Monthly Archives: October 2016

More Philippine miners threatened with suspension under crackdown

Published by MAC on 2016-10-27
Source: Statements, Reuters, Bloomberg, PDI, Sun Star (2016-10-27)

It has been another hectic few weeks with regard to mining in the Philippines, and the Government’s environmental crackdown. The long-awaited environmental audit from the Department of Environment and Natural Resources (DENR), headed by Gina Lopez, was finally promulgated at the end of September. (see: Philippines: President notes “Mining – My way or the environmental highway”).

It was generally greeted with cheers by civil society watch-dogs, who favourably noted the proposed suspension of almost half of the 41 operating mines (to add to the 10 already suspended). The bulk of firms affected were nickel miners, with many being in the Caraga region. However, some noted that the suspensions only involved notices that asked for set conditions to be applied, otherwise a suspension would commence. Many companies have argued they are already – or at least will be – in compliance, and how many firms will actually be suspended is open for question.

Ms Lopez has indicated her crusade will continue, promising she will place a moratorium on any new mines and ordering the investigation of alleged “midnight deals” involving some officials of her department and mining companies during the last days of the previous administration. The DENR has said it will cancel the license of another nickel miner, Austral-Asia Link Mining in Davao Oriental province, because it is next to protected areas. (Interestingly we believe this is the lease that Anglo-Australian BHP Billiton once co-owned, before withdrawing from the project).

Yet, the industry fight-back continues, with the much-expected first legal challenge to the ongoing suspension orders. The Chamber of Mines of the Philippines called the audit ‘tainted’ because of the inclusion of ‘anti-mining’ civil society groups. (Perish the thought there would be critical, or even independent, voices included!) The odd inconsistency of the DENR nominating some of the suspended companies for environmental awards has also been exposed plain. The obvious concerns around jobs have been aired, although Ms Lopez has reiterated that companies should employ workers on making good environmental failures and/or rehabilitation work.

A particular focus has been on OceanaGold, where the company has claimed to be in a “constructive” dialogue over its own suspension notice, while the local Governor of Nueva Vizcaya has called for unity in communities against the project. This is a request which seems to have been heartily welcomed, with citizen groups requesting the closure of the mine and expulsion of the company. There was also popular support for the people of El Salvador, following the ISDS case (see: OceanaGold loses compensation claim against El Salvador).

The President has continued to support his controversial minister, and talked of the need for a new ‘people-friendly’ mining law.
Outside of this main story, concerns about the human rights situation in the country continues – particularly after the killing of Jimmy Saypan, a noted anti-mining leader from the Compostela Valley. (See: Philippines: Anti-mining leader dies in hospital after gunmen attack).

Coal and climate change has also been making the news, with environmental groups continuing arguing against coal-fired power plants and mines. although President Duterte is saying the Philippines need not follow the rules of “imperialists” by abiding with the Paris Agreement on climate change.

What this will mean in practice is unclear, but – like the roller-coaster ride with regard to regulating the mining industry – it is likely to grab the headlines.

SOURCE: http://www.minesandcommunities.org/article.php?a=13544

Kenya: Weak Data Buries the Shine of Kenya’s Huge Mineral Resource

25 OCTOBER 2016
The Nation (Nairobi)

By Edwin Okoth

Kenya has vast mineral deposits that remain largely unexploited as data gaps keep the country’s undiscovered underground wealth out of the economic system.

A report released on the country’s potential mineral resources show that Kenya has billions below its surface worth of minerals yet to be mapped and quantified for mining.

The Ministry of Mining, which is yet to identify a consultant expected to carry out a year-long aerial mapping of the country’s minerals said in the Kenya Mining Investment Handbook 2016 that the country’s mining potential is huge and remains unknown.

“Numerous mineral occurrences have been recorded and mapped in the country. However, no detailed exploration work has been carried out to establish the extent of most of these mineral occurrences.

Nonetheless, Kenya has numerous ores and industrial minerals, which have been established to be in substantial quantities.

These minerals include soda ash, fluorspar, titanium, niobium and rare earth elements, gold, coal, iron ore, limestone, manganese, diatomite, gemstones, gypsum and natural carbon dioxide,” the ministry wrote in the report.

Earlier this month, Kenya hosted the first mining forum where leaders pledged focus on the sector which is capable of supporting up to 10 per cent of Kenya’s Gross Domestic Product.

Mining Cabinet Secretary Dan Kazungu said 17 bidders had applied to be the consultant expected to conduct the Sh3 billion survey to map the country’s mineral locations and allow for informed marketing of the country as mining hub.

