Coastal & Environmental Services 130 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 December and March is reduced from 3.56 Mm3 to 0.82 Mm3, and the onset of visible flows at the beginning of the wet season is delayed by two months from December to February.  For subsequent years, when average rainfall and runoff have resumed, the impacts are identical to those in the Average Runoff scenario, that is, the period during which visible surface flow could be expected before the construction of the dam will be reduced from 4½ / 5 months to 3, for the reasons described above.

As described above, seepage beneath the dam wall will be sufficient to maintain the wetness of the hyporheus downstream of the wall.

The impacts of the reduction in runoff downstream of the WSF are considered in terms of their possible impacts on the riverine ecosystems in section 8.3.6 – Impact 6.2 -following.

Impact 5.3: Impacts upstream of the WSF The WSF will not directly affect the flow regime of the river upstream of the impoundment, inasmuch as rainfall on the catchment will continue to generate surface and hyporheic flows in and beneath the channel. The upstream impacts will be to the ecological functioning of the river, as described below.

Mitigation Measures: Please refer to the mitigation measures listed under section 8.2.3

Impact Statement This impact can be easily mitigated from high significance to low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance

Impact 5.1: Habitat Modification Severe HIGH- Moderate LOW-

8.3.6. Issue 6: Fragmentation of the Aquatic Habitat

Impact 6.1: Isolation of the Mecopeti River upstream of the WSF The WSF will not directly affect the flow regime of the river upstream of the impoundment. However, the dam wall and the reservoir impounded behind the dam wall will present an insurmountable barrier to longitudinal migrations of fish. Plate 4-2 provides clear evidence that fish are present in the river when surface flow is sufficient to support them, and that local people catch fish in the river to augment their diet, and possibly also their household income.

The Mecopeti River is highly seasonal - dry for long periods during the dry season and unable to sustain fish life – but fish in the perennial Messalo River will be attracted into the Mecopeti when it begins to flow at the beginning of the rainy season. Migrations upriver will be for spawning in newly- inundated vegetation in slow-flowing pools and flooded backwaters, or in faster flowing rapids and riffle areas9 with clean boulders and cobbles. The shallow backwaters created during high river flows in the wet summer season are rich in food organisms and normally have relatively few predators, and thus serve as ideal nursery areas for the newly hatched young fish. At the end of the wet season, when river flows begin to drop, the fish migrate back downstream to the Messalo where there is permanent surface water. Pers comm, Dr Anton Bok, Anton Bok Aquatic Consultants, June 2017.)

9 A riffle is a (usually) short, steep reach of river between reaches of lower gradient or slow moving pools.

Coastal & Environmental Services 131 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 As illustrated in Plate 4-2, the fish fence comprises wooden stakes and reeds placed across the river channel at the upstream end of a riffle. Funnel traps woven from reeds are placed in gaps in the fence, and the trap is designed to trap fish migrating downstream at the end of the wet season when flow rates are declining as the rainy season comes to an end. It is probable that most of the adult fish captured at this time have already spawned, and the gaps in fish fences and funnel traps will allow most of the small fish to pass through. The ecological impact of this method of fish harvesting is therefore probably small, since it maintains the population by allowing juvenile fish to return downstream to the Messalo. (Pers comm, Dr Anton Bok, Anton Bok Aquatic Consultants, June 2017.)

It is not known which fish species use the Mecopeti as a spawning and nursery area, nor is it known to what extent the mainstem channel and the smaller tributaries upstream of the WSF are used for these purposes. The extent to which the local population rely on fish caught in the mainstem river and its tributaries upstream of the WSF is also not known.

The dam will definitely prevent fish from migrating upstream to spawn. It is possible that there are pools in the river in the upstream catchment commanded by the dam that could support a fish population isolated from the Messalo River, but given the relatively small size of the river this is considered unlikely. Small pools will dry up rapidly, and fish in standing water will be vulnerable to animal, avifaunal and human predators. It is probable that the river upstream of the WSF will become devoid of fish because fish from the Messalo will be unable to progress upriver beyond the dam wall, and because of the lack of suitable habitat to maintain a viable population in the river upstream of the WSF. The WSF will result in the isolation of 88% of the Mecopeti catchment from the Messalo River, at least for the duration of mining activities. Impact 6.2: Reduced flows and spawning/nursery areas downstream of the WSF As illustrated in Figure 8.1 the WSF will considerably reduce the volumes of water flowing in the Mecopeti downstream of the dam wall during the wet months in a year of average rainfall, and will also reduce the period during which water flows in the river from 4 / 4½ months to 3 months. The length of river channel available for fish spawning is also significantly reduced, as shown in Figure 3-9. Probable impacts are:  The reduced flow rates in the first month of spill may not be sufficient to provide the necessary cues for fish to enter the Mecopeti.  The reduced period when water flows in the river may not be long enough for young fish to grow sufficiently to re-enter the much larger Messalo River.  The reduction in spawning and nursery habitat will reduce the yield of young fish entering the Messalo from the Mecopeti. The indigenous fish of the area have adapted their life cycles to the natural and highly variable river flow patterns in the seasonal rivers and streams, but because the fish species are not known it is not possible to predict the impacts of the above disturbances caused to these cycles by the WSF with any confidence. The WSF will reduce the volumes of water flowing in the river, reduce the period when water is flowing in the river, and restrict the areas of spawning and nursery habitat available to fish, for the duration of mining activities.

Coastal & Environmental Services 132 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact 6.3: Impacts on the Fish Populations in the Messalo River Based on the gauging results in the Messalo River downstream of the mine site, where the rainfall / runoff ration was reckoned to be between 4 and 7% (KP 2017b), the MAR in the Messalo at the gauging point could be between 350 and 650 Mm3. The construction of the WSF is estimated to reduce the MAR from the Mecopeti from about 8.8 Mm3 to about 5.6 Mm3, an overall reduction in annual runoff of 35%10. The reduction is less than 1% of the lowest estimate of the MAR of the Messalo, and in terms of the availability of aquatic habitat is unlikely to have any significant impact on the river’s ecological functioning. The impact on the availability of water for downstream users will also be negligible.

However, as discussed previously, the TSF will also shorten the period during which the river flows and severely restrict the availability of spawning and nursery areas. It is not known what fish species use the Mecopeti as a spawning and nursery areas, or what the significance of the loss of a significant portion of the spawning grounds and nursery areas for these species in the Mecopeti catchment will be on the fish populations of the Messalo. The assessment of these impacts is tentative and conservative, and should be reviewed in the light of the results on studies of the ecological importance of the fish species to the Messalo.

The WSF will reduce the areas of spawning and nursery habitat available to fish for the duration of mining activities, thereby reducing the extent of spawning and numbers of young fish introduced into the Messalo.

Mitigation Measures: Impact 6.1: Isolation of the Mecopeti River upstream of the WSF  To avoid disruption of any phase of the upstream spawning migration and the subsequent return of fish to the Messalo construction must commence immediately after the river ceases flowing at the end of the wet season, and not before, and must be completed to prior to the commencement of surface flow at the beginning of the following wet season;  The impact may be partially mitigated by the provision of a means whereby migrating fish can overcome the barrier presented by the dam; that is, a fish passage facility, the simplest form of which is a fish ladder. Since fish passage is only required during the wet season when the river is flowing, it may be possible to modify part of the spillway to form a pool-and-weir, pool-and-orifice or vertical slot type ladder. The ladder must be as natural as possible, mimicking the natural riffles and rapids in the migratory paths along the river channel. If possible the upstream entrance to the ladder should be designed so that, in average or above-average runoff conditions, the ladder operates as early as possible in December and also in the early part of April, so as to reduce the extent to which the WSF shortens the wet season flow period. However, because the fish species using the river are not known, it is also not known how, when arriving at the head of the fish ladder after having swum upstream through moving water, if the fish will be able to navigate through 2 km or so of standing water in the impoundment to their spawning grounds further upstream; and  The necessity for and likelihood of success of a fish ladder will require inputs from a fish specialist. If a fish ladder proves necessary it must be designed by suitably experienced a specialist. Impact 6.2: Reduced flows and spawning/nursery areas downstream of the WSF  There are no feasible mitigation measures for this impact.

Impact 6.3: Impacts on the Fish Populations in the Messalo River  The construction of the dam wall must commence immediately after the river ceases flowing at the end of the wet season, and must be completed to prior to the commencement of surface flow at the beginning of the following wet season; and

10 The WSF does not affect the runoff from the area of the catchment downstream of the dam wall, for which the MAR is estimated to be around 1 Mm3, and which is added to the pre-dam and with-dam runoff from the catchment commanded by the WSF.

Coastal & Environmental Services 133 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

 The provision of a fish ladder on the dam wall may increase the available spawning and nursery areas. Impact Statement The impact of the WSF on the fish populations and spawning areas is difficult to mitigate and the impacts will therefore remain of high and moderate significance. However, the isolation of the Mecopeti River upstream can be mitigated from High to Moderate.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 6.1: Isolation of the Mecopeti Severe HIGH- Moderate MODERATE- River upstream of the WSF Impact 6.2: Reduced flows and spawning/nursery areas downstream of Severe HIGH- Severe HIGH- the WSF Impact 6.3: Impacts on the Fish Populations in the Messalo River Moderate MODERATE- Moderate MODERATE-

8.3.7. Issue 7: Contamination of Land and Water Resources

Impact 7.1: Pollution of soil and water resources from process waste The Process Water Pond may serve as the collection point for the decant water from the tails, regrind mill and overflows from the tailing thickeners and concentrate thickeners. This effluent water is anticipated to contain some levels of process feed that were fed into the system. The effluent water in the Process Water Pond will be diluted with water make-up from the environment and re-circulated to the plant raw water system for crusher dust suppression, reagent mixing, flocculant make-up, and to the plant water supply system.

It is anticipated that the re-circulated water in the Process Water Pond will contain at least low concentrations of heavy metals and frothers. Over time, the re-circulation and evaporation may result in an increase in the concentration of these compounds. The presence of a large pond containing process water, containing potentially harmful substances, could pose a threat of environmental contamination, particularly if the pond was to overflow after a period of heavy rainfall.

In the event that the pond overflows or is otherwise compromised, the accidental release of stored process water and associated sediment could lead to pollution of water resources and soil, and an increase in the turbidity of nearby water bodies. The potential consequences of increased turbidity include reduced light penetration and growth of aquatic plants. This could have subsequent, long- term negative impacts on local ecosystems and human health.

The release of hazardous chemicals in empty drums to the environment will also result in the pollution of soil and water resources (including surface and ground water), which are used by local communities in the proximity of the project area. Pollution may also arise from the accidental release of stored chemicals or uncontrolled storage and disposal of empty chemical containers.

Impact 7.2: Potential impacts to groundwater quality from leaching of pollutants from the TSF Increased exposure to oxygen and direct sources of water (i.e. rainfall) has the potential to mobilize contaminants associated with the TSF, impacting groundwater quality during the construction and operational phases.

Coastal & Environmental Services 134 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 The development of acid rock drainage (ARD) conditions is likely to occur in the tailings facility due to the presence of sulphides. The median ratio of sulphide minerals to carbonate minerals is 3:1. The ARD is however limited to the outer “shell” of the tailings facility, implying that although tailings toe seepage is likely to be acidic at a modelled11 pH of 3.0, the bulk of the basal seepage is shown by the model to be slightly acidic at a pH of 5.0.

Due to the likely development of ARD conditions in the tailings facility, lead, zinc, manganese and sulphate concentrations in specifically the tailings outer shell are expected to be elevated.

Impact 7.3: Potential impacts to groundwater from leaching of pollutants from the Waste Rock Dumps The risk of the development of ARD in the waste rock facility was shown by the geochemical and geohydrological assessment to be negligible. The risk of the leaching of sulphate and metals from the waste rock has also been shown to be negligible. Based on the geochemical risks assessment, no mitigation measures during operation and post operation are deemed necessary for the waste rock facility (see 12.4 of the Hydrogeological Specialist Investigation Report).

Impact 7.4: Potential impacts to groundwater from leaching of pollutants from the Low Grade Stockpile The assessment results indicate that mildly acidic conditions are likely to develop in the low grade stockpile material. The pH predicted by the model is 4.7. Although the stockpile material is likely to form mildly acidic conditions, the metal concentrations in the leachate from the stockpile material are shown to be below international regulatory guideline values. The sulphate concentrations in the leachate of the stockpile material are shown to be elevated above regulatory guideline values.

Impact 7.5: Contamination of surface and ground water from non-ore pollutants Hazardous materials and chemical pollutants (e.g. hydrocarbons from machinery and vehicles, floatation reagents, uncured cement, paints, shutter fluids, etc.) associated with mining activities, as well as washing detergents and soap, poorly-treated domestic effluents from the mining camp, construction workers using riparian zones for ablutions, etc., could pollute both groundwater and surface water. These pollutants could be harmful to aquatic biota and impact on drinking water quality for communities and domestic stock downstream.

Impact 7.6: Sedimentation and elevated turbidities in rivers Earthmoving activities associated with mining operations could be undertaken without taking effective anti-erosion measures. After heavy rains sediment-laden run-off from mining sites, waste rock dumps (WRDs), as well as spills from the tailings storage facility (TSF), and erosion of containment walls, may result in sediment-laden water entering adjacent drainage lines leading to nearby rivers.

Impact 7.7: Change in Water Chemistry  Temperature: Thermal pollution (from mining and processing activities) as well as the removal of riparian vegetation will increase in-stream temperature of water bodies. The increase in temperature will result in a decrease in oxygen solubility which may increase the toxicity of certain chemicals present in the water. The increase in temperature can also affect the life cycle patterns of organisms in the stream.  Suspended Solids: An increase in suspended solids can result from bridge / road construction, road use as well as industrial discharge / pollution into a water course. Depending on the severity of increased suspended solids in a stream, predator-prey interactions will be affected by diminished visibility.  Change in pH level: Should any effluent be discharged into a stream, it may alter the pH level of the stream. Any large changes in pH will add stress to organisms, and can change species

11 A conceptual and numerical model was used to determine the potential for Acid Drainage from the Waste Rock Dump, Tailings Storage facility, Pits and long term stock piles. Refer to chapters 7 and 8 of the Hydrogeological Specialist Report for details of the models used.

Coastal & Environmental Services 135 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 composition of the stream.  Conductivity and Total Dissolved Solids: As little information is present on the impact of an increase in conductivity and TDS, it is suggested that the rate of change is more important than the absolute change. A sudden increase in TDS can affect juvenile organisms. A change of not more than 15% is suggested.  Decrease in Dissolved oxygen: The oxygen requirements of fish and other aquatic organisms vary with type of species, life stages and size. Continuous exposure to concentrations of less than 80% of saturation is likely to have acute effects. Many toxic constituents such as ammonia, cadmium, cyanide and zinc become increasingly toxic as DO concentrations are reduced.  Organic Enrichment: The major effects of organic enrichment are a decrease in dissolved oxygen concentrations, an increase in turbidity and the concentration of suspended solids, an increase in nutrient concentrations and possible bacterial contamination of the receiving water body.  Nutrient Enrichment: Climatic and catchment characteristics influence initial nutrient concentrations in rivers. Anthropogenic sources of nutrients may be of the point-source type (e.g. sewage treatment works, industry, intensive animal enterprises) or nonpoint-source (e.g. agricultural runoff, urban runoff, atmospheric deposition).  Increase in Trace Metals: The overall ecological consequences of trace metal contamination of aquatic ecosystems is a reduction in species richness and diversity and a change in species composition. The selective elimination of less tolerant species, with the resultant reduction in competition and predation, may result in an increase in the abundance of more tolerant species.

Impact 7.8: Disruption of ecological function from spillage of Run of Mine while trucking The transportation of extracted ore by trucking to the processing facility is anticipated to result in some spillage of the ore materials onto controlled haul roads. Spilled material could also result in increased turbidity of water bodies and smother plants.

Mitigation and Management: Impact 7.1: Pollution of water resources (excluding AMD)  Manage the temperature of effluents prior to discharge to ensure an increase no greater than 3°C of ambient water temperature occurs;  Ensure the TDS of effluents is not more than 10% of the receiving stream prior to discharge.  Ensure the pH of effluent does not cause a fluctuation in pH of more than 1 pH above or below the pH of the receiving stream;  Ensure all liquid effluents from the mine are treated to relevant discharge standards before releasing into the environment;  Develop and implement a monitoring programme to ensure compliance with the relevant discharge standards and water quality standards defined in the ESMP;  Monitor potential pollution from waste rock dumps, stockpiles of material awaiting processing (the run-of-mine pad), and the TSF;  Ensure that trucks or conveyor belts are not overloaded with ROM, to avoid spillages;  Routinely recover spillage during mine operations, and ensure any spillage on mining equipment is cleaned up to avoid damage to environment and also equipment;  User one tonne sealed bags to truck graphite product, to avoid spillage;  Enforce a speed limit of 40km/hr to prevent the spillage of ROM during trucking, and reduce dust generation;  Rehabilitate the mine haul roads and processing plant areas post mining; and  Design the environmental monitoring programme for the facility in such a way so as to detect impacts of spilled graphite on terrestrial and aquatic ecosystems.

Impact 7.2: Potential impacts to groundwater quality from leaching of pollutants from the TSF  Develop mitigation measures and management interventions that focus on capturing TSF toe seepage to limit the migration of the small amount of seepage likely to seep into the subsurface.

Coastal & Environmental Services 136 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017

Impact 7.3 and 7.4: Potential impacts to groundwater from leaching of pollutants from the Low Grade Stockpile and Waste Rock Dumps  The simple remediation method of phytoremediation is deemed sufficient to limit the seepage of any stockpile leachate into the groundwater system, since the risk of metal leaching from the stockpile material has been shown to be low. An engineered barrier system is thus not deemed a necessary mitigation measure.

Impact 7.5: Contamination of surface and ground water from non-ore pollutants Please refer to section 8.2.5 (impact 5.3) for mitigation measures.

Impact 7.6: Sedimentation and elevated turbidity in rivers In addition to the mitigation measures stipulated for the construction phase (presented in Section 8.2.5 of this report), the following is also recommended:  Monitor the water quality in the water storage dam as part the water monitoring programme, to ensure quality is acceptable for release into the undisturbed Messalo River. This is required as the dam and TSF are located, out of necessity, in a natural drainage line. These facilities, together with the mine pits and processing plant, are all located upstream of the water storage dam. As all infrastructure is located in a single drainage area, the water storage dam is able to retain any contaminated flow, and hence also acts as a retention dam;  Ensure that mine water and surface run-off from the mining areas is detained in sedimentation ponds before the clear surface water (if uncontaminated) is allowed to flow into the adjacent drainage lines or streams. Any contact water, which could potentially be contaminate, must be recycled to the processing plant; and  Store contaminated water from the process plant in a dedicated storage reservoir, and feed back to the process water reticulation circuit, together with the supernatant or decant water from the TSF.

Impact 7.7: Changes in Water Quality  Implement the mitigation measures presented under impact 7.1 above

Impact 7.8: Disruption of ecological function from spillage of Run of Mine while trucking and use of conveyor belt  Fence off the process water storage pond and ensure the gate is locked at all times to limit unauthorised access;  Store and dispose all chemicals used on site in accordance with the national legislation and BPEO;  Store chemicals in secure, bunded designated areas;  Ensure Material Safety Data Sheets (MSDS) are readily available for all chemicals at the point of storage and use;  Develop an OP - Hazardous Chemical Management for the facility and ensure it includes detailed spill response procedures;  Do not store chemicals that may react in a dangerous manner within the same bunded area;  Ensure the compatibility of chemicals is confirmed prior to storage, and install signage showing the chemical names and hazardous properties (MSDS – material safety data sheets) in the designated temporary storage area;  Develop an Emergency Preparedness and Response Procedure for the project; and  Develop an OP - Waste Management for the facility, and ensure it includes measures that all chemical wastes and empty chemical containers are managed and disposed of according to the requirements of legislation and international BPEO.

