Massive Mongolian mine endangers nomads’ water, way of life

October 12, 2014 Posted by otwatchweb

From: https://beta.cironline.org/reports/massive-mongolian-mine-endangers-nomads-water-way-of-life/

This story was published with GlobalPost.

KHANBOGD, Mongolia – Ichinkhorloo Buya scooped fresh water into the camels’ trough and waited for them to return. The whooshing water always beckoned the animals, with their sharp sense of hearing, home.

But this time, they were nowhere to be found. Her children raced off across the bumpy moonscape of the Gobi Desert on motorbikes in a frantic search. They eventually found the camels huddled around an old rusty well. There was no reason the camels should congregate there.

But they heard something the men didn’t – an underground flow of fresh, cold water.

That sound meant something had gone awfully wrong: The precious underground water that sustains the herders’ fragile existence was flowing down into the brackish aquifer controlled by a booming copper and gold mine that’s rapidly changing daily life in Mongolia’s Gobi Desert.

This land of nomads boasts one of the world’s fastest-growing economies, thanks in part to that massive Oyu Tolgoi mine. It alone is expected to account for up to one-third of the country’s gross domestic product and deliver much-needed infrastructure and good jobs.

But as the mine scales up, the operation that’s now led by mining giant Rio Tinto has struggled to live up to its promises of world-class environmental standards. The mine pledged, for example, to leave herders’ scarce water sources untouched.

While company officials say the problems haven’t had a major impact on locals’ water, herders say that since the company built the wells, the land and their own wells have gotten drier.

Brian White, a senior adviser at Oyu Tolgoi, said the company continues to strive to meet or exceed both Mongolian and international standards.

“We have demonstrated progression toward meeting the commitments we have set,” he said in an email.

The mine has put itself directly at odds with a traditional way of life that’s already facing the strains of drought and climate change. Mongolia has warmed more than any other country in the last century, nearly 4 degrees Fahrenheit in 70 years.

Grazing land is disappearing. Wells are drying up. Plants that survived years of drought now are withering. Herds of camels are dying. The changes have altered basic life here, sparking an exodus of traditional herders from the dry, dusty plains to the shantytowns of the capital city, Ulan Bator.

“I would say this is the beginning of a disaster,” said Ravdaudorj Khayandorj, a south Gobi herder near the mine. “Not many people are left. They’re all fleeing to the north.”

About a quarter of the country’s nearly 3 million people live at the edges of the capital in yurts they brought with them from the increasingly uninhabitable countryside. The former herders have no running water or sewage system. But they do have a view. On days when the air isn’t choked with coal smoke, they watch tract housing and office space spring up amid the last generation’s severe Soviet housing blocs. They count the cranes on the horizon. They hope for construction work.

Oyu Tolgoi’s pit mine in Mongolia’s Gobi Desert is set to expand several times its current size.

Credit: Jargal Byambasuren for CIR

 

Nomads are increasingly abandoning the countryside for a stationary life in yurts at the edges of the capital, Ulan Bator.

Credit: Rachael Bale/CIR

 

Danzanshadov Enkhsaikhan, an activist and chemical engineer, checks one of Oyu Tolgoi’s cascading wells.

Credit: Rachael Bale/CIR

 

An investment firm valued Oyu Tolgoi’s mineral deposits at $300 billion.

Credit: Jargal Byambasuren for CIR

 

Growing demand for copper

Before it was a thriving mine, Oyu Tolgoi was little more than a hill in the vast desert.

Bits of green copper glinted in exposed rock, and the herds of nearly a dozen nomadic families grazed on grass and drank from a natural spring. The families relied on the milk, meat and hair of the camel to scratch out a living.

More than a decade ago, geologists realized the mineral deposits could be worth billions. One investment firm valued them at $300 billion. But to get the metals, a mining company would need massive amounts of water.

Neighboring China’s booming construction industry has fueled the demand for copper, in particular, which is used in everything from electrical wiring to plumbing and telecommunications. It’s also a key component in green energy products like hybrid cars and solar panels.

Water is not easy to come by in the Gobi. With as little as 2 inches of rain a year, an ephemeral river and hand-dug wells, the nomads couldn’t afford to share their water.

The mining company needed to find its own water. For that, it drilled exploration wells hundreds of meters deep.

The company had to build wells carefully to ensure the shallow water, so vital to the herders and already in short supply, would be protected. To get rights to the water it hoped to discover, the company in charge of the mine promised to uphold international environmental policies and first-rate development standards.

For example, in order to get financing from the European Bank for Reconstruction and Development, the company pledged to abide by the lender’s policies. One of its water standards includes demonstrating that the mine’s water supply wouldn’t have a negative impact on the water upon which locals depend.

In 2003, hydrogeologists made the discovery that made the mine possible – a perfect aquifer named Gunii Hooloi. It was far too deep for locals to access and too salty to be drinkable even if they could.

By 2009, Rio Tinto was about to take control of Oyu Tolgoi. Before it did, though, it needed to sign an investment agreement with the Mongolian government. Facing a $6 billion price tag to build the mine, investors wanted assurances that regulations and taxes would remain stable.

Negotiations, which had been going on for years, were just months away from concluding when word first surfaced of the leaking water in the desert. Oyu Tolgoi made no public statements on the wells. Several nomads said Oyu Tolgoi told them everything was fine. The government and Rio Tinto signed the agreement in October 2009.

Then in 2010, Oyu Tolgoi was preparing for a press event to show off its facilities. A local leader and chemical engineer named Danzanshadov Enkhsaikhan emailed the company. He threatened to bring reporters to hear the water cascading down the well shaft.

The response he got included an internal note, suggesting the company was as concerned about bad press as it was about water supplies.

In a note to staff, Samand Sanjdorj, Oyu Tolgoi’s vice president, proposed plugging the wells with concrete. It wouldn’t stop the cascading completely, but it would curtail the leakage significantly, he wrote.

Plus, “at least no one will hear that some water is leaking down with a noise,” Sanjdorj wrote. “I can imagine that if the press media comes to the bore and hear the cascading noise we will be in very bad situation.”

Improperly built wells

An hour’s drive from the small village that’s the herders’ central meeting place, a rusty tube sticks out of the desert’s sandy dirt. Nearby, a taller rusty pipe with a concrete base keeps watch like a miniature lighthouse.

Every nomad in these parts seems to know how to find these little tubes. Nomads have masterful orientation skills. They use the trajectory of the sun and the mountains in the distance to navigate a landscape with few visible roads and no landmarks other than clumps of brittle brush every few feet.

The tubes became a famous point of interest once word spread that the wells were making noise.

On a scorching hot day in July, Enkhsaikhan knelt down next to the tube. It wasn’t making any noise. But that wasn’t a good sign, he said. It suggested the shallow water the herders rely on was gone.

The tube touches several aquifers at different levels as it descends hundreds of meters into the sandstone and clay.

When companies build exploration wells that touch different water sources, like those outside Oyu Tolgoi, they must be sealed with impermeable material. This ensures water from a shallower source cannot cascade into a deeper one.

The contractor didn’t build those seals at Oyu Tolgoi’s wells. The construction plan shows only gravel where an impermeable barrier should be.

A “technological mistake,” Oyu Tolgoi’s vice president called it.

At least five other wells were cascading, too, a specialist brought in by the government later confirmed. Rio Tinto blames its drilling contractor, RPS Aquaterra, saying the company constructed the wells incorrectly.

But Rio Tinto should have been able to adequately oversee the work of its contractors, said mining expert Paul Robinson of the Southwest Research and Information Center, a New Mexico-based nonprofit focused on natural resource protection.

“What they did completely defeats the purpose of what was committed to and agreed to,” he said. “It is really bad performance.”

Bruce Harvey, a consultant for Rio Tinto, said the water loss is minimal. He compared it to “the width of the hair on your head compared to the size of this room,” during an interview in a mine classroom that would fit about 40 people in desks.

There are no public scientific studies or data that show how much water was lost.

White pointed to a company report that says the cascading does not have a “measurable impact” on the shallow aquifers upon which the herders rely.

Even so, the shallow and deep aquifers now appear to be connected, according to an independent 2013 audit. That can cause the contamination of the freshwater aquifer if the cascade reverses, a problem that’s potentially as serious as water loss.

Herders like Khayandorj said that since the exploration wells went in, plants that had survived years of drought have died.

“Yes, there were two to three years of severe drought,” he said, sitting in his yurt over bowls of salty milk tea. “But right after they set up those wells, families had to move away because of changes in the grass.”

Two wells he once used now are dry. He told Oyu Tolgoi, which has promised to find a new water source for any herder with a dry well. The company has dug several new, deeper wells for other herders. But in his case, the efforts didn’t work.

“They came. They dug with their machinery,” he said. “Nothing. It’s dry.”

Khayandorj and his family spent the entire summer, usually a time of rest for nomads, setting up temporary camp, constantly on the move for sufficient grass and water for their herds.

The nomads have suffered other affronts during Rio Tinto’s mine development. The company replaced a natural spring that was a place of worship with what looks like a man-made drainage ditch. It also dug up sacred elm trees, according to the U.S. Agency for International Development.

Lkhamdoorov Battsengel’s family, along with 10 others, used to live and graze their herds on pastureland of the Turquoise Hill, as the area is known. His family alone had 600 sheep and goats, 100 camels and dozens of horses and cows. When the mining company fenced in its land, it forced the families to relocate.

The land where Battsengel resettled couldn’t sustain his herds. He is down to 100 animals in total.

He’s now started a nonprofit environmental organization called Gobi Soil to influence Oyu Tolgoi’s environmental policies. It has banded with bigger nonprofits to file formal complaints with the International Finance Corporation, which is considering a $1.4 billion financing package to develop the mine further.

“We still have time to turn things back,” he said.

Battsengel now supports his family by collecting trash for Oyu Tolgoi.

Frontline Defenders: World Cup 2014 Campaign – Sukhgerel Dugersuren

June 17, 2014 Posted by otwatchweb

OT Watch executive director, Sukhgerel Dugersuren named a ‘Frontline Defender’

Front Line Defenders launches World Cup campaign in Brazil and Worldwide

See also: http://frontlinedefenders.org/node/26175

 

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia. Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks. After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector. Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity. To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others. You can write a message of solidarity here. Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup. – See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Foreign Mining, State Corruption and Human Rigths in Mongolia

June 10, 2014 Posted by otwatchweb

Global Research report on Foreign Mining, State Corruption and Human Rights in Mongolia

Report by Keith Harmon Snow, Global Reach

“Packed with distortions and outright lies, Mongolia’s privatized former state media
called them the ‘enemies of Mongolia’. On 16 September 2013, the leaders of
Mongolia’s Fire Nation (Gal Undesten in Mongolian), an environment and human rights
coalition, organized a mass protest in front of the Mongolian Parliament.
Decades of grassroots organizing to establish environmental protections were at risk:
on September 16 the Great State Khural (State Parliament) gathered with intentions to
dismantle the so-called ‘Law With A Long Name’ (LLN).”