According to the report, Kenya has world class deposits of rare earth elements in the coastal region with an estimated worth of Sh6.2 trillion and these could propel the country to the list of top five nations with rare earth deposits in the world.

In addition, the country has the world’s top six deposits for Niobium with commercial deposits of coal having been discovered in the north eastern region of the country and are currently under review for potential exploitation.

Even before the survey expected to take place next year starts in western Kenya, where gold has been discovered, a number of global mining companies are already operating in the country mining millions in tonnes of ores. More are expected to join once the mapping is complete.

Tata Chemicals Magadi, which has its operation in the Lake Magadi region in the Great Rift Valley is Africa’s largest soda ash producer and one of Kenya’s leading exporters with an annual production of about 360,000 metric tonnes of Soda Ash according to the report.

Kenya Fluorspar Company Limited has been mining fluorspar for export in the Rift Valley System since 1971.

Another major mining firm, which has been around since 1942 is the Africa Diatomite Industries Limited (ADIL) exploiting diatomite in Gilgil, a town north west of Nairobi, for export.

DIL has access to good quality diatomite deposits estimated at over 6 million tonnes and currently boasts of having the only known viable quality deposits of Diatomite in Kenya.Fenxi Mining, together with a local joint venture partner, Great Lakes Corporation are currently exploiting two exploration areas where coal deposits have been identified.

The company estimates that the area holds more than 400 million tonnes of coal reserves with estimated value of Sh4 trillion.”The country is vastly underexplored for minerals and its mining sector is currently dominated by the production of non-metallic commodities.

Kenya is the third largest producer of soda ash in the world and the seventh producer of fluorspar. Metallic minerals currently produced in the country include titanium, gold and iron ore. Export statistics for Kenya indicate a constantly growing sector,” the report said.

In 2014, for instance, Kenya exported 281,503 metric tonnes of ilmenite, 52,465 mt of rutile and 23,000 mertric tonnes of Zircon.

After next year’s mapping, which has been pending since 2012 due to lack of funds, further exploration and uptake of mineral rights is expected to boost Kenya’s capacity to position itself as a mining hub.

SOURCE: http://allafrica.com/stories/201610250182.html

The “Canada Brand”: Violence and Canadian Mining Companies in Latin America

Justice & Corporate Accountability Project

Communities first

The “Canada Brand”: Violence and Canadian Mining Companies in Latin America

Executive Summary

The Justice and Corporate Accountability Project has documented troubling incidents of violence associated with Canadian mining companies in Latin America. In general, neither the Canadian government nor industry are monitoring or reporting on these incidents.

What we found about the degree of violence and criminalization from 2000-2015

This Report documents incidents that are corroborated by at least two independent sources. We found:

– incidents involving 28 Canadian companies;
– 44 deaths, 30 of which we classify as “targeted”;
– 403 injuries, 363 of which occurred in during protests and confrontations;
– 709 cases of “criminalization”, including legal complaints, arrests, detentions and charges; and
– a widespread geographical distribution of documented violence: deaths occurred in 11 countries, injuries were suffered in 13 countries, and criminalization occurred in 12 countries.

In addition, our research shows that Canadian companies that are listed on the Toronto Stock Exchange do not include reports of violence in their mandatory reports on company performance. Between 2000-2015:

– publicly listed companies reported 24.2% of the deaths and 12.3% of the injuries listed in this report; and
– larger companies tended to report incidents in general terms, using blanket statements, whereas smaller companies tended to report in more detail

What is significant about this study?

This report on violence and criminalization associated with the Canadian mining industry in Latin America is the first to:

– compile information on reported violence over a 15-year period;
– name the companies involved and seek company comments on the incidents; and
– provide details and sources of the incidents, so that third-parties may reproduce our results.

The incidents documented in this report appear to be the tip of the iceberg

During our study we came across many reports of deaths, injuries and cases of criminalization that we could not include because they could not be corroborated through two independent sources. We were not able to include death threats, deliberate burning of crops and property destruction, forced displacement, reported assassination attempts without reported injury, illness from environmental contamination, or psychological trauma from any of the violence due to the extensive resources required to document these incidents. The violence reported is only from countries in Latin America, and does not cover Canadian mines in other parts of the world.

The world is taking notice of Canadian companies – for the wrong reasons

Canada has been criticized internationally for its lack of oversight of Canadian mining companies. Canada is singled out because more mining companies are domiciled in Canada than in other country; 41% of the large mining companies present in Latin America are Canadian.

