Support of SDNRP to Aynak Compliance Monitoring (GAF)

 

Presentations
AYNAK PROJECT UPDATE FEBRUARY 2012 AYNAK PROJECT UPDATE MAY 2012 AYNAK PROJECT UPDATE MAY 2013

AYNAK COMPLIANCE MONITORING PROJECT STATUS REPORT  FEBRUARY 2012

 


 

Ministry of Mines of the Islamic Republic of Afghanistan

Reference: MOM/PMU/74/QBS

IDA Grant No: H238-AF

 

SUSTAINABLE DEVELOPMENT OF NATURAL RESOURCES PROGRAMME

 

Consulting Services to Monitor Compliance with Contractual Provisions (oversight) of Aynak Mining contract

and

Capacity Building for Mining, Environmental and Social Inspection Activities for Mining Contracts in the Ministry of Mines, Afghanistan

 

AYNAK COMPLIANCE MONITORING PROJECT STATUS REPORT

JULY 2012

 

ACRONYMS & ABBREVIATIONS

TERM MEANING
AA Ancillary Agreement(s) to the AMC
ACMP Aynak Compliance Montoring Project - GAF
ACP Aynak Copper Project
ACPA Aynak Copper Project Authority in the Ministry of Mines
AMC Aynak Mining Contract (between the Government of Afghanistan and MCC)
BFS Bankable Feasibility Study
EMP Environmental Management Plan
ESIA Environmental & Social Impact Assessment
GAF Munich-based consultancy company contracted to MoM
IROA Islamic Republic of Afghanistan
ISAF International Security Assistance Force
JCL Jiangxi Copper Company Ltd
MCC China Metallurgical Group Company
MJAM MCC-JCL Aynak Minerals Company Ltd
MoM Ministry of Mines
NEPA National Environmental Protection Agency
PMU Program Management Unit (of the World Bank)

 

1.0              TERMS OF REFERENCE OF THE COMPLIANCE MONITORING PROJECT

The Aynak Compliance Monitoring Project requires GAF to systematically review the planning and execution of the Aynak Copper Project (ACP) and to measure and report on the degree to which the license holder is in compliance with:

  • The terms and conditions of MCC’s license, the Aynak Mining Contract (AMC) and all ancillary agreements (AAs);
  • All relevant laws and regulations of the IROA, particularly the Mining Law, Regulations and Procedures promulgated thereunder, but also all other relevant legislation; and
  • Internationally accepted standards: environmental, social, occupational health & safety and technical

The responsibility of GAF is to identify all aspects of the Aynak Project which require to be routinely monitored against all applicable laws, regulations, contracts, agreements and international norms; to assess the degree of compliance; identify & report deviations and to recommend corrective measures to the MoM.

GAF is required to establish a formal monitoring system and to implement it in respect of the Aynak Project. The monitoring system must be capable of adaptation to other major mining projects.

GAF will work with employees of the Ministry of Mines and of NEPA to establish and implement the formal monitoring system. GAF will provide on-the-job training in monitoring methodology & use of the system. This will be supplemented by some formal (classroom-type) training, developing their capacity to take over the monitoring of the Aynak Project and other, future major mining projects. Some general, technical training is included, as given to the Department of Inspectorate. Training will be supplemented by field trips to observe monitoring of active mining projects at foreign mine sites.

 

2.0  OVERVIEW OF THE AYNAK COPPER PROJECT

 

2.1 GENERAL OVERVIEW

 

The Aynak copper deposit has been known since ancient times and was exploited possibly as early as the second and third centuries CE. Large deposits of ancient slag give evidence of early mining and smelting of oxide ores and it is these activities that supported the establishment of Buddhist communities at the site. Exciting discoveries of cultural relics have been made at the mine site, including stupas, monasteries, statues, coins, paintings and many other artefacts. Mes Aynak is now regarded as an archaeological site of major significance.

