US objections hurt Rio's Mongolia push
RIO Tinto has run into further headwinds at the $US12 billion ($11.7bn) Oyu Tolgoi copper and gold mine in Mongolia after the US raised questions about environmental and social issues, providing more ammunition for the project's opponents.
The US Treasury said it had abstained from voting on whether the World Bank and the European Bank for Reconstruction and Development (EBRD) should help fund the mine because the mine's environmental and social impact assessment (ESIA) was not up to scratch and there were concerns about an associated coal-fired power station.
The US also threw a spotlight on the plight of camel and goat herders around the mine who had been forced to relocate.
The US position will not have a direct effect on the $US900 million of loans the World Bank's International Finance Corporation is providing as part of a $US4bn funding package for the second stage of Oyu Tolgoi.
That financing package was approved late last month by the IFC board, which consists of 25 directors representing member nations, without the US vote. But the position has done Rio no favours at a time when the Anglo-Australian miner is trying both to blunt Mongolian government calls for a greater stake in the big mine and to soothe local concerns about the negative effects of Oyu Tolgoi.
In a statement, the US Treasury said environmental policy concerns and legislative mandates meant it would not vote on the IFC finance.
"The United States believes the ESIA has gaps in critically important information, particularly related to the operations phase of the project and mine closure," Treasury said in a position statement dated late February but reportedly released last week.
"The ESIA does not provide a sufficiently detailed analysis of associated facilities and cumulative impacts, notably concerning a coal-fired power plant that will likely be needed to provide reliable power for the project.
"Also, the planned expansion in the project's mining capacity is covered only lightly in the cumulative impact assessment."
Neither Rio nor Turquoise Hill, the Rio subsidiary building the mine, would comment.
In 2010, the US, the world's biggest per-capita greenhouse gas emitter, abstained from voting on an IFC loan to fund coal plants in South Africa because of the potential effect on climate and the World Bank's stated commitment to be a leader on climate change.
It alluded to this in last week's statement, urging the World Bank and EBRD to push for a stronger analysis of the potential for putting renewable energy in the supply mix and additional commitments to reduce emissions at Oyu Tolgoi.
While not passing judgment on the relocation of herders, the US said it was "keenly interested" in the outcome of an IFC study into herder complaints.
The US also criticised the time it took to bring in the agencies.
"The timeline and complexity of the project, and the relatively late entry of IFC/EBRD when construction was already well under way, have created challenges for IFC/EBRD engagement, particularly on environmental and social issues," the statement said.
It has been suggested the statement was a protest at the IFC not being brought into the project earlier than May 2010.
The US Treasury said it had abstained from voting on whether the World Bank and the European Bank for Reconstruction and Development (EBRD) should help fund the mine because the mine's environmental and social impact assessment (ESIA) was not up to scratch and there were concerns about an associated coal-fired power station.
The US also threw a spotlight on the plight of camel and goat herders around the mine who had been forced to relocate.
The US position will not have a direct effect on the $US900 million of loans the World Bank's International Finance Corporation is providing as part of a $US4bn funding package for the second stage of Oyu Tolgoi.
That financing package was approved late last month by the IFC board, which consists of 25 directors representing member nations, without the US vote. But the position has done Rio no favours at a time when the Anglo-Australian miner is trying both to blunt Mongolian government calls for a greater stake in the big mine and to soothe local concerns about the negative effects of Oyu Tolgoi.
In a statement, the US Treasury said environmental policy concerns and legislative mandates meant it would not vote on the IFC finance.
"The United States believes the ESIA has gaps in critically important information, particularly related to the operations phase of the project and mine closure," Treasury said in a position statement dated late February but reportedly released last week.
"The ESIA does not provide a sufficiently detailed analysis of associated facilities and cumulative impacts, notably concerning a coal-fired power plant that will likely be needed to provide reliable power for the project.
"Also, the planned expansion in the project's mining capacity is covered only lightly in the cumulative impact assessment."
Neither Rio nor Turquoise Hill, the Rio subsidiary building the mine, would comment.
In 2010, the US, the world's biggest per-capita greenhouse gas emitter, abstained from voting on an IFC loan to fund coal plants in South Africa because of the potential effect on climate and the World Bank's stated commitment to be a leader on climate change.
It alluded to this in last week's statement, urging the World Bank and EBRD to push for a stronger analysis of the potential for putting renewable energy in the supply mix and additional commitments to reduce emissions at Oyu Tolgoi.
While not passing judgment on the relocation of herders, the US said it was "keenly interested" in the outcome of an IFC study into herder complaints.
The US also criticised the time it took to bring in the agencies.
"The timeline and complexity of the project, and the relatively late entry of IFC/EBRD when construction was already well under way, have created challenges for IFC/EBRD engagement, particularly on environmental and social issues," the statement said.
It has been suggested the statement was a protest at the IFC not being brought into the project earlier than May 2010.
Comments
Post a Comment