New Gold’s 2008 Sustainability Report

In a New Gold press release dated Dec 14, 2009 that’s titled New Gold Granted Injunction to Temporarily Lift Shutdown Order at Cerro San Pedro Mine, you can find the following statement ¹ :

New Gold Inc. (“New Gold”) (TSX and NYSE AMEX-NGD) today announces that it has been granted an injunction related to the suspension of operations at its Cerro San Pedro mine in Mexico. The court ruling temporarily overturns the Mexican environmental enforcement agency’s order to suspend mining operations at the Cerro San Pedro mine. New Gold’s wholly owned Mexican subsidiary, Minera San Xavier (“MSX”), filed the appeal seeking to overturn the suspension order on December 3, 2009. Mining operations will recommence at the Cerro San Pedro mine and are expected to continue through the duration of the appeal trial.

New Gold is one of the companies that I mentioned in my second letter to the Prime Minister of Canada. Out of concern for the possibility that they might not be running their mine at Cerro de San Pedro responsibly, I recently read through New Gold’s 2008 Sustainability Report ². My comments in this post are regarding that report.

In the report, you can find lots of positive statements about the importance of workplace safety and environmental and social responsibility. For example, on page 2 you can find reference to “a company-wide commitment to corporate social responsibility.” Given the data that they provide of zero lost-time injuries and zero fatalities for 2008, they do appear to have a good workplace safety record for their mine at Cerro de San Pedro. Their statements on environmental responsibility in particular are nonetheless extremely vague and unsatisfying to me, and some important concerns are not even addressed. Allow me to explain.

First of all, there’s a reference to ISO 14001:2004 which does nothing to allay my concerns for reasons that I discussed in a previous post. There is no mention in this report by New Gold that ISO 14001:2004 does not state specific environmental performance criteria, nor is there any mention of what specific environmental performance criteria their ISO 14001:2004 certification would entail.

Secondly, nowhere in New Gold’s 2008 Sustainability Report are the concepts of acid mine drainage or heavy metal pollution mentioned. As was explained in the video about Marcopper in the Philippines, some types of mining waste have been known to pollute local water with sulphuric acid and heavy metals. If a problem of acid mine drainage and heavy metal pollution were to develop at Cerro ³ de San Pedro, then it could persist for centuries, if not millennia, after the closure of the mine. The question of whether or not this problem could arise was not mentioned in New Gold’s 2008 Sustainability Report.

Another important question is the one of cyanide management. Cyanide heap leaching of gold typically involves soaking enormous amounts of crushed rock in a solution of sodium cyanide and water. Tonnes of sodium cyanide and millions of litres of water are used every day in the operation of a mine like the one at Cerro de San Pedro. Gold mining companies are of course aware of the public relations nightmare associated with soaking mountains in sodium cyanide. If the word cyanide on its own weren’t enough, then catastrophes such as the spills at the Baia Mare mine in Romania and the Omai mine in Guyana would be. So it’s clearly in the interest of gold mining companies to manage the cyanide responsibly, at least to the extent that doing so will provide for a maximal balance between the image of the company and the other benefits seen by the people, such as the shareholders, that each company answers to.

It’s also true that people deal every day with all kinds of dangerous substances, not just cyanide, and that within many developed countries regulations exist to ensure that hazardous operations are carried out properly. Towards the end of New Gold’s 2008 Sustainability Report, on p. 19, there’s mention of the International Cyanide Management Code. I quote directly from their report:

While cyanide has its inherent toxic properties, its safe transport, handling, use and destruction are well understood and manageable. New Gold mine operations use cyanide as part of the process of extracting gold from the ore using strictly controlled procedures for the safety of personnel and the environment alike. The International Cyanide Management Code (ICMC) provides an excellent international reference standard for transporting, storing and using cyanide. The ICMC is renowned as the international benchmark for cyanide management. For more information go to: http://www.cyanidecode.org/cyanide_use.

It’s interesting that they don’t state there whether or not they actually adhere to the ICMC guidelines that they mention. Take a look at the list of signatory companies of the ICMC. New Gold isn’t on that list ⁴.

Independent of anything to do with New Gold Inc., there’s a question in my mind of whether or not a company’s presence on that list indicates that it necessarily deals with cyanide responsibly in all of its operations. Two additional points come to mind however, as a result of New Gold’s statements regarding the ICMC:

• If New Gold is implementing a “company-wide commitment to corporate responsibility,” then it would seem natural to assume that the “strictly controlled” cyanide management procedures that they refer to would be good ones. But if they are good ones, then why would they appear to not satisfy what New Gold itself describes as “an excellent international reference standard for transporting, storing and using cyanide”? If on the other hand their procedures do satisfy the ICMC criteria, then what’s holding them back from either explicitly saying so in their 2008 Sustainability Report, or from being a signatory member of the ICMC?

