Sustainability_Environment_ManagingEnvironmentalChallenges_24052016

PanAust applies a consistent approach to identifying, assessing and verifying its material environmental issues through a continual review and measurement process. 

How the Company manages its ongoing key environmental challenges - tailings and waste rock, cyanide, and energy and carbon - is outlined here. 

Tailings and waste rock management

Tailings and the management of waste rock and acid rock drainage (ARD) are the most significant short- and long-term environmental risks for PanAust.

The quantity of tailings material, its metalliferous content and fine sediment nature, and the requirement for long-term, stable tailings storage facilities (TSFs) necessitates robust tailings management strategies. The management of waste rock and ARD is comprehensive due to the potential for ARD to induce acidity and dissolved metals into water which can impact on receiving environments. To effectively manage these risks, detailed planning and design is required before mine development. This, coupled with comprehensive governance during operations to limit environmental impacts to a level equal to or better than international standards, promotes beneficial post- mining land uses and reduces post mine closure liability.

 

Tailings management

PanAust operates two purpose-built TSFs, one for each of its operations in Laos. Each is designed and constructed to international standards (including the Australian National Committee on Large Dams, ANCOLD) incorporating the best available technology to account for an integrated life-of-mine and closure management strategy.

PanAust recognises that tailings storage facilities (TSFs) require comprehensive management and governance processes throughout the life of each facility. PanAust has a well-established stewardship program for its TSFs including the following:

Executive management commitment: A commitment from the Managing Director to ensure appropriate governance processes are in place and construction and operating procedures for the facilities are consistently adhered to.

Tailings Independent Review Panel (TIRP): The TIRP directly reports to PanAust’s Managing Director on material risks to the facilities. The TIRP currently consists of two industry-leading tailings and geotechnical specialists. Each year, the TIRP review includes physical inspections of the Phu Kham and Ban Houayxai TSFs, and an evaluation of the monitoring and measurement systems. The Panel reports its findings to a PanAust Tailings Review Committee reporting to the Managing Director.

Overview and quality assurance: A Principal Tailings Engineer, based in the corporate office in Brisbane, provides overview and quality assurance of design and construction activities.

Annual dam safety inspections: Annual audit of each facility completed by the Design Engineer.

Risk-based review: A risk-based review is completed annually.

Engineer of Record: An Engineer of Record is responsible for the design, construction, operation and performance monitoring.

Quarterly inspections: Quarterly inspections by PanAust’s Principal Tailings Engineer.

Inspections and monitoring: Daily, weekly and monthly inspections and monitoring by trained PanAust employees reporting to a site-based Tailings Dam Superintendent. Monitoring of seepage and embankment deformation is undertaken, as well as inspections and audit programs to ensure that the equipment is operational and working appropriately.

Detailed dam design: Detailed dam design for each construction period by the Design Engineer.

On-site laboratory: An on-site laboratory provides results for quality control and quality assurance of construction materials.

Mine Closure Plan: Final dam designs are being developed in preparation for closure. A pre-feasibility study is being completed to inform the final design and will be engineered to a feasibility study level during 2017 as part of the Lao operations closure plan.

Five-yearly comprehensive dam performance audits: A deep dive audit of tailings dam management in 2015 led to a commitment to comprehensive dam performance audits to be conducted on a five yearly basis.

 

Waste rock

PanAust’s approach to ARD management is considered leading-practice across the global mining industry. In 2016, the Company’s approach to ARD management was documented as a case study in the ‘Australian Government Leading Practice Sustainable Development Program for the Mining Industry Handbook on Preventing Acid and Metalliferous Drainage’.

PanAust proactively manages the potential for ARD from the early stages of mine planning through to operations and closure. At both Phu Kham and Ban Houayxai, the management strategy to address the potential for ARD commenced well before operation commenced, with sulphur modelling undertaken as an integral component of orebody modelling and mine planning processes. The sulphur modelling facilitated detailed characterisation of rock types based on their acid-forming potential which informed the development of an integrated ARD life of mine plan.

The ARD management plan provides strategies for the identification, control and monitoring of mine waste and is regularly updated with any relevant changes in sulphur modelling. Within the Phu Kham ARD management plan, waste rock is classified and managed in accordance with the following categories:

Blue waste rock: lithologies with non-acid forming potential and acid-neutralising capacity; can be deposited anywhere on site

Green waste rock: non-acid forming potential; can be deposited anywhere on site and is able to be used for other purposes

Amber waste rock: low acid forming potential; suitable for placement in purpose built, clay-lined cells in the TSF embankment wall to prevent oxidation

Red waste rock: high acid forming potential; deposited within the catchment of the TSF and is progressively submerged below a water cover to prevent oxidation and to reduce the potential for ARD.

On a day-to-day operational basis, mining operations use an equipment management system (Jigsaw), incorporating a real time global positioning system (GPS) to ensure that specific waste rock types are directed to the correct destination on a truck-by-truck basis.

High-level governance of ARD management is provided through PanAust’s ARD Review Committee which comprises internal management and external ARD consultants. The Committee check that management strategies are effective in limiting the potential for the generation of ARD during construction and placement of waste, and that it will continue to be effective following mine closure.

Consultant reviews of ARD management at both sites confirm that the programs for managing ARD risks at Phu Kham and Ban Houayxai are highly developed. The programs are consistent with methods described in the Global Acid Rock Drainage Guide which is sponsored by the International Network for Acid Prevention with the support of the Global Alliance 2014.

