U.S. raises serious concerns over OT's environmental, social impact

Wednesday, 13 March 2013 11:47

World number two miner Rio Tinto PLC has suffered another setback at the Oyu Tolgoi copper mine in Mongolia after the United States refused to vote on World Bank funding to expand the massive copper-gold project in Mongolia.

Operator Turquoise Hill Resources, which is controlled by Rio Tinto, has already spent more than USD 6 billion on the mine in the south Gobi Desert, where it hopes to start commercial production by June. The additional USD 4.5 billion debt package being negotiated with the International Finance Corporation (IFC), the World Bank's private sector arm, the European Bank for Reconstruction and Development and several private institutions is needed to develop Oyu Tolgoi to full capacity with an underground mine to compliment the open pit.

The Inter Press Service reported Friday the U.S. decision to abstain from voting would not derail IFC funding of the giant mine, but would add further pressure to make substantial changes to the controversial project.

“[T]he United States' review of the Environment and Social Impact Assessment (ESIA) for the project has raised concerns in a number of areas,” a position paper, dated last February but publicly released this week, states.

“First, the United States believes the ESIA has gaps in critically important information, particularly related to the operations phase of the project and mine closure... Second, the ESIA does not provide a sufficiently detailed analysis of associated facilities and cumulative impacts.

“In particular, the policy statement notes that the impact assessment, which currently focuses almost exclusively on the project's construction rather than its potential operation, covers this planned expansion ‘only lightly.’ The document also draws attention to longstanding complaints from local herder communities, currently pending before a World Bank Group auditor. The U.S. says it is ‘keenly interested in the outcome” of this review.’