UK Mineco Group marks successful 2018 mining and business results
The British company Mineco Limited, one of the largest mining investors in Serbia and the Western Balkans, is pleased with its results in 2018, although in the second half of the year prices on the international market of non-ferrous metals decreased, which directly affects the mines in the group, resulting in lower revenues.
“After we achieved truly the best results in 2017 since our establishment, we can be satisfied with last year as well, despite lower prices on the international market of non-ferrous metals. Nevertheless, a slightly lower business profit compared to the previous year did not slow Mineco’s development programme”, said Mineco Ltd Director Bojan Popović, while presenting the results of the past year.
Mineco’s total investments in 2018 in Serbia and Bosnia and Herzegovina again exceeded $20 million, and the companies in which Mineco takes partial ownership opened about 115 new jobs.
Popović pointed out that during the previous year, Mineco opened the lead mine near Olovo in Bosnia and Herzegovina, which is the first new mine with underground exploitation in Bosnia in the last 30 years. “Then the exploitation of ore began and it is currently being stored and waiting for processing at the beginning of summer,” said Popović, adding that in addition to $4.5 million invested over the past 12 months in further development of the mine and its infrastructure, a gravity separation plant for production of lead concentrate from the ore has been commissioned as well.
According to Popović, in April this year all parts of this plant will be integrated in Olovo, after which the testing and fine tuning in production conditions will start, and the first deliveries of lead concentrate from this mine can be expected in the summer.
Mineco is in the final phase of work on the European project IMP@CT, which should result in a system of equipment and processes for enabling small scale mining. On this project, funded by the European Commission, Mineco is part of a consortium with several universities and equipment manufacturers. During the spring, the delivery of a containerload of equipment to BiH is planned, where the first field tests and production will be carried out in one part of the Olovo mine, as a test mine for this project.
“We hope that this facility will justify the idea of the project and allow the exploitation of small ore deposits of strategically important metals such as lead or antimony that are all over Europe, and that it will provide Mineco a primary access to this technology to utilize its resources for launching a few smaller mines in Serbia and BiH”, said Popović.
One of Mineco mines that is growing and developing is the Bosil-Metal mine in Bosilegrad. There is a project in a pilot phase, which examines the results of trial production of concentrates from excavated ore in order to develop a commercial flotation project.
“This mine represents a great development opportunity for Bosilegrad and we are confident that this municipality will rise from the lowest category of development when the commercial production of lead, zinc and copper concentrates starts in 2020/21”, said Popović.
As for other mines partially owned by Mineco: Gross near Srebrenica, Velika Majdan near Ljubovija and Rudnik near Gornji Milanovac have continued their good work, with positive results in the past year.
In these mines, exploratory works continued in order to ensure the future of operations. Gross, the largest mine, recorded an investment of around $3 million in development, while the Rudnik mine invested nearly $5.5 million in its production and future.
The Rudnik mine, a company of exceptional importance for the economy of the Milanovac region, can look calmly at the years ahead from the aspect of potential and capacity, Popović pointed out, adding that continuous large investments in geological research, both in Serbia and Bosnia, have led to Mineco adding a research drilling team to its team of geologists, which enables more efficient service to existing mines and new sites.
Popović also said that in the past year, the most demanding Mineco project, was the construction of a small hydropower plant on the Drinjač river in Bosnia, near Zvornik, primarily due to the extremely complex geological structure of the site. “During this year, all remaining works will be completed so that Medoš One will start delivering the first kilowatts to the Republic of Srpska’s electrical network”, said Popović.
European Metals secures offer from Krupa to acquire Cinovec project
Western Australia-based European Metals received an offer from Krupa Global Investments to purchase the Cinovec lithium deposit, which is located northwest of Prague.
Cinovec is the largest lithium deposit in Europe.
According to the firm, it did not give consideration to this indicative offer because the letter from Krupa Global Investments did not detail price, terms or conditions.
KGI has released the letter to the Czech media, but European Metals stated that it did not have any discussion with KGI over the transaction.
This offer was made on behalf of the Ceske Lithium company, which is a member of the KGI Group in the Czech Republic.
European Metals, through its subsidiary Geomet s.r.o, has secured the control of the mineral exploration licenses awarded by the Czech state.
