CONSERVATION INTERNATIONAL Lightening the Lode A Guide to Responsible Large-scale Mining Amy Rosenfeld Sweeting Andrea P. Clark CI POLICY PAPERS CONSERVATION INTERNATIONAL ACKNOWLEDGMENTS Many people at Conservation International (CI) contributed This report has also benefited greatly from the com- their time and expertise to making this project happen. We ments and suggestions of reviewers from many fields and would like to thank CI staff members Okyeame Ampadu- organizations. While the views expressed in this paper are Adjei, Brent Bailey, Ian Bowles, Aaron Bruner, Chuck Burg, strictly those of the authors, we are grateful to the follow- Burke Burnett, Samantha Conrad, Regina DeSouza, Lisa ing individuals for their time, comments and advice: Craig Famolare, Chuck Hutchinson, Nedra Johnstone, Stan Andrews, Francis Botchway, Joe Browder, Tom Burke, Malone, Kojo Mbir, Marianne Guerin-McManus, Mari Bruce Clark, Desmond Connor, Jim Cooney, Krista Omland, Paulo Prado, Glenn Prickett, Chris Stone, Cheri Dahlberg, Carlos Da Rosa, Steve D’Esposito, Indu Sugal, Jamie Sweeting, Wendy Tan, Jorgen Thomsen, and Hewawasam, Rick Killam, Robert Moran, Gary Nash, Jim Sterling Zumbrunn for their valuable comments, advice Rader, Chris Sheldon, Ian Thomson, and Mark Thorpe. and assistance. Research interns Dan Holm, Dan Traum Finally, Conservation International would like to and Sara Wheeler-Smith contributed important research to thank The Tinker Foundation for its generous support of this project. The authors would also like to extend a special this initiative. thanks to John Pollack, the Pun King. MISSION STATEMENT With the explosion of our planet’s population and the radi- Conservation International (CI) believes that the cal conversion of natural lands for living space, farming earth’s natural heritage must be maintained if future gen- land, and waste disposal, the ecosystems that have tradi- erations are to thrive spiritually, culturally, and economi- tionally supported human societies are severely stressed. cally. Our mission is to conserve the earth’s living natural Ultimately at risk are the air we breathe, the water we heritage, our global biodiversity, and to demonstrate that drink, the soils and seas that feed us, and the living crea- human societies are able to live harmoniously with nature. tures that give us fibers, medicines, and countless other products. ©2000 by Conservation International. To receive more information or additional All rights reserved. copies or to provide comments, please contact: Business and Policy Group Printed on recycled paper in the United States of America. Conservation International, 2501 M Street, NW, Suite 200 Washington, DC, 20037 USA Conservation International is a private, nonprofit Telephone: (202) 429-5660 Fax: (202) 887-5188 organization exempt from federal income tax under E-mail: [email protected] section 501(c)(3) of the Internal Revenue Code. Cover: Misima gold mine, Misima Island, Papua New Guinea Courtesy Placer Dome Inc. CI POLICY PAPERS Lightening the Lode A Guide to Responsible Large-scale Mining Amy Rosenfeld Sweeting Andrea P. Clark 2000 CONSERVATION INTERNATIONAL TABLE OF CONTENTS 22 3.3.1 Potential negative environmental impacts of exploration 1 FOREWORD 22 3.3.1.1 Land-clearing 23 3.3.1.2 Road-building and infrastructure 2 EXECUTIVE SUMMARY development 24 3.3.2 Recommended practices for improving 6 1. INTRODUCTION exploration activities 24 3.3.2.1 Limiting land-clearing 8 2. A NEW GEOGRAPHIC FOCUS: MINING 24 3.3.2.2 Improving the use of access roads IN THE TROPICS and infrastructure 8 2.1 A Shifting Focus 25 3.3.2.3 Minimizing the impacts of drilling 9 2.1.1 Changing economics and technology 25 3.3.2.4 Reclaiming exploration sites 10 2.1.2 New incentives for investment 26 3.3.3 Potential negative environmental impacts 10 2.1.2.1 Privatization of mine operation and ore extraction 10 2.1.2.2 Revised mining codes 27 3.3.4 Recommended practices for improving 11 2.1.3 A geographic shift mine operation and ore extraction 11 2.2 The Exploration Explosion 27 3.4 The Mineral Production Cycle 11 2.2.1 The business of exploration 27 3.4.1 Potential negative environmental impacts 12 2.3 Regional Trends of the mineral production cycle 12 2.3.1 Latin America 27 3.4.1.1 Chemical contamination 12 2.3.1.1 The Tropical Andes 28 3.4.1.2 Metal toxicity 13 2.3.1.2 The Guiana Shield 29 3.4.1.3 Use of local water resources 15 2.3.2 Africa 29 3.4.1.4 Increased energy consumption 16 2.3.2.1 Ghana 29 3.4.1.5 Decreased air quality 16 2.3.3 Asia-Pacific 30 3.4.2 Recommended practices for improving the mineral production cycle 16 2.3.3.1 Indonesia 