Coastal & Environmental Services 137 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Impact Statement The pollution of the terrestrial and aquatic environment can be avoided if the mitigation and management recommendations for all the impacts listed above, are implemented. Without mitigation there is one impact of high significance, six of moderate and two of low significance. With the implementation of the mitigation measures, all nine impacts are rated as being of low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 7.1a: Pollution of soil and water Moderate MODERATE- Slight LOW- from process waste water Impact 7.1b: Pollution of soil and water Moderate MODERATE- Slight LOW- from hazardous chemicals Impact 7.2: Potential impacts to groundwater quality from leaching of Moderate MODERATE- Slight LOW- pollutants from the TSF Impact 7.3: Potential impacts to groundwater from leaching of pollutants Moderate LOW- Slight LOW- from the Waste Rock Dumps Impact 7.4: Potential impacts to groundwater from leaching of pollutants Moderate LOW- Slight LOW- from the Low Grade Stockpile Impact 7.5: Contamination of surface and Severe HIGH- Slight LOW- ground water from non-ore pollutants Impact 7.6: Sedimentation and elevated Severe MODERATE- Slight LOW- turbidity in rivers

Impact 7.7: Change in water chemistry Severe MODERATE- Slight LOW-

Impact 7.8: Disruption of ecological function from spillage of Run of Mine Moderate MODERATE- Slight LOW- while trucking and use of conveyor belt

Impacts associated with non-process wastes Impacts associated with non-process wastes during the operational phase are the same as for the construction phase and have therefore not been repeated here.

8.3.8. Issue 8: Lowering of the groundwater resources

Impact 8.1: Water Supply from groundwater resources - Lowering of water levels and decrease in groundwater availability During the operational phase, the portion of water abstracted from the open pits is likely to increase and the zone of influence will increase as well. It is assumed that the management measures provided for the construction phase will continue to be operated during the operational phase. Continuous dewatering by means of in-pit sumps will continue during mining, and reduce any possibility of decanting during operations. The groundwater model simulation showed that the dewatering of the open pits does not reach the village water supply situated nearby. Thus, the increased zone of influence and effects on the groundwater level only results in a low impact on adjacent water supply after mitigation, but impacts on ecological systems are regarded as moderate, as groundwater levels will be lowered, and this might affect certain ecosystems such as wetlands.

Impact 8.2: Pit dewatering - Decrease in regional groundwater levels and loss in groundwater supply (On Site) The simulated drawdown due to mine dewatering is shown in Error! Reference source not found. in the Hydrogeological and Geochemistry assessment and is reproduced in Figure 8-3 below. The simulation indicated a maximum Zone of Influence (ZOI) depth located at the open pits of approximately 125m in depth. The analysis indicates that the zone of influence (ZOI) associated with

Coastal & Environmental Services 138 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 mine dewatering during the life of mine could impact neighbouring groundwater users. Mine dewatering is a function of time and hydraulic parameters, and thus the numerical flow modelling is a management tool that should be used for decision-making.

Figure 8-3: Simulated Zone of Influence (ZOI) due to mine dewatering and water supply

Mitigation and Management: It is recommended that monitoring be conducted to determine if groundwater flow reduction and water level decrease occurs at sensitive receptors. Since there will be depletion of the groundwater in the aquifer due to the proposed open pit mine, and changes in local drainage patterns and flow regimes will take place, impacts during the operational phase are regarded as being of moderate significance.

Impacts 8.1 and 8.2: Pit dewatering - Decrease in regional groundwater levels and loss in groundwater supply (On Site)  Monitor the ZOI and take local and regional water level measurements monthly. Once medium term water levels are established, further mitigation and management measures can be considered, if required;  Update the groundwater flow model every two years, or as soon as additional groundwater exploration and/or monitoring data becomes available;  Implement real time monitoring to record the volumes pumped from the open pit mines;  Pump water from the open pit mine into the contact water settling system, and only allow it to enter any clean water system, natural drainage, or the aquifer once sediment has settled.  Maintain and inspect the dewatering ring-main at regular intervals for early detection of leakages, malfunctioning and acts of vandalism;

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 Install pressure gauges at the pipeline for early detection of pressure loss that may indicate leakages;  Conduct monthly visual checks to assess damp areas around borehole equipment and pipelines;  Store borehole and related equipment in a fenced area with a locked pump house for protection against theft and vandalism; and  Implement a monitoring program for the life of the mine. Impact Statement The model found that the lowering of the groundwater will have a greater impact on ecological systems than on the nearby communities. Implementation of the mitigation measures listed above will ensure that the significance of these impacts remains moderate for ecological impacts, and low for social impacts related to groundwater supply. IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 8.1a: Water Supply from groundwater resources - Lowering of Moderate MODERATE- Moderate LOW- water levels and decrease in groundwater availability for communities Impact 8.1: Water Supply from groundwater resources - Lowering of water levels and decrease in Moderate MODERATE- Moderate MODERATE- groundwater availability. Ecological impacts Impact 8.2: Pit dewatering - Decrease in regional groundwater levels and loss in Moderate MODERATE- Slight LOW- groundwater supply (On Site)

8.4. DECOMMISIONING PHASE IMPACTS

This section presents the issues that are likely to cause impacts during the decommissioning phase of the mining project, and the associated demobilisation of infrastructures.

8.4.1. Issue 1: Impacts on Flora

The decommissioning of the project could have a moderately positive impact on the natural vegetation, if areas of high sensitivity are restored to their natural state, and areas of moderate and low sensitivity are appropriately rehabilitated to a near-natural state. However, rehabilitating areas disturbed by mining is difficult, as the disturbance will effect the landscape, soil and soil fertility, and substantial and permanent changes to the topography result from infrastructure such as the TSF and waste rock dumps. At best a functional ecosystem, but more than likely with a substantially different species composition will be established.

In order to monitor rehabilitation success, detailed baseline surveys are required to refine the alpha diversity and indicator species, as well as to confirm and augment the list of SCCs (especially geophytes, the majority of which flower in the early wet season, and which may not have been identified during the late-wet season sampling), in order to more precisely characterise the pre- mining ecological conditions. It will also be necessary to establish nurseries to determine which of the naturally occurring plant species can be successfully propagated for rehabilitating areas disturbed by mining activities.

However, rehabilitating disturbed areas to a natural or near-natural condition may not meet the livelihood requirements of the project-affected communities, whose needs may be better served by reinstating the land to agriculture or woodlots. Accordingly, prior to commencing any rehabilitation activities it will be necessary to undertake a programme of stakeholder engagement to assess the needs of the communities. In this case the decommissioning phase will result in a net loss of

Coastal & Environmental Services 140 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 biodiversity, inasmuch as natural vegetation will be replaced by species of direct economic value to the communities, and thus this will be considered to be a negative ecological impact.

Small residual impacts as a result of the decommissioning phase will be similar to those listed for the construction phase, and will include increased dust levels which will smother the vegetation in the nearby vicinity, especially adjacent to roads, and impair the plant’s ability to photosynthesise (make food) and respire which in turn reduces the productivity and the growth of the vegetation, making it more susceptible to disease and predation.

Other impacts associated with the decommissioning phase may include the loss of vegetation, the loss of biodiversity and species of conservation concern.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance

Impact 1.1: Increased dust levels Moderate MODERATE- Slight LOW-

Impact 1.2: Loss of vegetation Moderate MODERATE- Slight LOW- communities Impact 1.3: Loss of species of Moderate MODERATE- Slight LOW- conservation concern

Impact Statement Impacts on the flora will be of low significance if the mitigation measures listed under the construction phase are implemented.

8.4.2. Issue 2: Impacts on Fauna

Impact 2.1: Decommissioning of mining infrastructure (excluding the storage water dam and TSF) The decommissioning of mining infrastructure will cause the displacement of bird, mammal, reptile, and amphibian species due to noise and dust pollution caused by the demobilisation of heavy machinery from site. Road mortalities will occur due to additional project vehicles required for the removal of project infrastructure and equipment. Hunting pressure on mammals and birds, as well as the persecution of snakes will continue.

Impact 2.2: Decommissioning of the permanent water bodies (storage water dam and TSF). The decommissioning of the storage water dam and TSF will result in the loss of habitat which a host of faunal groups would have become reliant on during the operational phase of the project. Over the projects lifespan, riparian habitats around the dam and TSF would have provided suitable habitat for a number of water bird guilds as well as numerous amphibian species. Reptiles and mammals would have become accustomed to the permanent water source, with many species likely to have developed a seasonal reliance on the permanent water body. The decommissioning of the water bodies would have adverse impacts on all faunal groups.

Impact 2.3: Residual impacts of pollutants on faunal groups Residual pollutants will have adverse impacts on all faunal groups, with the greatest impact being on amphibian species. Spillages of hydrocarbons and other pollutants may lead to development abnormalities and fatalities, especially of amphibian species.

Mitigation and Management: The following mitigation actions must be implemented:  Prevent employees from hunting/killing fauna through environmental training;  Enforce speed restrictions for all project vehicles (40km/h is recommended) to reduce the impact of animals being killed on the project roads;  Implement dust suppression techniques, such as the watering of project roads;

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 Prevent decommissioning of the storage water dam and maintain/manage dam infrastructure in perpetuity, by handing over to the relevant Mozambican authority.  Implement a management and maintenance plan for the dam.  Implement a Conservation Management Plan (CMP) with the hand over to the relevant Mozambique authority. The plan shall include monitoring of hunting activities at the dam.  No activities should take places during the hours of darkness where feasible.

Impact Statement The impacts on fauna during the decommissioning phase can be easily mitigated to impacts of low significance, and will even have a benefit to the faunal diversity if the permanent water bodies such as the WSF are handed over to the relevant Mozambican authority.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 2.1: Loss of faunal diversity associated with the decommissioning of Moderate MODERATE- Slight LOW- project infrastructures Impact 2.2: Loss of faunal diversity Substantially associated with the decommissioning of Severe HIGH- HIGH+ Beneficial permanent water bodies Impact 2.3: Residual impacts of Severe MODERATE- Moderate LOW- pollutants on faunal groups

8.4.3. Issue 3: Fragmentation of the Aquatic Habitat

Impact 3.1: Isolation of the Mecopeti River upstream of the WSF If the dam wall is left in place, intact and without provision for fish passage, the wall will continue to present a barrier to fish spawning migrations. The impacts will be the same as for the operational phase without mitigation, and the fragmentation of the catchment will continue without change. If a fish ladder has been installed the impacts will be the same as for the operational phase with mitigation. If the wall is either wholly or partially removed to clear the river channel it is possible that the significance can be reduced to moderate or low negative as the river recovers its former functionality.

Impact 3.2: Reduced flows and spawning/nursery areas downstream of the WSF The WSF will reduce the volumes of water flowing in the river, reduce the period when water is flowing in the river, and restrict the areas of spawning and nursery habitat available to fish, for the duration of mining activities. If the dam is left in place the reduction in available spawning / nursery areas will definitely be reduced from pre-mining levels and will remain so in the long term, although the flow regime will be restored. The severity of the impact is rated moderate to high negative, and the overall significance moderate to high negative. Partial or complete removal of the dam wall and careful rehabilitation of the affected river channel will restore the flow regime and, over time, the availability spawning and nursery areas. The overall significance is rated low negative.

Impact 3.3: Impacts on the Fish Populations in the Messalo River The WSF will reduce the areas of spawning and nursery habitat available to fish for the duration of mining activities, thereby reducing the extent of spawning and numbers of young fish introduced into the Messalo. If the dam is left in place the reduction in available spawning / nursery areas will definitely be reduced from pre-mining levels and will remain so in the long term, although the flow regime will be restored. The severity of the impact is rated moderate negative, and the overall significance moderate negative.

Coastal & Environmental Services 142 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 Partial or complete removal of the dam wall and careful rehabilitation of the affected river channel will restore the flow regime and, over time, the availability of spawning and nursery areas. The overall significance is rated low negative.

Mitigation Measures: Impact 3.1: Isolation of the Mecopeti River upstream of the WSF  Complete removal of the dam wall (or careful breaching and removal of the embankment over the width of the high-flow channel) and rehabilitation of the reservoir basin and river channel could facilitate the return of the river to its former status as a fish spawning and nursery area. Given the proposed decadal duration of mining there is no guarantee of the success of such an endeavour. Impact 3.2: Reduced flows and spawning/nursery areas downstream of the WSF  If the dam wall is left in place and intact when mining ceases the impacts will be the same as for the operations phase of the mine.  Once abstraction of water from the WSF ceases, the spills over the dam will be the same as the pre-dam flows in the river, albeit slightly reduced by evaporation from the surface of the impoundment. Attraction flows into the Messalo and the length of the river flow period will be restored to per-mining levels. The spawning / nursery areas will, however, remain severely restricted.  Partial or complete removal of the dam wall will restore the pre-mining flow regime and, over time, restore the availability of spawning and nursery areas throughout the catchment.

Impact 3.3: Impacts on the Fish Populations in the Messalo River  Refer to mitigation measures listed under impact 3.2 above

Impact Statement The fragmentation of the environment would have already occurred during the construction phase. The continued fragmentation of the aquatic habitat during the operational phase can be mitigated from impacts of high and moderate significance to impacts of moderate and low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 3.1: Isolation of the Mecopeti MODERATE- Severe HIGH- Moderate/Slight River upstream of the WSF LOW- Impact 3.2: Reduced flows and MODERATE- spawning/nursery areas downstream of Severe Severe LOW- the WSF HIGH- Impact 3.3: Impacts on the Fish Populations in the Messalo River Moderate MODERATE- Moderate LOW-

8.4.4. Issue 4: Contamination of Land and Water Resources

Impact 4.1: Sedimentation and elevated turbidity in rivers Inadequate rehabilitation of cleared and de-vegetated areas, contaminated run-off from old mining camps, WRD sites and the TSF, and poor maintenance of anti-soil erosion measures, as well as run-off from old roads, particularly at eroded river crossings, may result in sediment input and elevated turbidity levels in adjacent rivers.

Impact 4.1: Sedimentation and elevated turbidity in rivers Please refer to section 8.2.5 and 8.3.7 for mitigation measures.

Impact Statement This impact can be mitigated to result in a residual impact of low significance.

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IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.1: Sedimentation and elevated Severe MODERARE- Moderate LOW- turbidity in rivers

8.4.5. Issue 5: Lowering of the groundwater resources

Impact 5.1: Pit dewatering - Decrease in regional groundwater levels and loss in groundwater supply (On Site) The flooding simulations indicated that the water level in the pit post operation will stabilise between 20 – 35 mbgl i.e. with a head of between 100 meters above the pit bottom. Due to the low permeability of the rock matrix, the zone of influence will increase as groundwater is taken from storage by evaporative properties over the open pits. The zone of influence will increase by approximately 500m and primary apply to the Elephant resource. These changes in local drainage patterns and flow regimes will be permanent, but impacts during the post-operational phase can eventually be regarded as being of low significance

Impact 5.2: Flooding and decanting from pit negatively impacting groundwater and surface water quality The open pits will be flooded by groundwater and rain water. Additional storm surges could be directed back into the open pits. This will not take place during the operational phase of the mine, due to pit dewatering activities. However, after operation there is a risk that contaminated (acidic) water from the pit could flood from the pit during storm events. This impact is difficult to mitigate, but since the overall potential for acid formation is relatively low, the significance is regarded as MODERATE. Mitigation and Management: The following mitigation actions must be implemented:  Where logistically possible, monitoring boreholes should be established at the end of mining to determine the water quality and water levels; and  Monitoring of water quality in the monitoring boreholes drilled for that purpose should continue quarterly post closure for up to 120 months, and should monitor direction and rate of flow of contamination.

Impact Statement Impacts on groundwater quantity and quality are difficult to mitigate and the significance of these impacts will therefore remain of moderate significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 5.1: Pit dewatering - Decrease in regional groundwater levels and loss in Moderate MODERATE- Slight MODERATE- groundwater supply (On Site) Impact 5.2: Flooding and decanting from pit negatively impacting groundwater Moderate MODERATE- Moderate MODERATE- and surface water quality

Impacts associated with non-process wastes Impacts associated with non-process wastes during the decommissioning phase are the same as for the construction phase and have therefore not been repeated here.

8.5. CUMULATIVE IMPACTS

Cumulative impacts are defined as those “that result from the incremental impact, on areas or resources used or directly impacted by the project, from other existing, planned or reasonably defined developments at the time the risks and impact identification process is conducted.”

Coastal & Environmental Services 144 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 To assess the cumulative impacts the Suni Resources Montepuez Graphite Mine will have on the biophysical environment, it is necessary to identify developments that are similar in nature. The following mining projects and proposed developments have been identified:

Existing mine projects  The operational Syrah Graphite Mine located in Balama District;  The operational Gemfields Ruby Mine located in the Montepuez District;  The GK Graphite Mine; and  Mustang Ruby mine

Other possible future mines include:  The proposed Triton Minerals Ancuabe Graphite Project located in Ancuabe District;  The proposed Triton Minerals Nicanda Hills Graphite Project located in Montepuez District;  Rovuma Resources Nickle Mine;  Two exploration licenses have been granted to Mozambi Resources Limited; one license is contiguous with the Triton Minerals Nicanda Hills project and the other resource is further south.  In addition, Battery Minerals holds two other exploration license areas in the province that may be exploited in the future.

8.5.1. Issue 1: Impacts on Flora

The following cumulative impacts could affect the flora of the region:  Loss of vegetation communities directly (clearing) and indirectly (displacement of community machambas resulting in additional areas being cleared) at a regional scale will be exacerbated;  Loss of biodiversity and Species of Conservation Concern (e.g. Sterculia species) will be exacerbated to the point where local extinctions in the province could be expected; and  Invasion of alien plant species will be exacerbated to the point of displacing entire sections of indigenous vegetation.

IMPACTS WITHOUT MITIGATION Severity Significance

Impact 1.1: Loss of vegetation communities (direct and indirect) Severe HIGH-

Impact 1.2: Loss of biodiversity and Species of Conservation Severe HIGH- Concern

Impact 1.3: Invasion of Alien Plant Species Moderate MODERATE-

8.5.2. Issue 2: Impacts on Fauna

The expansion of the mining industry within the region will directly displace numerous faunal species through disturbances associated with habitat fragmentation and habitat loss. An improved road network associated with mining activities will allow communities to access isolated and largely unpopulated areas, increasing hunting pressures on regional fauna. The foreign demands for rare and endangered species (such as pangolin), skins and bones of leopard and lion, and the tusks of elephant, have created incentives for local communities to target SCC which previously were not part of their livelihood strategies.

IMPACTS WITHOUT MITIGATION Severity Significance

Impact 2.1: Cumulative Loss of Faunal Diversity and SCC Severe HIGH-

Coastal & Environmental Services 145 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 8.5.3. Issue 3: Impacts on the aquatic environment

Impact 3.1: Loss of aquatic biodiversity The cumulative impacts on water quality associated with the various mining operations and influx of work-seekers into the local catchment, could potentially all combine to exacerbate the individual impacts. An increase of people living in the area will increase the pressure on the water sources for ecosystem services, such as potable water, food source (fishing), irrigation of crops, and use of water for sanitation activities. These individual impacts include increased sedimentation and turbidity, pollution from chemicals or hazardous substances used in mining, and possible acid mine drainage originating from mine ore.

In terms of deterioration of water quality in watercourses downslope of the mine, the cumulative impacts of the various mining operations could potentially all combine to exacerbate the individual impacts.

Additional factors that will tend to increase the severity of the water quality issues include: a) Reduction in runoff to rivers (e.g. due to dewatering for the mine pit) will tend to increase the impact of any pollution event due to the reduction in the beneficial effects of dilution, and b) The clearing of riparian vegetation and reducing the width and density of the riparian buffer zone would reduce the important function this habitat plays in absorbing and filtering polluted run-off before it can enter the river channel.

Impact 3.2: Alteration of Flow regimes Various streams are likely to be damned, and the flow regime of these streams and rivers will be altered as a result of mining activities. A change in flow (whether it is an increase or decrease or change from continuous to sporadic) will alter the physical habitat of the water courses and thus alter species composition.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 3.1: Loss of aquatic biodiversity due to the synergistic effects of the Severe HIGH- Moderate LOW- above impacts Impact 3.2: Alteration of river and Moderate MODERATE- Moderate LOW- stream flow regimes due to mining

Mitigation and Management: Ultimately the mitigation of these impacts would be addressed by the Competent Authority (MITADER)

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9. ASSESSMENT OF IMPACTS ON THE SOCIO-ECONOMIC ENVIRONMENT

This chapter presents an assessment of the potential social impacts associated with the project during its construction and operational phases. These impacts are drawn from the Social Impact Assessment (SIA), the Land and Natural Resource Use Assessment, the Traffic Impact Assessment, and relevant sections of the Waste Report. The chapter also highlights the mitigation measures applicable for each impact.