The Cinovec lithium-tin project was bought by European Metals in 2012. The minewas closed in 1993 and then rehabilitated seven years later.
In November 2018, European Metals began geotechnical studies and finished preliminary feasibility study. This indicated a post-tax net present value of $540m.
The project has an initial probable ore reserve of 34.5 million tonnes at 0.65% lithium oxide and 0.09% tin.
The mine is expected to have an annual production of 22,800t of lithium carbonate for the first 20 years.
The mine is situated in proximity to car manufacturers and lithium ion battery manufacturers, reported Australian Mining.
In an ASX statement, European Metals stated: “The economic viability of Cinovec has been enhanced by the recent strong increase in demand for lithium globally, and within Europe specifically.”
Activists are campaigning against uranium mining in Spain
Environmental activists from Spain and Portugal have said they will create a human chain to protest against a planned uranium mine near the border between the two countries.
The Stop Uranium Platform Campo Charro group, one of those campaigning against the planned Salamanca mine, said the chain would symbolise the unity of the Spanish and Portuguese activists.
It is set to take place this Saturday.
“We want to denounce nefarious projects such as this one,” the Platform said.
Plans for the mine, which would be operated by the Berkeley Energia company, state that it would be opened in the town of Retortillo.
The Platform and other groups involved in the demonstration said the human chain would stretch between either side of the Spanish-Portuguese border.
It comes after Portugal’s parliament previously passed a motion calling on the country’s government to take all necessary measures to prevent the mining of uranium in Salamanca.
“It is logical that our Portuguese neighbours are concerned about the projects on the other side of the border,” the Platform said.
The Junta of Castilla y Leon has approved plans for the mine. The Platform claimed they signed off an environmental impact assessment without holding a public consultation.
The Junta refused to provide a new impact assessment after local opposition politicians called for one last year.
Berkeley Energia said they had established good relations with the local community in Retortillo ahead of the mine being built.
“The mine design incorporates the very latest thinking on minimal environmental impact and continuous rehabilitation such that land used during mining and processing activities is quickly restored to agricultural usage,” the company said.
BlueJay Mining PLC upgrades resource for its Greenland Dundas project as it presses ahead with PFS
The upgraded resource, which now stands at 101mln tonnes at 7.1% ilmenite, comes as the group prepares to publish a pre-feasibility study in the first quarter of 2019.
BlueJay Mining PLC has upgraded the resource for its Dundas Ilmenite project in Greenland.
The AIM-listed firm said in December that the updated JORC compliant mineral resource for the project was now 101mln tonnes at 7.1% ilmenite (in-situ), with higher grade portions at various cut off grades of 31.2mln tonnes at 10.7% ilmenite using a 3.5% cut off and 16mln tonnes at 12.9% ilmenite using a 4.5% cut off.
Ilmenite is the primary ore of titanium, a metal needed to make a number of high-performance alloys, while most of the ilmenite mined worldwide is used to manufacture titanium dioxide which is used in pigmentation, whiting, and polishing.
The new resource, which covered the Moriusaq area of the project, would replace a previous 2018 resource model and is expected to add positively to project economics ahead of the completion of an optimised pre-feasibility study .
The company also said the results “clearly” indicated “the strong possibility of a large and long-life operation with obvious expansion potential”.
Roderick McIllree, chief executive of BlueJay, said the company expected that resource updates for two other areas of the project, Iterlak and Iterlak East, would “add significant additional tonnage” to the project’s estimates.
The Interlak area estimates are expected to be updated in the first quarter of 2019, with an application for an exploitation license to be lodged in the same year.
The firm is already in offtake discussions for the whole ilmenite production at Dundas after a previous resource update in April 2018 increased the project’s estimate by 400% to 96mln tonnes at 6.9% ilmenite.
PFS expected in Q1 2019
The upgraded resource estimate comes as the firm prepares for the publication of the PFS for Dundas in the first quarter of 2019.
That is later than it originally anticipated but the PFS will include a number of engineering optimisations currently being worked on. Parts of the study will be released as they are completed but the full report will be in 2019, said the junior.
“Highest concentration of in-situ ilmenite” globally, says CEO
McIllree also says that Dundas has a distinction of having “the highest concentration of in-situ ilmenite of any mineral sands project globally” thanks in part to its geological characteristics.