30 3.4.2.1 Crushing and grinding 16 2.3.3.2 The Philippines 30 3.4.2.2 Concentration 18 3. INDUSTRY PRACTICES FOR INCREASING THE 30 3.4.2.3 Wastewater treatment ENVIRONMENTAL RESPONSIBILITY OF MINING 31 3.4.2.4 Smelting 18 3.1 Factors Influencing the Extent and Nature 32 3.5 Waste Management of Environmental Impacts 32 3.5.1 Tailings 18 3.1.1 Size 32 3.5.1.1 Potential negative environmental 18 3.1.2 Method of extraction impacts of tailings 19 3.1.3 Mineral characteristics 33 3.5.1.2 Recommended practices for improving 20 3.1.4 Geography and climate: The humid tropics tailings disposal and storage 20 3.2 Developing an Environmental Strategy 35 3.5.2 Acid rock drainage 20 3.2.1 Environmental impact assessment 35 3.5.2.1 Potential negative environmental 21 3.2.2 Employee training impacts of acid rock drainage 22 3.2.3 Proactive contributions to conservation 36 3.5.2.2 Addressing the potential impacts of acid rock drainage 22 3.3 The Mine Cycle CI POLICY PAPERS 38 3.6 Reclamation 65 5.2.2 Institutional reform 38 3.6.1 Handling soil and biomass 67 5.3 Legislation and Regulation 39 3.6.2 Rehabilitation of land 67 5.3.1 Mining codes 39 3.6.3 Revegetation 67 5.3.2 Environmental and social legislation 40 3.6.4 Maintenance and success criteria 69 5.3.2.1 Government’s role in environmental and 40 3.6.5 Monitoring social impact assessment 69 5.3.2.2 Regulation of small-scale mining 42 4. INDUSTRY PRACTICES FOR INCREASING 70 5.4 Financial Tools THE SOCIAL RESPONSIBILITY OF MINING 70 5.4.1 Taxes and fines 43 4.1 The Value of an Effective Social Program 70 5.4.2 Performance bonds 45 4.2 The Potential Adverse Social Impacts of 71 5.4.3 Trust funds Mineral Development 72 5.4.4 Directing revenues and contributions 45 4.2.1 Social displacement 72 5.4.5 Offsets 45 4.2.2 Physical displacement 73 5.5 Monitoring and Enforcement 45 4.2.2.1 Loss of land tenure 73 5.5.1 Monitoring 46 4.2.2.2 Relocation 74 5.5.2 Enforcement 46 4.2.3 Demographic changes 47 4.2.3.1 Potential negative health impacts of 75 6. CONCLUSION AND RECOMMENDATIONS demographic changes 47 4.2.3.2 Potential negative economic impacts of 79 APPENDIX: THE PHASES OF MINING demographic changes 79 A.1 The Mine Cycle 49 4.3 Recommended Practices for Improving 79 A.1.1 Exploration the Social Responsibility of Mining 79 A.1.2 Feasibility studies and project development 49 4.3.1 Requirements for a successful social program 80 A.1.3 Mine operation 49 4.3.2 Social assessment and monitoring 80 A.1.3.1 Underground mining 51 4.3.3 Stakeholder identification 80 A.1.3.2 Surface mining 51 4.3.4 Consultation and participation 81 A.1.4 Mine site reclamation 53 4.3.4.1 Consultation methods and processes 81 A.2 The Mineral Production Cycle 53 4.3.4.2 Examples of consultation programs 81 A.2.1 Comminution 56 4.3.5 Recognition of land rights 81 A.2.2 Concentration or beneficiation 58 4.3.6 Minimizing the adverse impacts of relocation 81 A.2.2.1 Physical separation 59 4.3.7 Economic compensation and support 83 A.2.2.2 Chemical separation 60 4.3.7.1 Making development sustainable 84 A.2.3 Metal refining or metallurgy 60 4.3.7.2 Direct economic benefits 62 4.3.7.3 Formal company/community agreements 85 GLOSSARY 63 5. GOVERNMENT TOOLS FOR PROMOTING 89 ENDNOTES A RESPONSIBLE MINING SECTOR 103 BIBLIOGRAPHY 63 5.1 Long-range Strategic Land-use Planning 64 5.2 Increasing Government Capacity 111 ABOUT THE AUTHORS 65 5.2.1 Training CONSERVATION INTERNATIONAL BOXES, TABLES AND FIGURES 9 Box 2.1: Junior Mining Companies 12 Box 2.2: The Gold Rush 21 Box 3.1: Corporate Environmental Management Systems 28 Box 3.2: Preventing Contamination from Mining Equipment 32 Box 3.3: Water Control: Goldfields Ltd.’s Henty Gold Project 36 Box 3.4: MEND (Mine Environment Neutral Drainage) 39 Box 3.5: The La Herradura Project 43 Box 4.1: Who is Responsible for Social Programs? 44 Box 4.2: Impacts on Women 48 Box 4.3: The Social and Health Impacts of Environmental Damage 54 Box 4.4: Working with Local Communities: Small-scale Miners 57 Box 4.5: The Potential Costs of Not Involving Local Communities 64 Box 5.1: Governance of the Mining Sector 68 Box 5.2: The Porgera Mine Agreement 82 Box A.1: Minerals 11 Table 2.1: Exploration Budgets of World’s Larger Mining Companies 13 Table 2.2: Gold Production in Select Countries 16 Table 2.3: Worldwide Planned Mine Construction Projects 5 Figure 1: Biodiversity Hotspots and Major Tropical Wilderness Areas CI POLICY PAPERS FOREWORD arge-scale mining is reaching some of the most remote and biodiversity-rich ecosystems on Earth, driven by growing global demand for minerals and rapidly changing technologies and economics in the mining sector.