The impacts are summarised in tables, and the significance pre and post mitigation are presented for each sub-section. Each theme or sub heading deals with impacts during the construction and operational phase. The primary mitigation and enhancement measures for most of the socio- economic impacts described in this chapter will be implemented through the project’s ESMP.

9.1. PLANNING AND DESIGN PHASE IMPACTS

Activities associated with the design and pre construction phase pertain mostly to exploration. As the project has an exploration license, impacts associated with exploration, and therefore the mitigation of these impacts, were included in the Exploration EMP (compiled to obtain this license) and will therefore not be repeated in this section.

9.2. CONSTRUCTION PHASE IMPACTS

9.2.1. Issue 1: Land Acquisition The project will require a land take and will therefore trigger impacts associated with land disturbances, reduced access to land and its natural resources, as well as potential economic displacement. The impacts associated with land acquisition include:

 Reduced access to future agricultural land;  Reduced access to natural resources and ecosystem goods and services;  Disruption to graves and scared sites; and  Loss of ‘sense of place’.

There are currently no households living within the project development footprint, and therefore physical resettlement is not anticipated. There are, however, farms (or “machambas”) about 2 km south of the Elephant deposit. The local communities depend on this land for subsistence farming, as well as for natural resource use, and therefore the full or partial loss of access to this land may indirectly result in greater food insecurity.

A Resettlement Action Plan (RAP), to focus only on economic displacement, by including a Livelihood Restoration Plan (LRP) is has been prepared as the proposed project footprint only impacts on established machambas, and there is no physical displacement of households required. A RAP has been prepared in parallel with the EIA, as community members will not be able to use farmland found within the proposed mine license area, due to safety risks to communities during the operation of the mine.

The project land take may additionally impact the cultural and traditional heritage of the surrounding communities, either through disturbances to graves and sacred sites, or as a loss of ‘sense of place’ that could be experienced by Project Affected Communities (PAC). However,

Coastal & Environmental Services 147 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 only one ceremonial site was observed within the project area, and this site was established during a prosperity ceremony conducted by the local villagers on behalf of the proponent for the proposed project in 2014. There are no other cultural heritage features or known grave/cemetery sites in the project area. However, it is possible that these do exist and may be discovered during the planning, construction and operational phases of the proposed project.

Impact 1.1: Reduced community access to, and loss of, agricultural land Agriculture is the main source of income generation for the surrounding communities, and there are limited alternative livelihood strategies and income generation activities available to the communities living in the area. Therefore, the acquisition of land will trigger some economic displacement and reduce access to potential agricultural land within the Elephant and Buffalo deposits which could have an impact on livelihood strategies. However, there are no existing machambas within the infrastructure footprint nor the footprints of Buffalo and Elephant pits although there are some that occur along the proposed access road and these will need to be relocated.

There are various potential indirect impacts associated with loss of agricultural land which this impact deals with, and these include:

 Loss of income generation potential from the land parcel;  Loss of status and sense of importance for the family affected;  Health impacts associated with nutritional-related deficiencies and elevated stress levels;  Social dependency on support programmes or aid from the Government; and  Changes to subsistence and income-generation strategies.

Impact 1.2: Heightened food insecurity Changes in livelihood strategies, particularly reduced access to land for subsistence farming and to harvest natural resources can compromise the food security of local communities. The land take for the project may therefore reduce community access to wild food sources found within the study area and this may affect food security.

Impact 1.3: Impact on Cultural Heritage Resources (disruption of graves and sacred sites) Cemeteries, gravesites and sacred sites are integral to communities’ cultural and social identity. The disruption or restricted access to these sites could undermine the traditions and culture held by the communities.

Impact 1.4: Loss of ‘sense of place’ A ‘sense of place’ refers to the identity and meaning or value that communities hold to a particular area or place. It comprises of a combination of characteristics that makes the place unique and meaningful. There are three aspects of ‘sense of place’ that are considered, namely:

 Attachment from a personal or group perspective (community land, land memory, knowledge and values);  Psychological aspects (the villagers’ own feelings for the land, the experience they have had on the land or the sense of pride, love or memories they associate with the land); and  Physical place attraction (the area’s beauty, social and physical attraction to them).

The ‘sense of place’ may be impacted directly through the construction of the proposed project, as well as indirectly through the changes to the physical landscape that the mine, and mining activities will result in. However, given the distance from the mining footprint areas to the nearest

Coastal & Environmental Services 148 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 villages, these visual intrusions on the current sense of place aesthetic will be more limited. The potential sense of place impacts that could arise as a result of “outsider” population in-migration to the project area are dealt with further on in this chapter.

Mitigation, Enhancement and Management: The following mitigation actions must be implemented:  As some machambas will need to be relocated, economic displacement is triggered, and a RAP is required. The RAP must include an agricultural valuation of all affected farmlands and possessions, and must develop appropriate compensation strategies and entitlement values.  The proponent must identify, monitor and report the number and location of machambas within the project study area on an ongoing basis, over and above that already undertaken in the RAP process to date. The RAP must be conducted in accordance with Mozambique Regulations for the Resettlement Process resulting from Economic Activities (2012) and the Ministerial Decree N155/2014 on the Internal Regulations for the Technical Commission on Monitoring and Technical Supervision of Resettlement.  Affected farmers must be notified when displacement / resettlement will take place at least three months prior to any mining activity, to enable them to harvest crops prior to displacement, and establish new fields in advance to ensure current levels of household food security are maintained at least in the short term.  No land or machambas must be affected prior to the completion of a RAP, which must include the provision of alternative land and farming support.  A Stakeholder Engagement Plan (SEP), including a Grievance Mechanism must be developed to provide community members with a process to use to inform the proponent of any machambas in the area; to indicate where access to agricultural land will become restricted; and to report on any other agricultural issues as a result of project activities.  The SEP must also allow community members to inform the proponent of any sacred sites or gravesites in the project area; indicate if/where access to these sites are restricted and to report any other disturbance to these sites as a result of project activities.  The SEP must include a Chance Find Procedure, must be developed so that, in the unlikely event that a significant heritage resource is identified, a procedure is in place to identify the sacred site or grave site and to protect and/or relocate the site;  Any grave sites or sacred sites identified in the project area must be recorded. A buffer area must be established around the grave or sacred site and no activities associated with the proposed project must fall within this buffer. Alternatively, the affected communities must be notified in advance and provided with the option of either receiving compensation or other forms of assistance with reburial and related expenses, which will be determined through compensation matrices; and  Through the SEP, continued and transparent community engagements should be held on a regular basis to provide any feedback, and allow for concerns, issues and/or grievances to be addressed. Minutes need to be kept of these meetings, and these minutes must be distributed to, and signed by, the proponent and relevant community leaders and local authorities.

Suni Resources has committed to assisting with agricultural extension services in the following way over the project’s lifespan:  Implement an agricultural program which will assist in increasing the yield of crops from local machambas. This could include: o Teaching various farming methods which are proven successful in other parts of Mozambique to increase crop yields;

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o Implementing farm methodologies which increase crop yield per hectare.  These extension services can be developed and implemented in consultation with the affected villages, local stakeholders (including NGOs) and government authorities.

Impact Statement The impacts associated with the acquisition of land can be reduced from impacts of moderate significance to impacts of low significance through the implementation of the mitigation measures listed above.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 1.1: Reduced community Moderate MODERATE- Moderate LOW- access to, and loss of, agricultural land

Impact 1.2: Heightened food insecurity Moderate MODERATE- Beneficial MODERATE+

Impact 1.3: Impact on Cultural Heritage Resources (disruption of graves and Severe MODERATE- Slight LOW- sacred sites)

Impact 1.4: Loss of ‘sense of place’ Moderate MODERATE- Slight LOW-

9.2.2. Issue 2: Economic Growth and Employment Opportunities There are limited economic and employment opportunities in the area, with very few household members formally employed or receiving a formal wage or salary. The provision of employment opportunities to unskilled, semi-skilled and skilled workers will directly and indirectly generate economic growth and opportunities in the area, particularly in cases where labour can be employed locally.

Impact 2.1: Provision of direct and indirect employment opportunities It is estimated that there will be approximately 250 workers employed during the construction phase of the project at its peak. This phase is estimated to take 18 months from start of construction to commissioning. The project may also provide lead to the provision of indirect employment opportunities arising through increased economic activity and growth in the area. These employment opportunities may be in Small, Medium and Micro-sized Enterprises (SMMEs) as discussed below.

Impact 2.2: Increased economic opportunities The project will result in an influx of people into the area which will increase the demand on local goods and services. This will provide economic opportunities for local community members who can start small businesses providing local services or offering locally sourced goods. The company will additionally provide indirect employment through awarding contracts to the local population that do not directly relate to mining activities, such as transportation, security, cleaning services, food supply services, sewing services etc. This income-generation would be reinvested in the local community, indirectly contributing to economic growth and development in the area.

Impact 2.3: Training opportunities and skills development The surrounding communities are uneducated and lack skills required in the workplace, specifically for mining projects. These community members will benefit from skills development and training opportunities, such as on-the-job training, workshops or other education initiatives in

Coastal & Environmental Services 150 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 the construction phase of the proposed project.

Impact 2.4: Community conflict due to perceived differential benefits It is likely that differential employment benefits (such as favouring people from other villages, larger towns, cities or migrants in search of opportunities over people from local villages) may lead to community conflicts due to unrealistic expectations about employment opportunities coupled with already high expectations from local communities relating to income generation activities and perceived benefits from the proposed project. This may lead to an influx of job- seekers and could create conflict during the construction phase of the project - when this influx is experienced at its highest rate - as has been noted in the extensive literature on this phenomenon.

Mitigation, Enhancement and Management: The following mitigation actions must be implemented:  Develop a Labour, Recruitment and Influx Management Procedure (LRIMP) that adhere to the International Labour Organisation (ILO) conventions. Guidelines for this procedure are unpacked in the SIA report.  Establish an employment equity program and employment committee to ensure that recruitment is fair and transparent and that job opportunities are maximised.  Employ directly affected, employable community members as a first priority for job opportunities and training, prior to employing people from further afield.  Employ a Community Liaison Officer (CLO) and a human resource manager to be responsible for continued interaction with the employment committee and the surrounding communities.  Implement a vulnerable person’s employment strategy to ensure vulnerable groups (women headed households and disabled persons) also derive benefits from employment.  Ensure the LRIMP includes a Grievance Mechanism (as per the one required for the SEP referred to above) to afford community members the opportunity to voice any concerns they have relating to employment opportunities, as these could ultimately result in internal community conflict, with in-migrants, or between the proponent and the communities.  Develop a programme for gradual replacement of expatriates and outsiders by local people and implemented over the course of the projects lifespan, in accordance with local labour legislation requirements. This plan could incorporate collaborative management strategies for in-migration, to ensure fair access to community benefits from the project, as well as transparent and effective communication with local stakeholders.

The following mitigation actions should be considered:

 The provision of scholarships and work apprenticeships to the local population, particularly the youth.  The sourcing of materials, products and services locally.  The provision of on-the-job training, skills development programmes and learnership opportunities to unskilled community members, who will gain workplace skills under the supervisor of more experience staff. The proponent can additionally support local primary schools, such as by providing school supplies, financial support or contributing to improved facilities, and by providing skills development opportunities to the youth.  The mine can assist with stimulating the economy of the nearby villages by purchasing locally grown food which would assist with providing an alternative income.

Impact Statement Economic growth, employment opportunities and skills development are positive outcomes from

Coastal & Environmental Services 151 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 having the mine in this area. These positive impacts can be further enhanced to benefit the nearby communities by implementing the measures listed above. Community conflict due to differential benefits and the loss of natural resources are associated with negative impacts but these can both be mitigated to an impact rating of low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 2.1: Provision of direct and Moderate Very MODERATE+ HIGH+ indirect employment opportunities Beneficial Beneficial Impact 2.2: Increased economic Slightly Moderate LOW+ MODERATE+ opportunities Beneficial Beneficial Impact 2.3: Training opportunities and Slightly Moderate LOW+ MODERATE+ skills development Beneficial Beneficial Impact 2.4: Community conflict due to Moderate MODERATE- Slight LOW- Differential Benefits Impact 2.5: Removal of natural resources that are used to make Slight MODERATE- Slight LOW- products that generate an income

9.2.3. Issue 3: In-migration of job seekers It is highly likely that the proposed project will attract migrant labour to the area in search of employment opportunities. As most of the villagers are unskilled and uneducated, skilled labour will likely be sourced from other areas within Mozambique, such as Balama, Montepuez, Pemba or even Maputo, as well as from neighbouring countries such as South Africa.

Literature on project-induced in-migration relates that population influx can threaten ‘project security’ and that it should be managed as a project threat, even though influx is considered out of the control of the developer. There are several direct and indirect impacts associated with an influx of people that will likely result in social, cultural, economic and political changes to the area, examples of which are listed below:

 Tension and conflicts between locals and migrants regarding access to: natural resources, land and employment opportunities;  Localised inflation of food and produce prices due to increased demand;  Increased pressure on already limited social and natural resources;  Increased ‘social ills’, such as prostitution, alcohol abuse, and crime;  Increased prevalence of communicable diseases;  Creating ‘poverty gaps’ and income and wealth inequalities between locals and migrants; and  Disruption of local cultural and social dynamics.

It must be noted that while there can be positive impacts resulting from this in-migration such as improved links to the mainstream economy, increased household or community empowerment and improved access to social infrastructure and public goods and services, it is the potentially negative ones that are assessed in more detail here. Owing to the fact that the project site is relatively isolated from the nearest large centres or villages, with little in the way of settlements or residential structures within the Mine Licence area, it is anticipated that any in-migrants will settle in those villages as opposed to the mine site and surrounds.

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Impact 3.1: Temporary / permanent influx of job-seekers The influx of people may result in the social tensions and conflicts discussed above. Alternatively, as also noted it may have positive impacts such as an increased locally available labour pool for the construction phase, increased demand for local goods and services resulting in increased economic opportunities for local communities, and ultimately a higher vocational skills base in the project area. Immediate construction phase concerns are the possible localised increase in food prices that may affect households in proximity to the mine (discussed further on below), as well as conflicts over construction phase job opportunities.

Impact 3.2: Increased risks to safety and security due to influx of people The influx of people into the area may cause community conflict and increased crime and other social and community health problems in the project area, posing a risk to the safety and security of the local communities and the proponent. Suni Resources has indicated that there will be full- time security at the operational plant site and at the accommodation village, which will be enclosed with a security fence and lockable gates manned by security personnel. The infrastructure located outside the village and plant area will be patrolled. The use of security personnel is important from a safety perspective to ensure safety of both the villagers and the proponent; however it is vital to ensure that the personnel are adequately trained to avoid conflict between local villagers and security staff. Local communities may feel threatened by security personnel or may feel that their access to the area is being unjustly denied. Ultimately, it remains the mandate of the Mozambican police service to enforce laws and deal with criminal activity in these communities.

Impact 3.3: Influx of people into the nearby communities will place a greater pressure on existing food resources and access to natural resources (Indirect impact) The proposed development is likely to result in the in-migration of job seekers, the employment and accommodation of mine staff, improvements in infrastructure (especially roads), increased demand for accommodation, meals and entertainment by mine staff, an and increase in trading opportunities. This influx of people needing accommodation, meals and entertainment is likely to increase the demand for food, charcoal, building materials, thatch and other natural resources – increasing pressure on these local environments. Local agricultural crop produce prices are likely to increase and it can affect the more vulnerable households in the study area. These impacts are expected to be of greater negative significance during the construction phase of the project.

The capacity of the local communities to effectively regulate the use of natural resources is expected to be undermined as a result of 1) the loss of natural vegetation resources and increasing pressure from the existing population, 2) increasing demand for resources due to the influx of job seekers and mine employees, and 3) the lack of knowledge and reduced compliance with rules due to in-migration. Over and above an overexploitation of a limited natural resource base and its environmental consequences, this could be a source of conflict between in-migrants and the local, and influx receiving, communities.

Impact 3.4: Increased pressure on local government social services infrastructure Although social infrastructure and services (health, education etc.) are limited in the study area, what is available is likely to become further pressured by the arrival of more people requiring medical assistance or enrolling children in local schools.

Mitigation, Enhancement and Management: Impact 3.1: Temporary / permanent influx of job-seekers The required Labour, Recruitment and Influx Management Procedure (LRIMP) should be developed with the IFC Projects and People Handbook (September, 2009) guidelines in mind. This document specifies the management approaches for project induced in-migration are as

Coastal & Environmental Services 153 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 follows:

Approach Category of Intervention Interventions Management of . Minimizing in-migration . Promoting regional growth project-induced into the project area . Planning access routes in-migration . Staging the inflow of . Managing the initial project footprint (multi-local projects, initial project bases) migrants . Use of buffer zones . Managing the migrant  Spatial planning, administration and resource allocation (including physical and social identification of appropriate settlement sites and creating “pull” factors) footprint . Infrastructure, services and utilities . Planning workforce recruitment policy and management . Access control . Planning material transportation . Planning worker transportation . Planning worker housing . Planning procurement of goods and services and development of supply centres  Definition of project-affected people (PAPs), compensation, participation, and development  Building multi-stakeholder frame works and stakeholder capacity

Suni Resources will develop the required LRIMP prior to the commencement of construction activity.

Impact 3.2: Increased risks to safety and security due to influx of people The following mitigation actions must be implemented:  The entrances to the project area must be controlled by trained security personnel.  All the PACs must be informed about the roles and responsibilities of the security personnel through community briefings.  A Grievance Mechanism will be available through the SEP and LRIMP respectively that allows villagers to voice their concerns regarding security personnel and possible community safety risks.  Reported incidents must be assessed by the proponent, who will implement appropriate measures as is legally permissible for them and their security personnel.

The following mitigation actions should be considered:  As far as possible, the proponent should sign an agreement with the private security company to be used which should allow for the following: o Human rights training; o When hiring security personnel, reasonable effort must have been made to inquire whether the personnel have not been part of past abuses; o Security personnel need to be properly trained in the use of force and, most importantly, appropriate conduct towards farm-owners; o Severe penalties should be given for any security personnel who is involved in theft or abuse; and o A code of conduct must be developed for the security personnel.  The company and local law enforcement officials should hold regular meetings with the communities to discuss safety and security issues, ideally assisting with, or helping to initiate, an appropriate community policing forum to deal with all safety and security issues.

Impact 3.3: Influx of people into the nearby communities will place a greater pressure on existing food resources and access to natural resources (indirect impact) As for Issue 2 and Impact 3.1 above.

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Mitigation and Management: Impact 3.4: Increased pressure on local government social services infrastructure As for Issue 2 and Impact 3.1 above. This is an indirect consequence of in-migration that the proponent effectively has little control over, other than the support or development of programmes or projects along these lines that benefit local communities and to some extent relive this pressure on government or other NGO facilities available in the study area.