Project Complaint Mechanism (PCM) Letter

May 13, 2014 Posted by otwatchweb

April 22, 2014

 

Dear Namsrai, Sukhgerel and herder Complainants from Khanbodg and Manlai soums,

 

We are writing to update you on the status of the Complaint you submitted to the PCM in 2013.

 

As you may know, PCM received a new submission from Complainants dated 1 April 2014 that provided further justification and clarification to supplement Complainants’ request for a Compliance Review. The submission has been registered as an addition to the original complaint, and was posted on the PCM website on 15 April 2014. The submission is now part of the official complaint, along with the two road complaints filed by herders of Khanbogd and Manlai soums in 2013.

 

The supplement references a broader range of issues than was provided in the original complaint. Consequently, according to the PCM Rules of Procedure, the Management and the Clients (Oyu Tolgoi and Energy Resources) will be required to revise their previous responses to the Complaint, considering both the original submission and the information contained in the supplemental letter. The PCM will then be able to finalise the Eligibility Assessment Report accordingly, taking into account the additional information provided by the Complainants and the responses from Bank management and the Clients.

 

PCM has asked the Bank and the Clients to submit their official revised responses to PCM by May 30, 2014. PCM will then consider these responses in addition to the supplement submitted by Complainants and finalise the Eligibility Assessment Report by the end of June.

 

We recognize the eligibility determination has taken much longer than expected and very much appreciate your patience through this lengthy assessment process.

 

Kind regards,

Anoush and Susan

OT Watch statement on the environmental, social, and economic impacts that Oyu Tolgoi Poses to local residents

May 7, 2014 Posted by otwatchweb

A major reassessment of the investment in the health, livelihood and
natural resources of the people living around OT is needed to insure
that they are not victims of OT’s impacts but survive those impacts
and sustain their community beyond the life of the mine.

Tayan Nuur Iron Ore Project

April 29, 2014 Posted by otwatchweb

Lake Tayan Iron Ore project Summary of a forthcoming report

Summary of a forthcoming report
TAYAN NUUR (LAKE TAYAN) IRON ORE PROJECT
March 6 – 11, 2014
OT Watch
Ulaanbaatar
Beginning of 2012 EBRD agreed debt financing of up to 30 mio. US$ and equity financing of up to 25 mio. US$ for the Mongolian mining company Altain Khuder LLC for the development for the Tayan Nuur iron ore mine. The project was environmentally categorized as “B” project under the assumption that environmental and social risks can be mitigated through appropriate commitment to good environmental and social practices. Part of the justification for the financing is that this is part of a broad approach in support of the sustainable development of the Mongolian mining sector and that it will improve standards, such as transparency and disclosure as well as corporate, environmental and social management practices.1
In March 2014 a team, consisting of OT Watch, Lawyers for Environment and the Council of Natives of Tseel Soum, visited Tseel Soum of Gobi Altai Aimag2 in Mongolia in order to
a) verify complaints of violations of human rights by Altain Khuder LLC in its Tayan Nuur project area;
b) carry out a survey of mining affected local community’s knowledge and awareness of the EBRD standards and policies;
c) respond to the request of Lawyers for Environment to provide information on the EBRD safeguards policies and the PCM mechanism to the local government and affected households of Tseel soum.
1 http://www.ebrd.com/english/pages/project/psd/2011/39581.shtml
2 Aimag – province, Soum – small town, Bagh – smallest administrative territorial unit
This is the executive summary of a forthcoming report presenting the findings of this March 6-11, 2014 initial fact-finding mission.
The mission included visits to the Gobi-Altai Aimag capital Altai, Tseel Soum and Derstei Bagh. The team held individual interviews as well as group briefings and survey taking meetings with the Aimag governor, chairs of Aimag, Soum and Bagh representatives, residents of Tseel, herders in Derstei and Bayangol, Tseel Soum doctor and customs, environment, land and specialized inspection inspectors.
The mission found that the project is violating several of EBRD’s safeguards:
 PR 1: Environmental and Social Appraisal and Management – The EBRD is financing a company, whose environmental impact assessment report was found inadequate in terms of meeting international standards, including EBRD’s own requirements. The “Environmental and Social Review and Action Plan” for the Tayan Nuur Iron Ore Mine carried out by ERM (Environmental Resources Management) states: “The EIAs do not meet EBRDs Performance Requirements with respect to:
• Ecological impact assessment;
• Disclosure of project information and consultation is not documented;
• Assessment of the impacts of the project’s water use and measures to minimise water use.
• Social impact assessment.”3
 Local administration institutions have limited to no capacity to ensure environmental protection, enforcement of law and transparent participatory decision-making. Residents and local administration expressed feelings of marginalization in decision-making on this project. The local administration has no power over a company that has not implemented the environmental protection plan, not built the promised black-top road or local development projects. Any attempt to enforce requirements ended with a lawsuit filed by the company against local government offices, public officials and individual residents.
 PR 2: Labour and Working Conditions – Local administration reports frequent fatal accidents at the mine. The Governor reports 10 deaths at the mine in the past year and half. The 2013 Aimag Police reports contains only three cases of fatal accidents, which led to investigation.
 PR 3: Pollution Prevention and Abatement – According to the reports of local administration and herding community, the only pollution prevention they are aware of – which was observed by this mission – is halting production in anticipation of any inspection as a way to pretend there is no pollution. The company stops production several days ahead of any inspection, clears waste around the mine site and disburses dust suppressants. When the mine is in operation people reported that they do not see the sky or anything around to that matter. There is black dust from the mine and road dust from their trucks transporting the ore. The trucks not only drive off road damaging the soil cover creating more dust but also do not have covers over the ore. This is largely affecting visibility, causing traffic accidents and contaminates soil and water.
o Snow around the mine area is heavily contaminated with fine black dust, which penetrates into soil when it melts. Herders fear that this process of melted snow in the soil could be contaminating shallow aquifers from which they drink. Approximately 30 households, who have lost access to water from the community well, are currently drinking melted snow. See Photo below.
o This mission has brought samples of snow and melted water for laboratory testing. As of writing this summary we are waiting for the results.
PR 4: Community Health, Safety and Security – There is little to no expertise and awareness among local community or Soum administration officials about the health impacts from the air, soil and water contamination by an iron ore extraction project or a mining projects in general. The mission found already severe air, soil and water contamination.
 PR 5: Land Acquisition, Involuntary Resettlement and Economic Displacement – Mining projects in Mongolia’s less watched remote areas are advancing without adequate assessment of possible environmental and social impacts, with little to no mitigation measures put in place for the safety of local communities. For example mining displaces and resettles local nomadic communities paying a nominal fee as compensation without replacement of land and water access.
o Physical displacement: Altogether 22 herding households have been moved off their winter camps under the so-called “resettlement program”. No land has been provided for resettlement. Herders are living on the land of relatives without official title to use of such land.
3 Environmental and Social Review & Action Plan, ERM, p.4 https://docs.google.com/file/d/0B4fCEp0znFy1cUpmNE9hM3dHRXc/edit?pli=1
o Economic displacement: An unspecified number of herding households has lost access to pasture and water resources. More are threatened to be moved off. No assessment of impact on community pasture and water resources has been done. Altain Khuder LLC has bulldozed some winter camps and threatens to do so with other camps if herders continue complaining about the quality of pasture and water. The discussion with local government made it clear that they have no information on how to handle a relocation situation. They were not aware of any responsibility and EBRD standard requirements to safeguard sustainability of living space and livelihoods of their residents.
 PR 7: Indigenous Peoples4: Nomadic herders are mobile, land-based people dependent on the pastures as key production and livelihood natural resource. They are carriers of this old traditional way of life seemingly engaged in a subsistence level economic activity. However, the livestock sector is composed of these nomadic herders, which is counted and reported in official statistics as representing 30% of the country workforce. Lack of protection of their rights to pasture drives thousands of herders out of business and straight into a category we now define as domestically displaced persons. Herders should had therefore been classified as IP and treated accordingly.
 PR 8: Cultural Heritage: As stated in the ESIA report for EBRD, Altain Khuder and the EBRD due diligence team decided that there was no cultural heritage affected by the project. The local community argues that the company trucks drive off road causing serious damage to their traditional Naadam festival horse race range, which is a loss of opportunity to enjoy and preserve cultural heritage.
o This mission argues that loss of access to pasture – the principal production asset of nomadic pastoralists is a loss of opportunity to live the traditional way of life and pass on this cultural heritage to the next generation of nomadic herders.
 PR 10: Information Disclosure and Stakeholder Engagement – A survey among 50 respondents and discussions with all people met reveals a complete lack of knowledge at the Aimag and Soum levels about the EBRD and its safeguards policies. The local administration and community had no knowledge about the EBRD financing Altain Khuder LLC and the Performance Requirements, which the company is required to implement in project operations. This includes a lack of awareness about the objective of the Bank to assist its clients in achieving adequate performance standards.
o Threat of use of force and intimidation: Interviews showed that there is no understanding of the purpose and process of stakeholder engagement. It was reported that the company does ask what the needs are but then turns around and files lawsuits claiming that anything the company had to supply to the community was forced out of them. The amount of fear and hopelessness among local community members was a feature not present in other mining affected communities in the country.
o Use of law enforcement to intimidate local community: Altain Khuder exercises a form of intimidation and harassment that is not only distressing but also time and resource consuming: The criminal lawsuits filed against people who complained or provided information to any institution involve criminal investigations which force the charged individuals to travel to Ulaanbaatar for frequent interrogations at their own cost. Currently there are seven individuals who were under investigation and now are being acquitted by the prosecution. Four of the seven people are local public officers in charge of Soum public health, education, Bagh administration and a cooperative. It isn’t clear what the next steps are in this case as there were several such acquittals in the past and the company kept taking them back to court. Official documents of these lawsuits are available in Mongolian language at the Lawyers for Environment. The Prosecution has turned down the claims for lack of substance.
o Disclosure of information: While the company website contains the “Environmental and Social Review and Action Plan” which includes some harsh criticism on the environmental impact assessment and proposes corrective action, the website remains silent on the fulfillment of these corrective action. Further, additional information on the extraction technology employed, mine development plan, operations management plans, environmental and social protection programs or reports of any kind are missing.5 There is also no information on the company management, members of BoD, owners or investors.
4 32. Indigenous Peoples are often closely tied to their customary lands and its forests, water, wildlife, and other natural resources, and therefore special considerations apply if the project affects such ties. While these lands
may not be under legal ownership pursuant to national law, use of these lands, including seasonal or cyclical use, by communities of Indigenous Peoples for their livelihoods, or cultural, ceremonial, or spiritual purposes that define their identity and community, can often be substantiated and documented.
5 http://www.altainkhuder.mn/?langid=2
All information available in the local community is that this is an open pit iron ore mine, which process ore at the mine in its 5 concentrators and exports to China via the border port at Burgastai. The most current information on the production capacity states that Altain Khuder LLC plans to build a sixth concentrator but has no ESIA or approvals for this action. The report of the Aimag Environmental Inspector on the company’s 2013 Report on Environmental Protection Program includes a list of activities not implemented but reported as implemented and a recommendation to formalize the process of building a 6th concentrator. According to the inspector this is an activity the company is planning but has not submitted any technical documents or impact evaluation reports. However, local herders state that the construction has already begun.
The findings of the FFM suggest that the objective of EBRD to contribute to sustainable mining in Mongolia hasn’t been reached so far and that the mitigation of environmental and social problems hasn’t been especially successful so far. Nor does it seem that committing Altain Khuder as company to good environmental and social practices has worked out yet very well. We therefore make the following
RECOMMENDATIONS
1. Carry out an assessment of the Altain Khuder LLC’s relocation program and its implementation. Assist with re-design of the program and its implementation.
2. Follow up on the petition from Tseel soum herders to EBRD requesting assistance with regaining access to water. The petition was delivered by OT Watch to EBRD Resident Representative on March 15, 2014.
3. Provide technical assistance to the local government, herding families in the EBRD relocation policies and standards leading to development and implementation of a satisfactory relocation and livelihood monitoring scheme. Support the local government in monitoring the companies activities to prevent them from causing the environmental harm on water, air and soil that it does apparently now.
4. Use EBRD’s influence to stop the company from harassing, suing and intimidating people trying to claim their rights.
5. Make sure that the information about EBRD’s involvement and the following rights for affected people is broadly publicized in the Mongolian language.
6. Apparently the categorization as “B” project, with environmental and social impacts that can easily be mitigated was over-optimistic, as the various problems raised in the report show. The categorization should thus be reviewed. This is a large size iron ore open pit mine, which should fall under item 14 of Annex A describing “open pit mining of large amounts of metal ores or coal”.
7. Inquire of EBRD about action taken to ensure that the customer knows its regulations and has developed a capacity to implement them. Recommend that EBRD develop and implement policies to this end.
General view of the Tayan Nuur iron ore mine.
General view of Tseel soum
A deep trench encloses a huge area of over 2.000 hectares around the mine and cuts off pasture land.
Black ore dust in the pan of melted water.
The Tayan Nuur company well is fenced in and guarded facility.

