Safety, Environment, Sustainability and Social Responsibility
During 2009, DPM continued to work toward meeting its commitment of achieving and maintaining recognized best practice mining, processing, environmental and health and safety standards at all its operations and facilities. The protection of employees, communities and the environment, from exploration and mining through to rehabilitation and closure, remains key to successful project development and operation.
In the latter part of 2008 and 2009, internal risk assessments were carried out wherever operations were suspended to ensure that standards of regulatory compliance and best practice environmental performance were maintained.
All of the in-country HSE and CSR teams report, on a quarterly basis, to the senior management of the Company who, in turn, reports directly to the HSE committee of the Board. The committee meets, on at least a quarterly basis, to monitor management’s progress in the implementation of policy and provides support for the commitment made by the Board with respect to social and environmental responsibility.
As part of meeting its best practice commitments, DPM joined the International Cyanide Management Institute and signed the International Cyanide Management Code (the “Code”) in 2007. The Code allows for pre-certification of projects and operations and the Chelopech MPF Project was nominated for assessment. The pre-certification audit was undertaken in mid-2008 and effective certification was awarded October 31, 2008. No further work with respect to Code certification is required until the construction of the MPF is completed. Due to further permitting delays, the Company is limiting its activities with respect to the advancement of the MPF Project.
Improvements to HSE and sustainable development policies and procedures continued during the year. During 2008, Seveso permitting and emergency response planning to support the development of the Chelopech MPF commenced. This process involved ongoing engagement with stakeholders, particularly the local communities, during 2009, and the Seveso and IPPC permits were approved by the MoEW in 2009. The IPPC permit has been appealed by NGOs, with a scheduled hearing date of May 19, 2010. The Seveso permit was not appealed and is operable. Rehabilitation activities at Chelopech are ongoing.
In 2008, the Company jointly funded the needs assessment phase of the Armenian Government’s Rural Poverty Alleviation Project. This project considers the social and infrastructure needs of rural villages in the region of its operation, the results of which will be used to plan suitable social and sustainability programs with the government, the communities and DPM’s future operations. DPM has also funded the installation of gas pipelines into areas where heating and cooking needs were not being adequately met and the addition of proper roofing to community buildings in neighbouring villages. In addition, the Company sponsors local sports teams, one of which has achieved international success, and is bringing a number of wider benefits to the Kapan area. During 2009, these activities continued although they were significantly reduced in scope as a result of the financial crisis.
DPM continues to develop strong community relationships, fund community programs and engage the communities in the Company’s project development plans at all sites.
In the fourth quarter of 2008, the Shahumyan operation was placed on temporary care and maintenance, and the strong community and government relationships established via these programs assisted in easing the transition and managing the impacts of the temporary closure. While the mine was on temporary care and maintenance some ongoing employment was offered, based on an agreement reached with the Armenian government. Furthermore the environment and community teams continued to be employed at the operation and worked on maintaining compliance with permits and laws, carrying out rehabilitation commitments, managing risks, continuing monitoring and managing water issues. During this period, training on safe underground mining techniques was provided to a number of employees.
The mine returned to operation in April 2009. During the care and maintenance period, there were no environmental incidents or issues, and compliance continued as the operation was re-started. Also during this time, the Company contributed, through ongoing reduced wage payments, to the social well being of the Kapan community in recognition of the mine’s status as a significant employer in and contributor to the economy of the Kapan area.
Strong community engagement programs commenced in 2007 and continued in 2008 and 2009 within the local municipalities of Chelopech, Chavdar and Karlievo. Community employee-based programs aimed at recognizing the family were successfully implemented. DPM has also funded various community projects during the year including work with the Orphanage at Zlatitsa, support of the hospital at Pirdop with the supply of heating diesel and equipment, kindergarten and school repairs and piping and sewage services. Also DPM continued to fund the Chelopech Language School, students of which are recognized with national awards on an annual basis.
In the municipalities of Chavdar and Karlievo, DPM funded street resurfacing and the refurbishment of a local kindergarten and municipal buildings. All cultural events in Chelopech, Chavdar and Karlievo are also supported by the Company.
Risk Assessment
Operational, environmental and permitting risks at all development and operating locations are continuously assessed and programs have been implemented to manage and/or mitigate these risks, where necessary. At exploration and development projects, beyond the normal commercial risks associated with mineral exploration, engineering and permitting risks have the greatest potential of affecting the Company’s future success. These risks are typically managed through the completion of advanced engineering studies and environmental and permitting programs on projects where there is a high probability of identifying a commercial discovery.
The process of risk assessment and management is well established at Chelopech. Although not yet formalized, it has become a routine part of operations and all identified risks have programs in place to address and mitigate such risks. Regular risk assessments of the Chelopech Mine are conducted by International Mining Industry Underwriters, the results of which have led to the implementation of numerous risk reduction measures at the site. These mitigating processes and procedures have resulted in a reduction in premiums for property insurance.
The process of risk assessment and management at the Deno Gold operations are in the early stages. Although the most significant risks have been identified, they have not all been quantified, and there may be other less significant risks to the operation which have yet to be identified. Areas where the assessments and development of management programs are still in progress are:
- Occupational health and safety, particularly in the underground mines;
- Public safety with respect to surface facilities, infrastructure and occupied land from old mined areas;
- Future permitting and social program requirements for conversion to combined open pit and underground operations;
- Supply and commercial risks related to the geographic location of the project;
- Commercial disruption and employee safety risks associated with social and political aspects of the project site; and
- Engineering risks.
During 2009, the risks to the Company of doing business with and providing funding to NCS was assessed and a number of additional programs were implemented and additional funding provided to mitigate environmental, human health and business reputational risks. With the completion of the purchase of the smelter on March 24, 2010, the Company’s program will be extended and DPM will develop a plan to bring the NCS operation into compliance with international good practice in the HSE and CSR areas.
In November 2009, the Company created the position of Director, Risk and Internal Audit, and Mr. Joseph MacDonald was hired on February 1, 2010 to fulfil this role. His responsibilities include: (i) the development of an integrated, analytical process that identifies and assesses the Company’s key risks across the organization, including operating (policies, practices and loss prevention), compliance (safety and environment) and financial, measurement of their impacts and benefits of identified mitigation strategies; and (ii) the assessment of internal control effectiveness and efficiency.
It is expected that all of the HSE and CSR risks across the business will continue to be identified and managed to an acceptable standard over the years 2010 and 2011.
Goals and Targets
The business and commercial and socio-political environment in which DPM operates is continuously evolving as its project and production schedules are also moving forward. As a result, the Company sets long term HSE and sustainable development goals for the coming years and relevant targets for the next 12 months. These goals and targets are intended to assist the Company in meeting its obligations to the countries and communities in which it operates and to ensure that DPM is well positioned to meet future challenges in a dynamic environment.
Operations Goals for 2010
- Continued alignment of community grants with key sustainability projects and an educational focus;
- Continued integration of this function into normal mining operations as a matter of course;
- Continual improvement in facility performance, design and operational safety;
- Ongoing improvements to reporting of community interaction and funding initiatives;
- Integration of new sites into the improved and standardized safety reporting;
- Continued success in permitting and permit renewal programs at all sites;
- Further development of a company-wide standardized management system;
- Further review of mine safety at Deno Gold and implementation of operational changes required to meet international good practice;
- Bring sites further toward full compliance with international best practice or norms in waste management, mine waste characterization disposal and management, water management and air and noise emissions; and
- Move toward international standards for reporting in the HSE and CSR areas of the business.