Impact Statement The in-migration of job seekers is a concern of the project due to the ramifications this impact will have on the communities, access to natural resources and the possible impact they will have on the natural environment that is deemed to be of high negative significance. However, through developing and adhering to the necessary management plan (the LRIMP) designed to mitigate against these influx induced impacts, the significance thereof can be reduced from high to moderate negative significance. Similarly, if appropriately developed and implemented, it is anticipated that increased safety and security risks will be of low significance if these issues are dealt with collaboratively by the company, communities and local law enforcement officials. It will be more difficult for the company to manage against the potential localised increases in food and other goods prices potentially resulting from increased pressure on natural resources, and the availability of local agricultural yields to satisfy this substantial increase in demand for these goods. For the construction phase it is anticipated that pressure on natural resources and local food prices will remain highly negative despite the implementation of mitigation measures that are available to the company. The additional pressure on government provided local social services and public goods will be of moderate significance over the construction period.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 3.1: Temporary / permanent Moderate HIGH- Slight MODERATE- influx of job-seekers Impact 3.2: Increased risks to safety Moderate MODERATE- Slight LOW- and security due to influx of people Impact 3.3: Influx of people into the nearby communities and increased Very Severe VERY HIGH- Severe HIGH- pressure on existing food resources and natural resources (Indirect impact) Impact 3.4: Increased pressure on local government social services Severe HIGH- Moderate MODERATE- infrastructure

9.2.4. Issue 4: Community and Employee Health and Safety Impact 4.1: Increased risk of vehicle collisions and personal injuries The roads, and therefore project-related traffic, will pass through a large number of settlements. Frequently, market activities are clustered alongside the road, where existing, non-mine-related traffic volume is highest. In these settlements of concern, vehicles are pulling onto and off the road without using their indicators, pedestrians cross the road at random points and children play alongside the road. In addition, there are several households, schools and football fields located in close proximity to the current access roads. The proposed upgrade of this access route and increased traffic will pose a safety risk to communities located in close proximity to the road as well as pedestrians and cyclists making use of the access route. Rural communities in the area are not aware of the risks that vehicles present, and are unfamiliar with road safety rules and the obligations of pedestrians.

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The following roads will be used by project traffic:  The EN106 between Pemba and Metoro;  The EN242 between Metoro and Montepuez  Road 509 between Montepuez and Vinte Cinco  An unnamed road between Vinte Cinco and the mine site.

Should Nacala be used as an import/export port, the following roads will be used:  The EN106 between Metoro and Namialo;  The EN8 between Namialo and Nacala;

Impact 4.2: Impacts associated with carrying abnormal loads It is probable that some items of off-site fabricated equipment such as transformers and storage tanks will be sufficiently large to classify as abnormal loads. The traffic authorities usually require guard vehicles to precede and follow such vehicles to warn other motorists of their approach, and often specify times when large, slow-moving vehicles should travel. Vehicles travelling with abnormal loads could pose a threat to the safety of community members if not managed appropriately.

Impact 4.3: Health impacts to employees and communities from non-process waste Sewage and sewage sludge is normally characterised by high concentrations of pathogenic microorganisms (viruses and bacteria) and helminths. Exposure to untreated effluent, either directly or through contaminated water resources, can result in the spread of numerous diseases including cholera. This impact will also occur during the operational and decommissioning phases.

Impact 4.4: Increased risk of disease transmission and prostitution The project-related activities could increase the risk of transmissible and communicable diseases that are spread through population movements and overcrowded living conditions. The possible influx of people into the project area may place pressure on living conditions, such as sanitation facilities, and the already limited health facilities, equipment and medicine supply.

Diseases that may be prevalent in the area include tuberculosis, respiratory tract infections and vector-borne diseases, such as malaria and other soil-, water- and waste- related diseases, diarrhoeal diseases, cholera, schistosomiasis (bilharzia) and soil-transmitted helminthiasis (intestinal worms).

The influx of people in the area may additionally lead to an increase in prostitution as well as HIV/AIDS and other sexually transmitted diseases. The local communities may also experience nutrition-related diseases due to food insecurity as well as substance-abuse associated with economic development.

Mitigation and management Impact 4.1 and 4.2: Increased risk of vehicle collisions and personal injuries and impacts associated with abnormal loads

The following mitigation actions must be implemented:  Implement a transport management procedure that reflect the mitigation measures proposed here;  Introduce and strictly enforce speed limits along the improved road and existing dirt roads;  Enforce an additional speed reduction when driving through or close to a village;  The upgrade of the road between the mine site and Montepuez must include measures to

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reduce the generation of fugitive dust, preferably by means of an industry standard aggregate sealing / wearing course suitable for all-weather use, but otherwise by regular and frequent application of dust suppressant, including water if it is available in sufficient quantities. All improvements to public roads will need to be approved by the Mozambican authorities;  Consideration must be given to designing the road to bypass settlements where housing and people are located too close to the road for public safety reasons. Nqueuene and Mavala village specifically must be bypassed;  Within the boundaries of the mine site, signage should be used to specify speed limits, and adherence to these limits should be monitored and rigorously enforced. On the national roads, the specified speed limit must be strictly adhered to by the mine and contractor workforce;  All drivers shall receive training for each type of vehicle, including light vehicle training, heavy vehicle truck training and abnormal truck load (including low-bed and trailers) training before they are permitted to drive these;  An Emergency Preparedness and Response Plan must be prepared, and must include provisions to deal with traffic accidents, particularly accidents involving personal injuries, and all drivers must be made aware of the procedures to be followed;  The use of company vehicles and other vehicles associated with the proposed project must be closely monitored, including: o A GPS tracker on the vehicles to determine the distance and speed. o A GPS tracker on vehicles to monitor usage (driver, date, time, mileage etc.);  Any incidents must be reported internally and assessed by the proponent, who will implement the appropriate measures;  Arrangements must be made with the appropriate traffic authorities for abnormal loads, and their requirements strictly adhered to;  Measures must be taken to keep children and adults away from abnormal loads while moving near villages;  Mandatory abnormal-load driver training for all participants involved in abnormal-load transport to and from the mine site; and  Develop and Implement a community education/sensitisation plan to traffic.

The following mitigation actions should be considered:

 Deliveries of construction material at night should be avoided;  Deliveries by heavy vehicles must, as far as possible, be scheduled to avoid the formation of convoys. Sufficient distance, as specified in the Road Code, must be maintained between heavy vehicles to allow light vehicles to overtake safely;  Regular communications with villages with regards to vehicle transport;  A road safety awareness campaign should be conducted in each village and schools; and  As far as possible deliveries of abnormal loads should be scheduled to avoid periods when significant volumes of construction traffic are making deliveries to site.

Impact 4.3: Health impacts to employees and communities from non-process waste

The following mitigation actions must be implemented:  Any employees tasked with management of sewage and sanitation systems should be vaccinated against key diseases associated with these waste streams and  Regular medical check-ups on all vulnerable personnel to be conducted and documented by the company.

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Impact 4.4: Increased risks to safety and security due to influx of people, risk of disease transmission and prostitution

The following mitigation actions must be considered:  Labour accommodation units during the construction phase need to be properly planned to avoid overcrowded living conditions.  The project proponent could support the local clinic through the provision of supplies or medical equipment and improved facilities.  Prior to the development and implementation of any healthcare assistance programme, it is proposed for the proponent to develop a memorandum of understanding (MoU) with the local leaders, health authorities and the Government to ensure that the project does not become the de facto government in the area.  A clinic or health-centre at the mining site will offer on-site occupational and emergency services for its workforce only; however, the company should also consider providing assistance to community members in life threatening emergencies. The clinic should develop its own health monitoring programme to track key health trends in the area as these can influence workforce health and safety.  The proponent could strengthen partnerships with local health authorities and NGOs by supporting certain health areas, or providing financial support for a particular treatment, including HIV/AIDS.  Development of a TB and Respiratory Tract Infection Management Policy and a HIV/AIDS Policy specifically for its labour force which involves screening and educational campaigns.  As part of the labour recruitment policy, all labour should undergo a pre-employment health screening assessment prior to being employed and/or accommodated on site during the construction phase. This should include specific tests for Tuberculosis (TB), Respiratory Tract Infections (RTI) or bilharzia (Schistosomiasis). The results need to be shared with the local health authorities, and workers with serious disease should firstly be treated prior to sharing contact with other workers.

The following mitigation actions should be considered:  The proponent should develop a Community Health and Safety Management Plan (CHSMP) which includes an emergency preparedness and response plan, to be developed in close collaboration with the PACs and local authorities.  The proponent is encouraged to develop an awareness campaign in collaboration with the local clinic for both communicable, and non-communicable diseases and prevention strategies. This campaign should be aimed both at the workforce and also the wider PACs.  The project designs should consider reducing the possible sources of vector breeding habitats.  Support existing malaria programmes or workshops in the area (or community based interventions), or develop new programmes specifically aimed at schools. Such programmes could be supported by local health workers.  Existing Water, Sanitation and Hygiene (WASH) community programmes could be supported. Additional WASH programmes could be initiated, using local community healthcare workers. In addition, free hand washing soap could be distributed to the workforce regularly with the aim of encouraging the practice of good hygiene.  Assist the government to regularly test the water quality of wells and PAC water supplies.  The proponent could investigate the possibility of upgrading (or providing) Ventilated Improved Pit (VIP) latrines at selected schools or health facilities in the PACs. As part of

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such provision, the proponent could support training at schools on hygiene practices and latrine maintenance.  A Code of Conduct should be developed for all workers at the mine to conform to basic health standards. This should include standards for not urinating or defecating in any open water sources.  Provide free condoms at the mine’s clinic, as well as in other health posts in the area.  The mine should offer free Voluntary Counselling and Testing (VCT) STDs including HIV/AIDS for its workforce/community and closest PACs from which its labour is sourced from.

Impact Statement Impacts associated with community and employee health and safety will be of high and moderate significance if not properly managed. However, these impacts can be mitigated through the development of appropriate procedures and the implementation of policies that need to be adhered to. With the implementation of the mitigation measures listed above, these impacts can be reduced to moderate and low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.1: Increased risk of vehicle Very HIGH- Severe MODERATE- collisions and personal injuries severe

Impact 4.2: Abnormal loads Slight LOW- Slight LOW-

Impact 4.3: Health impacts to employees and communities from non- Severe MODERATE- Slight LOW- process waste Impact 4.4: Increased risk of disease Very HIGH- Moderate MODERATE- transmission and prostitution severe

9.2.5. Issue 5: Impacts of Pollution on the Community and Employees Impact 5.1: Dust impacts from the construction of roads The existing access route to the project area is a single-track, dirt road that runs through various villages from Montepuez to the project site. Improvements to this road will not include asphalt and the road will remain as a gravel road. However, increased vehicle traffic will increase dust emissions (especially during the dry season). Vehicle-entrained dust from unpaved roads is generally the most significant source of dust for any mining operation. The force of the wheels travelling on the unpaved road causes the pulverisation of surface material. Particles are lifted and dropped from the rotating wheels, and the road surface is exposed to strong air. The wind behind the vehicle continues to act on the road surface after the vehicle has passed. The quantity of dust emissions from unpaved roads will vary linearly with the volume of traffic expected on that road. The dust generated will include inhalable dust (PM2.5) which could cause respiratory illness, as well as PM10 and total suspended particulate matter (TSP). The latter is nuisance dust, but will also reduce visibility and increase the risk of an accident. Human habitation tends to concentrate alongside the road, which means that these communities will be the most important sensitive receptors.

Impact 5.2: Increase in noise and traffic pollution Mine related traffic will cause direct impacts from noise and pollution (vehicle exhaust fumes), but the improved road will also result in a general increase in traffic, resulting in an induced a

Coastal & Environmental Services 159 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 secondary impact. The improved roads will increase the noise and vibration effects due to construction related heavy vehicle traffic. This increase in noise and traffic will negatively impact the quality of life for the local communities.

Impact 5.3: Nuisance impact (Production of odours, visual impact and attraction of pests and vermin) from non-process waste pollution The uncontrolled storage of solid waste, in particular food waste, can attract vermin and pests including rodents, birds and flies. These vermin / pests may pose a nuisance to adjacent communities and may act as vectors for disease. The uncontrolled storage of solid waste can result in the release of unpleasant odours which may be regarded as a nuisance to adjacent land- users, particularly that down-wind of the material. Odorous compounds are also released from relatively well-managed solid waste disposal facilities. The presence of large quantities of litter around the facility or at the proposed landfill may constitute a visual impact to employees and local communities. This impact will also occur during the operational and decommissioning phases.

Mitigation, Enhancement and Management: Impacts 5.1 and 5.2: Dust and noise impacts due to improved road access

The following mitigation measures must be implemented:

 Construct bypasses around Nqueuene and Mavala village as feasible.  Construction activities associated with the road must take place during working daylight hours.  Clearing vegetation only from areas that will be worked on in the short term future.  Restrict land-clearing and other construction activities during periods of high winds.  Pave or stabilise shoulders of roads with gravel or vegetation.  Provide storm-water drainage and construct curbing to prevent water erosion.  Establish a dust emissions monitoring procedure, and undertake further work to determine acceptable thresholds for monthly dustfall. A suitable standard is the South African National Dust Control Regulations, which stipulate a dustfall threshold not exceeding 600 mg/m²/day.  Applying dust abatement techniques (bitumen binding agents or water bowser wetting) to reduce dust emissions from temporary sources.  A speed limit should be introduced to reduce the noise and dust impacts. When travelling through villages reduce speed to 20km/h.  Periodically inspect project vehicles to ensure that noise levels are limited and vehicles have not been modified.  Ensure that no houses are constructed within the road servitude after road completion, as this will, to some extent, serve as a noise buffer zone.

Impact 5.3: Nuisance impact (Production of odours, visual impact and attraction of pest and vermin) from non-process waste pollution

Refer to mitigation measures for Impact 4.5 under section 8.2.5

Impact 5.4: Contamination of the soils from chemicals and other pollutants will reduce the agricultural potential of the affected land

All mitigation measures listed above and in section 8.2.5 and 8.3.7 must be implemented.

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Impact Statement All Impacts associated with pollution can be largely mitigated by implementing regular mitigation practices and procedures (dust suppression and unnecessary noise production). Good housekeeping and monitoring practices on site will largely reduce the significance of the nuisance impacts assessed here. The most significant impacts are those related to increased traffic in the area, with impacts from dust being of high significance before mitigation. Vehicle noise will be of moderate significance, but will be difficult to mitigate, and remains moderate. Nuisance impacts are easier to mitigate.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 5.1: Dust impacts due to Moderate HIGH - Slight MODERATE- construction of roads Impact 5.2: Increase in noise and traffic Moderate MODERATE- Slight MODERATE- due to construction of roads Impact 5.3: Nuisance impact (Production of odours, visual impact Moderate MODERATE- Slight LOW- and attraction of pest and vermin) from non-process waste pollution

9.2.6. Issue 6: Loss of Natural Resources Impact 6.1: Removal of plant based natural resources A number of plant resources are used as a source of food, for medicinal purposes and for the construction of shelters. The removal of vegetation at the pit sites, and for the construction of the supporting infrastructure, as well as the loss of vegetation from the inundation of the dam will result in the loss of ethno-botanically important species used by the communities for food, medicine, charcoal production and construction. However, these species are relatively widespread and not limited to the study area nor the construction footprint.

Impact 6.2: Loss of animal species used as a food source through loss of habitat and increased noise levels The loss of habitat and increased noise as a result of construction activities is likely to cause faunal species such as elephants, antelope and birds to move out of the immediate area. This will reduce the abundance of species in the study area which may impact on this food source (bushmeat). This impact will also occur during the operational and decommissioning phases.

Impact 6.3: Destruction of the soil profile and soil erosion The excavation activities that will occur during the construction phase will result in the removal of soil and possible destruction of the soil profile and subsequent loss of topsoil. In addition, the clearing of vegetation which binds the soil could result in erosion in certain areas, particularly along drainage lines and on steep slopes which would also result in the loss of topsoil.

Impact 6.4: Water Supply from groundwater resources - Lowering of water levels and decrease in groundwater availability Although unlikely, the possibility that mining and pit dewatering operations lower the local water table on which community wells are reliant, is a consideration that needs to be addressed by the company. During the construction phase, the radius of influence his been determined by the specialist study team to be limited to the pit perimeter. No mitigation or management is required during the construction phase as the impact is considered to be of low significance.

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Mitigation and Management: The following mitigation measures must be implemented:  Machinery that generates noise must be regularly maintained in order to ensure that no unnecessary additional noise is produced;  Limit clearing and excavations to the construction footprint and implement a system of demarcation familiar to all employees;  Only clear areas as and when required to avoid large areas being left bare for extended periods of time;  Remove topsoil and store it separately from subsoil for later reuse;  Topsoil should not be moved more than once during storage and should be used during rehabilitation of the construction footprint that is not required for the operational phase;  An erosion monitoring plan must be designed and implemented for the construction and operational phases;  Excavation activities must only take place in demarcated areas.  Prevent the mine and its employees from purchasing bushmeat;  Mining employees must be prevented from hunting on the site or in the surrounding area; and  All employees must undergo an induction and be informed of the legislation governing the use of natural resources, specifically with regards to hunting.

The following mitigation measures should be considered:

 Allow and encourage community members to remove species that will be impacted by the construction activities and inundation of the dam, and which can be used for the construction of shelters, food and medicine;  Provide alternative sources of construction materials through the implementation of woodlots with fast growing indigenous species such as Millettia stuhlmanii and Brachystegia boehmii. Alien species such as Eucalyptus should not be used.  Equipment with lower sound levels should be selected where feasible;  Silencers for fans should be installed;  Sound insulation must be installed where feasible; and  A noise monitoring plan must be implemented.

Impact Statement These impacts, particularly those associated with the influx of job seekers placing greater pressure on the availability of natural resources, have the potential to be of high and moderate significance after mitigation. Even with mitigation impacts from in-migration remain of high significance. However, with the implementation of the mitigation measures listed above the other impacts can be reduced to impacts of moderate and low negative significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 6.1: Removal of natural plant Slight MODERATE- Slight LOW- based resources Impact 6.2: Loss of animal species used as a food source through loss of Moderate MODERATE- Moderate MODERATE- habitat and increased noise Impact 6.3: Destruction of the soil Severe HIGH- Moderate MODERATE- profile and soil erosion

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IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 6.4: Water Supply from groundwater resources - Lowering of Severe MODERATE- Moderate LOW- water levels and decrease in groundwater availability

9.3. OPERATIONAL PHASE IMPACTS

9.3.1. Issue 1: Economic Growth and Employment Opportunities There will be employment opportunities and economic growth and opportunities experienced in the operational phase. In addition to the opportunities provided, it is expected that there will be a continued influx of people in search of these opportunities, placing pressure on resources in the area.

Impact 1.1: Provision of direct and indirect employment opportunities During the operational phase there will be approximately 250 people working on the mine site. All unskilled labour will be sourced locally from nearby villages. The skilled workforce will likely be sourced from within Cabo Delgado and other locations in Mozambique, with a small contingent of specialist expats from outside Mozambique assisting with managing the mine, mentoring and training. These employment opportunities will provide formal employment and a regular source of income, and therefore economic stability for households. Indirect local employment opportunities are likely to be maintained through small businesses and services providers dealing either the mine or its employees.

Impact 1.2: Increased or ongoing economic opportunities Continued local employment opportunities, although of lower availability than the construction phase, will continue to stimulate or maintain the level of economic activities and opportunities in the area. Although the project expenditure will be reduced to fit operational needs and requirements, and be significantly less than that of the construction phase budget, its continued stimulation of local labour, goods and services markets, as well as the growth of small enterprises, can be expected to continue.

Impact 1.3: Training opportunities and skills development The provision of training opportunities and skills development will continue to benefit the surrounding communities in the operational phase, further contributing to economic development and job opportunities in the area.

Impact 1.4: Community conflict due to perceived differential benefits Community conflict as a result of perceived differential benefits, influx of people and pressures on employment opportunities, income generation activities and natural resources in the area are likely to continue into the operational phase of the project.

Mitigation, Enhancement and Management: Impact 1.1: Provision of direct and indirect employment opportunities

The mitigation and enhancement measures recommended for Impact 2.1 of the construction phase (section 9.2.2) are applicable. In addition, labourers involved in the construction phase of the project should be incorporated in the permanent staff for the operational phase, as far as possible.

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Impact 1.2: Increased economic opportunities

The mitigation and enhancement measures under Impact 2.1 and 2.2 of the construction phase (section 9.2.2) are applicable.

Impact 1.3: Training opportunities and skills development

The mitigation and enhancement measures under Impact 2.3 of the construction phase (section 9.2.2) are applicable, however it is anticipated that more advanced technical training or tertiary instruction opportunities/bursaries may be made available by the company.

Impact 1.4: Community conflict due to Differential Benefits

The mitigation and enhancement measures under Impact 2.1 and 2.4 of the construction phase (section 9.2.2) are applicable.