“This would have been a hard rock mine…But the slow grind of the glaciers has effectively mechanically mined the material for us. Tide and wind and rain have then deposited what is a finished product on the beach over time. Its saved us the front end capex of setting up a mine there which helps a lot.”
That glacial grind has had significant consequences for the economics of production at Dundas, with McIllree saying the firm has “dodged anywhere between US$200-400mln in capex, mother nature has done our mining and concentrating for us”.
If Bluejay has the onward advance of glaciers to thank for the quality of the product at Dundas, it also has their retreat to thank for revealing the extent of the opportunity.
“Historically the project was only recognised as a small local occurrence,” says McIllree.
“But then the ice and snow melted, revealing a much larger occurrence. In 2015 we undertook a work programme that demonstrated the project could be globally significant. There are quite remarkable concentrations of the material across thirty kilometres.”
For those worried about the costs of operating in remote Greenland, McIllree offers reassurance aplenty. For one thing, there’s that initial capex dodge. But more tangibly, the project is situated near Greenland’s closest equivalent to an infrastructure hub, not far from two ports, two airports and the town of Qaanaaq, home to around 650 locals, all keen for an additional industry to start.
Even the mine camp has come pre-packaged: Bluejay has simply moved into a town that was abandoned following a change in local wildlife migratory patterns, providing a platform for accelerated implementation.
BlueJay can also count several heavyweight institutional investors among its shareholders, including HSBC, ING Bank, and FTSE 100 insurance group Prudential.
The three institutions hold stakes of around 8%, 4.9%, and 12.1% respectively.
With shares trading at about 13.9p as of 2 January 2019, BlueJay carries a market cap of around £116.4mln.
Greek Court Acquits 21 Environmental Defenders in Eldorado Gold Trial
Dimitri Lascaris: This is Dimitri Lascaris reporting for The Real News Network from Montreal, Canada.
This past October, The Real News was in Thessaloniki, Greece to report on the prosecution by the Greek state of 21 local residents charged with various criminal offenses in connection with an alleged arson at the gold mine of Eldorado Gold in Halkidiki, a pristine region of northern Greece. Eldorado is a Canadian gold mining company. Resistance to Eldorado’s mine was featured in the Avi Lewis Naomi Klein documentary. This Changes Everything. The court in Thessaloniki has just handed down a verdict in this massive criminal trial.
Now here to discuss the verdict with us is Maria Kadoglou, coordinator of Hellenic Mining Watch. She joins us from Halkidiki. Thanks for joining us today, Maria.
Maria Kadoglou: Thank you.
Dimitri Lascaris: So, Maria, what is the verdict?
Maria Kadoglou: The verdict was that all 21 residents were acquitted of all alleged crimes. It was clearly demonstrated in court that these charges against them were completely fabricated by the police. It turned out, it was revealed in court, that the evidence on which the case was based were not collected by the police, but they were collected by the security company of Eldorado Gold, which is clearly illegal. It was also demonstrated in court that the police planted the incriminating evidence in order to have convictions of the local people. And after that, the court decided to acquit them all.
Dimitri Lascaris: So this is not, I understand, the first time that Greek prosecutors have alleged serious criminal offenses against those who have engaged in resistance to the Eldorado mine. Could you tell us what has happened in prior prosecutions relating to Eldorado’s gold mine in Halkidiki?
Maria Kadoglou: Until now we have had around 500 people charged with various offenses relating to their resistance to the mine. Now, most of these cases have already taken place, and most people have been acquitted. Of course, there have been some occasions where we’ve had convictions of one year or so, but most of the decisions were good decisions. And for the others we have, we have to wait for the second degree trials.
Dimitri Lascaris: Now, there are other prosecutions pending, I understand, against local environmental defendants. What is the status of those prosecutions, and how many people are being pursued by the criminal authorities?
Maria Kadoglou: There’s one more big trial starting this December on the 19th, with 25 local residents accused of pretty much everything with pretty much the same as the previous case. Attempted homicide, arson, explosions, et cetera. We clearly believe, we believe that they will be acquitted as well.
Dimitri Lascaris: So one would imagine, nonetheless, despite so many acquittals, the fact that people are being subjected to criminal prosecution must be deterring, at least to some degree, resistance to the mine. What is the state of local resistance to the mine? Do people continue to engage in acts of resistance? And what are those acts of resistance looking like?