Environment Pays Price for Infrastructure Inefficiencies

March 23, 2014 Posted by otwatchweb

Originally published by EurasiaNet.org

Reposted from: http://www.eurasianet.org/node/66014

October 5, 2012
By Pearly Jacob

Mirage-like, a slinky piece of asphalt appears on the horizon after hours of driving across the dusty Gobi Desert. What’s coming into sight is the only paved surface for miles around. Yet many trucks are driving alongside the new highway, not on it.

In southern Mongolia’s mineral-rich hills, mining companies – foreign-run and local alike – are having trouble sharing something that should be a no-brainer: the roads. Despite the region’s remoteness, now two more roads are being built parallel to the new highway. They’re within spitting distance of each other – all heading through the same valleys and over the same hills towards China. And it’s the local nomadic herders paying the price.

Energy Resources, a private Mongolian firm, built the one existing road from its coal mine in Tavan Tolgoi – the world’s largest untapped coking coal deposit – some 245 kilometers to the Chinese border at Gashuun Sukhait. When it opened in 2011, herders in the vicinity welcomed the promised relief from dust stirred up by the constant traffic of coal trucks to the border. But with so many trucks still running on the bare earth, and construction seemingly nonstop alongside the new road, the air is just getting worse, residents and environmentalists complain.

That road was built on a 10-year build-operate-transfer concession agreement with the government, permitting Energy Resources to charge tolls on third-party users until handing the rights over to the state in 2021. But drivers working for neighboring mines say the toll of 180,000 tugriks (about $130) per load is exorbitant. One driver explains why he can’t afford to drive on the road: “We’re given 200,000 tugriks to deliver our load to the border and come back. If we pay the toll, there’s nothing left for us,” he said. To evade the toll, he drives on dirt tracks parallel to the new paved road.

A spokesperson from Energy Resources would not discuss the toll rate. In an email exchange, however, he defended the toll scheme and said the paved road still saves other companies money on fuel, time, and vehicle wear. Energy Resources has also recently signed an agreement with the government to build a railroad along the same route.

Running parallel to the Energy Resources road is a yet-unpaved road being built by a subsidiary of a private Mongolian company called Ajnai Corporation. A 2011 report published by USAID, Washington’s aid arm, raised concerns about Ajnai’s intention to build the road to avoid the Energy Resources toll. One problem, the report said, is that “local governments have the authority to construct their own roads, so there is no coordination.”

One hundred kilometers further south, the Oyu Tolgoi copper mine — a joint venture between Canada’s Ivanhoe Mines, British-Australian-owned Rio Tinto and the Mongolian government — is building yet another road, which will run alongside the Energy Resources road to the same border checkpoint at Gashuun Sukhait. The three roads crisscross each other at times but mostly run parallel. If all three are paved, this will mean over 500 kilometers of surfaced roads on this single, sparsely populated route. By comparison, in 2010, according to UN figures, Mongolia – a country roughly the size of Western Europe – had less than 2,600 kilometers of paved roads in total.

These routes bisect wildlife corridors between two adjacent national parks, the Small Gobi Special Protected Areas.

“Counting the proposed railroad, this will mean four parallel roads. Wildlife in this region, particularly the khulan [Mongolian wild ass] and gazelle, have already been affected by mining activities. When the roads are built, their migration routes will be cut off by not just one, but four dangerous crossings,” said Batsukh Choijonst, an ecologist at the park headquarters in Khanbogd. He said he asked government officials to find a way to limit the number of roads, but never got a response.

When asked if there was a way to collaborate with Energy Resources to improve the capacity of the existing paved road and share it, an Oyu Tolgoi spokesman said building a new road was part of its promise to the government.

Watchdogs feel the government is not doing enough to promote infrastructure efficiency. “We think it’s the government’s responsibility to fix its policies. You cannot allow every mine to have its own road. … It’s ridiculous,” said Sukhgerel Dugersuren, director of Oyu Tolgoi Watch, a non-governmental watchdog group.

Experts working on transportation development in other parts of the country also admit concern. “In building any linear infrastructure one would want to ensure there’s rational planning to avoid duplication of routes to minimize impact on the environment,” said Shane Rosenthal, deputy country director of the Asian Development Bank.

For herders affected by the dust, paved roads are petty compensation. At a camp site about two kilometers from the Oyu Tolgoi road construction, a local goat and camel herder, Dambadorj Mukhbayar, noted that the roads are fragmenting pastures and creating unnecessary dangers for his animals: ” Oyu Tolgoi is starting to pave the road now, after bringing in heavy equipment on dirt roads all these years. How can the new roads compensate for the damage already done?”

Leading Mongolian lawyer dismissess sentence given to Munkhbayar

February 25, 2014 Posted by otwatchweb

Reposted from: http://www.transrivers.org/2014/1066/
29 January 2014

Rivers without Boundaries finally obtained proper English translation of the  CRIMINAL CODE OF MONGOLIA  .

 According to this UN-approved copy the articles, according to  which Munkhbayar and each of his his friends were sentenced on January 21 to 21 year in prison, have the following titles:

Article 81. Act of terrorism

Article 177. Banditry-“zandalchlah” (see legal definition of this “zandalchlah”after the article)

Article 185. Illegal acquisition, preparation, keeping, carriage, distribution and

manufacture of firearms, ammunition and explosives.

However, they were fully cleared from accusations based on  Article 149. Extortion of property, because they apparently did not force money out of mining company.

January 22 press-conference at Zuuny Medee

January 22 press-conference at Zuuny Medee

 

The RwB representatives have declared on the first press-conference on January 22  that the sentence is absolutely disproportional to the deeds of protesters, and soon we learned that lead experts in Mongolia share our concerns and are even more radical in their judgement than NGOs. Zuuny Medee Daily on January 24,  presented an interview  taken by By Ch. Ul-Oldokh from the prominent  Academician Lawyer S. Narangerel regarding the 21 year and 6 months’ imprisonment sentence delivered by the court on the leader of “Fire nation “Ts. Munkhbayar and his team. Here we present translation of relevant parts done by Sukhgerel Dugersuren (OT Watch\RwB Mongolia). After the interview we provided text of relevant articles of the Criminal Code.

 

 

 

- The longterm imprisonment sentence delivered by the court on for Ts, Munkhbayar and team has shocked the public. What do you think about this court decision?

S. Narangerel-The court has delivered an inexplicably “inhumane” sentence in the opinion of right-mindedpeople in Ts. Mukhbayar’s case,which does not contain the elements of a grave crime against public security such as the crime of “banditry”.

I will not hide that I think that the court which delivered this sentence is not court where right or wrong is weighed but political tool that carries out repression and stamp on acts.

-Clause 177.2 of the Criminal Code which stipulates that subjects charged with a terrorist act under the clause shall be sentenced to 20-25 years of imprisonment.  That is what the court has applied?

S. Narangerel- I just said the court has applied this sentence in the Ts. Munhkbayar case when there is not element of a crime that is described as “banditry”.

-Why do you think so, can you elaborate?

S. Narangerel-Legislators defined the key element of “banditry” as direct or indirect act of forcing a public office or official to deliver or refrain from deliver  a certain decision.

Article 16 of the Criminal Code requires that a criminal offence have an element of a serious threat to society. Some decision-makers submitted a draft legislation that will derogate or weaken “the law with the long name”. A fight to stop this draft is all that took place here. (see THE SHORT HISTORY OF THE LAW WITH LONG NAME) (2009-2013)

The purpose of “the law with a long name” is to prevent land destruction, especially in headwaters and fragile areas, that will benefit the for profit interests of individuals. There is no way an attempt to stop an amendment that would make such a law weaker or derogate its implemention should be interpreted as a threat to society. This public interest demand is in fact in full conformity with the fundamental rights and interests of the Mongolian people.

In addition to this the Criminal Code stipulates that the crime should not only contain an element of demanding a public office or official to deliver or refrain from a certain decision but also should include an element of use of force or threat to use force that creates fear and panic in society, which did not happen in this case.

-You just mentioned use of force that creates fear in society did not happen in this case. Under the Criminal Code what is the definition of that use of force or threat to use force that creates fear in society?