Impact Statement The positive impacts associated with the economic benefits of the project can be further enhanced to a benefit of high significance during the operational phase. Community conflict due to differential benefits will be of low significance during this phase of the project.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 1.1: Provision of direct and Moderately Very MODERATE+ HIGH+ indirect employment opportunities Beneficial Beneficial Impact 1.2: Increased economic Moderately Very MODERATE+ HIGH+ opportunities Beneficial Beneficial Impact 1.3: Training opportunities and Moderately Very MODERATE+ HIGH+ skills development Beneficial Beneficial Impact 1.4: Community conflict due to Slight LOW- Slight LOW- Differential Benefits

9.3.2. Issue 2: Social Infrastructure Most projects provide additional community benefits which can be easily overlooked. This includes ad hoc social support to schools or clinics as well as assistance with construction or maintenance of wells, footballs fields and other activities aimed to improve social infrastructure, often through Corporate Social Responsibility (CSR) spends.

The proponent has assisted the nearest village will the maintenance of a broken hand pump, drilled four community water boreholes, has provided football supplies (uniforms and balls) to the local football team and intends to provide Nqueuene village with an additional hand pump for improved access to water. Once the mine is constructed and investors are re-paid, and the mine is cash positive, it will then be in a position to work closely with the community to ensure sustainable economic benefit programs are successfully implemented over the long term, and for future generations to benefit. However, during construction and project development there are limited funds and manpower resources available for large programs, as the company is fully occupied and focussed on constructing a mine, and getting it operational.

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Impact 2.1: Improvement of basic infrastructure, social services and the provision of socio- economic development opportunities The project support provided to local communities will likely result in improved basic infrastructure, and social services, such as wells or hand pumps, education supplies or improved healthcare facilities.

Mitigation, Enhancement and Management: The proponent is encouraged to develop a Community Development Plan (CDP) or a Social Development Plan (SDP) to plan and consolidate the company’s Corporate Social Responsibility (CSR) initiatives. The CDP must outline the commitments to community programmes, inclusive of specific annual targets. This plan is a legislative requirement under the Corporate Social Responsibility Policy for the Extractive Industry of Mineral Resources (Resolution N.21/2014).

Impact Statement The benefits associated with the improvement of basic infrastructure, social services and the provision of socio-economic development opportunities can be further enhanced to improve this benefit from moderate to high.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 2.1: Improvement of basic infrastructure, social services and the Moderate Very MODERATE+ HIGH+ provision of socio-economic Beneficial Beneficial development opportunities

9.3.3. Issue 3: Community and Employee Health and Safety Impact 3.1: Increased risk of vehicle collisions and personal injuries It is anticipated that 13 deliveries of product per day to Pemba would be required, in payloads of 25 tonnes each. Assuming that the trucks that delivered the previous days loads would be returning to site to collect another load, 26 trips per day will be generated by the mine’s operations. In addition, mine provisions and consumables, fuel and food will also be transported in light and heavy duty trucks. It is therefore expected that there will be more than 26 heavy vehicle movements a day, and considerably more light motor vehicle movements on a daily basis. As a result of these deliveries, there are risks relating to public safety and road congestion.

Impact 3.2: Risks to the health and safety of employees and local communities from the mismanagement of process water or wastes Process water used in the mining and mineral processing operations will be managed and reticulated through the TSF and a separate holding pond ant the processing plant. It is essential that the pH and chemical constituents thereof are managed by Suni Resources so as to ensure that any potential discharges of this water in high rainfall events does not affect local drinking water source quality. As such, this will be a key area of constant focus and monitoring for the company during the operational phase of the project.

Impact 3.3: Risks to the health and safety of employees from the TSF and WSF Water from the TSF will be captured in a pond prior to blending with the input process water to the plant. The presence of a large pond containing process water which contains potentially harmful substances will pose a threat to the health and safety of employees. In addition, access to the TSF pond and WSF by individuals who are not able to swim may result in drowning. It is important for the mine management to ensure access is restricted as much as possible to all water bodies on the mine site, to avoid accidental occurrences of drowning by employees and the

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Impact 3.4: Use of chemical storage containers for domestic storage of potable water – risk to the health and safety of employees and community members

Certain of the bulk chemicals used in the process, such as kerosene as a flotation agent, are classified as hazardous (United Nations Transport of Dangerous Goods – Model Regulations, 14th revised edition. 2005). These chemical residues may be ingested when used chemical storage containers, disposed as waste, are used for domestic storage of potable water. Ideally these materials should be transported and stored on site in bulk containers so as to reduce the risk of smaller containers being inappropriately reused in the communities surrounding the mine site.

Mitigation, Enhancement and Management: Impact 3.1: Increased risk of vehicle collisions and personal injuries

Refer to mitigation measures under impact 4.1 under the construction phase impacts above (section 9.2.4.)

Impact 3.2: Health and safety of employees and local communities from the mismanagement of process water or wastes

The following mitigation actions must be implemented:  Implement mine site surface and ground water monitoring for early detection of water contamination.  The integrity of the TSF must be inspected regularly by an independent and suitably qualified and experienced engineer. This should include monitoring of the TSF embankment for early detection of movement. Regular formal inspections of the facilities by operators on a daily basis and annual formal inspections by the Engineer of Record.  Avoid habitation downstream of the water storage dam (currently there are none) in case of catastrophic wall failure.  The Best Practical Environmental Option (BPEO) philosophy requires that the siting of waste rock dump and TSF must take into consideration the location and proximity to water resources, human settlements and sensitive ecological areas. In the unlikely event of failure, pollution of soil and water as well as physical risk to communities is minimised;  Ensure sufficient freeboard in all water storage ponds and the TSF to ensure that they do not overflow during high rainfall periods;  The quality of the stored process water should be monitored so that in the event of accidental discharge, the contaminants released into the environment are known; and  Access to the TSF and waste rock dump should be restricted as far as practical, and all local communities should be informed of the potential risks associated with these facilities through site notices and community meetings.

Impact 3.3: Risk to the health and safety of employees from the TSF, WSF and other water storage areas

The following mitigation actions must be implemented:

 The process water storage pond must be fenced off and the gate locked at all times to limit unauthorised access;  Flotation devices must be readily available around the facility;

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 Visit and monitored all water storage areas daily to detect occurrences of unrestricted access;  The Health & Safety induction training must incorporate these risks; and  Warning notices must be placed around such facilities for potential of drowning.

Impact 3.4: Use of chemical storage containers for domestic storage of potable water - risk to the health and safety of employees and community members

The following mitigation actions must be implemented:  All chemicals used on site must be stored and disposed of according to the national legislation and Best Practice;  Chemicals must be stored in secure, bunded designated areas;  Material Safety Data Sheets (MSDS) must be readily available for all chemicals at the point of storage and use;  A Hazardous Chemical Management procedure must be developed for the facility and must include detailed spill response procedures;  Chemicals that may react in a dangerous manner should not be stored within the same bunded area;  The compatibility of chemicals must be confirmed prior to storage and signage showing the chemical names and hazardous properties (MSDS) of the chemicals should be visible in the designated temporary storage area;  An Emergency Preparedness and Response Procedure must be developed for the facility;  A Waste Management Procedure must be developed for the facility which includes measures to ensure that all chemical wastes and empty chemical containers are managed and disposed of according to the requirements of legislation and international best practice; and  Buy in bulk where feasible and return containers to suppliers.

Impact Statement Impacts to community health and safety during the operational phase of the project have the potential to be of high significance unless mitigated. The implementation of mitigation measures can reduced all impacts to low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 3.1: Increased risk of vehicle Severe HIGH- Severe MODERATE- collisions and personal injuries Impact 3.2: Health and safety of employees and local communities from Very Severe HIGH- Slight LOW- the mismanagement of process water or wastes Impact 3.3: Risk to the health and Moderately safety of employees from the TSF and Very Severe HIGH- LOW- Severe WSF Impact 3.4: Use of chemical storage containers for domestic storage of Slight potable water - risk to the health and Very Severe HIGH- LOW- Severity safety of employees and community members

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9.3.4. Issue 4: Impacts of Pollution on the Community and Employees Impact 4.1: Dust impacts due to improved road The impact of increased dust due to the improved access road and therefore increased traffic volumes will continue in the operational phase of the project.

Impact 4.2: Increase in noise and traffic due to improved roads

Cause and Comment The improved roads will increase the noise pollution and vibration effects in the operational phase due to increased traffic volumes compared to the status quo. The increase in noise and traffic may negatively impact the quality of life for the local communities.

The following factors are considered the most significant with respect to road traffic noise generation:  Traffic volumes i.e. average daily traffic;  Average speed of traffic;  Traffic composition i.e. percentage heavy vehicles;  Road gradient;  Road surface type and condition; and  Individual vehicle noise including engine noise, transmission noise, contact noise (the interaction of tyres and the road surface), body, tray and load vibration and aerodynamic noise.

Mitigation, Enhancement and Management: The following mitigation measures must be implemented:  Restricting the number and type of vehicles that can access the road, if possible.  Preparing a dust control procedures/dust abatement techniques to identify dust sources, help reduce negative impacts of dust and provide monitoring of dust emissions.  Avoid the use of roads through villages where possible.  Introduce and adhere to speed limits on all roads.

The mitigation and enhancement measures under Impact 3.3 of the construction phase are applicable. In addition, the following impacts should be considered:

 Minimise individual vehicle engine, transmission and body vibration. This can be achieved by regular maintenance of the vehicles;  When designing roads, minimise the need for excessive acceleration and deceleration by minimising slopes through correct vertical alignments;  Maintain road surface to avoid corrugations and potholes; and  Minimise the need for trucks to reverse and activate their reverse sirens.

Impact Statement As with the construction phase impacts, dust impacts are of high significance, but can be reduced to moderate. Noise impacts can be mitigated to an impact of low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.1: Dust impacts due to Moderate HIGH - Slight MODERATE - additional access roads

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IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 4.2: Increase in noise and traffic Moderate MODERATE- Slight LOW- due to improved roads

9.3.5. Issue 6: Damage to public property Impact 6.1: Damage to public roads The large and heavy mine vehicles are likely to cause damage to public roads if they are overloaded.

Mitigation and management The following mitigation measures must be implemented:  Determine the design standards of the public roads to ensure that mine vehicles do not exceed the axel load limit allowed for those roads. Upgrade the road and bridges accordingly.

Impact Statement The damage to public property can be mitigated from an impact of moderate significance to an impact of low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 6.1: Damage to public roads Slight MODERATE- Slight LOW-

9.4. DECOMMISSIONING PHASE IMPACTS

On cessation of mining activity it is implicit that there will be retrenchments and job losses. It is likely that there will be additional phases of the project – if nearby deposits are considered large enough to allow for additional mining at a later point in time. However, it is not possible to qualify or quantify what the socio-economic impacts of the mine closure will be. It can be accepted however that loss of jobs, a shrinking of the local economy by way of reduced money circulating in the project area, as well as a potential decrease in the social services support that the project will bring to the study area will be largely lost, unless an alternative mechanism for managing these project provided social infrastructure and services is determined between all stakeholders prior to mine closure. In summary the following key impacts will occur:

9.4.1. Issue 1: Economic decline Impact 1.1: Loss of social services During the decommissioning of the mine various social projects initiated during the operational phase of the proposed project, such as educational, health and agricultural projects may be lost.

Impact 1.2: Loss of jobs at mine closure During the decommissioning phase of the proposed project the majority of staff previously employed will be retrenched as all mining activities cease.

Impact 1.3: Labour strike During the decommissioning phase of the project there is potential the staff may embark on go slow actions/ industrial strikes as they realise they are coming to the end of their contract and severance packages have not been dealt with to their satisfaction, or not deemed adequate

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Mitigation and Management Impact 1.1: Loss of social services

Ensure that the project is undertaken in a sustainable manner so that it can continue within the region post mine closure, i.e. include basic business training for PACs and community based organisations, and initiate pre-emptive discussions with key stakeholders on how these facilities can be managed post-closure timeously.

Impact 1.2 and 1.3: Loss of jobs at mine closure and labour unrest/industrial action

A retrenchment policy will be in place prior to any retrenchment activities being undertaken. Staff should be engaged with and the decommissioning process explained to them from the start of this phase.

Impact Statement Impacts associated with an economic decline as the mine prepares to close during the decommissioning phase can be potentially high. However, through the implementation of the mitigation measures listed above, these impacts can be managed and reduced to impacts of moderate and low significance.

IMPACTS WITHOUT MITIGATION WITH MITIGATION Severity Significance Severity Significance Impact 1.1: Loss of social services Moderate MODERATE- Moderate LOW-

Impact 1.2: Loss of jobs at mine Very VERY HIGH- Moderate MODERATE- closure. Severe Impact 1.3: Labour unrest/industrial Severe HIGH- Moderate LOW- action

9.4.2. Issue 2: Impacts of Traffic on Community and Employee Health and Safety

Decommissioning phase impacts are likely to be similar to construction phase impacts. Some of the following outcomes are likely:  Some plant equipment will be removed for reuse elsewhere.  Equipment will be dismantled and sold for scrap.  Unwanted infrastructure will be refurbished for community use where deemed sustainable and a net gain for the local community can be achieved in doing so.

The mine’s traffic management systems are likely to have developed to a stage where accidents are unlikely, or when they do occur, are dealt with rapidly and effectively.

The mitigation measures suggested for the construction phase, are also considered necessary for the decommissioning phase:  Within the project area, signage should be used to specify speed limits and adherence to these limits should be monitored. On the national roads, the specified limit should be adhered to.  Deliveries at night should be avoided.

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 Deliveries by heavy vehicles must, as far as possible, be scheduled to avoid the formation of convoys. Sufficient distance must be maintained between heavy vehicles to allow light vehicles to overtake safely.

If abnormal loads are to be transported:  Arrangements must be made with the provincial traffic authorities for abnormal loads, and their requirements strictly adhered to.  Speed limits must be strictly observed.  As far as possible deliveries of abnormal loads should be scheduled to avoid periods when significant volumes of traffic are present on affected roads.

9.5. CUMULATIVE IMPACTS

Cumulative impacts are defined as those “that result from the incremental impact, on areas or resources used or directly impacted by the project, from other existing, planned or reasonably defined developments at the time the risks and impacts identification process is conducted.”

There has been an increased interest in graphite mining within the Cabo Delgado Province as a result of resource discoveries. Other graphite mining companies with a presence in the area include Triton Minerals Ltd. and Syrah Resources (The Economist, 2015). Additionally, there are ruby mine operations in the area, including operations by Gemfields. Cumulative impacts arise as a result of successive, incremental and combined impacts of mining activities on society, the economy and the environment.

Cumulative impacts are complex and assessed on a broader level, making it difficult to apply the same methodology as direct and indirect impacts. Consequently, an overall impact significance has been determined for each of the cumulative impacts identified below.

Cumulative Impacts Significance Rating Increased pressures on existing social services (such as healthcare and HIGH - education) as a result of an influx of people into the area. An overall loss of sense of place or community identity. LOW -

Increased traffic congestion and road degradation. MODERATE -

Increased employment and economic opportunities. HIGH +

Development of human capital (training and skills development). MODERATE +

Increased awareness of health and safety. LOW +

Community development and infrastructure upgrades. HIGH + Contamination of soils and water will be exacerbated to the point of there being severe impacts on the livelihood strategies of the local HIGH- communities. Loss of future agricultural and grazing land will be exacerbated to the point where there is limited land available for communities to meet their basic HIGH- needs. Increased dust levels MODERATE-

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There are various site-specific mitigation and enhancement measures that can be implemented, including the implementation of environmental management systems, engagement with communities and other stakeholders and developing mechanisms for regular reporting on social and economic changes. There are effective broad-level strategies that may be implemented through cross-company collaboration, as well as engagement with national and provincial-level key stakeholders and regulators in this regard.

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10. ALTERNATIVES

10.1. PROJECT ALTERNATIVES

One of the objectives of the EIA process, and a legislated requirement under Mozambican law, is to investigate alternatives to the proposed project. Alternatives in relation to a proposed activity means the different means of meeting the general purposes and requirements of the activity and can include alternatives to:  The property on which, or location where, it is proposed to undertake the activity;  The type of activity to be undertaken;  The design or layout of the activity;  The technology to be used in the activity;  The operational aspects of the activity; and  The option of not implementing the activity i.e. the no-go option.

Alternatives must be any feasible and reasonable alternatives to the activity that will minimise harm to the environment. The EIA process must identify and comparatively assess the alternatives. However, if after having identified and investigated the alternatives, no feasible and reasonable alternatives are found, no comparative assessment of alternatives, beyond the comparative assessment of the preferred alternative and the option of not proceeding, is required during the assessment phase. The alternatives must aim to address the key impacts of the proposed project by maximising benefits and avoiding or minimising the negative impacts.

Table 10-1: Summary of the types of alternatives assessed as part of this ESIA Type of Explanation Comment Alternative Location Refers to both alternative The applicant has identified economical properties as well as graphite deposits within their concession alternative sites on the same area and can only develop a mining property. operation in areas with mineralisation.

Activity Different type of activity to There is no alternative for this type of achieve the same goal. For development, as the graphite found in the example, provision of public project area can only be used if it is mined transport rather than as described above. There is no alternative increasing the capacity of that is practically or economically viable for roads. Mozambique to export the graphite. Furthermore, the applicant wishes to develop a graphite mine, and are consequently not interested in any other type of development.

Design or Design: E.g. Different Three different TSF options were Layout architectural and or considered as part of this EIA and are engineering designs discussed in further detail below. Site Layout: Consideration of different spatial configurations of an activity on a particular site. Technological Consideration of such Although groundwater was the preferred alternatives is to include the alternative, the groundwater exploration option of achieving the same phase yielded unfavourable results in

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goal by using a different terms of bulk water supply, as insufficient method or process (e.g. quantities were available for the mine. The 1000 megawatt of energy total blow yield from the 17 boreholes was could be 8.14ℓ/s, with a maximum blow yield of 3ℓ/s generated using a coal-fired and proposed sustainable abstraction of power station or wind 2.6 ℓ/s, for limited abstraction durations per turbines. day. Although groundwater abstraction was the preferred option, the results indicated that this was not feasible and that surface water options needed to be investigated.

Surface water will be supplied in two phases. Phase one will use a pipeline that will pump water from the Messalo River to the mine site during the construction of the WSF. Phase 2 will provide water from the WSF once it has filled to a level that can be utilised.

Demand Arises when a demand for a Graphite is used in the production of lithium certain product or service ion batteries which are used in the can be met by some renewable energy sector such as for alternative electric cars, solar voltaic facilities and means (e.g. the demand for wind farms. There is therefore a demand electricity could be met by for clean energy on a global scale and supplying more energy or therefore a demand for the constituents using energy more efficiently required to make this technology. Graphite by managing demand). is one of these constituents required for the production of lithium ion batteries. Routing Consideration of alternative Two different haul routes for the export of routes generally applies to product were considered and have been linear developments such as discussed in further detail below. power line servitudes, transportation and pipeline routes. Scale and Activities that can be broken This specific mine has a relatively small Magnitude down into smaller units and footprint compared to other types of mines. can be undertaken on The surface area of the pits and associated different infrastructure have been kept to a scales (e.g. for a housing minimum to reduce the environmental development there could be impact of the mine on the surrounding the option 10, 15 or 20 environment. housing units. Each of these alternatives may have The footprint of the waste rock dumps at different impacts). both pits have been reduced in size (section 10.3.2). In addition, the TSF with the smallest footprint was selected (Section 10.3.1). “No-Go” This is the option of not As per the legislated requirements, the no Option implementing the activity. go scenario has been discussed below and the associated impacts assessed in chapter 7.

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10.2. FUNDAMENTAL ALTERNATIVES

Fundamental alternatives are developments that are totally different from the proposed project and usually involve a different type of development on the proposed site, or a different location for the proposed development. In the case of a mine it cannot include alternatives to the property on which, or location where, it is proposed to undertake the activity, as this mine is bound by the location of the resource. Thus, no alternative locations for the mine can be assessed. However, alternative locations for infrastructural components of the project that are not locality bound can be considered, as described below.