Maria Kadoglou: Well, yes. But you can imagine that five years of having these very, very severe charges against you is a huge. And of course these people had restrictive measures against them so they were not allowed to demonstrate. And if they were arrested for something else they would go to prison for the previous alleged offense.
So in our view these charges were all fabricated in order to stop people from demonstrating, stop people from talking, speaking out against the mining company.
Dimitri Lascaris: Well, we’ve been speaking to Maria Kadoglou of Hellenic Mining Watch about the acquittal of 21 environmental defenders charged by the Greek state with serious criminal offences or criminal accusations in the course of their resistance to the gold mine of Eldorado Gold in Halkidiki, Greece. Thank you very much, Maria, for joining us today.
Maria Kadoglou: Thank you very much.
Serbian mines prey for the largest international companies
Company Zijin, the majority owner of RTB Bor, became the new owner of the Canadian company Nevsun, which has investigation rights at the nearby Čukar Peki site.
It is one of the richest deposits of copper and gold in the world.
The Chinese company announced that the bid for the purchase of all issued shares and existing shares of Nevsun was successful. Nevsun’s shareholders have sold nearly 90 percent of the shares until final date, 28 December. Zijin has taken over all deposited shares and will pay for them 1.66 billion Canadian dollars (some 1.2 billion US dollars). Tanjug reports that Zijin has extended the period available to Nevsun shareholders to offer their remaining shares by the final date, expiring on 7 January.
“Shareholders offering their Nevsun shares in the extended period will receive the same amount of six Canadian dollars per share, which will be paid within three working days of the deadline,” the statement said.
Hence, the Chinese company succeeded in doing whatCanadian Landin failed to do last summer, whose USD 1.1 billion bid was rejected by the Board of Directors of Nevsun. They recommended that shareholders stay with the decision to reject a hostile bid to take over the Canadian competitor, but they advised them to sell their shares to the Chinese.
A future gold and copper mine, Čukar Peki, is obviously a serious prey for the serious international players. Indeed, there are very few companies that can swallow such a big bite, such as the opening of a mine at the Čukar Peki site. Because, according to a preliminary economic study, developedaccording to the method known as the Pea, the value of the Bor deposit is estimated at about seven billion dollars, Politika writes.
According to the estimates, the mining operations will bringSerbia five percent of the net revenue from the mineral resources fee, and an additional 15 percent from the tax.
The weight of gold, Bulgaria
The new gold mine in Krumovgrad boasts environmental performance and social responsibility, yet there are black spots along the path of the Bulgarian gold around the globe.
The technologies applied in the new gold mine in Krumovgrad rate among the most advanced in the world, states Lyubomir Haynov, Operation Director of the local branch of the Canadian ore mining company, Dundee Precious Metals. Konstantina Gradeva-Vassileva, the company’s Director for Sustainable Business Development, agrees: “We have learnt a lot about the environmental and social impact of mining”. For the past 15 years since Dundee extracts ores in Bulgaria, the company’s relationships with the public and authorities have truly evolved.
The turmoil at the end of the totalitarian regime ceased the operations of the Chelopech ore mine, one of the biggest deposits of gold and copper in Europe. DPM, controlled by the Canadian billionaire Ned Goodman, bought its concession rights in 2003 for USD 26 million, and in several years it scored annual sales amounting to hundreds of millions. Yet due to the stark public dissent, the company failed to expand its production in Bulgaria because of its use of cyanide technologies. The Canadians acquired instead a smelter in Namibia where they ship the Chelopech concentrate containing gold, copper, and large amounts of arsenic.
Jobs and dust
The ore mine in Krumovgrad in the Eastern Rhodope Mountain is the next phase of DPM expansion. Firstly, the locals opposed the new extractive site on their rural land. Yet the prospects of employment in a region with scarce opportunities, in addition to a cunning PR strategy and some pressure from the authorities, gradually changed their attitudes. Vasvi Ibriam, the mayor of the Sarnak village in the viccinity of the gold mine says: “It’s true, people get annoyed by the rock blasts and the dust. But we have to endure this for the jobs’ sake. In my village alone, there are already three or four men employed”. According to Vasvi, every man who wants to work now may get a job in Krumovgrad – not only at Dundee and its contractors but also at the new rubber factory or in the new big municipal projects.