 

Cyanide management

The Ban Houayxai Gold-Silver Operation uses cyanide in the processing circuit for gold and silver production. PanAust recognises that the use of cyanide for precious metal extraction is a sensitive issue and that stringent operating and environmental controls are necessary to ensure the safe transportation, use and disposal of cyanide and cyanide-related products.

PanAust is a signatory to the International Cyanide Management Code (the Code), administered by the International Cyanide Management Institute (ICMI). The Code is a voluntary program for the responsible manufacture, transport, and use and disposal of cyanide in the production of gold.

The Ban Houayxai Gold-Silver Operation was designed according to the standards of the Code and received pre-operational certification to the Code in 2012, and was certified in full operational compliance in March 2013. As required under the Code, the mine was again audited against ICMI's Verification Protocol within three years of its previous certification by independent professional third-party auditors in January 2016.

The ICMI subsequently received and accepted the auditors’ Detailed Audit Findings Report, which found that Ban Houayxai had maintained full compliance with the Cyanide Code's Principles and Standards of Practices throughout the previous three years. The Summary Audit Report and Auditor Credentials Form are available on the PanAust page on the ICMI's website.

The operation must be externally re-audited every three years to evaluate continuing compliance with the Cyanide Code. PanAust carries out internal audits each year to ensure compliance is maintained.

PanAust recognises that the management of cyanide risks is dependent upon a trained, competent, cyanide-aware workforce. The Ban Houayxai site-based Emergency Response Team has been trained to respond to cyanide incidents. Cyanide transportation activities are undertaken by an appointed Code-certified transporter and the site continues to host cyanide-awareness sessions with communities along the Ban Houayxai transport corridor. 

Of the many elements of Ban Houayxai that were designed and constructed to exceed and improve upon Code requirements, perhaps the most notable is the plant’s detoxification circuit. The circuit produces tailings slurry that contains less than the internationally agreed safe level of cyanide for solutions discharged to the environment. As such, prior to leaving the plant and before entering the TSF, cyanide levels are already better than international water quality standards to enable discharge of excess water to the environment.

Energy and carbon management

PanAust supports the ICMM principles for climate change policy design, and recognises that minimising human-caused climate change is an important international goal. The topic is of increasing interest to many of the Company’s stakeholders given the potential business impacts particularly in relation to water availability and extreme weather events.

PanAust is committed to improving energy efficiency at its operating sites and addresses the  potential physical impacts of climate change through established operating and contingency plans. Site systems are in place to manage water risks associated with extreme weather events and PanAust has flexibility it its logistics chain with regards to haulage routes and port access. In addition, PanAust has contingency plans in place for key materials in the general supply chain.

Mitigation plans are in place to address water risks related to tailings management and the operation of the Phu Kham open pit during significant rainfall events which include appropriate engineering designs, clean and dirty water diversions, detailed site water balances, and pumping and passive water discharge systems. Sites are also equipped to monitor for inclement and extreme weather, and have established triggers to review operational plans in preparation for business continuity during these conditions. Sites are equipped with emergency power supplies and critical part stores and have well-developed emergency response plans for significant rainfall events including contingencies for managing road closures and re-establishing transport routes along the logistics routes. The Company has flexibility with regards to its concentrate logistics options with haulage routes to one port in Thailand and two ports in Vietnam. PanAust’s port facilities are sized to provide storage contingency during interruption to business. Insurance programs are in place to reduce risks associated with delays and losses due to natural risks including weather-related events. PanAust has also prepared contingency plans for key materials in the general supply chain.

PanAust’s operating sites have annual energy and carbon emissions inventories. Both sites use a combination of direct and indirect energy sources to carry out their activities, predominately diesel and grid electricity sourced from hydropower. Hydroelectricity is the major source of electricity (provided by external providers) for the processing plants. Six small-to-medium-scale hydropower projects in Laos, most of which are run-of-river producing less than 100 megawatts with comparatively small land impacts, currently supply PanAust’s operations. Under exceptionally dry conditions, PanAust may be supplied with imported energy from Thailand which supplements the Lao grid from sources other than hydropower.

As a substantial consumer of energy, the Company focuses on annual business efficiency programs that reduce energy and fuel requirements.

Each year, PanAust reports in relation to its energy efficiency initiatives and climate change risks via the Carbon Disclosure Project (CDP). For the most up-to-date details regarding PanAust’s climate change risks and opportunities, go to the CDP website.

In growing the PanAust business, it is anticipated that the Group’s total carbon emissions will continue to increase over time despite energy-efficiency improvements at each operating site. Other variables are likely to be present, including the availability of natural resources and infrastructure at each geographic location. Host-government environmental and infrastructure priorities will also affect PanAust’s ability to consider efficient and low-emission alternatives during project design and operation. The Company recognises that different approaches to mitigate emissions will be required in each host country.

PanAust is committed to identifying and managing energy and climate change risks at the Project stage. Prefeasibility studies are required to consider conventional and renewable power options and operations and logistics are required to consider resilience strategies for the physical impacts of climate change.

Lessons learnt from Laos are being incorporated into the design of operational and logistical aspects of the Frieda River Project. Power studies for the project have considered renewable sources, including hydropower which is being incorporated into the integrated storage facility. Resilience for the transport route is material given the Project's remote location, which is accessed by a riverine logistics corridor. Baseline studies have been conducted to select construction and operating strategies for the logistics corridor and river and ocean port locations that provide flexibility during variable weather conditions.

Details of any environmental issues that PanAust has addressed during each calendar year are published in the Company’s annual ‘Business Review and Sustainability Report’.