10.2.1. Transport Corridors Graphite concentrate needs to be exported to the international market, from Pemba Port. Nacala Port was considered as an alternative port for product export, however Pemba is preferable as it is 236 kilometres closer to the mine site than Nacala (Site to Pemba = 260 kilometres. Site to Nacala = 496 kilometres) which has a cost and time saving for the mining operation (Figure 10-1). In addition a shorter route is beneficial from a health and safety perspective as the drivers of the trucks have a shorter distance to cover, reducing road fatigue and therefore possible accidents and the shorter route means that there are less villages that the trucks will pass through, reducing the possibility of accidents with community members.

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Figure 10-1: The product haul route corridors options. The red line illustrates the route to Pemba port and the black route illustrates the longer route to Nacala port.

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10.3. INCREMENTAL ALTERNATIVES

10.3.1. TSF Location

Three options were assessed for the proposed position of the TSF (Figure 10.1). These options were assessed based on the risk of the impact occurring (high risk of impact = red; moderate risk of impact = orange; low risk of impact = green). The risk of the impact was determined based on the specialist assessment undertaken for the proposed development. More detail on each impact is included in the table below (Table 10-2). Based on the table included below, the preferred option for the TSF is option 2.

Table 10-2: Assessment of each TSF alternative TSF Option 1 TSF Option 2 TSF Option 3 Footprint size and TSF option 1 has the TSF option 2 has the TSF option 3 will loss of largest footprint and will smallest footprint and will result in the loss of vegetation/habitat. result in the loss of 369 result in the loss of 227 310 ha of vegetation ha of vegetation and ha of vegetation and and faunal habitat. faunal habitat. The only faunal habitat. The only The only vegetation vegetation type of high vegetation type of high type of high sensitivity that will be sensitivity that will be sensitivity that will be impacted is the riparian impacted is the riparian impacted is the woodland. woodland. riparian woodland. Catchment and TSF option 1 is located TSF option 2 is TSF option 3 is drainage lines in a drainage line in a located in a drainage located in a drainage different catchment to line in the same line in the same the pits, waste rock catchment as the pits catchment. In the dumps and processing and waste rock dumps unlikely event of a plant. In the unlikely leak at the TSF this event that there is a and is located will be contained spillage from the TSF downstream of within the same and leaching from the important mining catchment. Waste Rock Dump, two infrastructure and separate catchments will within the same In addition, this be affected and will need catchment as the option is located to be rehabilitated. mining infrastructure, upstream of the thus minimising risk to WSF. In the event of people. a leak or spillage, this will travel down and In addition, this option is be caught and diluted located upstream of the by the WSF rather WSF. In the event of a than it entering the leak or spillage, this will surrounding travel down and be environment. This is caught and diluted by a safety measure to the WSF rather than it prevent the pollution entering the surrounding of the natural environment. This is a environment. safety measure to prevent the pollution of the natural environment. Distance from The closest point of TSF The closest point of The closest point of processing plant option 1 is located TSF option 2 is located TSF option 3 is approximately 1.7km approximately 0.15km located from the processing from the processing approximately

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plant. Capital costs and plant. This will 2.94km from the energy requirements to minimise the distance processing plant. pump the tailings from that the tailings need to Capital costs and the processing plant to be pumped and thus energy requirements TSF option 1 will be reduce both capital to pump the tailings more than if it is located from the processing closer to the plant as cost and energy plant to TSF option 3 with TSF option 2. requirements, as well will be more than if it as any risks related to is located closer to spillages. the plant as with TSF option 2. Location relative This TSF is located 4.6 This TSF is located This TSF is located to accommodation km downstream of the 0.6km downstream of 0.95 km downstream camp accommodation camp. the accommodation of the camp. accommodation camp.

10.3.2. Waste Rock Dumps

Buffalo Waste Rock Dump The position of the Buffalo Waste Rock Dump has been moved north of its original position to avoid the drainage line and Riparian Woodland to the south as these are considered to be of high sensitivity (Figure 10-2).

The position of the Elephant Waste Rock Dump has been moved south of its original position to avoid the drainage line and Riparian Woodland in the north as these are considered to be of high sensitivity (Figure 10-3).

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Figure 10-2: Figure illustrating how the Buffalo Waste Rock Dump has been moved to the north to avoid the Riparian Woodland, which is of high sensitivity.

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Figure 10-3: Figure illustrating how the Elephant Waste Rock Dump has been moved to the south to avoid the Riparian Woodland, which is of high sensitivity.

10.3.3. The “No-Go” Alternative

The removal of vegetation during the mining process and construction of associated infrastructure will cause the loss of important vegetation communities as well as habitat fragmentation within the project study area. These are dynamic ecosystems that provide the habitats to support all forms of life, which will be lost during construction and operation of the mine.

Under the “no-go” or no development scenario, the current disturbance caused by the local communities will remain, and may even expand, resulting in more undisturbed areas becoming fragmented. Thus, compared to the current land use, the impacts associated with the mine site and associated infrastructure is comparatively small when viewed at a broader scale.

In addition to the above, no socio-economic benefits would accrue to the nearby communities and the government. If the proposed project is not implemented benefits such as the opportunity to increase revenue capacity at local and regional levels, as well as the creation of employment will be lost, resulting in unimproved living conditions for the population in the project area. Furthermore, if the project is not implemented, the opportunities for growth and improved quality of life associated with the proposed social programmes will decrease, as will the secondary impacts that stem from higher income earnings (such as support for local businesses).

Since the majority of the area to be developed is of low ecological sensitivity and the existing practises by local communities may result in further degradation of the area, the social benefits

Coastal & Environmental Services 180 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 of the proposed project outweigh the potential negative ecological impacts, and thus the “no-go” option in this case is considered to be detrimental to PACs within the projects area of influence.

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11. CONCEPTUAL DECOMMISSIONING AND CLOSURE PLAN

11.1. WHY A PRELIMINARY MINE CLOSURE PLAN IS REQUIRED

Mine rehabilitation must be viewed as an on-going programme designed to restore the physical, chemical and biological quality or potential of air, land and water regimes disturbed by mining to a state acceptable to the regulators and to post-mining land users. Rehabilitation can take place throughout the life of mine, whereas mine closure by definition refers to those activities that take place after production has ceased.

The developed world (e.g. Australia and United Kingdom) are among the leading countries in developing mine closure and rehabilitation programmes and objectives. This is well articulated in the International Council on Minerals and Metals (ICMM) Planning for Integrated Mine Closure Toolkit and is amongst the most widely used international guideline documents for mine closure. The recommendations included in this report draw from the ICMM Guidelines which are explained in more detail below (Figure 11.1).

A Mine Closure Plan for the project will be developed by Suni Resources, initiated at this early stage as a Conceptual Closure Plan. These differ as a Conceptual Closure Plan should communicate the expected outcomes and goals of the closure activities, whereas the more a detailed plan includes timeframes and milestones, detailed methodologies for achieving goals, more detailed budgets, rehabilitation and site amelioration specifications, and monitoring and validation processes. This detail can only come later, when more details on the engineering designs of all components of the project are available.

This Conceptual Closure Plan is developed now for use during pre-feasibility, feasibility and design phases of the project, and to inform the EIA process. Its active life may be a few years, but if well-defined and based on effective community and stakeholder engagement, it may not change much during the first five years of construction and mining. However, the closure plan must be reviewed every five years over the life of the mine, in order to accommodate any changes in mining area, approaches to mining and other technical refinements that are likely to take place during the start and ramp-up phases of the project. These changes would also trigger a revision of the Closure Plan budget, to ensure that sufficient funds are available to cover any additional costs.

This rest of this section provides the broader principles and methodologies that will be adopted by the company to guide further closure planning, and provides the anticipated outcomes and objectives of the Conceptual Closure Plan.

11.2. TARGET CLOSURE OUTCOMES AND OBJECTIVES

The target closure outcomes of the Mine Closure Plan should be to (ICMM, 2008):

 Restore as much as possible of the mine area to a condition consistent with the pre- determined post closure land use objective.  Ensure that the mine area is left in a condition which poses an acceptable level of risk to public health and safety.  Reduce, as far as is practically possible, the need for post closure intervention, either in the form of monitoring or on-going remedial works.

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 Minimise or prevent post-closure environmental degradation (to the soils, water and air), by ensuring that the mine area is left in a condition that is chemically and physically stable.  As far as practical, minimise the immediate negative economic impacts to local communities associated with mine closure and maximise the likelihood of lasting benefits to local communities. This will include leaving infrastructure in place that has a post mining value to the communities.

The objectives of the Mine Closure Plan are further expanded upon below:

 Physical Stability - Mine structures that remain post closure should be physically stable such that they do not pose a hazard to public health and safety as a result of failure or gradual degradation. These structures should only erode and/or release solids into the environment to the extent that degradation of the surrounding area does not occur.  Chemical Stability - The infiltration, leachate or run-off from the mine site or waste storage facilities should not endanger public health and safety, or result in the pollution of soil, surface water or groundwater, or non-compliance with statutory water quality limits.  Land Use - Post closure, the mine site should be compatible with the surrounding land, to the extent that it is both practical and economical to do so.  Social - Post closure the mine should ensure that the needs of communities impacted and dependent on the mine are appropriately addressed. Social risks must be identified, and goals need to be defined and set for, inter alia, the following: poverty alleviation, education, health care, employment and employability, and improving social infrastructure. This will include leaving infrastructure in place that has a post mining value to the communities.

Figure 11.1: The integrated mine closure planning approach as recommended by the ICMM (2008)

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11.3. SITE SPECIFIC CLOSURE OUTCOMES, OBJECTIVES AND TARGETS

At this stage, the proposed post closure land use will likely be a combination of agriculture (machambas) and natural vegetation within defined ecological corridors, although no final decision has been made. The following main objectives have been set:

 Disturbed areas are to be returned to as close to their original state as practicable, by implementing a revegetation and replacement strategy;  The mine pits will be retained as voids, which will fill with water. They will be designed for long-term stability by sloping the perimeter walls of the open pit at 1:3 (18º) angles, and access will be controlled;  Waste rock dumps are to have a 1:5 slope and be covered with a minimum of 300mm of topsoil and/or other suitable growing medium (e.g. saprolite covered with organic matter or wood chips) and vegetated with indigenous species.  The TSF is to be capped at closure with 300mm of saprolite and covered with organic matter or wood chips, and must be dome shaped to avoid the ponding of water, and vegetated.  No topsoil shall be harvested from undisturbed areas for use in the rehabilitation and revegetation strategy;  Socio-economic impacts (including the loss of employment) will be minimised through careful planning and preparation for closure beginning three to five years before closure takes place;  Retrenchments and job losses are to be minimised by developing self-sustaining community development projects during the life of mine, as part of the company’s ongoing but yet to be developed Community Development Programme.

The above principles and concepts will be refined as part of on-going detailed closure planning and costing during the life of mine.

This Preliminary closure report has been compiled in fulfilment of the relevant Mozambican legislation. The overarching item of environmental legislation is the Environmental Framework Act (Law No. 20/97, 1 October 1997) which governs the use and correct management of the environment and its components, and to ensure sustainable development. It is the foundation for the legal instruments for the preservation of the environment. According to the Environment Act, the mining operation is liable for the costs of rehabilitating the degraded environment or restoration thereof.

In terms of the above-mentioned Act, the ESHIA conducted for the proposed mine must include a Closure Plan. The Closure Plan has to provide an indication of the rehabilitation costs related to the closure of the mine as mining activities are required to provide a bond to cover the costs of rehabilitation during mine closure. The value of the bond is set by the Government and is reviewed every two years. The bond may take the form of an insurance policy, a bank guarantee or a deposit in cash in a bank account that the Government maintains specifically for the purpose.

11.4. DECOMISSIONING, REHABILITATION AND CLOSURE OF SPECIFIC COMPONENTS

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11.4.1. Mine void/pit rehabilitation The objective of pit rehabilitation is to ensure that the site is left in a state that poses minimal risk to the health and safety of humans and fauna (wildlife and livestock) and the health of the environment. The two pits will disturb approximately 40ha of land. Since it is not possible (from a cost and operational perspective) to backfill the pits with overburden they will be left to fill with water and become in-pit lakes. As the open pit will not dry out completely due to the volume in storage being very large, it is possible to develop the pits into an aquatic ecosystems at closure.

However, the water level of the Elephant and Buffalo pits will range from 15m to 30m below the surface of the land. This presents a significant risk at closure as if someone falls into the pit, they will not be able to get out. Suitable benching of the pit is therefore required to create a shallow surface (1m deep) along the edge of the pit, and an access route out of pit needs to be created, most likely by using the access ramp required during operation.

Alternatively, all pit walls must be sloped at a 1:3 (18º) angle to the pit floor, or to the stable groundwater level that could establish within a reasonable period (being 15-30m below land surface). This pit wall sloping renders the pit safe for humans and domestic animals. Where concerns exist regarding the risk that the pit water poses to humans and animals, it will be necessary to implement measures to reduce access to the pit. As fences would be stolen, this may be achieved by the construction of a sizable berm around the entire perimeter of the open pit to keep domestic animals out and restrict human access. A further option is to plant an impenetrable vegetation barrier around the pit, using a spiny, fast growing but non-invasive species such as sisal. Prior to making a choice about a suitable species, a risk assessment to determine the potential for the species to become invasive must be undertaken. In regards to water quality, the geohydrology specialist investigations (Exigo, 2017) indicated that the development of AMD in post-closure pit water is unlikely (will reach a pH of 5.9, i.e. mildly acidic). In addition, pit water salinity is shown to be elevated above baseline conditions, although the concentration is the same order of magnitude as the groundwater baseline conditions.

Signs will be erected around the open pit and on all approach roads warning the public of the potential dangers of falling or drowning. These signs will be in English, local languages and symbols for illiterate people. Access ramps to the open pit will be closed off to prevent vehicle access. In addition, as part of the closure process, local communities will be informed directly of the potential hazards and precautionary measures to be observed around the pit.

11.4.2. Waste Rock Dumps To significantly reduce the costs of rehabilitation, the slope angle of the WRD should not exceed 1:5. This angle should also be maintained for WRD areas that have reached final profiling. Upon closure the WRD sides and tops must be covered with a minimum of 300mm of topsoil and vegetated with indigenous species during the wet season. Generally, average re-profiled outer slopes that have been re-vegetated will curb storm water flow velocities on the slopes. In addition, this should reduce precipitation percolating into the WRD. Should the WRD not be decommissioned with a proper cover system, monitoring of geotechnical properties within the WRD must be undertaken on an on-going basis to ensure the stability of the WRD.

In addition to the above mentioned objectives, it is recommended that the shaping of the WRD slopes be undertaken during the operational phase of the mine and that if acid generating waste rock has been identified, that this be separated from non-acid generating waste rock.

Acid generating waste rock will need to be encapsulated within non-acid generating waste rock to prevent/minimise the risk of acid mine drainage formation. Run-off from the surface of the waste

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Chemical analysis must be undertaken for representative waste, tailings and ore samples at regular intervals during the operational life of the mine. This test work is required to confirm whether the proposed mitigation measures designed to minimise acid generation are being effective, and the results must guide further actions. It should however be noted that according to the Geochemical Assessment undertaken as part of the Hydrogeological Specialist Investigation completed by Exigo (Exigo, 2017) “the mineralogical results indicate that the sulphide mineral content of the waste rock facility is much lower than that of the tailings. This was reflected in the ABA and NAG results, which indicate that the production of ARD from the waste rock material is unlikely. This aspect was further quantified by the numeric geochemical models developed for the waste rock material.”

At closure the waste rock dumps must be covered with saprolite and then topsoil, if available. If not, then compost or wood chips will be required, as saprolite is not a suitable growing medium for plants. Top soil must not be collected from undisturbed areas for use in waste rock dump revegetation.

11.4.3. Tailings Storage Facility Post closure, the TSF could be a potential source of sulphide minerals, and has the potential to cause AMD. According to the Geochemical Assessment completed as part of the Hydrogeological Report by Exigo “this is due to the presence of the minerals pyrrhotite [Fe1-xS] and sphalerite [ZnS], which are unstable in the presence of oxygen contained in the atmosphere. They therefore react to form acidity in the form of H+, sulphate [SO4] with iron and zinc. Sulphides such as pyrrhotite and sphalerite can contain metal impurities, which may also be leached due to the low pH of the acid rock drainage (ARD) leachate. Low pH values generally facilitate the leaching of metals.” Acid rock drainage or Acid Mine Drainage (AMD) from tailings impoundments is likely to reduce groundwater quality. This process is influenced by the amount of sulphide mineral present. The other minerals present will most probably be inert and although they are not expected to contribute significantly to groundwater pollution, they may contribute to elevated metal and trace element concentrations in the groundwater. However, the geochemical impacts from the TSF stockpile are sufficiently low that a liner system would not be required. Simple remediation methods such as phytoremediation are deemed sufficient to limit the leachate from seeping to groundwater surrounding and on top of the TSF upon cessation of mining.

To minimise the potential negative environmental impacts (both chemical and physical) of the TSF at closure and post-closure, the following is proposed for the TSF:

 During the construction phase topsoil must be stripped (at least 100-300 mm and subsoil/saprolite (minimum 300 mm)) before the TSF is constructed. These materials will be used to cover the WRD and TSF post closure;  Construct a permanent spillway to ensure physical stability of the facility during storm events. This will be done during the construction phase of the TSF;  Cover the TSF with a saprolite layer (at least 300mm thick, but contoured to ensure free drainage of surface runoff post-closure) followed by 100 to 300mm topsoil, and then establish vegetation;  The TSF should be graded to form a dome, to allow incidental rainfall to run off the surface of the TSF and to reduce water ingress into the tailings mass;

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 The TSF should have an external slope of 1:3 (vertical:horizontal) to ensure that it remains a stable landform in the long term, and to make it suitable for revegetation;  The establishment of a phytoremediation system should be considered in the operational phase with the long term view of post-closure. Phytoremediation would influence the site water balance and could also immobilise metals in the system. The potential migration rate and directional movement of metals such as lead should be evaluated (simulated) and a human and ecological health risk-assessment undertaken to determine the potential for especially lead to reach sensitive receptors; and  Monitoring of groundwater and surface water qualities around and downstream of the TSF area.

11.4.4. Roads The proposed haul and access roads around the site should be ripped, except those needed to access the facilities for inspection after closure. Roads that can and will be used by other users post closure should, however, be left, provided this is agreed upon by all parties concerned. These roads should then be handed over to the relevant authority (such as the Department of Roads) to ensure its proper maintenance in the long term.

Any roads which will no longer be required must be rehabilitated and will follow these general guidelines which will form part of the revegetation strategy:

 Bridges, culverts and ducts must be removed where they are no longer required.  The natural water flow must be restored and any disturbed section of the watercourse will be stabilised and revegetated.  The road surface, shoulders and embankments must be graded to a slope suitable to prevent erosion. Cuttings will be assessed and where necessary measures to improve safety and erosion stability will be implemented.

11.4.5. Processing Plant and Other Infrastructure Certain infrastructure may remain post closure. The objectives are to:

 Hand over the haul road to the appropriate government department (i.e. Department of Roads) for utilisation by the local communities once mining has been completed.  Hand over the water storage dam to the appropriate government department in order to provide a permanent water supply to the local communities in the area.  Hand over the clinic services to the local communities in the area, which will be of benefit of the local communities as healthcare facilities are scarce commodities within the region.  Consider handing over the administration facilities for modification into a secondary school for the area.  Consider handing over the workshop and maintenance area, and use this to support a post closure training programme for local community use. This will require the development of a technical training programme as part of the mine’s CSD programme prior to closure.