S. Narangerel-Use of force that kills large numbers of people, causes harm to their health, kidnap, arson that shocks society. Ts. Munkhbayar team has not caused any damage to life or health of anyone. They did not set fear in people by threatening to use or shooting at the public.

The fall session of the parliament was not even disrupted by this event. There was no damage caused to other people’s property. That is why there was and is no fear in the society. On the contrary, the public has received this act of showing fire arms as a last means left in their attempts to protect the environment and natural resources, a fight of courage and will. The clause of the Criminal Code defined as “banditry” is essentially a terrorist act, a crime of terrorism.


-You mentioned that there was no element of “terrorist act” in the Ts. Munkhabayr case. How should the appellate courts consider this case?

S. Narangerel  - Judges, prosecutors and investigators’ salaries are financed by taxes paid by citizens. The taxpayer tasked them to pacify the criminal and protect the innocent . They do not pay them to suppress the innocent and encourage the criminals. Therefore the court should abide by the fair justice rules and acquit the case based on the lack of elements of the alleged crime as stipulated in the Criminal Procedure Code. If it is too embarrassing for the court to acquit in such a manner, they could use Clause 16.2 of the Criminal Code stipulating that “An act or omission which, though formally containing signs of a criminal act specified by the Special part of the Criminal Code, poses no social danger by virtue of its little significance, shall not be qualified as crime”.

-How do you define “insignificant”?                   

S. Narangerel-It means that the intent was insignificant and caused no harm or damage.

- So no punishment at all?  Ts. Munkhbayar after all did walk on the government compound with fire arms in his hands?

S. Narangerel-One should look up the  stipulations of “illegal possession of fire arms” in the Criminal Code or the Administrative Law and see if there is a provision for an administrative penalty.

-What is the punishment for carrying fire arms illegally?

S. Narangerel-The highest sentence is 5 years of imprisonment.

-You are very critical of the new draft Law on Crime submitted by the Cabinet. The Munkbayar case seem to support the position that the letter of law, its definitions in Criminal Code need to be straightforward, clear and simple for everyone to understand and interpret?

-I think that the fact that the court sentenced Ts. Munkhbayar team to 21 years and 6 months of imprisonment will trigger some thought within the society. The 2002 Criminal Code was not a good code.

ATTACHMENT: Relevant Paragraphs from the  CRIMINAL CODE OF MONGOLIA

 

Article 6. Principle of Justice

6.1. Punishment and other measures of criminalliability shall correspond to the nature and

degree of the social danger of the crime, the character of the culprit and circumstances of the

crime.

6.2. A culprit shall be subjected to criminal liability once only.

 

Article 16. Concept of Crime

16.1. Culpable acts and omissions subject to the criminal liability specified in the Criminal

Code which are socially dangerous shall be recognized crimes.

16.2. An act or omission which, though formally containing signs of any action specified by

the Special part ofthe Criminal Code, poses no social danger by virtue ofits little

significance, shall not be recognized a crime.

 

Article 17. Classification of Crimes

17.1. Crimes shall be classified as follows according to the nature and degree of their social

danger and gravity of the punishment to be imposed:

17.1.1. minor;

17.1.2. less serious;

17.1.3. serious;

17.1.4. grave.

 

Article 81. Act of terrorism

81.1. Encroachment on the life of a state or public figure committed in connection with

his/her state or public activities with the view of destabilizing the public order or influencing

the decision taken by the government bodies or preventing political or other public activities

shall be punishable by imprisonment for a termof 11 to 15 years.

81.2. Assassination of a state or public figure withthe view specified in paragraph 1 above

shall be punishable by imprisonment for a termof 15 to 25 years or the death penalty.

Article 149. Extortion of property

149.1. Demand to transfer property or the right of ownership, or to performany actions of the

property nature under a threat of violence in respect of the victimor his/her close relations,

spreading of slanderous or libelous information about the victimor his/her close relatives,

damage or destruction of their private property or the property in his/her custody or under

guard, which could potentially cause a real damage shall be punishable by a fine equal to 251

to 300 amounts of minimumsalary, incarceration for a termof more than 3 to 6 months or by

imprisonment for a termof up to 3 years.

Article 177. Banditry “zandalchlah”

177.1. Arson, blast of explosives, poisoning and other similar actions or threatening to do

such with the purpose of organizing an armed band with a view of attacking state or public

enterprises, institutions, organizations or individuals as well as participation in such bands and

in attacks committed by themshall be punishable by imprisonment for a termof more than 10

to 15 years.

177.2. The samecrime committed by a recidivist, an organized group, a criminal organization

or if it has entailed human death another grave consequence shall be  punishable by

imprisonment for a termof more than 20 to 25 years or the death penalty.

 

Article 185. Illegal acquisition, preparation, keeping, carriage, distribution and

manufacture of firearms, ammunition and explosives.

185.1. Illegal acquisition, preparation, keeping, carriage, distribution and manufacture of

firearms(other than hunting), ammunition or explosives shall be punishable by a fine equal to

31 to 50 amounts of minimumsalary or by incarceration for a termof 1 to 3 months.

185.2. The samecrime committed repeatedly, by a group at an advance agreement, by an

organized group, as well as illegal manufacture offirearms, ammunition and explosives shall

be punishable by imprisonment for a termof 2 to 5 years.

Civil Society Review of the Oyu Tolgoi audit and Operational Management Plans

December 3, 2013 Posted by otwatchweb

For a PDF of the document click: CSO review of the OT OMPs final

November 13, 2013

 
The Oyu Tolgoi (OT) copper/gold mine in the South Gobi aimag of Mongolia, which is one of the International
Finance Corporation’s (IFC) largest and most complex infrastructure investments, poses a significant
environmental and social risk to the local community of Khanbogd soum in the South Gobi, as well as to the
country at large. As presented in our collective submissions before the Board approval in February 2013,1 the
Project’s ESIA was incomplete and retroactive, a situation that was partially remedied with the recent, but much
delayed, publication of the project’s Operational Management Plans (OMPs).
While we are pleased that the plans, as well as the April 2013 audit of the project, have finally been published,
we are concerned that the OMPs and the audit fail to address many of the key issues we flagged to the IFC and
the European Bank for Reconstruction and Development (EBRD) back in February. In the absence of an
opportunity for formal public comment, we take this opportunity to provide some initial thoughts regarding the
audit and the OMPs and rearticulate the concerns we share with the impacted herder community in Khanbogd.
We ask the Board to hold disbursement until it can ensure that (i) critical components of the OMPs, such as the
Biodiversity Monitoring and Evaluation Programme and Water Monitoring Plan among others, and other
unreleased reports, such as the Aquaterra groundwater monitoring report, are disclosed and an opportunity for
public comment is provided; (ii) the ongoing processes related to the CAO complaints on the compensation
package and Undai River diversion and the EBRD Project Complaint Mechanism complaint on roads and dust
impacts are more effectively taken into account; and (iii) herders are guaranteed access to clean water, clean
air, and adequate pastureland, which is dependent on the previous two asks. We also ask that a clear process
and timeline for reviewing the OMPs be established, especially since the OMPs envisage the expansion of blockcaving
and Gunii Hooloi water abstraction north of the existing indicated areas.
These key asks are supported by the following observations on the disclosed audit report and OMPs, as well as
the most recent updates from the communities themselves. As a reflection of our previous recommendations,
these observations relate to seven areas of concern: (1) OT’s failure to properly implement important social and
environmental commitments; (2) water scarcity; (3) the Undai River diversion and replacement of the Bor Ovoo
Spring; (4) Stakeholder Engagement and impacts on herder livelihoods; (5) waste management and mine
closure; (6) the proposed coal-fired power plant; and (7) biodiversity.

1. OT’s Failure to Properly Implement Important Social and Environmental Commitments

  • The audit found a total of 108 instances in which OT had failed to comply with its own social and environmental commitments since September 2012, more than half of which (64 in total) OT has still failed to address.2
  • It is clear from the audit that while OT has addressed a substantial number of the least critical compliance issues, it has failed to fully address nearly 90% of the non-compliance issues that, according to the auditors, are “reasonably likely” to cause negative impacts, material damage or even irreversible harm to sensitive resources.3
  • With regard to the OMPs, we fear that if such a pattern continues, OT may fail to properly implement the commitments outlined in the OMPs in a timely manner, with resulting serious, negative impacts on the herders and the environment of the South Gobi.

2. Water Scarcity

  • The audit confirms that OT has not adequately responded to declining water levels of several herder wells.4
  • The audit confirms the existence of several “cascading” wells that “indicat[e] possible cross connectivity” between the shallow aquifers used by herders and the Gunii Hooloi aquifer used by OT.5 The planned mitigation is to abandon the wells once permission is obtained from local authorities, but neither the audit nor the OMPs discuss repairing or replacing affected herder wells.
  • The audit does not include a comprehensive audit of OT’s water balance – its use and reuse of water – and while the OMPs commit to future external audits of the site water balance, there is no indication that comprehensive reviews of the monitoring results will be conducted regularly or made public.6 Regular auditing of OT’s water balance is vital to understanding OT’s impact on water scarcity in the region, as well as whether it is fulfilling its water conservation commitments.
  • The Water Monitoring Plan, described as “[t]he principle procedure” for implementing OT’s water management plans,7 is still not available for review. The release of this document is critical, as the available OMPs do not address the impact of toxic leachate on surface and ground water sources that improper waste rock management may cause.8

3. Undai River Diversion and Replacement of the Bor Ovoo Spring

  • Although the OMPs indicate that the Undai River diversion will not be completed until Q3 2014,9 the diversion is already in place. The audit confirms that OT made changes to the diversion project without properly notifying lenders or adequately considering impacts to biodiversity.10 Neither the audit nor the OMPs mention how findings of the independent expert panel convened under the CAO process to investigate impacts of the Undai diversion will be integrated into future management plans.
  • The audit confirms that OT’s interim Bor Ovoo spring replacement does not fulfill OT’s commitment to create a replacement spring that mimics the ecological function of the original.11
  • Herders report that construction of the permanent replacement spring has not been completed due to the company’s inability to demonstrate that the current proposed design can replicate the original spring’s important ecological service of preventing soil and water contamination by flushing/cleansing animal droppings from around the spring and downstream areas. As Governor T. Buyan-Ulzii stated, the local government will not issue the land permit until the herders are satisfied with the proposed design of the artificial spring.