Unofficially, the operation in Krumovgrad will commence in full in the spring of 2019 with the opening of the flotation factory, a couple of months delay from the initial schedule. The technology envisages lower environmental impacts: there will be no tailing pond, and the water used in the production process will be purified to drinking quality before poured back into the Krumovitsa River. “We are certainly the first ore mine (in Bulgaria) to do this”, proudly states Haynov.
The online system for environmental monitoring developed by the company reveals many cases of overshooting the allowed limits of fine particles around the mining site – yet this is the inevitable price of employment. In addition, DPM created a fund worth USD 5 million to back up the small and medium-scale local businesses. This social support might be inspired by the EBRD – last year the development bank entered the Dundee family by swapping an extended credit line for a 10-% share in the company.
No doubt, the investor’s efforts in Chelopech and Krumovgrad deserve praise, but still the Canadian company cannot turn into a saint overnight – neither in environmental nor in social or fiscal sense.
Toxic piles in Africa
In the summer of 2015, a mission of Bulgarian environmentalists visited the town of Tsumeb in Namibia to get a firsthand view of the DPM smelter situated there. Unlike Bulgaria where public communications seem to be of highest priority to the company, the management of the African branch denied a meeting with the European guests. Nevertheless, local activists assisted the mission in its inquiries, and it registered a number of setbacks during the transportation and stockpiling of the Chelopech concentrate.
Yet the biggest problem in Tsumeb turned to be the arsenic – both for the smelter’s staff and the local population. The polymetallic ores of Chelopech have a very high (over 5 %) arsenic content, and the technology used in the smelter is not suited to process them safely. According to the International Agency for Research on Cancer, arsenic and its compounds are “group 1 carcinogens”. When the high-grade arsenic concentrates from Bulgaria started to enter the Namibian smelter, the workers felt the difference and energetically protested. The authorities felt obliged to intervene, and production volumes were halved. Yet from the beginning of 2014, the volumes were not only restored to their former level but also additionally doubled.
In 2012, on the request of the union activist Oscar Kakunga (latter dismissed) a full-scale health examination of the smelter’s workers took place. 1 722 probes were taken, and in 69 % of the cases the concentration of arsenic in the workers’ blood and urine exceeded 100 μg/g. In the neighboring South Africa, the reference value for over-exposure to arsenic is 50 μg/g, yet since the exposure to arsenic is extremely hazardous, the World Health Organization holds that “a safe level of arsenic (in air) cannot be established”. The smelter’s management states that after 2014 the levels of arsenic in the workers’ urine have diminished without citing concrete numbers.
Instructive is the experience of Johannes Amutenya, now 33-years old, who has worked for some months with the Chelopech concentrate. Prior to DPM acquiring the smelter, the staff underwent health examinations every two months, but with the new owner – only twice a year. The workers received no more documents on their health status but only verbal assessment that everything is OK. Johannes decided to have an independent health check in South Africa. The doctor who examined him said,” You are too young to kill yourself with this job”.
The Bulgarian mission managed to get hold of photos of the storage site for the surplus arsenic (several thousand tons of arsenic trioxide from Tsumeb are sold to Malaysia and South Africa to be used as pesticides – a practice not allowed in the EU). Only several hundred meters from residential buildings, thousands of tons of arsenic are stored in ordinary sugar bags in the open – decaying under the African sun.
Genady Kondarev, who took part in the Tsumeb investigation, recalls, “There was a colossal quantity of toxic dust piled on the site. After a couple of years under the hat of Dundee, this facility had almost entirely used up its storage site for arsenic waste. Since the shocking results of the medical tests in 2012, we haven’t heard about newer health checks with publicly accessible results regarding the arsenic levels in the worker’s organisms”.
Slow boat to China
In addition to its low environmental standards and cheap labor, Namibia attracts foreign investors with zero tax rates. The smelter of Tsumeb lies in a Special Processing Zone, freed from corporate taxes and VAT. The Human Development Index ranks Namibia 129th in the world, yet DPM – and thus the shareholder EBRD – do not feel embarrassed by the fact that they deny the national budget the funds that might be used for healthcare or education purposes.