• If New Gold is implementing a “company-wide commitment to corporate responsibility,” but did not see fit to become a signatory member of the ICMC, then why are they talking about how good the ICMC is?

Cerro de San Pedro is elevated above the city of San Luis Potosí, the latter being located at the bottom of the Tangamanga Valley. The outskirts of the San Luis Potosí urban area are about 10 kilometers from the leaching pad and about twelve kilometers from the extraction site. According to some 2005 data from the INEGI, Mexico’s federal agency specialising in the collection of statistical and geographical information, the neighbourhood of Cerro de San Pedro where the extraction occurs was at an altitude of 2040 meters and the neighbourhood of La Zapatilla where the cyanide leaching occurs was at an altitude of about 1950 meters ⁵. The municipality of Soledad de Graciano Sánchez, on the east side of the San Luis Potosí urban area, the side that is closest to the mine, has an elevation varying between 1740 meters and 1870 meters ⁶.

Including only the municipalities of San Luis Potosí and Soledad de Graciano Sánchez, the city of San Luis Potosí had just under a million inhabitants in 2005 and was growing at a rate of 2 % per year ⁷.

update May 2, 2010: One thing that also shouldn’t go unmentioned is the aquifer. I left out mentioning San Luis Potosí’s aquifer since it was harder to find details about it and I hoped to investigate it later, and assumed that the information that I’d presented was enough to explain why I was concerned. But it should go without saying that the aquifer is of extreme importance, not only due to the fact that the mine is dealing with a lot of toxic material, but also due to the fact that mines such as this one use immense amounts of water, and San Luís Potosí does not have an abundance of water to begin with.

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[1] The press release is available at www.sedar.com or from New Gold’s home page at www.newgold.com.

[2] A link to New Gold’s 2008 Sustainability Report is currently prominent on their home page, so please go ahead and read that report along with any other information that they have to offer.

[3] In case you’re wondering what cerro means, it’s a Spanish word with a definition that would fall somewhere between the definitions of the English words hill and mountain. Cerro de San Pedro is in the Sierra Madre Oriental mountain range.

[4] At the time of writing, this list had been last updated on December 1^st, 2009.

[5] Both neighbourhoods are in the municipality of Cerro de San Pedro. They’re referred to as localidades by the INEGI.

[6] The INEGI data can be found here (in Spanish).

[7] That census information is also available from the INEGI, and can be seen here (in Spanish).

Marcopper Mine on Marinduque, Philippines

An interesting but disturbing story that’s worth learning about is the one of the Marcopper mine on Marinduque Island in the Philippines. The mining company in charge of the Marcopper mine was Placer Dome Inc. of Vancouver which was later acquired by Barrick Gold.

A website from Oxfam Australia provides some information about the damage that was caused by Marcopper. At that website are links to some reports as well as a video documentary. In case you went to that site but missed the video then here it is:

MiningWatch Canada also has some well-presented and readable information about the Marcopper mine. For example, there’s this link.

The human cost of gold: And a deadly price to pay

In the two letters that I’ve written so far to the Prime Minister on the topic of Canadian mining abroad, I included links to articles from the Tanzanian newspaper ThisDay. When I originally read those articles, they were available on the ThisDay website. Since they ended up disappearing, I included links to Google’s cached versions of those articles in my second letter. I don’t think there’s any need to invoke conspiracy theories since a lot of other articles disappeared as well, and there’s probably a mundane explanation for what happened.

The second of the two articles disappeared from Google’s cache on or up to a couple days before the third of December. The first is still available at this time but will undoubtedly disappear as well. In the interest of recording the information that was in the second article, I’m including it below. The article is copyright © Thisday Ltd. I’m posting it for purposes of communicating an important environmental and human rights issue to the public.

What follows after this sentence to the end of this post is the article.

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Tuesday, June 30 2009

The human cost of gold: And a deadly price to pay

THISDAY REPORTER
Dar es Salaam

VILLAGERS living near a gold mine owned and run by Canada’s Barrick Gold Corp. in Tarime District, Mara Region are demanding the immediate closure of the project, saying they are paying a deadly price for the mining activities in the area.

