Share prices likely to be hit in aftermath of Djibo cyanide spill

Avocet photo of overturned cyanide truck

Shares in Avocet mining may be about to fall as investors begin to realise the potential for disaster surrounding the recent cyanide spill from a truck bound for Inata gold mine.

Although its a suprise to me that anyone with an internet connection would have bought shares in the first place, as when you look up who the directors used to work for, it doesnt exactly fill one with confidence. (Can’t be bothered to do the research? Keep reading.)

Fortunately for Avocet though, the cyanide poisoning seems to have, on this occasion, claimed only a few fish as victims.

However, some worried investors do seem to have woken up to the perils of investing in a company which relies on supplies of poison that are trucked through inherently risky terrain, in a manner which would be unlikely to stand up to scrutiny in a ‘developed’ country.

Meanwhile of course, firm commitments are not forthcoming from Avocet mining, or their cyanide suppliers Samsung, who seem to be hoping that all the bad news will just go away.

To be fair it hasnt been the best news year for Avocet, having already had to deal with a large scale labour dispute, Avocet can hardly have relished the negative media attention they have received following the spill of Cyanide at Djibo barrage, which occured about a month ago, and was first reported here, and which has subsequently spread far and wide across the internet.

But it wouldnt be fair to single out Avocet for particularly special attention though, mining companies in general have a pretty bad reputation.

Rio Tinto for example have over a number of years been associated with bad news stories, the most recent of which was when they became embroiled in a bribery and espionage scandal –  as Avocet must surely know, one of their two executive directors, Avocet’s Andrew Norris, used to work for Rio after all.

As we all know, safety is a big issue in mining. When a New Zealander fell to his death at Kanowna Belle gold mine in Australia in 1999 (not long after the mine was bought by a company called Delta Gold) industry experts went on record to decry the ‘widespread complacency in the mining industry‘. In fact this ought really to be clear to Avocet too, Avocet’s Mike Donoghue was formerly General Manager – Operations of Delta Gold.

But we must remember that things are done differently in Africa, take for example the Katanga mining operation in that most troubled of African countries, Congo (DRC).

When the Katanga contract was agreed  with the Congolese government, analysts pointed out that it “allows a tax regime that appears to offer very little benefit to the Congolese government.”  Why was this an issue d’you suppose, perhaps because one of the key individuals involved in Katanga mining was an alleged war profiteer called George Forrest. The same George Forrest for whom the UN prescribed financial sanctions as a result of his participation in the illegal exploitation of Congo’s resources.Weirdly that same George Forrest was a key funder of Joseph Kabila’s political party, People’s Party for Reconstruction and Democracy (PPRD) during the 2006 elections (go figure!).

Yep, they do things differently in Africa, something which Avocet may also realise, seeing as Avocet’s other Executive director, Brett Richards was Senior Vice President at Katanga Mining immediately prior to joining Avocet.

At least there have not been any verifiable complaints of exploitation of local people yet; unlike for example the much maligned ‘Anglo American’ group, who were roundly criticised by War on Want for  “profiting from a pattern of global abuse and brutality against poor people, including the murder of opponents” – for more details about all that, you could just ask either one of Avocet’s Russell Edey or Robert Pilkington both of whom used to work for Anglo American, as did Avocet’s vice president, the afore mentioned Andrew Norris.

Anyway, with such a wealth of experience of scandal hit mining companies between them, these clever guys should be able to navigate a path out of these difficulties… at least until another truck full of poison falls into a reservoir.

Cyanide spillage in Djibo, Burkina Faso demonstrates dangers posed by Gold mining

A British mining company has been left facing tough questions over a potentially disasterous cyanide spill near Djibo, Northern Burkina Faso.

London based Avocet mining own the lucrative Inata Gold Mine, to where a truck carrying 40 tonnes of the toxic chemical was headed when it overturned beside a reservoir.

The incident which took place on the 29th of July has left Avocet and its contractors with serious questions to answer, over the safety of their operations, and the continued use of toxic substances in the processing of gold ore.

Yet despite coming close to causing catastrophic contamination to water supplies, AND the fact that it is the third of accident of its kind in recent months, the accident has been hardly reported.

