Norsk Hydro investing in Thai postash mine: Refuses to disclose the Environmental Impact Assessment

By Øyvind Eggen
Norwatch
 
Norsk Hydro has an intentional agreement to buy all the potash produced by the mining project, and to enter as a co-owner with 20 per cent share in the mine. The potash mining project will be the first in Thailand, and the largest Asian supplier of potash, which is today in short supply on that continent. The mining activities will be underground, and the entire mining works will take up about two square kilometres, including roads and one side track of the railway which is to transport the potash to a coastal port. The project is located in an area with poor soil and little agricultural activity. The material to be produced is a mix of potash chloride and regular salt, and is simply scraped off the rocks at depths somewhat below 300 metres under the surface. The project aims to return uncompacted material to the mining galleries when the project is completed, thus making the waste problem minimal.

So - at least it looks as if the vital environmental aspects have been taken care of.

- We have a great job ahead in educating the media, the public and the authorities so that they understand that this is a good project, says head geologist Keith Crosby of Asia Pacific Resources, the company that has been established to develop the project and sell it to the investors. The management of Hydro Agri refers all questions regarding the project to this company.

Crosby explains that they have already arranged two successful village parties with free food and live music. In addition, they have supplied the villages with sporting suits, computers and T-shirts. And in the villages the company places posters with the company's version of the future prospects for the area.

- In connection with such projects, we run the risk of people entering from outside of the area, making problems for us by organising protest activities, only to serve their own interests, he explains.

EIA is hidden from the public
An Environmental Impact Assessment (EIA) has been made for the project, and the company boasts that the assessment is in compliance with the World Bank guidelines for mining projects. The World Bank general guidelines, applicable in all sectors, clearly states that all EIAs should be publicly available. Also, the guidelines regarding mining projects refer to these general guidelines. Still, NorWatch's request to look at the assessment for the project in Somboon is turned down.

- I am sure you understand that a lot of the information contained in the EIA is of a confidential nature. However, we provide some information through press releases, our web pages and our annual report, says director of Asia Pacific Resources, Donald P. Hague, to NorWatch.

As far as NorWatch is able to establish, the local people are presently positive to the project, which offers the prospect of jobs and money. The mine would employ 900 people, half of them underground. The technology to be employed is "world standard", that is, the state of the art technology, according to Crosby.

- Have you considered going for a lower level of technology and more labour intensive solutions in order to provide more jobs?

- You feel we have sacrificed jobs to have the latest technology? Well, I can say for sure that we don't go for the second-best solutions only to create more jobs. This is all about dollars; everybody wants dollars and we have to choose the solutions that are least costly for us.

No forced displacement
About 7200 people live in the 12 villages surrounding the mining project area. No one are to be displaced by the project, but about 50 families grow rice or other crops in the area, and this production which will be lost. Less than half the area bought for the project is presently used for agricultural production, the remainder is of poor quality and is only to a limited extent used for pasture.

All land needed for the project has been bought through direct negotiations with private landholders, and the authorities have not been involved in this process. According to the company, the price was about 8 million US dollars.

- In some cases we offered to trade the land for new land, but no one chose this option, says technical director Hague. He claims that the only complaint yet to be heard from the local population was from one man who was disappointed that they did not also buy his land.

- We were lucky that we did not have to buy eucalyptus or sugar cane plantations, that would have made it more expensive, says Crosby, and makes no mention of the rice fields to be destroyed.

No information to the tenant farmers
Crosby explains that a part of the area procured by the company, has been bought from non-resident landowners. Hence, some of those working the land are tenant farmers who lose the land they till without any compensation. The company refuses to disclose how many people will be affected in this way.

- Is there any chance that these people will be assisted with simple means, for example by helping to find new land to hire, give advise regarding their changed situation and perhaps a few sacks of fertilizer to help them better make use of the poor soil in the nearby areas? After all, the mine is going to produce fertilizer for half of Asia?

- Do you really mean that we, after spending 8 million dollars buying the properties, are to spend perhaps four more millions on top of that, paying for social programmes? I don't have the answer to that, but I don't believe that it is within the responsibilities of a private company, Crosby answers.

- On the other hand, let's be realistic about this. Should we refrain from initiating this project because some people lose some land? he asks.

- Have you made sure that those who work as tenant farmers have been informed about the project?

- I doubt if it is right to speak to the local population about this until all the contracts have been signed. I don't think it is the right time. It would only disturb them and made them uncertain if we told them we were initiating a mining project before we know for sure that the project will be executed and before we know when the construction work will start. 'Timing is everything', says the Canadian.

- Speaking of timing, how long will it take from securing the last contracts to starting construction work?

- It'll be at least six months.

- Which means that people who are to lose their source of income will have no more than six months to find a new way of fending for themselves, provided you give them the information as soon as the contracts are signed and the necessary licenses have been granted? That's just a bit longer than the time it takes to grow one crop of rice?

- Yes, but there is no doubt that the local people are aware of the project. It has been on the radio and in the newspapers. Also, we have had the best consultants in the world to do the Environmental Impact Assessment, Crosby says.

- But, have the best consultants in the world actually talked to the people who already live in the area?

- No, I don't know. But I'm not going to answer any more questions of that kind, they make it all sound so negative. Also, most of those to be affected have a chance to be employed by us, at a very high salary. People will come begging to work for us, says the head geologist. 

Norsk Hydro in Thailand
Norsk Hydro has a letter of intent with the Canadian company Asia Pacific Resources, established with the sole purpose of developing this project and 'sell' it to investors. The mining project is located in Somboon, south of Udon Thani in northeast Thailand. The mine is to produce potash, which is an important ingredient in fertilizer production. The investments will amount to about  USD 600 million. According to the agreement, Hydro will buy the entire production from the mine for all its estimated 25 years of operation, and is also to have a 20 per cent ownership in the company. Allegedly, negotiations are going on with an Asian investor, whose name is not disclosed, that is supposed to have mining experience.

Asia Pacific Resources
Norsk Hydro's partner in the Thai mining project, Asia Pacific Resources (APR), has been established to develop only this mining project. The APR is a part of the Crew Group of Companies, a Canadian company with extensive experience in exploiting natural resources in poor countries. The main activity of the Crew Group is to enter projects early in the project cycle, and develop them into a form which is saleable to investors. The group is presently involved in a number of mining projects in Africa, mining for copper, zinc, gold, Fluor, coal and diamonds. One of their biggest engagements is with the Botswana Diamondfields, which is engaged in diamond mining in Botswana and Angola. Many of the mines are in early phases, and have not yet started production, and the company is on constant lookout for investors for their mine projects. 

Norwatch Newsletter 10/99