Already, scores of people residing around Barrick’s North Mara Gold Mine are showing serious signs of exposure to pollution in the form of water contaminated with various chemicals allegedly flowing out of the mine and into the nearby River Tigethe.

The villagers accuse the mine management, under the Canadian investor company, of causing fatal health hazards to human beings, livestock, and land in Kebasula Ward in Tarime, where the mine is located.

They say more than 20 people have died in recent weeks as a direct result of the contaminated water.

’’We have no problem with investors. But the investors must respect and treat us like human beings. These Canadians are killing us…they are not doing business,’’ said Ms Esther Mugusuhi, one of a group of affected villagers interviewed by THISDAY in Dar es Salaam yesterday.

Ms Mugusuhi said the mining activities by Barrick Gold have incapacitated her and many others, in her case rendering her right hand dysfunctional.

’’I used to work productively in my farm, but I am now a dependent person…all because of the investors,’’ she asserted.

She called on the Canadian Government to intervene in the environmental nightmare by ensuring medical costs for all the victims of pollution in the area are footed.

Another villager, Mkwave Mwita, pointed an accusing finger at the Tanzanian (home) Government for valuing mining activities by foreign investors more than it values the welfare of its own citizens.

’’I think this is the only country on earth where stones (gold) are more valuable than human beings,’’ Mwita stated.

Like Ms Mugusuhi, he also said the Canadian Government is morally obliged to help those affected by the North Mara Gold Mine operations because ’’it is Canadians that are reaping more benefits from Tanzanian mineral resources than Tanzanians themselves.’’

Pictorial and other evidence from the area strongly indicate a real danger of more people residing around the mine area and using the River Tigethe waters for various household uses contracting serious diseases that have so far remained a puzzle to local medics, and could eventually even kill them.

The villagers described infections that start with increased body itching and frequent yawning, causing victims to scratch their bodies and end up with lacerations.

The chairman of Kebasula Ward’s CCM branch, Keremani Nyakiha, was part of the group interviewed, and said more than 20 people have so far died as a result of the infections within the past couple of months.

He said many more villagers in the area are bed-ridden and with little hope of recovering due to lack of appropriate medical attention, while there are reports that over 150 cattle have died of the ’disease.’

Despite his CCM posting in the ward, Nyakiha did not hesitate to blame the Government for ’’playing politics’’ with the lives of people over this matter.

’’This is not an issue of politics…it is about people’s lives,’’ he said, adding: ’’The situation in Kebasula is terrible – people are dying, cattle are dying, dogs are dying, everything is dying. Soon there will be no living organism in the area…not even toads.’’

He castigated district and regional government leaders of deliberately turning a blind eye to reports of villagers dying of the allegedly poisonous infection, and favouring the investors instead.

’’It is ridiculous and shameful for a whole Government leader to dismiss in public what is obvious to everybody. If the Government has nothing to do for its people, it had better just keep quiet,’’ Nyakiha asserted.

Asked to mention any benefits the surrounding village communities may be reaping from the mining project, he retorted: ’’Nothing…just dust and skin diseases.’’

The group of villagers are in Dar es Salaam on a mission to raise public awareness on their case, courtesy of the Norwegian Church Aid non-governmental organisation.

Independent medical experts consulted by THISDAY say the villagers could be suffering from cyanide poisoning as a result of expanded mining activity. It is understood that short-term exposure to high levels of cyanide harms the central nervous system, respiratory system, and cardiovascular system. Even very small concentrations of the toxic substance can kill humans, fish, birds, livestock and plant life.

However, when contacted for comment late yesterday, Barrick Tanzania spokesperson Teweli Teweli dismissed the allegations as baseless, saying Kebasula Ward – situated about 30 kilometres from the mine – is too far to be vulnerable to any seepage from the mine’s sewage pond.

He named villages surrounding the mine as Nyangoto, Kewanja, Genkuru, and Nyamongo.

’’Following the problem of water leakage on May 9 this year, we conducted a meeting with the surrounding communities and agreed that any anomaly to cattle or human beings should be reported to us…but we heard nothing until the ward councillor wrote to us about the deaths of 18 people,’’ Teweli told THISDAY.

He dismissed any chance of a ’’scientific’’ connection between the claimed deaths and Barrick North Mara Mine operations.

Teweli said initial remedial work to intercept and divert water from the mine from reaching waterways in the vicinity has been completed and ongoing remediation and monitoring continues.

