LUMWANA COPPER PROJECT ENVIRONMENTAL IMPACT ASSESSMENT JULY 2005 Environmental Impact Assessment Lumwana Copper Project i July 2005 EXECUTIVE SUMMARY This Environmental Impact Assessment (EIA) has been prepared in support of the environmental assessment of the Lumwana Copper Project by the Government of the Republic of Zambia. Equinox Copper Ventures Limited (ECV), a Zambian registered company and ultimate subsidiary of Equinox Minerals Limited, a Canadian/Australian explorer and resource development company, plans to develop the Lumwana Copper Project which is located in the North Western Province of Zambia approximately 300 km by road from the Copperbelt city of Kitwe and 95 km west by road on provincial centre of Solwezi. The Project has a planned life of mine of 18 years and will involve the mining of two distinct areas. Area 1 is the Malundwe deposit which will be mined from year 1 to 5. Area 2 is the Chimiwungo deposit and will be mined from year 6 to 18. On average 20 million tonnes of copper ore will be mined each year, producing an average of 500,000 tonnes of copper concentrate each year. The copper concentrate will be transported by road to the Zambian Copperbelt or elsewhere in Southern Africa for further processing to copper cathode. The operation will use conventional open pit mining and processing techniques with the main components of the project being: • Malundwe main and east pits; • Chimiwungo main, south and east pits; • Malundwe and Chimiwungo waste rock dumps; • Processing, maintenance and administration facilities to support the operations; • Tailings storage facility; • A number of fresh water dams; • 330 kV power line from Solwezi to the Project; • Residential estate with up to 3000 dwellings; and • Associated infrastructure to support the above All ECV employees will be provided with accommodation in the newly constructed Lumwana Estate which will provide all the facilities of a large, modern town such as hospital, schools, recreational facilities and the resultant business development opportunities that would be expected for such a development. For Zambian citizens, who are permanent employees of ECV this will also provide an opportunity to purchase a house with an affordable loan repayment system. The North-Western Province of Zambia has had little development over the last 20 years and there are no active mining operations in the area. It is anticipated that the Lumwana Project will make a significant positive socio-economic contribution to the area including the extension of reticulated power to the area and the upgrading of the main T5 highway (committed to by the GRZ). The project is located within Large Scale Mining Licence 49 (LML-49). It is expected to disturb an area of approximately 8,700 hectares, of which nearly 5,000 hectares is within the Acres No. 105 National Forest. There are no private landholdings or residential dwellings within the proposed disturbance areas of LML-49 or the associated infrastructure areas. Project development will not require the relocation of any indigenous people. Environmental Impact Assessment Lumwana Copper Project ii July 2005 An environmental baseline study was completed as a component of the Bankable Feasibility Study (BFS) in 2003. The Lumwana East River and its major tributaries, the Malundwe stream and Chimiwungo stream, are the main water courses in the project area. Surface water quality across the project are similar and generally of good quality. However aluminium, selenium, lead, uranium and cadmium concentrations occasionally exceed Zambian Drinking Water Quality Standards. Bacterial faecal coliform counts recorded at all monitoring sites during the wet season when the baseline monitoring was conducted also exceeded the Zambian Drinking water Quality Standards. Relatively high concentrations of aluminium, boron, iron and uranium were recorded in most of the stream sediments. Groundwater sampled in village wells along the T5 highway is generally of good quality. By contrast the electrical conductivity, total dissolved solids and sulphate concentrations are elevated in groundwater at the Malundwe deposit. Soils close to the mineralised deposits exhibit relatively high copper values. Away from the copper deposits, element concentrations are low or below detection limits except for aluminium and iron. The soils of the area are typical of those found in sub-tropical regions, being heavily leached, low in nutrients and of poor fertility. Subsistence farming is practiced using the traditional Masala method (slash-and-burn). Farming is the main source of livelihood. The main crop harvested is cassava with maize, sweet potatoes, beans and pineapples grown in the slightly more fertile dambo (wetland) soils. Cultivated land is concentrated close to the main road. Wildlife was once abundant in the project area, however during the last 30 years or so, the larger mammals have been killed or forced to move out of the area as a result of over hunting, poaching and population pressure. Small mammals such as Duiker, Bush Baby and Velvet Monkey are occasionally reported, whilst small reptiles and birds are commonly sighted. The baseline survey discovered pre-historic rock engravings close to the Lumwana East River in an area that will be affected by the construction of the dam wall and waste rock dump. The rock engravings onsite of pockmarks and includes strokes on rock faces. The engravings will be removed and preserved prior to project construction if necessary. A background radiation survey was conducted in the two planned mining areas because there is uranium associated with the deposits. Whilst uranium will not be processed, it will be selectively mined and stockpiled within discrete zones of the waste rock dumps to allow for the potential of downstream processing if it proves economic. The major potential social and environmental impacts of the project are: • The development of the project will require the significant disturbance of up to 8,700 hectares of land. Whilst the footprint is large, the area where flora and fauna will be severely impacted is small in relation to the total area of woodlands in the North Western Province. The impact is local and not likely to affect the ecology of the region. The impacts on flora and fauna will be reduced by progressive revegetation and rehabilitation of affected areas. Local provenance species will be used wherever possible and closure criteria developed to ensure that a sustainable landform is developed. • Impacts on surface water quality could arise from contamination by spillage, accidental release from plant area, the tailings storage facility or from mine dewatering water and drainage water entering the Lumwana East River. Controlling direct runoff from operational areas into local watercourses will reduce the impact of the mine on surface water. ECV will ensure that no water leaving the site exceeds statutory standards and that mitigation measures such as hydrocarbon traps and sedimentation ponds will be utilised in areas where potentially contaminated water may discharge. • Seepage through the base of the waste rock dumps or the tailings storage facility could impact the groundwater quality. Geochemical characterisation studies undertaken on the Malundwe tailings and sulphidic waste rock indicate both materials to be non-acid –forming. On this basis, the risk of acid rock drainage occurring is considered to be low. This will be monitored on an ongoing basis. Environmental Impact Assessment Lumwana Copper Project iii July 2005 • Discharge from the tailings storage facility could potentially impact the Lumwana East River. However metallurgical test work performed on the Malundwe tailings slurry indicates that the effluent will comply with Zambian Standards and where appropriate World Bank Guidelines and United States Environmental Protection Agency (USEPA) limits for effluent discharge. The tailings storage facility is not designed to overflow, although low quantities of seepage may discharge from the toe of the facility. This will be monitored to ensure Zambian limits are met at all times. • Radiation levels in plant effluent will comply with USEPA limits. There will be very low levels of uranium in the tailings solids (33 ppm) and liquid phases (0.16 mg/L). • Construction of the Lumwana East River diversion to make way for the Malundwe main and east pits and waste rock dump and tailings storage facility will have a permanent environmental impact. However, the loss of aquatic flora and fauna and riverine forest will be limited and the aquatic ecosystem of the upstream and downstream sections of the Lumwana East River will not be adversely impacted. ECV will ensure adequate flow rates are maintained through the construction and operational phases of the project. • The project investment will introduce beneficial multiplier effects in the local and regional economy. The project will promote the business of local suppliers and contractors providing goods and services to the mine. A direct favourable economic impact of the project in Lumwana will be the additional employment earnings generated in the local economy. • From a socio–cultural perspective, the project is likely to attract people from the surrounding areas and beyond seeking employment. This will put the local population in direct competition with outsiders, a concern already expressed at the project EIA consultation meeting held at Lumwana. Depending on experience and availability of jobs, ECV is committed to employing local residents from Lumwana