Ok Tedi Mine

The Ok Tedi Mine is located near the headwaters of the Ok Tedi, a river in Papua New Guinea. Mine operations are responsible for one of the worst human-induced environmental disasters in the world.

The Ok Tedi Mine is operated by Ok Tedi Mining Ltd (OTML) which is majority owned by the PNG Sustainable Development Program Limited (PNGSDPL). Prior to 2002, it was majority owned by BHP Billiton. BHP Billiton is a Australian mining company with properties in Australia, Latin America and Africa. It had a market capitalization of over US$100B in 2005. [1]

The mine opened in 1984 to exploit what was believed to be the largest deposit of copper in the world, as well as substantial gold deposits. [2] The town of Tabubil (population 10,000) was built to serve the mining operation. The mine operators discharge 90 million tons of contaminated tailings, overburden and mine-induced erosion into the river system each year. [3] In 1999, BHP admitted that the mine is an ecological disaster. [4]

The discharge caused widespread and diverse harm, both environmentally and socially, to the 50,000 people who live in the 120 villages downstream of the mine. Chemicals from the tailings killed or contaminated fish, which subsequently caused harm to all animal species that live in the area as well as the indigenous people. The dumping changed the riverbed, causing a relatively deep and slow river to become shallower and develop rapids thereby disrupting indigenous transportation routes. Flooding caused by the raised riverbed, left a thick layer of contaminated mud on the flood plain the plantations of taro, bananas and sago palm that are the stables of the local diet. About 1300 square kilometers were damaged in this way. Although copper concentrations in the water are about 30 times above the standard level, it is still below the World Health Organisation (WHO) standards.

The reasons for this disaster are complex. The original plans included an Environmental Impact Statement (done by an Australian Consultancy) that called for a tailings dam to be built near the mine. This would allow heavy metals and solid particles to settle, before releasing the clean ‘high-water’ into the river system where remaining contaminants would be diluted. But the plan was seriously flawed and in 1984 an earthquake (common in the area) caused the half built dam to collapse. Afterwards the company continued operations without any dam, initially because BHP argued that it would too expensive to rebuild it. Subsequently, the cash-strapped PNG government decided a dam wasn’t necessary, in the wake of the closure of the Panguna mine.

But the seeds of conflict were sown before the mine even begun operations. Almost all of PNG’s land is held under a complex system of native title, with ownership divided amongst a huge number of small clans, while the central government retains control over how resources that lie under the ground are used. The 2000 members of the clan that held ownership of the land on which the mine would be built were included in the formal negotiations. They got cash, jobs, infrastructure (schools, health care, etc.), but the indigenous communities who live downstream from the mine were not consulted, and received none of the benefits.

In the 1990s the communities of the lower Fly Region sued BHP and received US$28.6 million in an out-of-court settlement, which was the culmination of an enormous public-relations campaign against the company by environmental groups. As part of the settlement a (limited) dredging operation was put in place and efforts were made to rehabilitate the site around the mine. However the mine is still in operation and waste continues to flow into the river system. BHP was granted legal indemnity from future mine related damages.

The Ok Tedi Mine is scheduled to close in 2010. Until that time two thirds of the profits go into a long-term fund to enable the mine to continue to contribute to the PNG economy for up to half a century after it closes. The balance is allocated to current development programs in the local area (Western Province) and PNG more generally. [5]