Until recently, the output of the smelter was brought to the market by the Louis Dreyfus Company. This huge Switzerland-based company constitutes the letter “D“ in the so-called ABCD group comprising four gigantic corporations that dominate the world’s food trade. The Metal Department of Louis Dreyfus had operations in Peru, Namibia, Australia, Mexico, China etc., and scored high profits. However, due to some strategic reasons, in the middle of 2018 this metal division was sold to the Chinese NCCL Natural Resources Investment Fund. Prior to this, Dundee Precious Metals had stated that it has a long-term trade contract with Louis Dreyfus. Most probably, the new destination of Bulgarian gold is China.
The Tsumeb smelter processes – in addition to the Chelopech concentrate – also concentrates from the El Brocal mine in Peru (they have even higher arsenic content) as well as other sources. The output of the smelter is not pure metal but “black copper” – an alloy refined up to 98.5 %, which contains not only copper and gold but also several valuable rare earth metals. It is a mystery where the final processing to marketable ingots is taking place and, correspondingly, who collects the value of the rare earths unaccounted neither in Bulgaria nor in Namibia. The only hint we get is from the corporate website of DPM stating that it supplies „refineries in Europe and Asia”.
The UNCTAD database – the United Nations body for trade and development – reveals that up to 2017 the annual copper exports from Namibia to Switzerland amounted to an average of USD 150 million, besides USD 100 million copper concentrates. This trade flow will probably turn to Asia with the selling of the metal division of Louis Dreyfus. China already buys from Namibia uranium ores and other radioactive materials worth USD 100 million per annum.
The metal flows passing Namibia evaporate in enormous global merchant companies. Yet it is clear that both producers and intermediaries use to exploit the zero tax rates and the “liberal” environmental legislation in the African country. Even the EBRD – the development bank that explicitly states its environmental and social commitments – sees nothing worrying happening between the model ore mines in Bulgaria and the shiny golden ingots in the treasury.
Black Tax Holes
Dundee is an old enthusiast of tax optimizing. For the six years between 2012 and 2017, the ore mine in Chelopech generated nearly EUR 1.1 billion incomes and EUR 380 million profits before taxes. For the whole period, the company paid the Bulgarian budget EUR 38 million in corporate taxes and EUR 30 million in concession fees. Excluding the taxes and social contributions on salaries, the state manages to collect only 6 % of the value of the gold extracted from its earth.
Moreover, it is disputable whether the real profit of DPM in Bulgaria is only EUR 380 million for six years. The company declares heavy depreciations; pays interests on loans granted by connected entities, has administrative expenses in order of EUR 100 million, there are also many other expenses that raise doubts. The issue of unaccounted rare metals was presented above.
Tax optimization gathers pace when profits leave the low-tax Bulgarian environment. The Bulgarian Trade Registry reveals that DPM uses two companies registered on the Curacao Island and another company based on the British Virgin Islands – both jurisdictions are well-known tax havens. The latter company called Vatrin Investment Ltd. is 100 % owned by a cooperative with headquarters in the Netherlands – Dundee Precious Metals Cȍoperatief U.A. According to the Dutch trade law, there are several cases when cooperatives are not obliged to pay dividend taxes, there is also an option to avoid the tax on profits.
For this scheme to be applied the Dutch cooperative must include another company registered in the Netherlands – DPM also owns such. It is worth mentioning that the rights to develop the golden deposit in Chelopech in 2003 were acquired by another Caribbean branch of the Canadian extractive company, this time abiding in the Barbados Island.
When having such an elaborate offshore network it is no wonder that in 2016, the Chelopech ore mine recorded a profit of EUR 35 million after taxes, and the mother company based in Toronto declared USD 147 million loss. The same happened one year before: the net profit from Chelopech was EUR 45 million, but that of DPM in Canada – only USD 7.6 million.
Across the seas
The ores and concentrates processed in countries with low environmental standards arrive there by ship. Millions tons of crushed rocks circle around the globe in pursuit of somewhat cheaper smelting while marine transportation emissions remain excluded from the global climate schemes. They consist far not only of carbon dioxide, but also of soot and Sulphur and Nitrogen oxides. The German Naturschutzbund calculated that marine transportation is responsible for 22 % of the world’s Nitrogen oxides emissions, and the soot for 50 % of the Arctic warming. The highest allowed Sulphur content in the ship fuels is 3 500 times above that of car fuels.