Further investigations have now revealed that, incredibly, only relatively small amounts of cyanide were lost in the spill, but the accident and its aftermath have aptly demonstrated the incredible dangers posed to remote communities by the use of toxic chemicals in gold mining.

The two 20 tonne cyanide filled containers were being transported to Inata Gold Mine (around 40 km from Djibo in Northern Burkina Faso) by a subcontractor, when the truck carrying them swerved off a dam wall at the side of a reservior, and overturned.

Business as usual - Burkinabe people walk past overturned truck full of cyanide.

Following a clean-up operation overseen by worried mining company bosses, the lethal chemicals were transferred to the Inata Gold Mine, where it was discovered that the containers had indeed been damaged, and that relatively small but extremely deadly amounts of cyanide had leached out into the watercourse.

Fortunately for local people, it would seem that so far no human casualities have resulted from the spill, although numerous fish have been found poisoned, and stringent safety measures were immediately adopted by local farmers to protect precious livestock.

The real scandal is not just that this potentially disasterous incident took place, although it is in fact the third such incident to have taken place over recent months, but that so little has been said about it.

Only the children’s author and Burkina resident ‘Sahel Steve’ Davies has made any significant noise about the incident.

This is despite the fact that Avocet, which has its headquarters in London, prides itself on its CSR reputation – Avocet boasts on its website that:

“The health and safety of the Group’s employees and strict adherence to environmental compliance are of paramount importance…”

Avocet then procede to talk about the various social and development projects undertaken by the company in the region. In a report (right click ‘save as’) released by Colin Belshaw, general manager of Inata Gold Mine, the finger is squarely pointed at the Korean company Samsung, who are responsible for transport of the chemicals, and their local subcontractor Vehrad Transport. Mr Belshaw also opines that strong sunlight and local flooding should mitigate against the effects of the spill.

One might perhaps expect more from a business which apparently prides itself on its health and safety and wider CSR record. Particularly one might at least expect it to be a bit better at communicating with local residents affected by such a spillage via governmental news outlets – but that is not so according to Steve Davies who reports:

“Now, nearly three weeks after the accident, an uneasy calm has returned to Djibo. Lots of dead fish have been found but to date no humans have died from contact with contaminated water. So public opinion has settled on the theory that only a small amount of cyanide leaked out. This is being inferred from the lack of poisoned people piling up in hospital corridors. There has been no communication from the municipal authorities.”

Journalist Hyacinthe Sanou writing for allafrica.com points out:

“…une réaction officielle, pour rassurer et surtout sensibiliser la population, n’aurait pas non plus été de trop.” (An official reaction, to reassure and educate the local people, should not have been too much to ask.)

Avocet will yet need to work harder, much harder, if it seriously wishes to be seen as having higher ethical standards than other mining companies, such as the scandal hit Rio Tinto (for whom Avocet’s Executive Director A M Norris used to work).

Some will doubtless be left feeling that the truth is that in a remote area like Northern Burkina Faso, where foreign correspondants and share holders are thin on the ground, and where one mine can produce almost 240,000 ounces of gold per year (almost half of the company’s ambitious total annual target output of 500,000 ounces) public relations are not such a big priority.

There are also questions to be answered about their use of cyanide, which is famously toxic, but in mining terms also remarkably cheap. Funnily enough, no mention is made of the chemical on the company’s website, but it is used in the extraction of gold from the ore.

In 2000 a large cyanide spill at the Baia Mare Gold Mine in Romania caused massive scale pollution of water courses, leading it to be known as the worst environmental disaster in Europe since Chernobyl.

This and other environmental disasters have now led to cyanide being banned from the gold processing industry, first in Hungary and more recently in Bulgaria too.  So far as I know however, there is no great campaign against the use of the killer chemical in less wealthy/ developed/ media savvy parts of the world.

I would urge you to read Steve’s report and share it – this kind of life and death situation is the price others pay for western gold consumption, we need to be ready to hold producers such as Avocet to account for their standards of behaviour.

Please make sure you visit Steve’s site, and please repost, tweet and generally publicise this news in any way you can – public scrutiny leads to demands for higher standards. Public ignorance means companies can potentially get away with murder.

I have asked Avocet for a statement on this situation, and will publish their reply.