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The Ok Tedi Copper Mine

MINE PROFILE

-Regulated by PNG Mining Act of 1976 and subsequent "Agreements

-Heavy investment in infrastructure

-2011 Copper production 130,000 tonnes -$1.8 billion USD revenue, $600 million USD Profit

-Employs 2,000

-Mine depletion and extension

-Direct mine tailings discharge into river

issues 3

Inadequate Government Regulation

-PNG Government owned 30% of o Tedi mine

-Gave permission to dispose waste into the river

-PNG government was on BHP's side at first as BHP has provided substantial amounts of revenue

-Refused to close operation in 1998 even though already advised by OTML

ISSUE 2

POOR RISK MITIGATION

  • Discharge the waste into the river is not their only choice!!
  • Three engineering firms reported workable sites for a tailings dam can be easily built nearby.
  • OTML rejected due to high cost

  • BHP supposed to continuously monitor the environment!!
  • In 1996, BHP finally set up a Mine Waste Management Project, long after the environment have been affected.
  • Fail to adopt a flexible risk management strategy to evolve with the changing environment.

by NUR FADHLIYANA BT NOOR AZMAN

- 242726 -

ISSUE 1

INEFFECTIVE ENVIRONMENTAL RISK ASSESMENT

Fail to comprehended geographic structure In the late 1970s, the Ok Tedi project started

Due to steep valley slopes, high rainfall, soft nature of the waste rock and landslide activity

Have to abandon the tailings dam

CONTINUE.....

CONTINUE...

CONTINUE.....

CONTINUE....

Constructions of the dams

OK Menga dam:

In 1982, construction on the ok Menga hydroelectric dam started.

In 1983, the project was abandoned

Ok Ma dam.

Late 1983, excavating ok Ma dam started

In 1984, a landslip occurred, project abondoned.

Riverside disposal

After the tailings dam have been abandoned, The PNG Government allowed riverside discharge of waste

The environment impact were acceptable to the PNG Government.

Impact

Both environmental and ethical.

Failed to perform effective environment impact studies (EIS)

no adequate geotechnical investigation preceded attempt to build the dam

The Ok Menga should have been a signal

Huge amounts of money wasted on failed construction projects because of inadequate site investigation

No or little safety margins was set which is not enough (the Precautionary Principal)

The EIS used in the risk assessment was irrelevant and not timely.

Made the assessments focus on short-term economic benefits OTML was with little concern about how to mitigate the damage to the environment

Eager to generate economic benefits to meet shareholders demand.

Prioritized company benefits to environment protection

The risk assessment was seriously wrong

SOCIAL IMPACT

-Development of modern infrastructure, Services

-Introduction to cash economy

-Rapid influx of foreign workers and residents

-Loss of subsistence crops, riverside gardens

-Loss of hunting area and fishing, drinking, swimming opportunities

ENVIRONMENTAL IMPACT

-Mine began discharging all tailings into Ok Tedi/Fly Rivers

-121,000 tons per day of waste rock

-Trace amounts of copper and gold

-Increased sedimentation

-Increased flooding

-Deforestation ---more than 1,500 square kilometers forest disappeared, 3,000 square km in the future

-Fish population have declined by 95% in the Ok Tedi River, 85% in the upper Fly river

-Acid Mine Drainage which renders large ares inhospitable to organic life for centuries has been witnessed.

Thank you!

INVESTOR PROFILE

BUT NOW !!

100 %

BHP BILLITON

Was created in 2001 through the merger of the Australian Broken Hill Proprietary Company Ltd and the Anglo-Dutch Billiton plc.

The world's largest mining company measured by 2011 revenue

The world's third largest company measured by market capitalization.

where is the Mine?

CASE TIMELINE

1976 - Ore Body Discovered

1982 - Mine Construction begins

1984 - Gold extraction begins

1986 - Landslip halts construction of mine tailings dam

1988 - Copper extraction begins

1994 - Lawsuit filed

1996 - Settlement

2001 - BHP withdraws

-Papua New Guinea granted independence from Australia in 1975

-Richly endowed with mineral resources ---Poor, although growing rapidly

-Approx. 25% of GDP supplied by mining sector

-6.3 million population

-Simmering conflict concerning Bougainville rebels

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