4. Stakeholder Engagement and Impacts on Livelihoods

  • The audit verified the resolution of grievances submitted by herders to OT, but it did so without attempting to find out whether herders were satisfied with OT’s “resolution.”12 The same problem exists regarding the auditors’ statement on resettled households.13 Similarly, both the audit and the Stakeholder Engagement Plan praise OT’s consultation practices while only briefly acknowledging the complaints raised about this issue to the IFC, the CAO, and the EBRD.14
  • The OMPs note that OT selected an 11 member panel to help develop and implement the Pastureland and Livelihood Improvement Strategy,15 but it is unclear if and how OT took measures to avoid conflicts of interest in selecting panel members; neither the TORs for the panel nor the list of panel members has been disclosed. The Strategy also fails to explain how the panel will draw on the findings generated by the investigation of the Undai diversion impacts being undertaken as part of the CAO process.

5. Waste Management and Mine Closure

  • The audit is critical of OT’s failure to put in place effective methods to sort or segregate different types of waste rock, saying that OT’s methods “did not reflect a precautionary approach to the management of these materials.”16 OT must relocate stockpiles and do additional sampling/testing per the recommendations of the auditors.
  • The Integrated Mineral Waste, Acid Rock Drainage and Dump Management Implementation Plan, which would presumably address some of the auditors’ concerns, is not yet available.
  • The Mine Closure Plan, dated June 2012, is too conceptual and lacks detail. For instance, the tailings dam cross-section is shown as a conceptual drawing, rather than as built.17 To be relevant, the plan must be updated as facilities are constructed.

6. Coal-fired Power Plant

  • The OMPs scarcely mention the proposed coal-fired power plant and do not identify a timeline for the Power Plant ESIA.18 The OMPs fail to commit OT to a comprehensive study of the combined impacts of a captive coal-fired power plant and the mine. It is unacceptable to issue a supplemental ESIA for the coal plant, which will lead to critical decisions being made before the full impacts, particularly impacts on the scarce water supply, are known.19
  • While OT has pledged to do a full alternatives analysis, the documents still appear to assume that the power will come from a new coal plant.20

7. Biodiversity

  • Fundamental components of the Biodiversity Management Plan (BMP),21 such as the Biodiversity Offsets Management and Biodiversity Monitoring and Evaluation Programme (BMEP), are still not available, and will not be available until 2014 and 2015, respectively.22
  • There are no data supporting many of the key mitigation measures proposed in the BMP. For instance, baseline data for the BMEP should have been collected long before construction and operations commenced but was only scheduled to begin in Q2 of 2013.23
  • The targets proposed in the BMP are unrealistic or highly improbable. For instance, the target of eliminating wildlife deaths attributable to OT does not outline any incentives for the target to be maintained or for reporting of the number of incidents, nor does it plan for the chance that wildlife deaths may increase.24 To comply with the ESIA’s adoption of the precautionary principle in assessing biodiversity impacts,25 OT must develop contingency plans to address the possibility of missing BMP targets, especially since the audit indicates that OT is behind in its commitments to install wildlife underpasses on the unfinished OT Gashuun Sukhait road.26

For more information, please contact:
Sukhgerel Dugersuren, Executive Director, OT Watch, otwatch@gmail.com
Sarah Singh, Accountability Counsel, sarah@accountabilitycounsel.org
Jelson Garcia, Bank Information Center, jgarcia@bicusa.org
Sarah McNeal, Bank Information Center, smcneal@bicusa.org
Fidanka Bacheva-McGrath, CEE Bankwatch Network, fidankab@bankwatch.org
Richard Harkinson, London Mining Network, research@londonminingnetwork.org
Nicole Ghio, Sierra Club, nicole.ghio@sierraclub.org
Paul Robinson, Southwest Research and Information Center, sricpaul@earthlink.net

 

Notes:

1 These include our February 11, 2013 letter to WBG President Kim and February 15, 2013 letter to EBRD President Sir Suma Chakrabarti (available at:
http://www.bicusa.org/wp-content/uploads/2013/03/CSO-letter-to-Dr-Kim-on-Oyu-Tolgoi.pdf; http://bankwatch.org/sites/default/files/letter-EBRD-OT-
15Feb2013.pdf), as well as our February 26, 2013 reply to OT LLC and the IFC (available at: http://www.bicusa.org/wp-content/uploads/2013/02/CSOReply-
to-OT-LLC-and-IFC.pdf).

2 ERM April 2013 Audit Report (available at: http://ot.mn/sites/default/files/documents/ESIA_Audit_report.pdf), Table 3-1 at p. 12.
3 Ibid, Tables 2-2 & 3-2. This may be exacerbated by the conflict between aimag and soum regulators and OT on how to implement Bank standards, as
suggested by the audit report.
4 Ibid, Table 3-2 ##1.11 & 1.12 at pp. 18-19.
5 Ibid, Table 3-2 #1.15 at p. 21. In addition, GHW 4×6 bore construction shows the use of gravel for fill around the pipe, raising the question of whether this
was an instruction to the contractors.
6 See Water Resources Management Plan (available at:
http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Water_Resources_Management_Plan_EN.pdf), p. 29 (indicating only that Project Lenders can
request a comprehensive presentation of monitoring results no more than once per year).
7 Ibid, p. 13.
8 The current Water Resources Management Plan refers only to monitoring bottled drinking water quality and effluent waste water, which is to be treated
and discharged to the Tailings Storage Facility (TSF). In view of the reported lack of rigor in separating acid-forming rocks and the planned discharge to the
TSF of waste with high acidifying levels of ammonia [at 30 mg/l], the potential for leachates containing toxic metals/metalloids escaping to surface and
groundwater is troubling. The Water Resources Management Plan also references the 2003 WHO DW Guidance [updated in 2006, 2008, 2009 and reissued
in 2011] which flags universal mining waste concerns with arsenic and selenium, of which there is evidence in the South Gobi (see

http://londonminingnetwork.org/docs/Purevdorj_B_Olkhanud_Capstone.pdf).

9 See Environmental and Social Management Plan (available at: http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_ESMP_ENG.pdf), p. 53.
10 ERM April 2013 Audit Report, pp. 54-55.

11 Ibid, Table 3-2 #6.06 at p. 42; see also ibid, Table 3-2 #1.10 at p. 17 & #1.19 at p. 23.
12 Ibid, p. 88.
13 Ibid.
14 See ibid, pp. 102-103; Stakeholder Engagement Plan (available at:
http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Stakeholder_Engagement_Plan_EN.pdf), pp. 22, 60-62. Rio Tinto has fashioned itself as a
“leader in stakeholder consultation” while at the same time destroying the sole source of surface water in Khanbogd soum without community consent, as
evidenced by the complaint to the CAO on the Undai River diversion.
15 Pastureland and Livelihood Improvement Management Plan (available at:
http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Pastureland_and_Livelihood_Improvement_Strategy_EN.pdf), p. 12.
16 ERM April 2013 Audit, Table 3-2 #1.16 at p. 21.
17 Mine Closure Plan (available at: http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Mine_Closure_Plan_EN.pdf), pp. 55, 57.
18 See Environmental and Social Action Plan (available at: http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_ESAP_Sep2013_EN.pdf), p. 1.

19 Although the latest Power Plant DEIA suggested that it would have low water-use, the tailings storage facility will have to contain its ash, adding to both
the volume and toxic contents of the TSF during operations and afterwards. This is another example in which the impacts of the mine and the power plant
must be analyzed together in a comprehensive study.
20 See Environmental and Social Management Plan, pp. 16, 53.
21 Available at: http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Biodiversity_Management_Plan_ENG.pdf. The newest version (October 14) is
available at http://ot.mn/sites/default/files/documents/ESIA_OT_OMP_Biodiversity_Management_Plan_EN.pdf, and omits much of the tables found in
the original Biodiversity Register (Annex D).
22 Ibid, pp. 7, 23.
23 Ibid, p. 23. It is unclear whether this Core Biodiversity Monitoring Programme has begun as scheduled or what the methodology is, as documents related
to this program have not been disclosed.
24 Ibid, p. 22.
25 See ERM April 2013 Audit, p. 55.
26 See ibid, Table 3-2 #6.13 at p. 46.

Mongolia Copper Mine at Oyu Tolgoi Tests Water Supply and Young Democracy

December 3, 2013 Posted by otwatchweb

Link to original article: http://www.circleofblue.org/waternews/2013/world/mongolia-copper-mine-oyu-tolgoi-tests-water-supply-young-democracy/

By Keith Schneider, Circle of Blue

Tuesday, 05 November 2013

Mining boom in South Gobi influenced by local and global citizen activism

KSchneider_Mongolia_IMG_4746

Image © Keith Schneider / Circle of Blue
Mining giant Rio Tinto and Mongolia’s young, free market government are the $6.6 billion, 80-square-kilometer (30-square-mile) Oyu Tolgoi mine in the South Gobi Desert. It is the largest industrial enterprise ever constructed in Mongolia, and, with 7,500 workers, the nation’s largest employer. Click image to enlarge.

KHANBOGD, Mongolia – Though it is well before noon, the hot light of the South Gobi desert sun punches through the ventilation openings at the peak of Byambasuren’s white ger.
The door of her teepee-like home, a single round room built of felt and canvas, is open to a dirt compound surrounded by a fence made of rough-cut wood. Beyond that, cattle and horses churn a small grid of unpaved streets to powder. Herders on foot follow behind, their features obscure in yellow clouds of dust.

Byambasuren’s ger lies 700 kilometers (434 miles) from Ulaanbataar, Mongolia’s capital. The trip overland is mostly on hard-packed dirt roads and takes 15 hours across treeless steppes and sand. Much of the world’s second largest desert remains remote from the world, even forbidding.

“Before Oyu Tolgoi came here, we had enough water for our animals. Now we don’t. Things are different.”

–Byambasuren

That is not the case for Byambasuren, a young herder and mother, or for Khanbogd, an expanding livestock and desert town in Omnogovi, Mongolia’s largest province, which lies along the border with China.

Not far away, about 40 kilometers (25 miles) south, mining giant Rio Tinto and Mongolia’s young, free market government are developing one of the planet’s sizable reserves of copper and gold. The $6.6 billion, 80-square-kilometer (30-square-mile) Oyu Tolgoi mine is the largest industrial enterprise ever constructed in Mongolia, and, with 7,500 workers, the nation’s largest employer.

Along with the oil-producing tar sands mines in Alberta, Canada, Oyu Tolgoi also is among the most thoroughly scrutinized resource extraction projects on Earth. The reason: It’s located in one of the most water-starved regions of Mongolia.

Singing well, South Gobi, Khanbogd, Coal, water scarcity, South Gobi, Mongolia, Omnogovi, Tsogttsetsii, Oyu Tolgoi. Rio Tinto. copper mine, gold, water, food, energy, choke point, circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
Byambasuren, a young herder and mother, and an activist in Khanbogd, Mongolia who’s work is influencing Rio Tinto’s copper and gold mine in the South Gobi Desert. Click image to enlarge.