– Four United Nations bodies have called on Canada to hold Canadian companies accountable for their operations overseas.
– The Inter-American Commission on Human Rights has had three hearings on the accountability of Canadian mining companies and called on Canada to adopt measures to prevent “multiple human rights violations”.
– In June 2016, 180 organizations from Latin America sent a letter to Prime Minister Trudeau demanding action on promises for a mechanism for corporate and state accountability.

Existing Canadian government policies are not addressing the problem

The Canadian government continues to promote the “Canada Brand” by relying on voluntary, non-enforceable Corporate Social Responsibility (CSR) codes to measure company conduct. The two main government offices responsible for CSR are the Office of the Extractive Sector Corporate Social Responsibility Counsellor (CSR Counsellor) and the National Contact Point (NCP) under the Organization of Economic Cooperation and Development (OECD). Neither office conducts investigations, nor do they have the power to sanction companies directly or compensate victims. Their only power is to recommend the withdrawal of Canadian government financial and embassy support.

There is no indication that there is any systematic review of company behaviour nor any publicly available information to indicate that the current CSR Counsellor has responded to reports of violence or considered withdrawing Canadian embassy support.

There is no evidence that the government does not have the capacity to handle more complaints

The international community demands a more robust accountability mechanism for both state and company accountability, but opponents claim that the government does not have the capacity to handle the claims. There is no evidence that the current CSR Counsellor, nor the NCP, have too many cases to handle.

– The CSR Counsellor was established in 2009 and has handled only six complaints.
– The current CSR Counsellor’s website shows no indication of any investigations, disputes, dialogues or any engagement with specific conflicts.
– The current CSR Counsellor has no Annual Report and the only Publications are news reports of six speeches made by the CSR Counsellor since his appointment in 2015.
– The NCP only dealt with one case in 2015 and five cases in total since 2011.

Methodology

To compile this information, JCAP coordinated a group of volunteer law students from five different Canadian universities to identify incidents of violent conflict and criminalization. Researchers compiled an initial list of incidents using existing databases made available through the Observatorio de Conflictos Mineros de Ame?rica Latina (OCMAL),1 the McGill Research Group Investigating Canadian Mining in Latin America (MICLA)2, the EJOLT Environmental Justice Atlas3, and the 2015 report of the Working Group on Mining and Human Rights in Latin America entitled The Impact of Canadian Mining in Latin America and Canada’s Responsibility.4

Law students then carried out focused research on conflicts involving violence, using English and Spanish media, NGO, government and company reporting available on the internet, or through the Internet Archive. The primary search engine used was Google (Google Canada and Google for the host country in question). We also used HuriSearch for NGO reporting, and the SEDAR online database for corporate disclosure. For each incident, researchers attempted to access a variety of sources. In general, however, the most widely available sources were local media and NGO reporting. Company reporting was minimal and official government reporting was either minimal or inaccessible.

To view the complete Report, click the link below:

The “Canada Brand”: Violence and Canadian Mining Companies in Latin America

SOURCE: https://justice-project.org/the-canada-brand-violence-and-canadian-mining-companies-in-latin-america/

South Africa: Authorities Finally Move Against Australian Mining Company

20 OCTOBER 2016
GroundUp (Cape Town)

By Glenn Ashton

The controversial Australian mining company Mineral Resources Commodities (MRC) has launched a court case against the national Department of Environmental Affairs (DEA) arising from the department’s raid on the company’s Tormin Mine, situated 350 kilometers north of Cape Town.

A spokesperson for the company Anne Dunn, confirmed that MRC was taking legal action.

The raid in late September had been expected after numerous complaints to mining and environmental authorities about alleged illegal actions by the mine in the coastal zone. These include the construction of structures on the beach zone, mining in prohibited zones and questions about a massive collapse of the sea cliffs below the mine processing plant.

These actions fall under the the National Environmental Management Act and specifically the Integrated Coastal Management Act (ICMA). They also appear to be in conflict with Tormin’s mine licence conditions managed under the Mineral Petroleum Resources Development Act.

This was the second recent blow for MRC. The company announced its withdrawal from the rich Xolobeni mineral sands project on the Wild Coast in July this year after divisions in the community peaked with the murder of anti-mining leader Sikhosiphi “Bazooka” Rhadebe in March.

Tormin’s mining practice has been in the spotlight since the mine began operations in March 2014. The following month the Department of Mineral Resources issued the mine with instructions to rectify several changes it had made to its mining practices which deviated significantly from the original environmental authorisation provisions of the mining licence.

