corporations: rio tinto (australia), oxiana ltd (australia)
In December 2002, the first gold was poured from the Sepon mine in southern Laos, near the Vietnam border. Australian mining company Oxiana Ltd., backed by a 20% stake from mining giant Rio Tinto, has been quick to establish the gold project, and has its sights set on rapid expansion in order to extract the much bigger copper deposits nearby.
With half of its tropical forests still intact, Laos is a country of outstanding biological importance, made more so by the rapid recent disappearance of neighboring tropical forests throughout the Southeast Asian region. The many rivers, fed by the forests and monsoon rains, flow into the mighty Mekong River and provide an essential source of fish, farmland irrigation, and drinking and bathing water to millions of people.
cyanide sludge scenario The Oxiana goldmine uses a process called ‘cyanide heap leaching’. This entails crushing the mined rock and pouring cyanide solution over it to extract the gold particles. The millions of tons of leftover sludge, known as ‘tailings’, contain a toxic ****tail of cyanide compounds and dangerous heavy metals such as mercury, cadmium and lead. Effluent from the process is dumped into the Nam Kok River, a tributary of the Mekong with high aquatic biodiversity.
livelihoods lost Of the 262 species of fish found in Laos, 135 live in the Nam Kok River, along with at least four turtle species, one of them endangered. Three of the fish species are on the IUCN endangered red list. This high incidence of biodiversity compares with 36 species of fish found in the whole of the UK. For the local people, fish provides an essential food source, accounting for up to half of their protein intake.
Concern is mounting about the impact the mine wastes will have on the river. The aquatic studies carried out by Oxiana are simplistic, and the level of monitoring suggested is inadequate. But beyond this, there is no suggestion of remedial action to be taken should it be found that mine discharges are negatively impacting the health of fish and the people that eat them. Even worse, there is no comprehensive plan of action in the event of a major waste spill, as so commonly occurs at mine sites.
Two villages have been moved to make way for the mine, and the traditional cultivation and sacred ancestral sites of the Lao Theung indigenous people have been destroyed without adequate ‘land for land’ compensation. Instead, they are being forced to give up their traditional shifting cultivation practiced over millennia and adapt to settled farming.
seeking cash for gold and copper In 2002, The World Bank’s International Finance Corporation offered US$30 million to support the Oxiana project, but the company declined the offer in favor of financing from European banks with fewer conditions attached. The European Investment Bank (EIB) is currently considering a loan of 60 million Euro for the copper expansion. Australia’s Export Finance Insurance Corporation has already provided financial support. Laos, a single-party Communist state with very few avenues for democratic participation, is not exactly a model of good governance. The EIB, however, gives little regard for human rights and civil liberties considerations.
The copper mine would produce 36 million tons of waste, and would use sulphuric acid to extract the copper. The resulting problem is that when the waste rock is exposed to air, the once Oxiana has siphoned off the mineral wealth of Laos, it will skip the country, leaving its toxic legacy for one of the poorest countries in the world to cope with. acid it produces commonly leaks out of mines and contaminates water sources.
The gold project alone is projected to extract gold worth $1 billion, with the sums for the copper project much larger. However, due to the corporate, staff and income repatriation tax breaks negotiated by Oxiana with the Lao government, only around 1% of the profits will remain in the country. The rest will flow abroad to Oxiana executives and shareholders in rich countries.
In twelve years time, the mine will be exhausted. It will leave behind a ticking time bomb of toxic waste which if not properly contained, maintained and monitored for years to come could cause catastrophe. Independent mining specialists have registered surprise at the lack of planning and financial commitment by Oxiana for mine rehabilitation and closure. The worry is that. once Oxiana has siphoned off the mineral wealth of Laos, it will skip the country, leaving its toxic legacy for one of the poorest countries in the world to cope with.
