China gets the profits, and the Yenisei River gets the runoff?
The Kyzyl-Tashtyg complex ore deposit, which also contains, gold and silver, is located 240 km from Kyzyl, the capital of Tyva. In 2006 Lunsin LLC, part of the largest Chinese mining corporation “Zijin Mining Group,” won a tender for complex ore development there. The proposal stipulates the construction of an open mine for ore extraction and building of the ore enrichment and processing plant. According to information from the company’s management, investments in this facility are $129 million. Another $97 million will be invested before 2014.
Lunsin LLC plans to produce zinc, lead, and copper concentrates for further export to China. The construction of the ore plant is being carried on by Chinese workers – at present the number of workers exceeds twice the original plans (1000 instead of 500). This fact is a worry for regional authorities because it’s one of the first precedents when the development and running of a deposit in Russia is totally carried out by a Chinese company using a Chinese labor force. According to Eugene Simonov, the coordinator for the “Rivers without Borders” project, this is the way 90% of Chinese commodity-driven business abroad works:
- The main goal of the official policy is to provide in-flow for Chinese economic development. Projects in Russia differ little from schemes throughout the world from Mongolia to Australia, - says Simonov. – By the way, the “Zijin Mining Group” has a reputation of large-scale poisonings of local people and conflicts both in China and abroad.
The Kyzyl-Tashtyg mineral deposit is located in the midst of a cedar taiga forest on the shores of the Ak-Khem River, which is a tributary of Greater Yenisei (Bii-Khem). The last confluence with Kaa-Khem near Kyzyl and forms the Yenisei – one of the biggest rivers in the world. Unfortunately, today hundreds of hectares of the cedar forest have already been destroyed, and a 175-m deep open pit has formed on its place. Debris, household rubbish, and other garbage are simply buried on-site, and drainage issues are not yet resolved. Some estimates say that following the plant’s start-up, about 500 cubic meters of untreated sewage will be dumped daily into the Ak-Khem River (or 182.5 thousand tons a year). This could potentially lead to the growth of enteric and other infections among local people and to the reduction of fish resources.
WWF Russia and other ecological NGOs claim that the delay in the construction of treatment facilities as compared to the construction of the plant is the greatest cause for worry. The public Prosecutor’s office of the Tyva Republic also unveiled some violations in the ore enrichment and processing plant project: as of August 2011, 11 administrative cases were initiated against Lunsin LLC. The total amount of the fine is trifling compared to the investments – about $20,000, which was paid by the company. It is estimated that mitigation for damages to the natural environment will total about $5 million (only 4% of that which has already been already invested).
- As a result, the Chinese enterprise Lunsin LLC stands to make enormous gains, Chinese industry will receive the metals it needs, and it seems that Russia will only receive the cost of the license and innumerable damages in the form of water pollution in the Yenisei, logged cedar forests, unsightly open mines, and destroyed ecosystems, - says Alexei Knizhnikov, WWF Russia Oil and Gas program coordinator.