These beaches are famous for their pink sands, tinted by high proportions of garnet, a super-hard and therefore commercially useful mineral. Other minerals – zircon, ilmenite, rutile and leucoxene – were further treasures hidden within the pink sands. These minerals collectively make up almost half of the beach by volume, a veritable bonanza. Tormin declared a profit of $12.9 million on a turnover of $48 million in 2015, its first full year of operation.

From the outset Tormin only had environmental clearance to extract around 5% of the minerals, specifically the zircon and rutile. This would have had only limited environmental impact. However the mine unilaterally began to extract the full range of minerals from the sand, a move that placed the environment of the mine at serious risk through extraction of half of the beach sand by volume.

These beaches are backed by steep, unstable sea cliffs. Consequently all mining – and any other activity at all – was forbidden in a buffer zone that extended 10 metres from the foot of the cliffs seaward. However this has apparently been ignored from the outset, with details of mining recorded in aerial photographs and Google Earth images.

Because the entire mine is directly on the beach, it falls within what is defined by ICMA as the coastal protection zone. This includes an area up to a kilometre from the shoreline. ICMA provides substantial statutory protection to this important ecological zone, hence the exclusion zone. ICMA is administered by the DEA.

It is also important to note that when Tormin gained permission to mine the beach, mining was jointly governed by both DEA and DMR. DEA dealt with environmental governance and DMR with mining. However in December 2014 this changed into what is known as the “one environmental system” where DMR assumed all responsibilities for mine management, including the environment. This is central to the legal challenge Tormin has launched against DEA’s raid on the mine.

DMR appears to have insufficient capacity, knowledge, or will to enforce good environmental governance. This has been evident at Tormin. In March 2015 DMR questionably granted Tormin permission to expand the processing area, which also falls in the coastal zone. The department also permitted a radical change in mining methodology that involved trucking all the beach sand to the processing zone on the cliffs above the beach. This was originally to have been pumped in a concentrated slurry from the beach.

Worse yet, in April 2015 the Western Cape director of DMR granted permission for further plant expansion and for the illegal groyne – a structure running from the beach out to sea – that Tormin had built on the beach, from within the exclusion zone well into the surf zone. This kind of activity is prohibited under ICMA and requires extensive environmental research. The provincial DEA informed DMR that its permission was irregular and could not be countenanced. DMR failed to take further action.

Various independent parties repeatedly informed both DMR and DEA of their concerns about these contraventions, to no avail. In November 2015, the Centre for Environmental Rights wrote a letter to the Western Cape office of DEA, setting out that department’s obligations in terms of ICMA and its statutory obligation to take action against the alleged transgressions by Tormin. In May 2016 DEA responded that it took the matter seriously and was investigating, in consultation with DMR.

Action was finally taken in the raid this month, almost a year after the letter to DEA. The raid involved representatives from national and provincial DEA, The South African Police Services, The Department of Rural Development and Land Reform and the local Matzikama Municipality. DEA spokesperson Albi Modise told GroundUp that the raid formed part of a criminal investigation process.

The legality of the raid has subsequently been challenged by Tormin via its holding company Mineral Sands Resources. However the DEA was, at the time of writing, not aware of any legal challenge to the raid.

Several questions arise. First, if everything was above-board at Tormin why would the company be reluctant to allow inspection of its operations? Tormin has established a record of discouraging and preventing inspections by various parties, including DEA and the municipality. The latter’s officials have been forbidden by elected councillors to inspect the mine, an illegal action under the Municipal Systems Act. Tormin has claimed that inspections disrupt operations, a hollow excuse.

Secondly, if there were no problems, why is Tormin challenging the legality of the raid in what appears to be a direct attempt to stonewall the investigation?

Contacted by GroundUp, Tormin and its director, Mark Caruso, declined to comment further on the matter. A report in News24 by Matthew le Cordeur quoted Caruso as saying he felt the warrant was illegal as the mine was regulated by DMR not DEA. He went on to claim that Tormin was legally compliant with mining and environmental legislation.

These claims appear trite. If everything was above-board, Caruso should have no concerns. It is telling that he apparently wishes to retreat to the protection of DMR, given that department’s apparently limited grasp of its environmental responsibilities and its bizarre prior rulings.

What consequences may Tormin face? Firstly, it could be in breach of its mining licence by mining in the exclusion zone. It could be forced, under section 24 of the National Environmental Management Act, to rectify this and to address the construction of the rock groyne. It could be ordered to properly repair the collapsed cliff. It could be instructed to address the changes to mining methodology and put proper measures in place to prevent further erosion of the beach and cliffs. Work at the mine could be halted until this is done.

