Anything for a quid. Social and environmental costs of Australia’s resources boom


Dirty Money. The true cost of Australia’s minerals boom

Matthew Benns

Random House Australia, 2011

A review

As an environmental disaster it was world-class — up there with last year’s Gulf of Mexico oil spill, and then a bit. In fact, according to some, BHP’s Ok Tedi mine in Papua New Guinea is the third largest environmental disaster ever, and the largest associated with mining. A sliding scale of environmental disasters is probably meaningless — they all threaten our future on this planet — but this one was on a grand scale.

In 1984, BHP in partnership with the PNG government began mining at Mount Fubilan in the Star Mountains on the headwaters of the Fly River. Mount Fubilan was pretty much a mountain of copper with the added bonus of a gold cap, but the inconvenience of several million tonnes of soil and rock.

The Star Mountains are among the remotest and wettest places on earth, receiving 1000 metres of rain annually on precipitous volcanic mountains. All that rain makes the Fly River a very big and important waterway. It’s not a long river, but it carries an enormous volume of water.

Earthquakes are frequent in New Guinea’s seismically active mountains, and a small one fairly quickly demolished the half-built tailing dam intended to keep BHP’s heavy metals and other dangerous mine waste out of the Fly. BHP decided it was too expensive to build a new dam, and proceeded to flush a big part of Mount Fubilan down the river — 80 million tonnes a year. What was once a mountain is now is a deep pit in the ground.

The once clear waters of the Fly turned milky brown, about 1300 square kilometres of forest are dead, the crocodiles are long dead, 90 per cent of the fish are dead and the remainder inedible because of heavy metal pollution, the livelihoods of 50,000 people and 120 or so villages are gone because the fish are gone, the boars that lived in the forest are gone and the village gardens are dead.

BHP sold out of Ok Tedi in 2002 after local landowners began court action seeking compensation. BHP settled the case for $US28.6 million and indemnity from further prosecution. The mine still operates under other ownership and is still pumping tailings down the river.

This is not a new pattern for BHP, named after the distinctively shaped Broken Hill in the Barrier Range (Leaping Crest to the Aboriginal people of the area) of far-western NSW. Broken Hill Proprietary started out in 1885 mining a rich lode of silver, lead and zinc, and pulled out in 1939, leaving a legacy of lead-laden tailings that have ever since been stirred up by every breeze to poison generations of Broken Hill children.

Like Mount Fubilan, the Broken Hill is no longer a feature of the landscape, but there are plenty of tailings dumps.

Matthew Benns, in a clear, easily read style, outlines all this and a lot more about the other side of Australia’s minerals boom — the side that’s never mentioned in the business pages of the daily newspapers, and rarely in the general news.

There’s Lihir Gold, for example, a stockmarket favourite later taken over by Newcrest Mining.  It ran one of the biggest goldmines in the world in the Louise Caldera on Lihir Island in PNG’s New Ireland province. That mine also had an inconvenient amount of other stuff mixed in with the 550,000 ounces of gold it extracted annually.

Lihir solved the problem by dumping the tailings across 60 square kilometres of deep ocean, denuding the area of most marine life.  There’s even a name and an acronym for this — deep-sea tailings processing (DSTP) — no doubt designed for eyes to slide over in an ASX prospectus. But never mind, who can sell fish, sea grass, coral and other marine life on the stock exchange?

Gold is popular since the global financial crisis. Its price has soared as stockmarket gamblers look for a “safe haven” that’s less subject to abrupt fluctuations, and Benns includes the stories of a couple of goldmining companies that also could have done better environmentally, although that didn’t hurt their stock price.

There’s Barrick Gold, which mines on the edge of Lake Cowal, a seasonal body of water in central NSW. When full, in about seven out of every 1o years, Lake Cowal is the largest inland lake in NSW, and an internationally recognised breeding ground for 227 species of bird. As well, the goldmine happens to be on a site that’s sacred to the Wiradjuri people.

Because Lake Cowal is located in a dry area, extraction of water from it is strictly regulated, but the mine is allowed to take as much as it needs. Barrick uses a lot of cyanide in processing its ore and has an unfortunate problem with massive amounts of contaminated tailings, but no doubt the birds have been warned to stay away, like the Aboriginal people whose sacred site has been destroyed.

Barrick also mines at Porgera in the New Guinea highlands, and there the tailings, 6 million tonnes of them annually, are flushed away in the Porgera-Stickland river system, staining it bright red.

The story doesn’t stop there, as Australian companies from Saskatchewan to The Philippines to various parts of Africa scour the world seeking minerals to rip out of the ground and turn into profits and tradable securities. Benn describes the Montaro oil well blowout that polluted a large area of the Timor Sea and destroyed the livelihoods of several Indonesian fishing villages. Then there’s the ongoing disaster of uranium mining in the Northern Territory, and repeated tailings dam failures in monsoonal rain.

The book also touches on matters such as the largely unknown story of fly-in, fly-out prostitution to attend to fly-in, fly-out workforces at remote sites scattered across Australia, and the effects on local towns of the increasing use of FIFO.

As Benns says, it’s a dirty story, as mining with scant respect for the environment or local residents, whether they be NSW and Queensland farmers fighting fracking, Aborigines defending their sacred sites, Indonesians or New Guinea highlanders trying to protect their lands, or Africans such as those of the village of Kilwa in the Democratic Republic of Congo, most of whom were shot down by troops called in by Canadian-Australian Anvil Mining to defend its operations.

Matthew Benns has put together a great deal of information on Australian mining companies, their dubious environmental and social records and their political methods. His information is referenced and everything I have cross-checked is accurate.

One thing is clear, the methods Benn describes make social and environmental disasters inevitable, they are not accidental, but their vast wealth means they can buy political influence and they can get away with just about anything, including murder at times.


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One Response to “Anything for a quid. Social and environmental costs of Australia’s resources boom”

  1. Ed Lewis Says:

    See also a review by Helen Lobato at Online Opinion

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