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 waste rock management continues to be the most significant short- and long-term environmental risk for PanAust. The management of acid rock drainage (ARD) at Phu Kham is a key focus. The management of tailings is significant due to: the volumes requiring management, its ARD potential and metalliferous nature, and potential for sedimentation impact. 

Purpose-built tailings storage and/or waste rock facilities are used to dispose of tailings and waste rock generated from the Phu Kham and Ban Houayxai mines. The facilities are designed and constructed using a risk-based approach that accounts for the best life-of-mine and closure management strategy.

PanAust recognises that tailings storage facilities (TSFs) can represent a material risk and therefore require wide-ranging management and governance processes to reduce the risk to as low as reasonably practicable. The key safety governance measures that are in place with regards to the management of PanAust’s TSFs include the following:

  • Daily, weekly and monthly inspections and monitoring by trained PanAust employees reporting to a site-based civil engineer.
  • Quarterly Inspections by PanAust’s corporate Tailings Engineer.
  • Detailed Dam Design for each construction period by the Design Engineer (Knight Piésold).
  • Annual Dam Safety Inspections by the Design Engineer (Knight Piésold).
  • Periodic Tailings Independent Panel Reviews (consisting of two industry-leading tailings and geotechnical specialists). The period of review is determined based on performance of the facility and planned construction activities.
  • A five-yearly comprehensive independent Dam Performance Audit was added to the audit schedules for the Company’s dams in 2016. 

At PanAust’s Phu Kham Operation, the management of ARD commenced well before mine operation, with sulphur modelling undertaken as an integral component of ore body modelling and mine planning processes. The sulphur modelling allowed for 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 ARD and is kept up to date with any relevant changes in sulphur modelling. Within the plan, waste rock is classified and managed in accordance with the following categories:

  • Blue waste rock: limestone OR non-limestone lithologies with non-acid forming potential; can be used anywhere on site
  • Green waste rock: non-acid forming potential; can be used anywhere on site
  • Amber waste rock: low acid forming potential; suitable for placement in purpose built cells in the tailings embankment wall
  • Red waste rock: high acid forming potential; deposited within the catchment of the TSF and is progressively submerged below a water cover to minimise environmental risk

On a day-to-day operational basis, mining operations at Phu Kham use a real time, Global Positioning Satellite (GPS) equipment management system (Jigsaw) to ensure that specific waste rock types are directed to the correct destination on a truck-by-truck basis.

PanAust provides high-level governance of ARD management through the ARD and Sediment Management Committee.  The Committee comprises internal management and external ARD specialists, who check that management strategies are effective in minimising ARD generation during construction and placement of waste and will continue to be effective long after mine closure.

Consultant reviews of the ARD management at both sites confirm that the programs for managing ARD risks at Phu Kham and Ban Houayxai are highly developed and are consistent with methods described in the Global Acid Rock Drainage Guide.

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’.