The Government of the Islamic Republic of Afghanistan awarded a contract for the construction and operation of a mine on the Aynak deposit in June 2008. The contract was awarded to the China Metallurgical Group company, MCC following a rigorous tender process, supervised by reputable, international consultants to ensure transparency. The contract is a confidential document but incorporates comprehensive safeguards to ensure adequate protection of the economic, environmental and social interests of the IROA. The Aynak Mining Contract, together with its Ancillary Agreements, commits MCC, through its subsidiary MJAM, to construct the mine and to commence commercial production within an agreed time period, and to construct associated major infrastructure. The Government of the IROA has certain obligations to assist in these activities.

MJAM has established a camp at the mine site and the Government of the IROA has made adequate arrangements for security of the mine site and access road.

MJAM has carried out additional exploration drilling to supplement data from earlier, Russian exploration programs. The company reports a total resource of 454.4Mt @1.75% Cu. Two ore zones have been identified, the Middle District, which will be mined initially as an open pit and later underground, and the West District which will be mined as an underground section using sub-level caving. It is planned to extract some 9.9Mt per annum of ore from the open pit, at an overall stripping ratio of about 6:1 and yielding some 186,000t of copper per annum. When the underground section commences production, output will increase to some 18.1Mt of ore per annum and copper production will rise to about 294,000 tonnes. The life of the mine is projected at some 30 years.

Ore from the mine will be crushed, milled and treated by froth flotation to produce a concentrate. It is planned to construct a smelter and refinery to further process the concentrate, producing pure copper for export.

MJAM is currently preparing a full feasibility study incorporating an ESIA and EMP for approval by the Ministry of Mines and NEPA. Landmine clearing is at an advanced stage and continuing.

 

2.2 TAILINGS DISPOSAL

One of the major technical challenges of the project is the disposal of concentrator tailings remaining after extraction of the copper minerals from the ore. The tailings dams will be designed to overcome the risk of damage due to earthquakes which are known to occur in Afghanistan. MJAM has applied to the Ministry of Mines for approval of the tailings dam site. After considering a number of options, the Ministry has provisionally approved two sites for inclusion in the Feasibility Study, selected for technical reasons as well as offering minimal disruption of resident populations and being free of known occurrences of historical artefacts.

 

2.3 ARCHAEOLOGY

The discovery of a significant archaeological site at the mine has partially disrupted the mining program. Prior to the commencement of the mining project, there had been looting of the relics. No cultural relics have been damaged or destroyed by mining activities and there are no plans to commence work in any part of the site until it has been cleared of relics. MJAM is co-operating fully with the Government of the IROA to ensure the protection of all cultural relics and a large team of local and foreign archaeologists is on site, assisted by a substantial workforce drawn from surrounding villages.

The Ministry of Information and Culture is responsible for the recovery program and the Ministry of Mines is working in close consultation with them. The two ministries have signed a Memorandum of Understanding "for the purpose of protection and preservation of cultural & historical heritage at Aynak Copper Mines."  The PMU has obtained funding from the World Bank, the Ministry of Mines and the Ministry of Information and Culture and has established a fully staffed and equipped logistical support unit for the archaeological work at the site. Part of the funding is being used to provide specialised equipment, technology and consumables required for the recovery work.

ISAF has constructed temporary storage facilities for relics recovered from excavations. A section of the National Museum in Kabul has been dedicated to the display of relics recovered from Mes Aynak.

 

2.4 LAND ACQUISITION AND RESETTLEMENT

The Ministry of Mines has, in collaboration with provincial government, led the process of relocating families living within the areas which will be affected by planned mining activities. International consultants are assisting in this process to ensure that sustainable resettlement processes are followed, compatible with internationally accepted guidelines. Within the mine site, 5 occupied villages exist with a resident population of some 63 families. All but 20 families have been relocated pending final resettlement, compensation packages have been agreed and land has been identified for allocation for residential and agricultural purposes. The Ministry of Mines has made substantial progress with construction of infrastructure for a new village near the town of Muhammad Agha for the affected families, including water reticulation, sewage systems, schools and a mosque. These activities have all been conducted in compliance with relevant World Bank Guidelines and a formal grievance procedure has been established to assist affected persons in obtaining speedy redress.

