IFC-owned Greystar/Angostura gold development in trouble
Greystar shareholders kicked out management and board as they did not secure permits and broad community support. Revisions of IFC Performance Standards and Equator Principles has a new case study to wrestle with. As reported by infomine.com, Greystar (listed on TSX and AIM: GSL) has been working on the development of Angostura gold-silver mine for 15 years, investing C$153 in the US$1 billion project. Angostura's Environmental Impact Assessment was submitted in December 2009. However, Colombia's Energy and Mines Ministry said the company can't build the mine in a protected watershed area. In March 2011, Greystar decided to withdraw its permit applications and submit a new, reconfigured mine plan.
Although IFC’s 2009 Environmental and Social Review summary touches on presence of regulated habitat of key importance (the páramo – although it does not mention Colombia’s emerging mining law that prohibits mining activity in the páramos - approved by Congress later on in July 2009), this apparently did not find its way to key investment/project risks in IFC’s Summary of Proposed Investment. Also, the usual concerns about open-pit mining and cyanide heap-leaching may have been underestimated. Perhaps assurances by Greystar, presence of historical and artisanal mining in the area, and the context of other 'paper parks' around the world gave IFC’s team comfort that more modern mining practices would be acceptable and could be permitted. It would also be interesting to explore if biodiversity offsets or other strategies could have provided additional risk mitigation measures.
At this time, it is unclear if IFC’s Ombudsman/Advisory Ombudsman (CAO) office (or others) will be asked to review why IFC proceeded with a $12 million equity investment in this project. [IFC’s CAO is currently helping to mediate other mining & metals project complaints related to BHP’s Mozal aluminum smelter in Mozambique, about which I blogged here: NGOs Testing BHP Billiton and Investors’ Metal.] But, in many ways, this may be an interesting project to dissect and review for lessons learned given the on-going review of the IFC Performance Standards and the Equator Principles about which I blogged here and here.
I would be curious to read your perspective on this development.
About the author: Mehrdad Nazari (MBA, MSc, LEAD Fellow) is a Corporate Responsibility, Sustainability Reporting & ESIA Advisor, and Director of Prizma. He was previously an environmental consultant with Dames & Moore, Principal Environmental Specialist at the EBRD and CSR Research Director at CoreRatings. Mehrdad is also a GRI-approved trainer on GRI's sustainability reporting framework and a licensed AA1000 Assurance Provider.