A Cyanide Story (Part Two): Putting the Code to the Test
Read part one of A Cyanide Story here.
By Doug Hadfield, MiningandMoney.com
Since the International Cyanide Management Code (ICMC) was ratified in 2002, just fifteen gold producers have become signatories. According to Dr Terry Mudder, who was part of the UNEP group that created the code, this number is misleading because these fifteen represent more than 50% of the global production of gold.
“Most of the major gold mining companies have become signatories to the Cyanide Code and have either already or are in the process of certifying their individual operations,” Mudder told me.
Mudder believes that had the Cyanide Code been in place in 2000, and had the Baia Mare mine been certified, the massive spill in Romania likely would not have occurred.
“Essentially, all of the incidents that occurred in the past were preventable had the operations been certified under the Cyanide Code and followed its Principles and Standards of Practice,” Mudder said.
It is true that no major incidents have occurred since the code was ratified; however not everyone agrees on the reason for this.
In an email to MiningandMoney.com, Vice President of the International Cyanide Management Institute (ICMI) Norm Greenwald noted, “It is impossible to say whether [the reduction in spills] is due to the Code, society’s growing environmental awareness, or simple good fortune.
Also, John Carrington, ex-Vice Chairman and Chief Operating Officer of Barrick Gold Corp., conceded that “As an industry, we realize that no Code or set of practices can guarantee that incidents cannot or will not occur.”
For the ICMI, this could be a Catch-22: The ultimate success or failure of the code lies in its ability to prevent catastrophes like Baia Mare. If, as Carrington suggests, spills cannot be prevented, it’s likely that public pressure to end cyanide use - at least in mining - will grow. Already, cyanide use is banned in Montana, the Czech Republic and Costa Rica. Several other nations, including the EU, severely restrict its use.
Moreover, it’s not just the major spills that cause public consternation - 21 of the 34 spills listed by the Rainforest Information Centre occurred after 2002. Although most were of questionable significance, each new incident sends a gaggle of NGOs - not to mention the communities effected - into paroxysms of I-told-you-sos.
One signatory to the ICMC is Golden Star Resources (TSX: GSC, AMEX: GSS), a company exploring and mining in developing regions of Africa and South America.
Ironically, just months after signing on to the ICMC in January 2006, Golden Star reported a second cyanide spill at its Bogoso mine in Ghana (the first occurred in 2004).
“The spillage was located within minutes and the pipe shut down within an estimated 30 minutes of the leak starting,” a press release from the company stated. Golden Star reported that a total of five to eight cubic meters of tailings had “sprayed” out of the tailings impoundment.
The village of Dumase reported numerous illnesses and a number of fish killed in the Aprepre River as a result of the spill. Since neither the company nor the Ghanaian government performed any empirical tests on the affected ecosystem, the actual extent of the harm done has never been established. One Oxfam spokesperson did tell me, “If you referred to [the river] as a stream it would not be inaccurate.”
In spite of this, the spill landed the company in court with the village of Dumase, which is seeking compensation for the spills. The plaintiffs argue that Golden Star acted negligently and have demanded that the company commission health investigations.
A number of NGOs and mining critics were quick to point out that Golden Star was a signatory of the code when the spill occurred. MiningWatch Canada published a statement from Oxfam, WACAM, FIAN, EARTHWORKS and itself that argued, “The Cyanide Code is meaningless if a company with a bad track record of cyanide management, such as Golden Star Resources, is not immediately and thoroughly audited.”
However, Vice President of ICMI Norm Greenwald explained that, while unfortunate, the spill at the Bogoso mine occurred during the three-year interim period between Golden Star becoming a signatory to the code and the required audit of its projects.
“While there can be no reasonable expectation that an operation would be in compliance with the Code prior to its initial certification audit, ICMI does require notification from signatory companies of any significant cyanide incident occurring at their operations regardless of whether or not they have yet been certified,” Greenwald said. “When the operation undergoes its certification audit (due by March of next year), the auditor will evaluate whether the facility has implemented the procedures necessary to prevent a reoccurrence.”
In other words, any cyanide mishaps that occur prior to Golden Star’s certification audit next March do fall within the purview of the ICMC, but the significance of that purview prior to the audit is for the record only.
From the outset, the authors of the cyanide code were aware of the need to attract a majority of junior producers - not just majors - to sign on and make the changes necessary to prevent further spills.
ICMI had to adopt a “kidd gloves” approach to attracting juniors, so as not to scare them off with prohibitive expectations and costs. The minutes from a 2001 United Nations Environmental Program (UNEP) meeting (which later formed the ICMI) conceded, “…there were concerns that to impose a heavy auditing burden whether in terms of quantity of work or cost would drive smaller and developing country companies away from the Code. If the Code is to attract them it must assist and encourage them to improve their management, not impose untenable burdens.”
Golden Star’s VP of Sustainability, Dr. Mark Thorpe, was reluctant to put a dollar amount on the costs incurred so far by the company to get “up to code”, but said much of the work “would have been required anyway.”
“As part of ICMC implementation, we have improved our cyanide storage, mixing and handling facilities,” said Thorpe. “It should be noted that although we take legal possession of our cyanide only when it is delivered to the mine, we take a proactive approach in training the communities along the transportation route. At the Bogoso processing plant, we have moved from receiving cyanide in bags to the direct delivery of cyanide in tanks, so eliminating a lot of waste generation and the need to directly handle cyanide at the site.”
From what Thorpe says, it appears that the costs of implementing the code’s principals and practices are substantial, but not necessarily prohibitive.
Greenwald told me that ICMI is actively trying to attract smaller gold producers to the code. “…We have recently been in contact with at least three additional companies with production in the 100,000 to 200,000 ounce per year range that we expect will soon become signatories,” he said.
Meanwhile, existing signatories continue along the process to certification. In January this year, Golden Star completed a “pre-audit evaluation” of its mines with a third-party cyanide consultant. Although the company has until March next year to complete its final audits, Thorpe says the company will carry out certification audits in 2008.
Once audited, Golden Star can become ICMI-certified with either of two grades: In Full Compliance or In Substantial Compliance (these are published online at www.cyanidecode.org).
With a Substantial Compliance grade, a project is granted temporary certification - the company must develop a Corrective Action Plan and become fully compliant within one year of the audit date.
A third grade, Not in Compliance, requires that the company address and rectify all shortcomings found by the auditor prior to the expiration of the three year period.
To date, none of the signatory mining companies has received a “Not in Compliance” grade. Only one, South Africa’s AngloGold Ashanti, received the lesser grade of “In Substantial Compliance”, because the company was purchasing cyanide from a manufacturer that was not yet fully compliant. The issue has since been resolved.
As more gold producers around the world sign on and implement the ICMC standards and practices of cyanide management, a picture of greater organization emerges. However, time will tell if the code is enough, or if other involuntary measures are required to prevent catastrophes like Baia Mare in Romania.
If the ICMC is a code whose time has come, it has taken a great deal of time and work to build and get the necessary stakeholders on board. The code is now six years old and has fifteen signatories comprising 50% of the world’s gold production. To the gold industry and the authors of the code, this is - as Dr Mudder says - “a major accomplishment and a first of its kind for the international mining industry.”
Greenwald pointed out that the ICMI has received support from a number of public and private groups, including the G8, International Finance Corporation and the World Bank.
Meanwhile, communities like Dumase in Ghana and other spill sites will be conscious of their water for a while to come.
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