The AMC makes provision for employment of locals, with measurable targets, and for development of skills among the local population.

 

2.4 PROJECT PROGRESS

The processes of landmine clearing and land acquisition, together with the unexpected discovery of the major archaeological site, have led to significant delays in the implementation of the mining project. Despite the massive security support provided by the Government of Afghanistan, there have been several incidents perpetrated by insurgent groups seeking to disrupt the project.

Despite these impediments, the economic importance of this development to the Islamic Republic of Afghanistan is well known and there is determination by Government  to achieve commercial production at the earliest possible date, without detriment to the nation's cultural heritage. There are many activities essential to the progress of the project which can be carried out off-site concurrently with archaeological work. These activities include planning, design and procurement of plant and equipment as well as the construction of supporting infrastructure away from the site, particularly the access road and rail links and power and water supply facilities. The Ministry of Mines is accordingly working closely with MJAM to assist the company to progress these activities with all due dispatch. In June 2012, a technical team from China which is responsible for the mine design and preparation of the Feasibility Study, visited Afghanistan and held detailed technical consultations with the MOM both in Kabul and at the mine site.

 

3.0 COMPLIANCE MONITORING PROJECT ACTIVITIES: GAF

The ACMP contract between the Ministry of Mines & GAF took effect in September 2011 and the GAF team immediately established itself in offices supplied by the PMU in the Afghanistan Geological Survey. Local support staff have been engaged to work with expatriate experts, an armoured vehicle has been procured and the GAF team is working with the Ministry of Mines & NEPA.

Prior to formal commencement of the project, a one-week study tour was undertaken to the Kansanshi Copper Mine, Zambia, in August 2011, together officials of the ACPA unit of the Ministry of mines and His Excellency, the Deputy Minister of Mines. Kansanshi is owned and operated by First Quantum Minerals Ltd. The tour was undertaken in association with the GAF capacity-building project in the Dept. of Inspectorate. The group saw all aspects of a modern, large-scale, open pit copper mine with a concentrator & SXEW recovery plant, and the participants were privileged to witness in some detail the laying of the HDPE liner and construction of under-drains for a large new tailings dam. The Kansanshi Mine was constructed and brought into production in an accelerated program despite logistical and infrastructural challenges comparable with those facing Aynak. It is an excellent example of what can be achieved despite adverse business conditions, achieving world-class standards in a Third-World environment.

The GAF team undertook a detailed legal review of the AMC & AA and from that has produced a summary forming a model highlighting key points for compliance monitoring. In liaison with other consultants, GAF has assisted the MOM to develop a structure for managing all aspects of the Aynak Copper Project in the Ministry and has prepared Terms of Reference  for each component and a summary job description for each post.

The team is actively engaged in assisting departments in the Ministry with responsibility for the Aynak project to establish the planned working structures and to implement formal work procedures and reporting mechanisms to be effective in their duties, both in facilitating and monitoring the activities of the mining company.

GAF provides technical advice to the Ministry on a day-to-day basis on every aspect of the project. GAF has compiled a catalogue of available technical data on the Aynak deposit and has also provided up-to-date, large-scale mapping of the site from high-resolution satellite imagery.

Technical discussions to date have focused on planning and co-ordination to expedite the start of actual mine construction. GAF has advised and assisted the Ministry in assessment and approval of the tailings dam sites, and a variety of issues affecting the preparation of the Feasibility Study.

The GAF team has compiled technical training material for MOM and NEPA officials and conducts formal training sessions in parallel with on-the-job training during the course of officials' routine duties. Further study tours will be undertaken to provide exposure to best practice in major mining projects abroad. Preparation and presentation of formal training modules is a continuous process but modules prepared to date include:

 

INTRODUCTION TO MINING

MINERAL PROCESSING

MINE WASTE ROCK

MINE TAILINGS DISPOSAL

MINE CLOSURE PLANNING & MANAGEMENT