Unlike earlier eras, when industrial companies descended on unwary countries to mine and log and drill with scant resistance, resource development in the 21st century faces new operating rules, many of them imposed by people like Byambasuren.

Timeline: Democracy, Mining Transform Mongolia

1990: Mongolia transitions from a single party socialist system, with ties to the Soviet Union, to a multi-party democracy.

1997: Mongolia’s authorities enact the Mineral Law and opened most of the country to mineral development. More than 6,000 licenses were approved, including those for the big copper and coal mines in Omnogovi.

2003: BHP, an Australian company, drills water monitoring wells in anticipation of developing the Oyu Tolgoi mine.

2007: A Mongolian herder named Tsetsegee Munkhbayar wins the Goldman Environmental Prize, a prestigious American public service award for his work to organize opposition to mining pollution in the Onggi River.

2009: Major construction begins on Oyu Tolgoi. Rio Tinto assumes primary management and ownership of the mine.

2009: Mongolia enacts the Law on the Prohibition of Minerals Exploration in Water Basins and Forested Areas, which outlawed many forms of placer mining — the extraction of mineral deposits from streams, rivers and protected wild lands.

2010: A World Bank study warns that unchecked water use by mines in Omnogovi and two neighboring South Gobi provinces could deplete the region’s groundwater supplies by 2022.

2010: The Mongolian government suspends almost 2,000 mining licenses and tightens provisions for securing licenses.

2011: Mongolia starts work to overhaul its mining law.

December 2012: The government circulates a draft mining law that alarms industry executives because new provisions called for higher financial returns for the Mongolian government and heightened scrutiny of licenses.

June 2013: Mongolians re-elect President Tsakhiagiin Elbegdorj of the Democratic Party, who campaigned on attracting foreign investment and heightening environmental oversight of the mining industry.

July 2013: First shipments of copper concentrate are shipped from Oyu Tolgoi to Chinese processors and markets.

She and seven other herders, who have access to cell phones and the Internet, belong to Gobi Soil, a year-old environmental group. Byambasuren and her colleagues are the on-the-ground local hub of a national and global network of policy strategists, environmental scientists, and communications specialists that elevated Oyu Tolgoi and Mongolia’s capacity to manage its mining sector to the nation’s top political issue.

In June, Mongolians re-elected President Tsakhiagiin Elbegdorj of the Democratic Party, who campaigned on attracting foreign investment and strengthening environmental oversight of mining.

There are two big ecological issues. The first is preventing water pollution, principally in northern and central regions of the country caused by gold mining practices that use mercury and cyanide.

The second is sharing the South Gobi’s limited water supply between livestock herders and the country’s biggest hard rock and coal mines. “We need water,” Byambasuren, who like most Mongolians uses only one name, says through an interpreter. “Before Oyu Tolgoi came here, we had enough water for our animals. Now we don’t. Things are different.”

High Stakes, Major Players

Several big players, including Mongolia’s government, the World Bank and Rio Tinto, the world’s second largest mining firm, have a stake in the mine’s development. Rio Tinto, based in London, is well aware that its record of environmental management at a number of its mines is routinely criticized by prominent international environmental groups as abusive.

One example is the company’s big and closely scrutinized Grasberg copper and gold mine in West Papua, Indonesia, which it operates jointly with Freeport McMoran. The mine uses more than a billion gallons of water a month and unloads 230,000 metric tons of waste into the Ajkwa river daily, which kills plants and contaminates drinking water, according to Corporate Watch, a London-based investigative oversight group.

Among its many objectives, Oyu Tolgoi represents a new opportunity for Rio Tinto to introduce Mongolia and the world to state-of-the-art mining practices, including water use and recycling techniques that conserve water and limit pollution. The international mining sector, mindful of its global reputation, regularly commends Rio Tinto, which last year earned total revenue of US $55.6 billion, for responding to technological trends and heightened civic expectations here.

The Mongolian government, which owns slightly more than one third of Oyu Tolgoi, counts on the mine to finance its ascent to economic and political influence in Asia. The country’s newly elected Democratic Party leaders also want to prove they have the smarts and moxie to manage Mongolia’s mineral treasures and work as an equal partner with a global industrial giant.

The World Bank and its affiliated financial institutions, which helped to fund Oyu Tolgoi, weigh new loan requests to expand the mine against Rio Tinto’s record in the South Gobi in achieving the United Nation’s Millennium Development goals. And environmental and human rights organizations, with offices networked from Ulaanbataar to Beijing to New York to London, make a strong case that the Manhattan-size mine, tearing a big hole in the South Gobi, is producing permanent damage to land and water, and eroding the region’s irreplaceable culture of tiny human outposts, livestock herding, and seasonal wandering.

Oyu Tolgoi, in effect, is at the center of a globe-circling vortex of competing ambitions. It’s more than the mine’s location in a mineral rich and environmentally sensitive, water-scarce region or its immense dimensions. It’s more than the huge price tag and the mine’s prominent and stubborn developer. It’s more than a young government’s insistence on oversight and fair economic returns, or the substantial pressure from the world’s environmental community to restrain damage.

It’s all of these facets, mixed and modulated on a global motherboard, that have amplified Oyu Tolgoi into an internationally significant case study of the fierce and increasingly transparent civic conflict over tapping the earth’s natural resources.

Little more than a decade ago, this was territory so vacant it rivaled Antarctica, Siberia, and the Australian outback as places farthest removed from the global mainstream. Now there’s an airport outside Khanbogd. The money to be made here lures thousands of workers and attracts regular convoys of television producers, magazine writers, and documentary film crews.

Mongolia, Ulaanbataar, mining, South Gobi desert Mongolia Khanbogd Oyu Tolgoi Rio Tinto copper mine gold water food energy choke point circle of blue wilson center J. Carl Ganter

Image © J. Carl Ganter / Circle of Blue
The population of Ulaanbataar, Mongolia’s capital, has nearly tripled since 1990 and is almost half of the national population of 2.9 million. Click image to enlarge.

Oyu Tolgoi’s executives are sensitive to the attention. “We are very aware of almost everything that’s said about this mine, wherever it comes from,” says Mark Newby, Oyu Tolgoi’s 42-year-old environmental manager, in an interview with Circle of Blue. “You have to listen. You have to respond. You can’t go eye to eye with the country or the community. A number of large mines worldwide did that, and they lost their mines as a result.”

‘Singing Well’ Sounds Alarm

Along the west wall of Byamba’s ger is a display cabinet with glass doors. Looseleaf notebooks, standing on end like encyclopedia volumes, occupy one shelf. They are sections of the mine’s environmental and social impact statement produced under contract for Rio Tinto.

Joining her are: Battsengel Lkhamdoorov, a 40-year-old herder who founded the Gobi Soil environmental group; Paul Robinson, a mining reclamation expert from New Mexico; and Batnasan Damdinsuren, a travel industry manager and interpreter who’s toured mining regions in Russia, Mongolia, and the United States.

“It was like bells ringing, it was a sound that you never forget.”

–Byambasuren

Byamba rises from a stool at the center of a room that is getting steadily warmer and draws a binder from the case. It contains maps of the area with an assortment of red, blue, green, orange and pink dots. Each dot designates a well that supplies water to Oyu Tolgoi, or a well that monitors levels in underground water reserves close to the surface or 60 meters (180 feet) deep. The wells were drilled by Rio Tinto, or by Oyu Tolgoi’s previous managers, BHP and Ivanhoe Mines.

Byamba is particularly interested in one map with pink dots. She points to a well designated GHW4X6. “Here it is,” she says, “This is the problem.”

The day before, in a meeting in a local government office, Byamba told this story about the well. It is, she said, the “singing well” discovered by camels sometime in 2008 or 2009. She wasn’t sure. With their hooded eyes and dual humps, the big ungulates huddled day after day around a brown length of steel well casing, about eight inches in diameter, a foot tall, and open at the top.

Their behavior was so unusual, and so persistent, that some of Byamba’s neighbors rode into the desert on motorcycles and small trucks to investigate. The men didn’t see anything wrong with the pipe — no holes, no cracks. But when they dropped to their knees and put their ears to the well what came back wasn’t the drip, drip of a leak. What they heard was the unmistakable sound of a stream flowing deep underground. It was a cascade of water, startlingly loud in a land so dry that even when rain or snowmelt caused springs or streams to flow, it hardly made any sound at all.

“It was like bells ringing,” Byamba says. “It was a sound that you never forget.”

There are many places in southern Mongolia — a nation larger than Spain, France, Germany and Britain combined — where economic intent and water scarcity converge. None, though, illustrates the confrontation with more clarity or urgency than in Omnogovi, where Mongolia’s largest and thirstiest hard rock and coal mines are located. For several years Mongolia’s economy has grown more than 15 percent annually, faster than all but a handful of countries, largely due to the mineral exploration and development in this province so close to China’s steel and coal-fired power plants.

West of Oyu Tolgoi, hundreds of trucks loaded with coal from mines in and around Tsogttsetsii head to China on a two-year-old paved highway. In July, Oyu Tolgoi began its first shipments of copper concentrate to China. A 250-kilometer rail line (155 miles) from the Omnogovi mines to China is planned.

Omnogovi also is a place where domesticated camels outnumber people, where springs are rare, and rivers run intermittently. Just as gas prices in the United States serve as either a measure of national well being or a gauge of societal stress, water supply serves as a meter for uneasiness between Omnogovi herders and mining companies, and as a proxy for a range of other concerns.

The story of the singing well is illustrative. It was one of a group of production and monitoring wells drilled in 2003 by Ivanhoe Mines, a Canadian company, in anticipation of developing Oyu Tolgoi. Marked in white paint — GH4X6 — the well is surrounded by much older wells, dug by hand and no deeper than 20 feet, to tap what herders call “soil water,” the moisture stored closest to the surface and used to water livestock.

Coal, water scarcity, South Gobio, Mongolia, Omnogovi, Tsogttsetsii, Khanbogd Oyu Tolgoi Rio Tinto copper mine gold water food energy choke point circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
For several years Mongolia’s economy has grown more than 15 percent annually, faster than all but a handful of countries, largely due to the mineral exploration and development in Omnogovi, the country’s largest province. Trucks loaded with coal make their way out of a mine in Tsogttsetsii. Click image to enlarge.

Byambasuren says she is one of the herders who were forced to reduce the number of animals they cared for because some of those hand-dug wells dried up. Nobody knew why until camels discovered the singing well. Byambasuren and her neighbors suspect the cascade they heard was soil water somehow pouring into the deeper aquifer and drying out their wells.

Robinson, a mining expert and research director at the Southwest Research and Information Center in Albuquerque, New Mexico, inspected the singing well and explains to Byamba that GHW4X6, as constructed, is different than what was described on the well’s technical document. “This picture shows only one pipe,” Robinson says. “The actual well has two. The second serves as an outer casing. What we saw is different than what’s shown here in important ways. This picture doesn’t show the outer ring.”