A hundred thousand tons of concentrate from Chelopech travel for 9 000 miles every year to reach Namibia, that same amount arrives in Tsumeb from other places, including the Pacific coast of South America. Europe closes its eyes not only for the accompanying contamination but also for the development impacts: poor countries specialize in delivering raw materials, the processing remains for regions with loose environmental standards, and the surplus value in the final phases is being collected by the rich. The free trade agreements of the EU just cement the inequality in global industrial development.
The Krumovgrad ores will not be shipped to Tsumeb since their arsenic content is low. Indeed, there is something different in their case. A long and hard opposition of the stakeholders at last guaranteed the acceptable quality of the DPM extractive operations. Daniel Popov, a Bulgarian NGO mining expert, said: “The management of DPM saw potential in being environmentally responsible. The right person in the right place and time was Adrian Goldstone, the DPM Sustainability Director, who saw the potential of being environmentally responsible. Krumovgrad is a lesson of how interacting with the locals and the NGOs might alter the initial business plans until they become acceptable for the whole society”.
Dundee’s Chelopech Bulgaria mine exceeds 2018 production guidance
Dundee Precious Metals’ Chelopech mine and smelter, in Bulgaria, achieved another record year of gold production, at 201 100 oz, in 2018, exceeding the company’s guidance of 190 000 oz to 200 000 oz.
Moreover, copper production of 36.7-million pounds was in line with guidance of 35-million to 38-million pounds.
Chelopech’s production performance was attributed to the company realising a higher gold grade and recoveries in the mined areas.
Further, the company’s Tsumeb smelter, in Namibia, also achieved a record year of complex concentrate smelted, at 232 000 t, in line with guidance of 230 000 t to 250 000 t.
“Chelopech exceeded expectations for the year and Tsumeb continued to ramp up throughput, delivering a strong performance,” Dundee president and CEO Rick Howes said in a statement on Wednesday.
He added that as a result of the company’s Krumovgrad project, in Bulgaria, being on budget and ready to start concentrate production during the first quarter of this year, Dundee expects to deliver considerable growth in gold production and free cash flow.
The company’s fourth quarter and full-year 2018 operating and financial results are expected to be released on February 12.
New reports press for revised terms to Armenia gold mine
If you’re looking for a revolution, sign up for notifications from your embassy. The messages pinging on smartphone screens that night in October began not long after stepping into the evening streets around the Yerevan Cascade, warning of impending demonstrations outside the Armenian parliament. To be sure, the flashing blue and red sirens and thousands of people flooding past were impossible to ignore as well, so the consulates’ SMSs came as little surprise and instead provided more than anything context to the oncoming commotion.
Earlier in the day, Armenia’s prime minister, Nikol Pashinyan, whose popular movement swept to power in April by toppling the kleptocratic rule of Serzh Sargsyan, had called on his supporters to stand against the opposition Republican Party’s calls for a dissolution of the National Assembly. The power grab was seen as a last ditch attempt by the old guard to hang on to the authoritarianism that had stifled political life in the country for nearly two decades.
The peaceful demonstration and spirit of optimism and revolution on display that October evening served as the backdrop to our visit to Armenia, where we had travelled to survey opinions about the operations of Lydian International, the largest foreign investor in Armenia whose flagship Amulsar gold mine and its chequered history has been a flashpoint of conflict across the country.
A constant source of conflict
As part of his rise to power, Pashinyan had promised to re-evaluate the terms of Lydian’s concession, which the company believes will contribute USD 185 million annually to GDP, though critics had said was a bad deal for the the country’s coffers and the environment. During our visit, there was a general sense that Armenians expected him to make good on this campaign promise.
The Amulsar mine is situated near Jermuk, a resort town two hours southeast from the capital made famous for its natural beauty, hot springs and health spas. Locals have long contended that the gold mine, which has already caused dust pollution and would use cyanide leaching technology to separate the concentrate from the ore, poses a serious threat to tourism in Armenia’s ‘little Switzerland’ and could be detrimental to Armenia’s water resources, such as Arpa river and lake Sevan.
Residents of Jermuk were not consulted during the environmental and social impact assessment in 2015 and 2016, which led the Compliance Advisor/Ombudsman of the International Finance Corporation to conclude that the impact of the mine on Jermuk’s water and tourism brand was not properly assessed.