Once closure is complete, a decision to either demolish any other remaining facilities or hand them over to the local authorities for conversion into social infrastructure will need to be made through a consultative process. The structural integrity of any structures that are to remain on site for use by local communities must be assessed by an independent specialist prior to handover. Any structures that are found to be structurally defective must either be demolished or repaired prior to handover. All other infrastructure will be decommissioned as follows:

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 Any surface buildings and infrastructure which are no longer required will be demolished, unless specific directives to the contrary are received from the authorities. Such directives may result from communities’ requests. This will need to be confirmed through a stakeholder engagement process undertaken as part of the closure plan goal refinement exercise.  A detailed plan indicating the location of any remaining infrastructure will form part of the closure plan.  All brick and concrete buildings associated with the processing plant will be demolished and the rubble buried either on site to a minimum depth of 1.0 m, or placed in the TSF and then covered with saprolite and top soil.  Foundations will either be removed or will be covered with a layer of soil, or soil forming material, the depth to be determined following trials to be undertaken.  Non-re-useable materials including rubble and waste will be disposed of at suitable sites in accordance with the waste management and disposal plan that will be developed.  Following the removal of the infrastructure, a soil contamination assessment will be undertaken by an independent specialist, and remediation and re-vegetation activities implemented where necessary.  Support infrastructure buried underground, such as tanks and their pipes, and other pipes and service tunnels will, depending on the proposed future use of the site, either be kept as is or be unearthed and removed from the site. If they are to be left in-situ, the integrity of all underground pipes and tanks will be assessed by an independent expert. If the integrity of sub-surface infrastructure is compromised, it must be removed.  Any sub-surface infrastructure (including but not limited to pipes and tanks) that are likely to contain hazardous chemicals (including fuel) must be removed.  Any remaining openings and access ways will be blanked.  Electrical equipment and infrastructure such as transmission towers, electric cables and transformers which are no longer required will be demolished and removed from the site. The soils in the vicinity of transformers will be assessed for contamination and appropriate decontamination measures will be implemented, in accordance with Mozambique regulatory requirements, if necessary.  All disused mining plant and equipment, such as winches, pumps and conveyors, concentrator equipment such as thickeners, and heavy machinery will be removed from the site. It is not anticipated that any of this machinery or equipment will be contaminated. However, the mine will confirm this before any machinery or equipment is removed from the site. If any of the machinery or equipment is found to be contaminated it will be appropriately decontaminated before being removed.  During the mitigation and rehabilitation works, particular attention will be paid to the places where equipment was parked. The mine will assess these sites and if the soils are contaminated appropriate remedial measures will be taken in compliance with Mozambican regulatory requirements.  There will be a landfill on site for general waste. The design of this landfill has not yet been finalized. At closure the following will apply: o On completion of the land fill the covers will be completed and re-vegetation of the cover undertaken. o The Closure Plan for the mine will include details for the closure of the landfill and will ensure that the closure of this specific facility meets the requirements of Mozambique legislation and international best practice. Post-closure monitoring of these facilities may be required.

 The soil and vegetation function of the mine footprint will be restored.

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11.4.6. General Surface Rehabilitation General surface rehabilitation should ensure the surface topography emulates the surrounding area, is free draining, has a “neat” appearance and is re-vegetated. Special attention must be given to shaping and removal of heaps of excess material, scrap and waste. The entire area is to be ripped, covered with 300 mm of topsoil and vegetated. The details of the revegetation must be documented in a comprehensive rehabilitation plan.

11.5. SOCIAL COMPONENTS OF CLOSURE Post closure the mine should ensure that the project affected communities and those who have become dependent on the mine are suitably catered for. The following must be considered:

 The future public health and safety of local communities are not compromised;  The after-use of the site is beneficial and sustainable to the affected communities in the long term;  Adverse socio-economic impacts are minimized and socio-economic benefits are maximized.

Although an SIA has been undertaken for the EIA, this SIA focuses on the construction and operation phase, with little detail on the decommissioning phase. As part of the mine closure process, Suni Resources should conduct a Social Impact Assessment (SIA). This study can be used as a basis to engage with communities to understand perceived impacts, identify how best to manage adverse impacts and explore opportunities that mine closure may bring. The SIA will take the following strategic issues into consideration with regard to closure:

 Job losses – prior to retrenchment, alternatives to retrenchment must be considered and only if no viable alternative is available should retrenchment be implemented in accordance with a retrenchment management plan that has been developed to minimise adverse impacts of retrenchment on workers. The retrenchment management plan must be non-discriminate and reflect sufficient consultation with workers, their relevant organisations and if applicable the government. In addition, the retrenchment management plan must comply if any existing bargaining agreements.  Psychological impacts (on employees and the broader community);  Impacts on suppliers (business planning workshops pre-closure with SMME to assist them moving on from reliance on the mine);  Health impacts;  Loss of income to the municipality and government (fiscal impacts);  Discontinuation of Social Labour Plan (SLP) and Corporate Social Responsibility (CSR) activities; and  The nature of the current economic / social contribution compared to the future contribution / loss of contribution post closure.  General site hazards that pose a risk to the safety of local communities. Risk management strategies for general site hazards may include: o Restricting access to the site, through a combination of institutional and administrative controls, with a focus on high risk structures or areas depending on site-specific situations, including fencing, signage, and communication of risks to the local community. o Removing hazardous conditions on construction sites that cannot be controlled affectively with site access restrictions, such as covering openings to small confined spaces, ensuring means of escape for larger openings such as trenches or excavations, or locked storage of hazardous materials.

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The information that will be gathered from this study will provide room for engagement within the organisation and other interested and affected parties such as local councils, government and other organizations about impact mitigation policies and legacy aspects of mine closure.

Engagement with affected communities throughout the life of the project is essential and to this end, the company will be guided by the approach recommended by the ICMM. It is recognized that to achieve effective closure that is beneficial to the operating company and the community that hosts it, the views, concerns, aspirations, efforts and knowledge of various internal and external stakeholders must be brought together. This should be determined using a multi- stakeholder process that includes regulatory agencies, local communities, traditional land users, adjacent leaseholders, civil society and other impacted parties For the Suni Resources mine this will involve:

 Incorporating closure planning into the early stages of project development and operations;  Collating the goals and views of various stakeholders (project owner, local community, government, and non-governmental organizations (NGOs)) at the early feasibility (EIA) stage of project development to inform closure and post closure goals;  Acting to meet the goals by working with the relevant stakeholders;  Using the concepts of risk and opportunity to both minimize liability and maximize benefits to all relevant parties;  Using multidisciplinary expertise and multi-stakeholder processes to ensure that mitigation of risk in one area does not increase risks in another; and  Ensuring that the social closure phase ties in with the infrastructural and environmental closure phases.

Thus, engagement with internal and external stakeholders will be undertaken throughout the life cycle of the project, and to achieve lasting benefits at a local and regional level, Suni Resources appreciates that the views of external stakeholders must be understood. To ensure that these benefits are delivered, Suni Resources will identify key external stakeholders and engage with them to foster a two-way understanding of mutually beneficial outcomes. These outcomes will be explained and presented in the Comprehensive Closure Plan and disclosed to stakeholders in a manner consistent with the requirements of the applicable standards referred to above.

11.6. POST CLOSURE MINE SITE INSPECTION, ENVIRONMENTAL MONITORING AND REPORTING

The post closure period usually comprises three phases:

 Active phase, years 1-2  Passive phase, years 3-5  Inspection phase, years 5-8

During the active two-year period the company will continue supplying specific social services to surrounding communities in line with the corporate social responsibility agreements that would have been put in place during the mining operation.

During the life of the mine, the company will continuously engage the local authorities and traditional leadership structures as part of the hand over process (i.e. handing over the infrastructure and services). All actions will be guided by the on-going dialogue between the mine

Coastal & Environmental Services 190 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 and relevant stakeholders. The passive three-year period will most likely entail the handover of the infrastructure and services to the relevant local and/or provincial authority (i.e. handing over of roads to the Department of Roads). Suni Resources proposes that at the same time it will provide advice on technical or social issues that may arise during this 3-year period with a final sign off taking place in the 5th year post closure. Suni Resources will implement a programme of post closure environmental inspection and monitoring to assess the success of mine reclamation and verify that the various components of the closed mine are not adversely impacting adjacent watercourses and groundwater, and do not pose a potential health risk and/or danger to the public. The purpose of monitoring is to ensure that the objectives of the rehabilitation programme are met and that the progressive rehabilitation process is followed as planned during the life of the mine. The regularity of the monitoring will be dependent on the aspect being monitored, for example dust and groundwater monitoring will be ongoing and will be initiated prior to construction to obtain baseline values, whereas biodiversity monitoring will take place progressively throughout the operational and closure phases. An independent consultant will conduct the site inspection and environmental monitoring.

Suni Resources proposes that post closure environmental inspection and monitoring be conducted bi-annually for the first two years to establish seasonal variations. Bi-annual site visits will be made before the rains and at the end of the rains (active phase). It is expected that final inspection and monitoring will be conducted five years after mine closure, but this will depend on the success of the closure and rehabilitation process (passive phase). The findings of this inspection will determine whether or not any further post closure site inspection is necessary (inspection phase), or whether further interventions to improve, for example, the revegetation of areas will be required. Detailed tracking of the progress of progressive rehabilitation will also permit the annual review of the closure plan to reflect this progress, thus reducing or increasing the quantum required for final closure costs. The physical aspects of rehabilitation should be carefully monitored during the operational phase as well as during closure, so that deviations from expectation can be catered for in subsequent versions of the mine closure plan and costing.

Post closure environmental inspections will focus on:

 TSF and WRD wall stability;  Pit wall stability and water levels;  Erosion on the waste rock dump sidewalls and upper surfaces;  Surface and ground water quality and quantity;  Success of establishing an indigenous vegetation cover in areas where it has been established;  Proportion of mined land that has been fully rehabilitated;  Any activity by the general public or persons unknown that may adversely affect the stability of disused mine structures, pose a danger to the community or possibly result in environmental degradation;  The condition of site access roads, bridges and culverts.  Alignment of actual final topography to agreed planned landform;  Depth of topsoil stripped and placed;  Chemical, physical and biological status of replaced soil;  Community health and safety; and  Socio-economic status of affected communities.

Consultations will be held with local community leaders to listen to and record any issues of concern pertaining to the closed mine site.

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An external consultant should produce an annual post-closure environmental monitoring report at the end of years 1 and 2 and a final post closure environmental report at the end of year 5. These post closure environmental reports will be submitted to Mozambique government entities and made available to all stakeholders. The reports will present the findings of the mine site inspections/walkovers and the results of the environmental monitoring programmes. Where rehabilitation/reclamation activities have not obtained the desired result, the consultant will make recommendations on what additional reclamation work is required to achieve full reclamation. Any areas of concern will be highlighted. The reports will include a post closure photographic record of mine reclamation.

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12. CONCLUSIONS AND RECOMMENDATIONS

The primary objectives of an ESIA process is the identification and assessment of environmental and social impacts and critical risks so that:  A decision can be made on whether or not to proceed with the project,  Modifications to the project to reduce impacts and risks can be made,  The conditions under which the project can proceed are made known, and  Management strategies can be put forward to reduce the significance of negative impacts and enhance positive ones.

The latter are discussed in detail in the Environmental and Social Management Plan.

This chapter discusses the key issues which have been identified by the ESIA process and the proposed key mitigation and management actions which will be required to reduce all environmental risks associated with the project to an acceptable level. In addition to this, this chapter also summarizes the residual impacts that may occur as a result of the construction and operation phases of the proposed development.

12.1. SUMMARY OF KEY ISSUES

12.1.1. Terrestrial habitat loss and fragmentation The habitats and vegetation communities present within the study area are for the most part undamaged with minimal evidence of harvesting. The vegetation, rivers and rocky outcrops are intact and therefore provide an important habitat for faunal species, including mega herbivores such as elephant. They are also important floristically as there are a number of mature, seed bearing trees that are important for contributing to the continued dispersal of seeds throughout the site. Since these plant communities and faunal habitats are intact, the unmitigated impacts associated with the construction and operation of the mine are anticipated to be high. However, if mitigation measures, such as the siting of ancillary infrastructure outside of sensitive areas are implemented, and a conservation corridor is created and managed to ensure connectivity between the different vegetation types and habitats (Figure 12-1), the majority of these impacts can be reduced to either moderate or low.

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Figure 12-1: Proposed conservation corridors for the project area.

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12.1.2. Loss of Biodiversity The loss of vegetation communities and habitats will result in the loss of both floral and faunal species, as well as species of conservation concern. Plant species will be lost through active clearing for the mine infrastructure, while faunal species will be displaced through a loss of habitat. Further faunal species loss will be experienced due to increased mortalities related to an increase in the number of project vehicles using roads, increased hunting as a result of an influx of job seekers, and associated increase in local community dependence on fauna for both food and cash sale; and lastly persecution of reptiles, specifically snakes both venomous and non- venomous.

Since there is high floral and faunal biodiversity, the unmitigated impacts associated with the construction and operation of the mine are anticipated to be high. However, if these impacts are mitigated, such as for example preventing the employees from harvesting indigenous species and hunting for bush meat, and implementing a conservation corridor, most of these impacts can be reduced to either moderate or low.

12.1.3. Invasion of Alien Flora and Fauna Species Invasive floral and faunal species can displace indigenous species by outcompeting them for resources such as sunlight, nutrients, food etc. Left unmitigated, this can become a problem when plant communities are transformed or faunal species become locally extinct. Given that the site is intact with little evidence of alien plant and animal species, it would be a concern if they were introduced into the area through negligence as a result of the construction and operation activities of the mine. However, these impacts are easy to mitigate and provided the study area is monitored for alien fauna and flora, and that these are eradicated as and when they appear, these impacts will be of low significance.

12.1.4. Human/Wildlife Conflict and the increase in the presence of elephants within the project area The increase in elephants is likely to increase Human-Elephant Conflict (HEC) since elephants are known to feed on machambas and the owners of machambas generally report these individual elephants as problem elephants. A consistent water supply in the dry season is likely to attract faunal species including prey species, and hence also predators, which pose a risk to both fauna and humans. The presence of elephants is also likely to attract poachers, given the high elephant poaching rate reported in Mozambique Ministry for the Coordination of Environmental Affairs, 2014). .

The unmitigated impact associated with the general human/wildlife conflict will be high, but this can be mitigated to moderate if precautionary measures, including education and training, are implemented.

The presence of elephants at the site, as a result of the introduction of a permanent water source, is uncertain for the following reasons:  There is uncertainty around the size of the existing population of elephants in the region.  There is uncertainty about the effect of the dam on elephants.  There is uncertainty about the elephant associated pressure on resources within 0-15km of the WSF.  There is uncertainty about the resource impacts on vegetation dynamics, faunal species and other groups.

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As such, two impact scenarios have been presented where the unmitigated impacts are either moderate because elephants have a limited impact on the receiving environment, or it is very high because elephants have a significant impact on the environment. With mitigation measures it is anticipated that the impacts can be reduced to a significance of low and moderate respectively, but this will need to be monitored continuously, and an ecologist with in depth knowledge of elephants consulted if or when the need arises.

12.1.5. Alteration of Flow Regimes on the Aquatic Habitat There will be a cumulative impact on the quantity of water from the abstraction of water from the Messalo River into the water dam, and this may affect the receiving streams and downstream users. Discharge of effluent into nearby water courses will also affect flow regimes. This will alter stream characteristics, thereby altering stream habitats and consequently species composition of the receiving streams.

The Messalo River is utilised by villagers who are in close proximity to the project area. The river is a source of food (fish) and in a few instances used for potable water.

A specific river system will support a unique assemblage of species (fish, invertebrates and aquatic plants) adapted to the prevailing flow conditions that determine temperature, sediment transport and nutrient flow. A decrease or increase in any of these flow conditions could lead to changes in the community structure within the system, such as loss of a particular species or a population increase in others. The changes may also provide conditions for new or previously scarce species to flourish.

We do not believe the mine would considerably alter the quality of the river due to the distance of the mine from the Messalo River, as well as the limited flow of the tributaries in the project area during the wet season.

12.1.6. Fragmentation of the Aquatic Habitat The WSF can be expected, in a year of average rainfall and runoff, to reduce the runoff from the upper part of the catchment of the Mecopeti River by around 35%. This will shorten the duration of the period during which water flows in the river channel downstream of the dam from 4-4½ months to 3 months, and delay the onset of flow in the river channel by 1 month. Seepage through and under the dam wall should maintain moisture levels in the channel bed downstream of the dam wall at a level sufficient to sustain the viability of dormant insect and fish eggs. The dam wall will prevent upstream migration of fish into the upper part of the Mecopeti catchment, unless provision is made for fish passage. This will restrict spawning and nursery habitat to the downstream channels between the dam wall and the Messalo River, and reduce recruitment of young fish into the Messalo River. The species and numbers of fish that use the river, their importance to the ecological functioning of the Mecopeti and the Messalo, and their importance as a food source for the local people who fish for them are not known. The suggested mitigation measures and the assessment of the severity of the impacts, which are premised on the conservative assumption that the fish species that use the Mecopeti are ecologically and socially important at a regional scale (sensu CES’s impact mitigation schema), are tentative.

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12.1.7. Contamination of Land and Water Resources-Waste Streams It is recommended that all waste streams should be managed according to the waste management hierarchy, and according to the Regulation on the Management of Municipal Solid Waste (Decree 94/2014 of December 31st) and the Regulation for the Management of Hazardous Waste (Decree 83/2014 of December 31st). This specifies that wherever possible, production of wastes should be prevented or minimised at source. Where prevention or further minimization is not possible, wastes should be re-used, recycled and then disposed of responsibly so as to minimise impacts to the environment. The options of waste minimisation, re-use, recycling and eventual disposal should be explored further during the development of the Integrated Waste Management Plan for the facility.

Due to the remote location of the project site, to meet relevant legislation it is recommended that non-hazardous waste landfill be developed. It must be designed and operated to international standards in order to isolate the wastes and prevent environmental contamination, particularly groundwater contamination. The landfill site will require licencing and auditing by MITADER. As such, guidance on the design and site selection of the landfill site should be developed in accordance with Annex I of the Regulations on Waste Management, Mozambique (Decree 83/2014 of December 31st) to guide the construction of the facility. Until such time as this facility is fully operational, all general waste produced during the construction phase must be stored on site in a secure access control area, in a legally-compliant manner that minimises environmental impacts.

Alternative options will need to be considered for the management and disposal of hazardous wastes in the Integrated Waste Management Plan. These would be to either develop a dedicated and specially-designed hazardous waste cell within the new on-site landfill or, alternatively, to construct a bunded and secure facility for temporary storage of hazardous waste on site until such time as it can be transported off-site for safe disposal. Although the only established hazardous waste landfill in Mozambique is located in Maputo, there is an indication that new hazardous waste disposal facilities are in the process of being developed across the country and closer to the project site, including one in Pemba (Cabo Delgado Province), which is approximately 200km away. The disposal of hazardous waste at that facility should be regarded as the preferred option.

Potential for Acid Mine Drainage The results from the geohydrology study show that the mass transport model indicated the slow migration of sulphate from the TSF during the life of the mine, and implied a migration rate of 4 to 5cm a day. Monitoring should be implemented in the shallow weathered and deeper fractured rock aquifers to monitor trends. Seepage capturing could be necessary in latter stages of the operations. However, no external receptors (water users) are impacted by the mass transport of sulphate from the TSF.

The Elephant open pit floods to level 370mamsl about15 years after closure, which is 15m below the lowest pit surface decant level of 385mamsl. The Buffalo open pit floods to level 385mamsl in about 20 years, which is also 15m below the lowest pit surface decant level of 400mamsl.

Fortunately, the development of acid mine drainage (AMD) conditions in the post-closure pit water is unlikely. Groundwater and geochemical modelling of the pit water quality showed that pit water will reach a steady-state equilibrium at a pH value of 5.9, which is mildly acidic, but cannot be considered as AMD. For comparison, natural rainwater has a pH value of 5.5.

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Groundwater and geochemical modelling of the post-closure pit water salinity showed that levels will be elevated above baseline conditions, although the concentration is the same order of magnitude as the groundwater baseline concentrations.

The development of acid rock drainage (ARD) conditions is likely to occur in the tailings but is limited to the outer “shell” of the tailings facility, implying that although tailings toe seepage12 is likely to be acidic at a model pH of 3.0, the bulk of the basal seepage is shown by the model to be only slightly acidic at a pH of 5.0.

Due to the likely development of ARD conditions in the tailings facility, the metal and sulphate concentrations in specifically the tailings outer shell are expected to be elevated. The risk of the development of ARD and leaching of sulphate and metals in the waste rock facility was shown by the assessment to be negligible.

The assessment results indicate that mildly acidic conditions are likely to develop in the low-grade stockpile material. The pH predicted by the model is 4.7.

