By YEHIURA HRIEHWAZI - freelance reporter
SWISS mining giant, Xstrata Plc, says it will not dump mine waste into the Sepik River system from its Frieda River gold and copper mine when it begins production in 2017.
This welcome announcement is a big shift away from the traditional riverine tailings and waste disposal systems by mining companies in PNG. Ok Tedi, Porgera and Tolukuma dump treated tailings into river systems much to the dislike of impact communities and environmental groups but supported by the PNG government that monitors and ensures WHO standards of toxicity, or otherwise, are maintained in river systems where the waste are neutralized before disposal.
Being a Swiss company where its government and people are totally opposed to environmental degradation, Xstrata will not go down that path. The Swiss and the Scandinavian countries like Finland, Norway and Sweden are so stringent on adhering to such principles and ethics that only last year, Norway expelled Barrick Gold from one of its large financial institutions because it operates the Porgera gold mine which dumps treated tailings into the Strickland River system.
Xstrata and junior partner Highlands Gold Ltd last week announced a big increase in their gold and copper deposits at Frieda River licence in Sandaun province.
They said a pre-feasibility study is expected to be completed by in the third quarter of this year with construction to commence in 2012 and production in 2017. This is good news for the 3500 Ok Tedi employees who could be easily absorbed into Frieda when the Mt Fubilan operation just south of Frieda closes in 2013, if it's not extended to 2020.
Frieda's general manager Mr Dugie Wilson told a radio Australia (ABC) program that Frieda's expected mine life is 20 years and will almost double amount of ore intake in the processing mills. Ok Tedi crushes 23 million tonnes of ore annually while Frieda will process 40 million tonnes.
Mr Wilson said that makes Frieda River project one of the top 10 Greenfield mines in the world.
"We have done a lot of additional drilling which is then not only lifted the size of the resource, but I have confidence in how the copper mineralisation is actually distributed," he said.
Quizzed on the company's environmental and waste management system, Mr Wilson said the company believed strongly in environmental sustainability.
"We would not build a project which resulted in tailings being dumped in the river. Xstrata just would not be there," he said.
Asked if Xstrata was considering a new way of waste management apart from the traditional riverine disposal he said: "Well certainly, as I said, Xstrata will not build a project which dumps tailings into the river.
" We have a design which is being developed of how we will actually store the waste rock and also the tailings. I mean both of them are significant challenges, but we think that we have some answers there as a risk mitigation that we are through the studies carrying more than one option, so that then if we start finding that we are entering a blind alley and that we see some technical difficulties with a particular option, that we have still got others. So we don't get forced into a place we don't want to be," he said.
Frieda River project is located at the headwaters of the Sepik River, north of Ok Tedi mine and 170km northwest of Porgera mine. It is a very remote location , one of the reasons why it was on the drawing board for 40 years until Xstrata took over the project in 2007 and fast-track exploration work to prove up the ore body and made commitments to its development.
Mr Wilson said nearly 40 per cent of capital costs would be off site, " so you are potentially looking at pipelines to take concentrates to places where they can either be barged or put for loading into a coastal port, we're looking at airports, we're looking at either an on-site power station with a potential hydro-electric dam. Yes, there is a large amount which needs to be constructed before the project can start and what is very difficult is the fact that a lot of this infrastructure needs to be in place before you can actually start building the mine, so the construction period is longer than you would expect to find elsewhere."
In terms of jobs and revenue to PNG, Mr Wilson said lately there has been a lot of focus on the LNG projects but Frieda will have positive impact on some of the most rural, isolated and poor communities.
"One of the things which has occurred in PNG is an absolute focus on LNG and where we see Frieda having a major impact and why we have spent a lot of time, with the project for the last three years and a lot of that is focusing on speaking to provincial government to get regional development plans aligned. So the impact on PNG is certainly going to pale into insignificance compared to these major gas projects. But if you start talking about some of the poorest regions and the most undeveloped regions of PNG along that north coast, that's really where the real positive impact will be," he said.