“We do acknowledge that the well wasn’t installed in the best manner possible”

–Mark Newby, Evironmental Manager, Oyu Tolgoi

Robinson explains in English as Batnasan, who was raised in the South Gobi, translates for the two herders. Robinson concludes that the actual construction of the monitoring well is flawed. It was built with a sleeve of rock and gravel packed alongside the well’s steel casing that may be allowing soil water to drain from the surface to the deeper underground reservoir. “This is the low point,” he tells them. “It’s like a bathtub drain.” Robinson, an exacting professional, cautions that his view is a thesis based on his visual inspection and the document.

Mark Newby, the mine’s environmental manager, is well aware of GHW4X6. He says it is theoretically possible that it could drain the soil and shallow surface wells close to it. But that seems unlikely, he says. He says the company monitors the shallow wells in the area closest to GHW4X6, which was drilled before Rio Tinto took over the mine, and they aren’t losing water.

“We do acknowledge that the well wasn’t installed in the best manner possible,” Newby says. “But the effects that people think are going on wouldn’t be expected. And we haven’t seen anything like that in shallow wells.”

Mongolia by the Numbers

Coal Production Mongolia

With ample reserves and China's world-leading market right next door, Mongolia's coal production is soaring.

With ample reserves and China’s world-leading market right next door, Mongolia’s coal production is soaring. Click image to enlarge.

Copper Production Mongolia

Oyu Tolgoi, one of the largest copper mines in the world, started marketing copper concentrate in July, 2013, an event that will prompt sharp increases in Mongolia's copper production.

Oyu Tolgoi, one of the largest copper mines in the world, started marketing copper concentrate in July, 2013, an event that will prompt sharp increases in Mongolia’s copper production. Click image to enlarge.

Gold Production Mongolia

Unregulated wildcat placer gold mines produced a treasure in gold early in the 2000s, and a mess of Mongolia's rivers. In 2009, Mongolia enacted a law to protecti rivers and forests, which outlawed the harmful practices and limited gold 	production.

Unregulated wildcat placer gold mines produced a treasure in gold early in the 2000s, and a mess of Mongolia’s rivers. In 2009, Mongolia enacted a law to protecti rivers and forests, which outlawed the harmful practices and limited gold production. Click image to enlarge.

Improved Roads Mongolia

Mongolia expanded its paved highway network by roughly 130 kilometers (81 mlles) annually in the first decade of the century, twice the annual increase in paved highway in the 1990s.

Mongolia expanded its paved highway network by roughly 130 kilometers (81 mlles) annually in the first decade of the century, twice the annual increase in paved highway in the 1990s. Click image to enlarge.

Graphs © Luke Gehrke / Circle of Blue.

In September, Rio Tinto posted online a mass of new environmental studies that noted what it called “cascading behavior” in GHW4X6 and five other nearby wells, “indicating possible cross-connectivity of aquifers at these locations.” The new data pointed to a drainage problem with six wells that was stronger than Rio Tinto has acknowledged previously.

Regardless, in 2010, a year after Rio Tinto assumed primary management and ownership of Oyu Tolgoi, the company proposed pouring grout into GHW4X6 and the surrounding monitoring wells in a project to decommission the wellfield, he says. The regional government, which has jurisdiction for projects outside the mine’s perimeter, wouldn’t issue a permit for the work.

Instead, the local government turned to a citizen-government working group, which was established at the direction of the World Bank to oversee aspects of Oyu Tolgoi’s operations, including the decommissioning project, which still hasn’t happened.

The back and forth exemplifies most of the interactions between mine executives, local government officials, and herders. Newby asserts that Rio Tinto operates Oyu Tolgoi with exceptionally ambitious standards of water conservation, safety, and pollution prevention. Critics say the company can do much better.

A Contentious Project

Everything is an issue at Oyu Tolgoi. Robinson notes, for example, that Rio Tinto was late in preparing a mine reclamation plan to secure overburden and rock wastes during the mine’s operating life, and after Oyu Tolgoi closes. Rio Tinto finally introduced the plan in late September, years after the first ridges of mine spoils appeared at the edges of the open pit.

Herders complain that dirt roads constructed by the mine owners are barriers to their animals and cause excessive levels of dust. Oyu Tolgoi excutives say the issue is exaggerated. Rio Tinto is building a new 107-kilometer highway (66.5 miles) from the mine to the Chinese border. Company executives, mindful of the civic distress about dust, said in October that the first 80-kilometers of the new highway will be paved by the end of the year. The final 27 kilometers will be paved by the end of 2014.

Most significantly, herders worry that Oyu Tolgoi is draining the region’s water supply and making it difficult for their animals to find water. The steel fence that surrounds the gaping mine has blocked traditional herding corridors. Oyu Tolgoi also cut off a freshwater spring within the fenceline that herders used for generations.

Singing well, South Gobi, Khanbogd, Coal, water scarcity, South Gobi, Mongolia, Omnogovi, Tsogttsetsii, Oyu Tolgoi. Rio Tinto. copper mine, gold, water, food, energy, choke point, circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
The South Gobi’s famous singing well. When herders dropped to their knees and put their ears to the well what came back wasn’t the drip, drip of a leak. What they heard was the unmistakable sound of a stream flowing deep underground. Click image to enlarge.

The company substituted a manmade spring for the natural spring and installed it along the mine’s southern fenceline. Water bubbles from two pipes there, pools in mud, flows to a shallow pond, then vanishes into the dry sand of the Undai riverbed. Rio Tinto executives said the two pipes are temporary measures to keep water flowing past the mine’s boundaries so that livestock can drink. The project’s completion, they said, has been held up by local officials who want a review by the citizen committee.

On the afternoon that Robinson and two herders visit the artificial spring, they express skepticism that it will be as effective in watering livestock as the natural spring. “Just moving water to a new place won’t serve the need,” he says. “You can’t create a spring without the right geologic conditions. Oyu Tolgoi can’t just move water to a place that is convenient. They have to move the spring to a place that holds the water or it will become soil water, not surface water. “

Democracy Driving Growth

In the summer of 1990, as its Soviet neighbor to the north slowly collapsed, Mongolians held their first free election, a signal act that ended 70 years of socialist control. Almost nothing in this big country of surpassing vistas, a huge southern desert, and a treasure chest of mineral and energy resources has been the same in the 23 years since.

Skycranes hoist men and materials to the summits of new office towers in the capital city, where 1.4 million people live. The population of Ulaanbataar has nearly tripled since 1990 and is almost half of the national population of 2.9 million. Outside Ulaanbataar, across the green steppes, cell phones and solar panels connect and power the country’s rural herding families.

Visualizing Mongolia

Mongolian Population 2011

Map created by Andrea Zheng/ Circle of Blue
Shades of brown represent the population (in thousands), with darker shades representing larger populations. To see the population in each province, click on the map.

Surface Water Inventory (Rivers, Springs, Mineral Water, Lakes) 2007.

Map created by Andrea Zheng/ Circle of Blue
Shades of blue represent the total number of surface water sources, with darker shades representing higher quantities. The surface water sources include rivers, springs, mineral water, and lakes. To see the total number of surface water sources in each province, click on the map. Note that the last water census was conducted in 2011, but the data for each province of Mongolia does not seem to be published anywhere online.

Number of Livestock (Horse, Camel, Cattle, Sheep, Goat) in Thousand Heads 2010.

Map created by Andrea Zheng/ Circle of Blue
Shades of red represent the total number of livestock (in thousand heads), with darker shades representing higher quantities. The number of livestock includes horses, camels, cattle, sheep, and goats. To see the total number of livestock in each province, click on the map.

As the U.S. and much of the developed West experience a damaging unraveling of institutional capacity and public confidence, Mongolia is ambitiously pursuing an economic development strategy that is founded in modern goals of environmental sustainability, income growth and nation building.

“We are a large country with a small population,” said Chuluunbat Orchibat, the 55-year-old deputy minister for economic development, in an interview with Circle of Blue. “Our economic goals are very high. We are working to improve the quality of life here. We also are trying hard to establish environmental standards that are high. We’ve had difficulties. But we know both can be done.”

In interviews with herders and shopkeepers, activists and executives, Mongolians expressed similar views of the country’s potential. Two clear advantages make the economic formula possible: Copper, gold and coal lie beneath Mongolia’s South Gobi desert — hard rock and energy wealth that international mining companies are tapping; and Mongolia shares a border with China, the world’s largest processor and consumer of such materials.

Tsakhiagiin Elbegdorj, Mongolia's Ministry of Environment and Economic Development, Mongolia, World Economic Forum, water scarcity, Ulaanbataar, mining, South Gobi desert Mongolia Khanbogd Oyu Tolgoi Rio Tinto copper mine gold water food energy choke point circle of blue wilson center J. Carl Ganter

Image © J. Carl Ganter
In June, Mongolians re-elected President Tsakhiagiin Elbegdorj of the Democratic Party, who campaigned on attracting foreign investment and strengthening environmental oversight of mining.  In September the World Economic Forum,  Mongolia’s Ministry of Environment and Economic Development, the International FinanceCorporation’s Water Resources Group 2030 brought together conservation leaders, business executives and members of parliament to discuss the implications of demands on Mongolia’s water resources. Click image to enlarge.

There is, though, considerable skepticism among environmental specialists in and outside Mongolia that an economy dependent on mining can marshal the policymaking and enforcement apparatus to reach its environmental goals. Mining industry executives also are growing deeply suspicious of the Mongolian government’s ability to oversee their sector’s operations with consistency and fairness.

Just as in the other nations Circle of Blue has reported from in recent years — China, India, Qatar, Australia, and the western United States — some of the most significant issues center on water supply. The overriding concern: Can Mongolia safeguard its fresh water and grow the hard rock and coal mining sectors in a region of the country where water is in short supply?

“People care about this. Actually, young people are eager to make sure we have enough water. They want to protect the motherland,” said Bailgalimaa Nyamdawa, a 25-year-old lawyer at the Center for Human Rights and Development, a Ulaanbataar-based legal group that prosecutes civil cases against water polluters in the mining sector, most of which are owned by the Chinese.

“We need good regulations,” Nyamdawa said through an interpreter. “We need good enforcement. We need more people who know how to influence good policy. Before the mining started we didn’t have such problems.”

Growing Pains

In the first years after throwing off socialism in 1990, Mongolia’s rush to generate hard currency from mining was a familiar story of boom and pollution. While converting from a centralized economy to the free market, Mongolians suffered through dire seasons of food shortages, energy shortages, hunger and joblessness.