The unmitigated impacts to groundwater associated with the leaching of pollutants from the TSF are moderate, but this can be mitigated to an impact of low significance. The unmitigated impacts to groundwater from the leaching of pollutants from the waste rock dumps and low grade stockpiles is low.

12.1.8. Lowering of the Groundwater Resources The groundwater exploration phases yielded unfavourable results in terms of bulk water supply from groundwater. Surface water, either from the WSF or a pipeline options that draws surface water from the Messalo River will be used.

However, pit dewatering could have an impact on the groundwater used by the nearby communities, and the impacts of this were carefully investigated in the groundwater model. It was found that the simulated dewatering rates peak at approximately 4000m³/d and 3500m³/d for Buffalo and Elephant respectively (at year 12 of mining). However, due to the heterogeneity of the aquifer, dewatering rates could differ and the model should be updated once new monitoring data becomes available, to narrow the band of uncertainty and increase the confidence levels associated with the data.

Current mine dewatering should allow for a ramp up program to be able to handle 4000m³/d of dewatering from each pit. This should not be taken into consideration in the bulk water supply as this is not a proven resource (i.e. water from mine dewatering as a source of water for the mine).

The study found that the Zone of Influence indicated that no nearby communities will be influenced by a lowering in water levels due to mine dewatering, as they are located well outside the zone of influence (i.e. the area affected by mine pit dewatering). However, as a precautionary measure, the monitoring program should include external receptors (village boreholes) to record any impacts on water levels and associated yields.

The unmitigated impacts associated with the lowering of the water table are moderate, but this can be easily reduced to an impact of low significance if the proposed mitigation measures are implemented.

12 This is water that seeps into the ground and then flows as groundwater under the wall of the TSF. Below the wall this water may reach the surface, or remain as shallow groundwater.

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12.1.9. Loss of Natural Resources- People living in rural communities such as Nqueuene and Sinhojo village are very reliant on access to clean water, agricultural land and natural resources to support their livelihoods. Developments such as a mine can threaten these livelihoods if not managed properly.

The proposed mine and supporting infrastructure is located more than 5km from both Sinhojo and Nqueuene Village. The field survey and social interviews indicated that the use of the mine area by these villages for agricultural purposes, grazing or the collection of natural resources is fairly limited. This is probably due to the distance of the site from the villages, and because there is suitable fertile land and grazing closer to each of the villages, as well as adequate natural resources to meet the community’s current needs.

Consequently, the direct impacts on the livelihoods derived from these resources is considered to be of low significance as a result of the low utilisation of the proposed site. However, the indirect impacts associated with the influx of job seekers into the communities is a concern. An increase in numbers will place greater pressure on the existing resources, which could have a long term or even permanent negative impact on the community’s access to these resources in the future. For this reason it is crucial that an influx management plan is developed to deal with the issue of in-migration in its entirety.

12.1.10. Land Acquisition Land acquisition during the construction phase will result in reduced community access to potential agricultural land and possible heightened food insecurity. However, as mentioned above, this area is over 5km from the two nearest villages and as such it is not used extensively for agriculture, grazing or as a source of natural resources. This unmitigated impact will therefore have a moderate significance. If the recommended mitigation and enhancement measures are implemented, the impact of reduced access to agricultural land and access to natural resources and ecosystem goods and services will be of low significance. The impact on food security may be moderately beneficial due to benefits gained through mitigation and enhancement measures that the project proponent is advised to develop and implement.

12.1.11. Economic Growth and Employment Opportunities The project has the potential to significantly enhance the standard of living of those directly affected, as well as the population in the project area through the creation of employment opportunities directly (employed by the mine) and indirectly (selling of local goods) by the project,

These impacts are particularly important in an area where poverty is endemic and where employment opportunities are lacking. Expectations of job opportunities and development projects are high amongst local residents. It is very important to instil realistic expectations with regards to benefits from the project, and to develop a strategy of equitable distribution of job opportunities and benefits amongst the affected parties.

The project will also have positive impacts on a national scale by contributing to Mozambique’s GDP, increasing the contribution to forex earnings as well as increasing investor confidence in Mozambique.

A concerted effort to optimise the local socio-economic benefits of the project will therefore result in positive social and economic impacts of high significance.

It is, however, essential that project-related activities consider the cultures and traditions of the local communities and avoid or minimise impacts on community livelihood practices as far as

Coastal & Environmental Services 199 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 reasonably possible. It is necessary to maintain engagement with local communities as well as with local and district authorities throughout the project phases, to ensure that communities are aware of project-related activities and the proponent is aware of any community grievances or concerns and can, where feasible, address these timeously and effectively.

12.1.12. Social Development Improvement to basic infrastructure and social services as well as the provision of socio-economic development during both the construction and operational phases is a benefit of the project. The significance of these benefits can be further heightened through the implementation of enhancement measures such as supporting local schools through educational programs, provide a skills and development program to upgrade the employability of the local community near the mine and implement an agricultural program that targets increasing the yield of grain grown in local machambas. These enhancement measures to improve social infrastructure will be implemented during the operational phase, once the mine has a positive cash flow.

In addition, community development programmes will be developed in the area by local communities. The significance of these benefits can be further heightened through the implementation of enhancement measures.

12.1.13. In-migration In-migration can have far reaching effects on both the local communities living near the project area, on the natural resources they are reliant on and on the terrestrial and aquatic environment. An influx of outsiders can cause tension within the host communities, inflate local food prices, increase the pressure on wildlife from increased poaching, and place additional pressure on the available natural resources. It is therefore of importance that procedures for disseminating employment-related information, recruitment and supply chain procedures, as well as influx management and security arrangements are developed and implemented to avoid this. It is recommended that a Labour Desk is established. This committee should also be tasked with establishing and implementing an Employment Enhancement Plan / Procedure, as well as (where feasible and possible), an Expatriate Replacement Plan with progressive reporting. It is also recommended that an Influx Management Plan, aligned with the IFC guideline on influx management (IFC, 2009) is developed and implemented.

12.1.14. Community and Employee Health and Safety

Traffic The project is expected to cause a fairly large increase in traffic volume. Approximately 200km of the roads to be used by the project are paved, and for the most part are in good condition. The length of unpaved road from Montepuez to the mine site will undergo upgrading, and the plan is to construct some bypass roads, which will divert heavy mine traffic from the village centres that the roads currently pass through. Further afield the project traffic will pass through numerous settlements between the mine site and Pemba. In these areas, the unmitigated risk of accidents involving mine vehicles and other road-users is seen as high, but these impacts can be reduced to moderate and low by implementing the suggested mitigation measures.

Health A Community Health and Safety Plan that includes identification and evaluation of risks and impacts of project activities on health, safety and security of local communities; and the provision of procedures to prevent and avoid negative impacts and enhance any positive impacts to community health, safety and security is required. This may include the provision of adequate health related information and prevention measures through community engagement, perhaps in

Coastal & Environmental Services 200 Suni Resources S.A, Montepuez Project Draft Environmental and Social Impact Assessment – August 2017 collaboration with the local clinic, as well as traffic safety rules and appropriate plans and mitigation measures for demarcating and fencing-off the mining area.

12.1.15. Impacts of Pollution on the Community and Employees Increased levels of dust, noise and traffic along the roads are likely to affect the communities living alongside the access roads, and will also impact employees living and working within the mine concession. In addition, nuisance impacts such as the production of odours, attraction of pests and vermin, and the visual impact of the mine itself could also negatively affect Nqueuene and Sinhojo villages. These unmitigated impacts will be of moderate significance during the construction and operational phases but can be reduced to low significance with the implementation of mitigation measures. The simplest and most effective ways of mitigating dust impacts is to establish and enforce speed limits or 40 km/hr along all roads, but reduced to 20 or 30 km/hr where the road is close to sensitive receptors. IN addition, wetting the road during the dry season also reduces dust levels. Speed limits also increase safety, and reduce the risk of traffic accidents.

12.2. IMPACT SIGNIFICANCE BEFORE AND AFTER MITIGATION

12.2.1. Biophysical impacts The pie charts below (Figure 12.2) provide a summary of the biophysical impacts pre and post mitigation for all project phases. There is the potential for 58 biophysical impacts as a result of the mine. There is one very high, 17 high, 35 moderate and three low unmitigated negative impacts as well as two beneficial impacts. Figure 12.2 demonstrates that with the implementation of mitigation measures, this can be reduced to one high negative impact, 19 moderate negative impacts and 33 low negative impacts. Two of the low negative impacts can be changed to beneficial impacts and the two low beneficial impacts can be further enhanced if mitigation and enhancement measures are implemented.

The fundamental recommendation supporting this statement is that the recommendations contained in the ESMP must be implemented.

Pre-Mitigation Post-Mitigation

Very High High Moderate Low Low+ Moderate+ High+

Figure 12-2: Pie chart illustrating the number of very high, high, moderate, low negative and positive biophysical impacts pre and post mitigation.

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12.2.2. Socio economic impacts The pie charts below (Figure 12.3) provide a summary of the social impacts pre and post mitigation for all project phases. There is the potential for 39 social impacts as a result of the mine. There are two very high, eight high, nineteen moderate and three low unmitigated negative impacts. In addition there are two positive impacts of low benefit and five impacts of moderate benefit.

Figure 12.3 indicates that with the implementation of mitigation and enhancement measures there will be no very high and no high negative social impacts, and seven moderate and 24 low negative impacts. Importantly, enhancement measures result in three impacts of moderate benefit and five impacts of high benefit.

Pre-Mitigation Post-Mitigation

Very High High Moderate Low Low+ Moderate+ High+

Figure 12-3: Pie chart illustrating the number of very high, high, moderate, low negative and positive social impacts pre and post mitigation.

12.3. CONCLUSION

Although only 60 kilometres from the city of Montepuez, the study area is sparsely populated and under-developed.

The proposed project has the ability to increase the economic growth and employment opportunities for the local communities and add to livelihood diversification. Furthermore, the project will generate tax and revenue for the government. The implementation of the project will increase the economic productivity of the area through:  Hiring local resources to both build and work on the mine site;  Aligning objectives with CPI investment law which will generate tax and royalty revenue for the government; and  Increase household economic dependency through the multiplier effects which will be generated from the proposed project.

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In conclusion, it is the opinion of the authors of this ESIA that the Montepuez Graphite Mine Project will result in environmental, social and health impacts that can be managed to levels of significance that would be regarded as acceptable to society and the natural environment, provided the recommendations presented in this report and ESMP are implemented. The project will also bring significant economic, education, health care and development benefits to the local populations and provide substantial beneficial wealth to the government of Mozambique and its people.

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STRASBERG AND KLOECK-JENSON. 2002. Challenging Conventional Wisdom: Small Holder Perceptions and Experience of Land Access and Tenure Security in the Cotton Belt of Northern Mozambique. [Online]. Available: http://www.mokoro.co.uk/files/13/file/lria/challenging_conventional_wisdom_mozambique.pdf [2016, September 20].

THE ECONOMIST. 2015. Mozambique could become new graphite mining centre. [Online]. Available:http://country.eiu.com/article.aspx?articleid=641974048&Country=Mozambique&top ic=Economy&subtopic=Forecast&subsubtopic=Economic+growth&u=1&pid=301744814&oid= 301744814.[2016, October 23].

United Nations (2005): Recommendations on the Transport of Dangerous Goods – Model Regulations, 14th revised edition.

VALEIX, MARION, et al. "Elephant-induced structural changes in the vegetation and habitat selection by large herbivores in an African savanna." Biological Conservation 144.2 (2011): 902-912

VILLAGEREACH, 2010. Vaccine Coverage and Vaccine and Rapid Diagnosis Test, Logistics Study, Niassa. [2016, September 20]

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World Health Organizations (WHO) Guidelines for Drinking-water Quality, 4th edition (WHO, 2011): http://www.who.int/water_sanitation_health/publications/2011/dwq_guidelines/en/index.html.

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APPENDIX A – CES MITADER CERTIFICATE

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APPENDIX B – CATEGORIZATION LETTER

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APPENDIX C – EPDA LETTER OF ACCEPTANCE

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APPENDIX D: RESPONSE TO EPDA COMMENTS

Section 7 of Letter: Findings and Comments Issue Response 1 The document under analysis does This was shown under section 12 of Appendix 1 of the not show the total investment of the Application form that was submitted to the authorities. project; This information is of a sensitive nature and it was therefore not included in the EPDA as this is a public document.

A letter indicating the investment amount will be submitted as part of the final EIA report to the authorities. This letter will not be included in the public documents that are released for disclosure. 2 From the social point of view, the Noted and agreed. project will contribute positively by providing employment to the local community and will boost the activities developed at local level and surrounding areas. 3 Taking into account the river located The proponent is aware of this potential impact and has in the vicinity of the mining area in therefore gone to great lengths through the design some way there will be pollution by process to ensure that the ecological environment and the sludge and by soluble chemicals if surrounding local communities will not be affected. adequate mitigation measures are not observed; Geochemical conceptual and numeric modelling of the WRD, TSF and the temporary Low Grade Stockpile (LGSP) found that the potential for the contamination of groundwater from Acid Mine Drainage (AMD) is low provided simple remediation methods, such as phytoremediation which limits the leachate from seeping to groundwater, are implemented.

The design and positioning of the infrastructure has been done in such a way that the surface water from the waste rock dumps and process plant will be directed towards the TSF where it will be caught. In addition, the water storage facility is located downstream of the TSF as a safety mechanism to catch any polluted water and sludge should there be a TSF failure.

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4 In the area of direct intervention of Only farms located along the access roads will be the Project there are populations impacted. A small Resettlement Action Plan is underway practicing agricultural activities, for these farms and will include the required especially growing sesame; however, Compensation Plan. This process is running concurrently the EPDA makes no mention of a with the ESIA process and all relevant community and Compensation Plan for this economic government stakeholders have been engaged in this activity; process since July 2017. 5 The document under analysis refers The nearest village, Nqueuene village, is located outside of to the existence of machambas, but the exploration license area and is 5km from where the not the existence of population in the proposed mine and infrastructure will be located. There area of direct intervention of the are some farms in the license area but these will only be Project, and one of the peculiar affected by the widening of the roads. As discussed above, characteristics of the rural population a RAP and compensation plan is being drafted for the in Mozambique is to live near the farms that will be impacted on, however, no physical places where they practice resettlement of people or their houses is necessary or agriculture. required by the project.

Section 8 of Letter: Conclusions/Recommendations Issue Response 1 A description of the influence of the Section 4.2.5 (Surface Water Catchment) and section activity in the watercourses of the 4.2.6 (Rainfall and Surface Water Runoff) of the EIA deals area covered by the project, in order with this. to mitigate pollution by sludge and other chemical substances; 2 Include concrete actions of social Section 5.7 (Socio-economic development needs) responsibility and consider the identifies the development needs of the project affected concerns raised by interested and communities and how the project can contribute to affected parties during the public community development. The ways by which the consultations; community feels the project may assist are included in this section as well as details of how the proponent would like to contribute.

All issues and concerns raised by the community to date have been included in the public participation (PP) report submitted with the EPDA and all issues and concerns raised after the release of the EIR will be included in a second PP report. 3 Present the results of the analysis of Refer to the Hydrogeological specialist investigation the reference situation with respects report and the Surface water and aquatic report. to the surface water and groundwater quality of in the area of interest. This has also been summarised in sections 4.2.5 to 4.2.10 of the EIA and the potential impacts assessed in chapters 8 and 9 of the EIA. 4 Predict diversion channels and The waste rock dumps have been designed to divert sedimentation ponds around the any run-off to the tailings storage facility to reduce waste rock stockpile downstream of the risk of surface water pollution. Refer to section the mine pit in order to manage the 3.2.4 of the ESIA. risks of surface water pollution.

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5 Ensure that the EMP presents This has been addressed in the EMP and reference to this accountability actions in the law included in Table 2-1. implementation, monitoring and treatment of sewage and other effluents in acceptable manner in accordance with Article 16 of the Decree No 18/2004 (Regulation on Environmental Quality Standards and Effluent Emissions], in order to preserve the water quality, the ecosystem, protection of the river basin and the environment of the direct and surrounding; 6 Include in the solid waste Refer to the waste and wastewater assessment specialist management chapter, the Integrated report and the Environmental and Social Management Solid Waste Management Plan in Programme that details the specifications for this. accordance with the provisions of the Mozambican legislation; 7 Inclusion in the design of the Project The siting of a landfill in Mozambique is regulated by one landfill site especially designed Decree 83/2014 of December 31st and as such a Landfill and in compliance with the national Site Assessment Report will be done during the legal instruments for its construction; construction phase to identify a suitable landfill site for the operational phase.

The Landfill Assessment Report will classify the type of landfill based on its size, the type and quantity of waste that will be disposed and its leachate potential. It will provide three site options for the location of the landfill site based on the wind direction, the position of the accommodation village and nearby villages, social features such cemeteries, clinics, sacred sites etc and ecologically sensitive features such as rivers and forests. The assessment will also take into account the topography and geology of the site. 8 Undertake specialist studies on the The following specialist studies have been conducted as social, economic and environmental part of this EIA: impacts downstream of the Messalo  Aquatic and Surface Water Assessment River, as well groundwater;  Botanical Assessment  Faunal Assessment  Geohydrological (groundwater) and geochemistry Assessment  Land and Natural Resource Use Assessment  Social Impact Assessment  Traffic and Transport Assessment  Waste and Wastewater Assessment

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9 Present detailed and consistent road Please refer to the Traffic and Transport specialist study safety information according to the and impact assessment. phases of the Project (Construction, Operation and Decommissioning); 10 Indicate the information on the A paragraph that details information on the control of frequency of the control of the the TSF will be added to chapter 3 i.e. the project stability of the tailings basin and the description. An impact that assesses the possible impact possible impacts and mitigation and mitigation measures in cases of its rupture will be measures in cases of its rupture; added to the impact chapter. 11 The assessment of the impacts on the This has been assessed in the Social Impact Assessment Nqueuene and Pilane Villages, as they and the results presented in chapter 9 of the ESIA report. will be indirectly affected by the Project; 12 The survey of the situation of the Only farms located along the access roads will be Project site, so as to safeguard in a impacted. A small resettlement action plan is underway timely manner, the resettlement for these farms and will include a compensation plan. issues, since in the EPDA it is not clear There are no houses that will need to be resettled. whether this will occur or not; 13 A detailed description of the project Refer to section 3.1.3 of the EIA report. location; 14 The bush clearing procedures This has been highlighted in Table 2-1, section 2.2 of the described in the Regulation of the ESIA report. Forest Act (Decree 12/2002 of 16 June) must be observed; 15 Include an analysis on the Chapters 8 and 9 of the EIA report have assessed the environmental impact of impacts of all infrastructure on the biophysical and social complementary activities that can be environments. necessary, such as: (i) Operation of borrow-pits, (ii) access roads and maintenance and (iii) construction camps; 16 Include the Protection of the Working Law No. 19/2014 repeals Law No. 12/2009 of 12 March Person or Job Candidate living with and Law No. 5/2002 of 5 February. Details of Law HIV/AIDS Act (Law No. 5/2002 of 5 19/2014 have been included in Table 2-1, section 2.2. February) in the chapter of the legal framework, 17 Include in the Legal Framework, in This has been included in table 2-1 and the applicability relation with the Forestry and Wildlife of this act in relation to the project explained. Act as well as the respective Regulation, the aspects related to the activity, which should be observed in the study and in the other stages of the Project;

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18 The presentation of health and safety Section 9.2.4 and 9.3.3 of the EIA report provides measures for workers and recommendations on health and safety measures. communities in the vicinity of the Project area, and Awareness programs This has also been included in section 8.4 of the EMP. on HIV-AIDS and other contagious diseases; 19 The presentation of the overall This information is sensitive in nature and has therefore investment amount of the Project and not been included as part of this draft ESIA. This the respective Cost Spreadsheet with information will be included in the final ESIA and details such as: submitted to the authorities for review.  The nominal list of equipment and machinery forecasted for the Project and its respective cost,  Construction cost,  List and quantity of Personal Protective Equipment and its respective cost.  Safety material and equipment and other necessary equipment, including supporting material,

The above items must be presented in a differentiated way, indicating the costs of direct acquisition and/or rental or hiring costs. This information shall be inspected in the context of the issuance of the Environmental Operation License

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