If the DEA raid found sufficient evidence – apparently computers and documents were removed from the mine – that these actions were knowingly undertaken, management could be held liable and criminal action could be instituted. Ignorance of the law is no excuse; it is the duty of the mine owners to be fully informed and adhere to all relevant legislation.

The result could involve substantial damages, a revision of the operating licence of the mine, withdrawal of the licence entirely or even the expulsion of the company from the country.

After years of civil society oversight, the authorities have finally taken action and are investigating some serious concerns with Tormin’s management practices.

Australian mining companies have evoked mixed response in Africa. Some are exemplary, participatory and transparent. Others feel they can do as they wish without consequence. Judgement remains open in Tormin’s case.

Ashton is a journalist, author, researcher and columnist. He was commissioned by GroundUp to do this analysis.

SOURCE: http://allafrica.com/stories/201610201012.html

Tanzania: Barrick Gold Loses Appeal Vs 160 Billion /- Tax Evasion Ruling

By Faustine Kapama
3rd October 2016

London-based giant gold mine company, African Barrick Gold Plc (AB G), has once again lost its appeal against being found to have evaded tax for four years consecutively from 2010, amounting to 81,843,1327 US dollars (over 160bn/-).

This follows the decision of the Court of Appeal to “strike out” the appeal AB G, the appellant, currently known as Acacia PLC, had lodged to fault the judgment issued on March 31, this year, by the Tax Revenue Appeals Tribunal on the matter.

Justices Edward Rutakangwa, Salum Massati and Stella Mugasha ruled in favour of Commissioner General with Tanzania Revenue Authority (TRA) after observing that the appeal by AB G was incompetent for failure to include key documents in the records, like documentary evidence tendered at the trial.

According to the justices, there was no gainsaying here that the omission to include the documentary evidence tendered at the trial does offend against the mandatory provisions of Rule 96 (1) (f) and (2) of the Rules, which is clear and elaborate on what the record of appeal should mandatorily contain.

“We have no flicker of doubt in our minds that these documents are very necessary for conclusive determination of the appeal. Being core or primary documents in this appeal, failure to incorporate them in the record renders the (same) incurably defective and the appeal incompetent,” they declared.

Among such documents were affidavits read and all documents put in evidence at the hearing, the order if any giving leave to appeal, the memorandum of appeal, record of proceedings, the judgment or ruling, the decree or order and the notice of appeal.

The AB G business entities in Tanzania, include Bulyanhulu Gold Mining Limited, North Mara Gold Mining Limited and Pangea Minerals Limited, which operates the Tulawaka and Bunzwagi Gold Mines.

It had declared dividends in UK to its shareholders on the income generated from gold mines operated in Tanzania amounting to 412,504,257 US dollars for 2010 to 2013 years of income.

However, the AB G declared to have incurred loss in Tanzania, where the three gold mine companies operate. Nevertheless, the Tribunal composed of three members under the chairman of High Court Judge Dr Fauz Twaib had stated in its judgment dated March 31, 2016; “Indeed, we share the (Tax Revenue Appeals) Board’s surprise as to how could this be possible,” said the Tribunal.

The Tribunal dismissed the appeal lodged by the company to challenge findings of the Board, saying it was inconceivable that AB G could pay so much money in dividends for four consecutive years, while its only assets were the three loss-making entities incorporated in Tanzania that do not make any profit. “The Board expected some clarification of this rather strange state of affairs and proof as to how it could be possible.

That proof, unfortunately, was not forthcoming from the appellant and its witnesses and counsel’s explanation fell short of an adequate discharge of relevant burden,” the Tribunal observed.

One important issue and which had attracted fierce criticism from the appellant’s counsel stems from the Board’s acceptance of the contention by the Commissioner General of the Tanzania Revenue Authority (TRA), the respondent, that AB G had serious plans to avoid tax.

The Tribunal found that the Board reached such conclusion relying on the fact that all the appellant’s subsidiaries in Tanzania were loss making and therefore not paying dividends to its shareholders and yet at the same time the AB G has consistently been declaring dividends.

“In the circumstances, it is fair to conclude that the respondent’s argument that the transactions were simply a design created by the appellant (AB G) aimed at tax evasion was justified,” the Tribunal declared.

According to the Tribunal, since the company’s only entities that carry on business anywhere in the world were the three Tanzanian gold-mining companies, the AB G’s only source of revenue that could create net profits retained earnings would be the three Tanzanian companies.

SOURCE: http://allafrica.com/stories/201610030047.html