’’Management and monitoring of this specific situation will remain a priority of the mine,’’ he added.

Meanwhile, Prime Minister Mizengo Pinda yesterday directed the Minister for Home Affairs, Lawrence Masha, to investigate the reported pollution at the Barrick North Mara Gold Mine.

The premier gave the directive when responding to a question from the Tarime Member of Parliament, Charles Mwera (CHADEMA), who wanted to know from the Government what is to be the fate of victims of the reported mine pollution.

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What is ISO 14001:2004?

First of all, where will you find reference to it? If you read information made available by New Gold Inc. about their Cerro de San Pedro mine, then you’ll see they state that they have received ISO 14001:2004 certification for their environmental management system. For example, in their annual report for 2008, you can find the following statement:

Cerro San Pedro’s environmental management system received recognition from the International Organization of Certification, achieving ISO 14001:2004 status.

So that’s the context that it exists in. Let’s see if we can find out what it is. Let’s first figure out what ISO is. Some information on what ISO is is available at the ISO website. It’s a non-governmental organization formed out of a large number of member institutes around the world, many of which are themselves mandated by governments, with a central office in Geneva. They publish international standards in the interest of allowing businesses to operate in a way that meets not only the needs of the business in question but also the broader needs of society as a whole.

That sounds good. But then what is ISO 14001:2004? Again, an explanation is available on the ISO website. Look at the following paragraph that’s taken from that link:

ISO 14001:2004 specifies requirements for an environmental management system to enable an organization to develop and implement a policy and objectives which take into account legal requirements and other requirements to which the organization subscribes, and information about significant environmental aspects. It applies to those environmental aspects that the organization identifies as those which it can control and those which it can influence. It does not itself state specific environmental performance criteria.

That last sentence in particular caught my eye, although I’ll admit I had to read it a few times before convincing myself that I was reading it correctly. Read it again yourself. So in the case of ISO 14001:2004, ISO does not specify the environmental performance criteria that are decided upon by the company and the people who tell the company what it can do. I’m guessing that whether or not that’s satisfactory would depend on factors such as what country you live in, what kind of laws exist there, how well those laws are recorded and respected, what kind of influence you have in that country, what company is being certified, and how much you value environmental safety.

It seems therefore that the answer to the question of what ISO 14001:2004 actually is is not as straightforward or consistent as the answer to what it isn’t. I don’t want to trivialize the amount of hard work that I imagine is often involved in achieving this certification. But the amount of work or expense that might go into doing that can’t discredit the value of what we’ve been able to determine from a bit of reading.

If you don’t know what New Gold Inc. or Cerro de San Pedro are and would like to find out, then you can do so by reading my second letter to The Prime Minister of Canada, or visit their website at www.newgold.com.

Toxic spill discussed in Tanzanian Parliament

I’ll start this post by providing the link to an article from the Tanzanian newspaper Daily News. The article was published on November 2nd, 2009 and is titled Bunge braces for North Mara acid spillage report. “Bunge” is the Swahili word for parliament.

In that article, mention is made of a study led by a Norwegian university which “revealed that the concentrations of some of the elements in water at the mentioned sites were above the World Health Organisation (WHO) drinking water recommendations.” The Norwegian university that they’re talking about would have been the Norwegian University of Life Sciences as mentioned at this link on Mining Watch Canada’s website.

These are Norwegian and Tanzanian scientists that are doing these studies, not the innuendo-motivated group that we might have originally been led to believe.

The study is said to have been done at two mines, the North Mara mine and another at a place called Nyakabale. I’ve previously mentioned Barrick Gold’s North Mara mine, but I haven’t yet looked into any information about the Geita mine at Nyakabale which belongs to AngloGold Ashanti. Reading in detail the full report from the Norwegian university would also be interesting.

MiningWatch Canada has already presented in a readable fashion some essential information from that report and given you access to the report itself. So if you’re interested in learning more, then please go ahead and check out the link from MiningWatch Canada.

Update January 22/2010

In the original post, I mentioned that this Daily News article had made me wonder about a possibility of chronic seepage from the mine. I removed that statement. On rereading the article, it does not indicate anything that would be in addition to Barrick Gold’s statement regarding a waste-containment failure that was detected in May of 2009.

However, the fact that the seepage in question was associated with acid drainage indicates that the issue of controlling pollution from this mine will be a serious problem for a very long time after the mine has closed. This is one of the unfortunate realities of acid mine drainage (also called acid rock drainage). So the question in my mind of a chronic pollution problem remains.