Case Study- GRML

SHEC Integrated Management System

Challenge:

The Gold Ridge Project is located on Guadalcanal, one of the five larger islands that comprise the South Pacific nation of Solomon Islands.  The project lies approximately 30 km south east of the capital Honiara.  A mining lease was granted under the Mines and Minerals Act 1990 on 12 March 1997 and is valid for 25 years, with an option to renew for a further 10 years and is administered via a Mining Agreement signed on 7 March 1997. Construction of the mine by Gold Ridge Mining Limited (GRML, then a subsidiary of Ross Mining NL, an Australian based company) commenced in 1997, followed by commencement of gold ore processing and production in August 1998. 

On 6 June 2000 the mine was overrun by militants and was placed under a force majeure provision which is provided for both in the Mines and Minerals Act (amendment 1996) and the Mining Agreement.  The arrival of the Regional Assistance Mission to the Solomon Islands (RAMSI) has brought back normalcy and stability and has led to a restoration of peace and law and order.  A complex sequence of events followed the closure of the mine.  These included an insurance claim for loss as a result of the closure, and several changes of ownership in subsequent years.

Following its premature closure on 8 June 2000, the mine was ransacked and artisinal (illegal) alluvial miners took the opportunity to re-establish themselves at the mine. 

The then mine owners, Australian Solomons Gold Limited, sought funding from banks and the International Finance Corporation (IFC, the commercial lending arm of the Works Bank).  The challenge faced by Graham A Brown & Associates was to provide the documentation required by a diverse group of international lending institutions that would satisfy all of their needs.

Strategy:

Graham A Brown & Associates conducted an initial Environmental and Social Audit using a standard protocol developed for the ANZ Bank (see above).  This resulted in a number of recommendations that were addressed by GRML.  We were then commissioned by GRML to develop an Integrated Management System (IMS) including Environment, OHS, Community Relations and IMS (common) procedures, and an IMS Implementation Action Plan.  IFC funding required the development of a number of documents that were placed on public display including the IMS, a Resettlement Action Plan (2000 artisinal miners had to be moved off the mine site), a Community Relations Management Action Plan, a Stakeholder Engagement Plan and an Economic Development Action Plan (see Solomons Gold for copies of these documents).

Results:

GRML was sold to Allied Gold Limited in February 2010, following which funding was provided by the lending institutions including IFC which took an equity position in the mine.  The first gold was poured from the $150 million refurbished mine in March 2011.

At the end of August 2012, the assets of Allied Gold were acquired by St Barbara Limited, an Australian listed company, including Gold Ridge Mining Limited. In April 2014, St Barbara shut down the Gold Ridge mine following flash floods. St Barbara employees were subsequently banned by the Solomon Islands government from re-entering the country. Gold Ridge was sold by St Barbara for A$100 to a landowner-controlled company GoldRidge Community Investment Limited (GCIL) in May 2015, including all legal and rehabilitation liability. The Solomon Islands government's Disaster Management Council declared Gold Ridge a "disaster" area on July 7, 2015.

Follow-up:

Following the sale of GRML to Allied Gold Limited, we continued to assist GRML throughout 2010 with environmental and community relations support specifically to comply with IFC’s 13 requirements which included development or supervision of:

  1. GRML’s Operating Manuals
  2. Environmental Management Plan
  3. Local Stakeholder Communication
  4. Voluntary Principles on Security and Human Rights Training
  5. Biodiversity Management Plan
  6. Monitoring of the Tailings Storage Facility (TSF)
  7. Compliance with the International Cyanide Code (including a Code audit – Graham Brown is a Lead Auditor under the Code)
  8. Monitoring of the Resettlement Action Plan and the Economic Development Action Plan (EDAP)
  9. Mine Closure and Rehabilitation Plan
  10. Additional Geohydrological Investigations
  11. Developing Community Programs from the EDAP
  12. Safety, Health, Environment and Community Relations Auditing
  13. GRML Management Capacity

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