Statement - 'Legal Action on OK Tedi Misconceived'
Broken Hill Proprietary Co Ld
11 April 2000
Number 35/00
LEGAL ACTION ON OK TEDI MISCONCEIVED: BHP
The Broken Hill Proprietary Company Limited (BHP) today rejected claims that
it had not complied with terms of a 1996 out of court settlement agreement
relating to environmental damage at the Ok Tedi copper mine in Papua New
Guinea.
The agreement required the Company to 'commit as soon as practicable to the
implementation of any tailings option recommended by the independent enquiry
or review to be conducted by the State, provided BHP bona fide considers that
option to be economically and technically feasible'.
Although the PNG Government has not yet conducted a public inquiry, in 1995 Ok
Tedi Mining Limited (OTML) initiated a series of comprehensive investigations
of options to retain mine tailings and reduce the amount of mine waste
entering the Ok Tedi/Fly River system.
Four options were reviewed in detail and environmental, financial and risk
analysis concluded that dredging sediments from the Lower Ok Tedi for storage
adjacent to the river and a combined dredging/tailings storage option should
be further explored.
The analysis discounted the option of a tailings dam on the Ok Ma due to the
high risk of catastrophic failure. Landslide activity coupled with steep
valley slopes, high rainfall and the soft nature of the waste rock forced the
abandonment of the proposed tailings dam during construction in the late
1970s.
The OTML Mine Waste Management Project cost more than $US 100 million and is
publicly reported in more than 23 scientific studies. These were subsequently
subjected to a detailed peer review process to ensure the science was of a
high standard.
In 1998 OTML commenced a dredging trial at an annual cost of $US 35 million.
This trial dredging program has recently been extended following approval by
the PNG Government.
OTML is currently working with government officers to provide a comprehensive
information and consultation process amongst all village groups in the Western
Province affected by either continuation of Ok Tedi mining activities or
closure of the mine.
BHP Managing Director and CEO Paul Anderson said yesterday that BHP believed
the mine closure process should strike a balance between the environmental and
social/economic considerations and must take into account the needs of the
local communities, PNG Government and other stakeholders.
In a radio interview yesterday morning, Mr Anderson said: 'What we've tried to
make clear is that we're not comfortable with the status quo, which is simply
operate the mine to the end of its economic life.
'BHP can't unilaterally act, we obviously need the participation and
cooperation of our partners, the PNG Government and the local communities. It
will take a while to develop a process that will put in place a sustainable
economy within the western province of Papua New Guinea. And that's going to
take years as opposed to months.'
Attached: OTML press release
Ok Tedi Mining Limited MEDIA STATEMENT
11 April 2000
Ok Tedi Mining Limited (OTML) today said it was concerned that litigation over
the settlement agreement for the Ok Tedi mine in PNG would have an adverse
impact on consultation with PNG communities affected by the mine.
OTML Managing Director, Dr Roger Higgins, said that OTML rejected claims that
it was in breach of the 1996 settlement which related to environmental
mitigation options at the PNG copper mine.
He said that OTML had met all of its obligations under the settlement
agreement.
'In addition to meeting those obligations, OTML conducted a rigorous
scientific and risk assessment of the options for mitigating the environmental
impact on the Fly River and Ok Tedi,' he said.
'These assessments were then subjected to the scrutiny of an independent Peer
Review Group. The risk assessment and underlying reports have been described
as 'first rate' by the World Bank,' he said.
'The risk assessment found that none of the options examined for mitigating
the environmental impacts provided a clear path forward. The results of the
project clearly demonstrated the considerable conflicts between the
environmental, social and economic issues confronting OTML and the PNG
Government.
'In response to the risk assessment the PNG Government has requested us to
co-operate with them on an extensive consultation program with the
communities whose lives would be affected by decisions on the mine's future.
Any decision must have the support of the local people,' Dr Higgins said.
'The consultation process reflects that it is those people and the PNG
Government who must decide what should happen at the mine. In our view, this
is the only way to resolve the future of the mine.'
Inquiries: Barbara Sharp 61 3 9662 4023.
* * * *
Contact:
MEDIA RELATIONS: Mandy Frostick
Manager Media Relations Melbourne
Ph: +61 3 9609 4157
Mob: +61 419 546 245
INVESTOR RELATIONS: Rob Porter
Vice President Investor Relations Melbourne
Ph: +61 3 9609 3540
Mob: +61 419 587 456
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