New research sheds light on disputes
These allegations were the focal point of our visit. Together with the Armenia social NGO ‘Community Mutual Assistance,’ we went to Jermuk and the surrounding villages of Kechut and Gndevaz to conduct first-of-its-kind independent research into what local people know and think about the operations of Lydian. In addition to this sociological research, we were accompanied by biologists from the Balkani Wildlife Society in Bulgaria who were conducting an independent analysis of the environmental impact assessment prepared by Lydian as a prerequisite to begin mining operations at Amulsar.
The results of this research provide insights into the conflict between the mining company and local communities and suggest that more work on assessing the environmental and social impacts of the mine are needed, should Lydian want to secure consent from the new Armenian government. The European Bank for Reconstruction and Development is providing CAD 10.5 million (EUR 7 million) in equity to Lydian, ‘earmarked for financing of Environmental and Social Mitigation Measures,’ such as the establishment of the Jermuk National Park to offset biodiversity losses resulting from the project.
In the case of the research into the ESIA prepared by Balkani, a number of findings should be considered as part of a government’s revision of the agreement with Lydian. In particular, Balkani found that the existing assessments were at odds with the Bern Convention on the Conservation of European Wildlife and Natural Habitats. For instance, a portion of the mine is sited inside an Areas of Special Conservation Interest. This area received this designation because of a number of unique species and habitats situated in this region that could be damaged by the project, a situation which Lydian fails to address entirely in its documentation.
The sociological research found that the awareness about the social consequences of the mine is highest in Gndevaz, due in part to Lydian presence in this community and having employed a number of the villagers at its projects. Residents in Kechout and Jermuk felt less informed, and perceptions and assessments have been formed by observation, like of the dust and noise from construction, and the activists protesting against the mining.
Substantial concerns about impacts to agricultural lands and pastures were expressed by nearly three quarters of respondents, while 80 per cent were concerned about further future impacts. People related their concerns about the destruction of apricot orchards, pastures, as well as fear that fruit is covered with dust. A similar number of respondents, 85.7 per cent, expressed concerns about the potential impacts of mines on their health.
The biodiversity and sociology experts recommend that the new government in Armenia should request new environmental and social impact assessment and consultations with local communities on potential risks of harm to their environment, livelihoods and health. As a protester against the mine said “I’m sure that the government will hear us, otherwise the revolution will be useless if the government is going to treat us the way the previous government did.”
China’s Zijin Mining to raise US$1.2 billion through share issue to fund takeover of Nevsun Resources
Zijin Mining Group, China’s largest gold miner, said it plans to issue 8 billion yuan (US$1.16 billion) worth of shares in Shanghai to finance the purchase of a Canadian mining company, the biggest overseas acquisition since the company went public in Hong Kong in 2003.
The miner said in a Hong Kong filing Tuesday filing that it planned to issue 3.4 billion shares, raising 8 billion yuan to finance its 9.36 billion yuan purchase of a 100 per cent stake in the Toronto-listed company Nevsun Resources. Nevsun has a copper-gold project in Serbia and a 60 per cent stake in the copper-zinc Bisha Mine in Eritrea.
Zijin Mining said the Canadian company’s copper resource accounts for 26.2 per cent of Zijin’s present copper reserve, 18.3 per cent of its current gold reserve and 24 per cent of its zinc reserve.
The share sale proposal, pending approval by China’s securities regulator, came just one day after Nevsun said Zijin had been successful in its friendly takeover offer for the company.
Nevsun said about 89.37 per cent of the total issued and outstanding shares were tendered to the offer of C$6 (US$4.46) per share in cash by the December 28 deadline.
In November Zijin cleared the last major regulatory condition for the takeover as it won approval from China’s State Administration of Foreign Exchange and the support by the Canadian Investment Canada Act.
Nevsun’s Timok copper-gold project is expected to come online soon, while the Bisha Mine in Eritrea, is under production, generated C$23 million in the first nine months of 2018, according to the filing.
Zijin said it will finance the remaining amount of the deal by other means.
In recent years Zijin has acquired mineral assets from Africa to Australia. In August, the company spent US$1.26 billion for a 63 per cent in Serbian copper mining and smelting complex RTB Bor.