Desperate to generate revenue, Mongolia’s authorities in 1997 enacted the Mineral Law and opened most of the country to mineral development. More than 6,000 licenses were approved, including those for the big copper and coal mines in Omnogovi.

Camels, singing well, South Gobi, Khanbogd, Coal, water scarcity, South Gobi, Mongolia, Omnogovi, Tsogttsetsii, Oyu Tolgoi. Rio Tinto. copper mine, gold, water, food, energy, choke point, circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
Camels outnumber people in Omnogovi, Mongolia’s largest province in the South Gobi desert along the border with China. Click image to enlarge.

The first mineral mining boom occurred in northern and central Mongolia, where rivers and streams were colonized by gold miners and companies, many from Russia and China. They dropped backhoes and pumps into waterways, turned high pressure hoses on river banks, and used mercury and other toxic substances to separate gold from mud and sand. In short, they made a colossal mess.

Mongolians fought back at the grassroots. As a herding culture, Mongolians understood the ties between their well being and the health of water and land. Local non-profits allied themselves with international environmental organizations. Mongolia’s news media, aided by video and photographs taken by citizens and posted on the Internet, turned the damage into a national and international story.

In 2007, Tsetsegee Munkhbayar, a herder, was awarded the Goldman Environmental Prize, a prestigious American public service award, for his work to organize opposition to mining pollution in the Onggi River, one of the country’s longest and largest.

Mining and environmental damage also became an election issue. In 2009, Mongolia enacted the Law on the Prohibition of Minerals Exploration in Water Basins and Forested Areas, which outlawed many forms of placer mining — the extraction of mineral deposits from streams, rivers and protected wild lands. In 2010, the government suspended almost 2,000 mining licenses and tightened provisions for securing licenses.

Mongolia Khanbogd Oyu Tolgoi Tsogt Tsetsii

Map © Jordan Bates / Circle of Blue
Map of Mongolia including Tsogt Tsetsii, Khanbogd, and Oyu Tolgoi. Click image to enlarge.

In 2011, Mongolia began to overhaul its mining law. In December 2012, the government circulated draft rules that alarmed industry executives. The new provisions called for higher financial returns for the Mongolian government and greater scrutiny of mining licensees.

The proposed regulations also offered greater security for water resources. The justification, say most industry executives and environmental authorities, is sound. Though smaller gold mining operations in the wet North and central regions led Mongolia’s mining boom in the first decade of the century, the country’s development authorities anticipate that the big and thirsty coal and hard rock mines in the South Gobi will generate the huge revenue streams, and employment, that will drive Mongolia’s economy.

Water Supply At Risk

Water supply is an impediment to increased mining. In 2010, the World Bank published a study of water use in Omnogovi and two neighboring South Gobi provinces. The study said that 3.8 million head of livestock consumed nearly 32,000 cubic meters (8.3 million gallons) of water daily. That was less than a fifth of the almost 100,000 cubic meters (26.4 million gallons) of water used daily by coal mines around Tsogttsetsii, and the nearly 70,000 cubic meters (18.5 million gallons) that was consumed daily by Oyu Tolgoi during its construction. At that rate of consumption, the bank estimated, the region’s groundwater supplies would last 10 to 12 years.

Rio Tinto reached different conclusions in its environmental studies. Oyu Tolgoi’s water source, explains Mark Newby, is an aquifer called Gunii Hooloi, near Khanbogd, that is 300 meters to 400 meters deep (1,000 to 1,300 feet). The aquifer was discovered by the Rio Tinto’s hydrologists and contains tens of billions of gallons of saline water, according to the company.

Mongolia, Ulaanbataar, mining, South Gobi desert Mongolia Khanbogd Oyu Tolgoi Rio Tinto copper mine gold water food energy choke point circle of blue wilson center J. Carl Ganter

Image © J. Carl Ganter / Circle of Blue
As the U.S. and much of the developed West experience a damaging unraveling of institutional capacity and public confidence, Mongolia is ambitiously pursuing an economic development strategy that is founded in modern goals, supported by young people, of environmental sustainability, income growth and nation building. Click image to enlarge.

The Mongolian Water Authority permit allows Oyu Tolgoi to use 870 liters of water per second (20 million gallons daily), which is pumped to the surface and transported by pipeline 35 kilometers to serve mining operations. Newby says the mine recycles 80 percent of its water and uses under 500 liters per second (11.5 million gallons daily), far less than the permitted amount. Even at the higher permitted level of water use, he says, Oyu Tolgoi will consume about 20 percent of the water contained in Gunii Hooloi.

Rio Tinto’s study conservatively estimated that aquifers in the South Gobi were capable of supplying 500,000 cubic meters (132 million gallons) of water daily. A cubic meter is 264.4 gallons. That level of consumption, according to the company study, could be reached by 2020 as more mines open in the region, and more people arrive in Khanbogd and other towns to work and live.

Like the U.N. report, the Rio Tinto study concluded that water shortages are a barrier to mineral development in the South Gobi. The company study said “there may eventually be a need for the construction of water pipelines from the Kherlen or Orkhon rivers.” Those are two of Mongolia’s largest rivers and lie 1,000 kilometers (621 miles) away in the country’s forested North.

South Gobi, Khanbogd, Coal, water scarcity, South Gobi, Mongolia, Omnogovi, Tsogttsetsii, Oyu Tolgoi. Rio Tinto. copper mine, gold, water, food, energy, choke point, circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
Khanbogd, Mongolia, a growing livestock and mining town in the South Gobi Desert, where water scarcity and mineral development are colliding. Click image to enlarge.

Proposals to pipe water from the North to the South have popped up periodiocally in Ulaanbataar since construction of Oyu Tolgoi began in earnest in 2009. But they aren’t generally taken seriously.

The cost of building and operating a lengthy water pipeline would be enormous. The Kherlen River flows into China, and Orkhon’s waters reach into Russia. Both countries would be expected to exert significant diplomatic opposition to such large water diversion projects.

What’s more, by the time water shortages become an emergency in the South Gobi, climate change may well have dried up enough of the nation’s surface water to significantly deplete the supply carried by the Kherlen and Orkhon rivers.

Climate Change Hotspot

A 2010 United Nations report found that since 1940, average annual temperatures in Mongolia increased 2.14 degrees Celsius (4.42 degrees Fahrenheit), a rate of increase that is higher than almost any other country. The number of droughts in Mongolia has increased 95 percent since 1950, and 680 rivers and 760 lakes have dried up since 2006, according to the U.N. study.

The drying trend is most pronounced in the South Gobi, according to the U.N. report. That’s also where the Oyu Tolgoi mine is located.

“In southern Mongolia, characterized by Gobi desert, the impact of climate change is expected to be extremely challenging. It will be in the form of extreme events — sand and dust storms, flash floods or heavy snowfalls, droughts, desertification, land cover changes and water stress.”

–United Nations Report, 2010

“In southern Mongolia, characterized by Gobi desert, the impact of climate change is expected to be extremely challenging,” according to the report. “It will be in the form of extreme events — sand and dust storms, flash floods or heavy snowfalls, droughts, desertification, land cover changes and water stress.”

In Ulaanbataar, Deputy Economic Minister Chuluunbat Ochirbat described the cross-cutting economic and environmental trends, unfolding in multiple dimensions, that confront his young nation. National ambition, he said, is expressing itself in new public pressure to gain more control of foreign industrial projects. The country’s mineral abundance can be developed with stricter environmental oversight and enforcement, which he said is occurring. But he acknowledged that the one big barrier that has not been adequately recognized or addressed is water scarcity.

“We’ve taken some actions,” Ochirbat said. “We suspended mining leases to control water pollution. We approved a new law four years ago to protect rivers and forests. I think what’s important right now is that our mentality has been upgraded. But we know we aren’t using our water resources properly.”

Tough Choices Ahead

Heading south to the Gobi Desert, and not far from Ulaanbataar, the sole paved two-lane highway dissolves into multiple hard-packed, single lane dirt roads. They criss-cross each other and from a distance resemble braided strands that rise to the peak of wind-tossed ridges and fall to treeless green valleys. Every now and again lone dirt roads peel off to the East or West, their destinations known to local residents and expert drivers who are familiar with the territory.

The multi-tracked roads, unique in the world, form a powerful metaphor for Mongolia’s national development. The sheer mass of unmarked roads that bound across the grasslands and desert reflect the fast-growing number of drivers and vehicles, and rising personal incomes fostered by a free market economy and just two decades of mineral development.

South Gobi, ger, herders, livestock, Khanbogd, Coal, water scarcity, South Gobi, Mongolia, Omnogovi, Tsogttsetsii, Oyu Tolgoi. Rio Tinto. copper mine, gold, water, food, energy, choke point, circle of blue wilson center, Keith Schneider

Image © Keith Schneider / Circle of Blue
The children of a herding family near Oyu Tolgoi spend the afternoon in the shelter of their ger. They are (l. to r.) 17-year-old Batbayar, 11-year-old Gurragchaa, and 15-year-old Odgerel. Click image to enlarge.

Multi-tracking also represents the complexity of Mongolia’s choices. Follow the tracks and eventually they lead to Khanbogd, a desert town that is both enthused about mineral development and concerned sufficiently about dust, water, and the durability of a generation’s old herding culture to support Gobi Soil, an activist citizens group.

The South Gobi is a frontier of economic development and a laboratory of environmental consequences and social responses. It’s the sort of place that attracts people like Sara Jackson, a young American who is a human geographer and doctoral candidate at York University in Toronto. Jackson has traveled often to the South Gobi to study the effect of Oyu Tolgoi on the region’s residents. “I spend time thinking about how people feel,” she said in an interview with Circle of Blue.

In preparing her dissertation, Jackson conducted 80 interviews and held five focus groups to understand how Mongolians in Ulaanbataar, Khanbogd, and several more communities perceive Oyu Tolgoi. The idea, she said, is to promote communication between stakeholders.

In a draft report she wrote earlier this year, Jackson found persistent distrust among the stakeholder groups: Citizens felt they were being ignored and Rio Tinto officials felt their work to support independent review groups at Oyu Tolgoi was not appreciated. Dust from new roads and a dwindling water supply are viewed by stakeholders as chronic problems that haven’t been addressed to the extent that residents feel their complaints produce actual results.

Jackson’s conclusion: “Without resolution of the issues discussed above, feelings of marginalization and exclusion will continue to cause local, regional, and national tensions about Oyu Tolgoi and mining development in general. However, mining has had the positive effect of politicizing citizens, who are now more aware of and active in local politics.”

“I’ve spent a lot of time thinking about what I learned in Mongolia,” Jackson added in the interview. ”Cautiously, what can be said is that what’s happening in the South Gobi is different than in other developing places. Oyu Tolgoi is a big target. They do get picked on more than other companies. But at the same time, if they are pushed that raises standards. And they are