DUNDEE PRECIOUS METALS COMPANY: IF COMPANY STOPS OPERATING, SITUATION IN KAPAN TO BECOME HARD

ArmInfo
2009-12-07 11:53:00

ArmInfo. The biggest social achievement of Deno Gold Mining Company
is that the company continues its activity. If the company stops
operating, the social situation in Kapan will become harder, said
Adrian Goldstone, Vice President of Environment and Sustainable
Development of Dundee Precious Metals Company at the EBRD workshop
held in London.

According to EcoLur, Adrian Goldstone made this announcement in reply
to EcoLur’s question, what kind of responsibility Deno Gold Mining
Company bears in Kapan for three communities, Syunik, Shahumyan and
Geghanush that have found themselves on the verge of environmental
and social disaster.

Under Adrian Goldstone, the situation in Kapan is a difficult
inheritance received from the Soviet Union. "It’s very hard to work in
Armenia. Deno Gold Mining puts much effort to change the situation,"
Goldstone noted. He said that the company intends to start open-cast
development (Shahumyan Mine) where newest technologies will be applied.

Dundee Precious Metals Company is nearly related with Deno Gold Mining
Company through Vatrin Company registered in the offshore zone of the
British Virgin Islands. This financial chain is tracked by EBRD loan
the bank allotted for the construction of Geghanush tailing developed
by Deno Gold Mining Company.

The workshop in London was devoted to the issue of environmental
and social responsibility in mining sphere. Besides EBRD, it
was participated by the representatives of mining and consulting
companies, as well as CEE Bankwatch Net Work (Bankwatch network is
an international non-governmental organization that has members in
the countries of Western Europe and CIS, and deals with monitoring
of international financial institutions, including EBRD).

In the course of this event CEE Bankwatch Net Work which EcoLur
Informational NGO has joined to, held a separate meeting with Dariusz
Prasek, Head of Operational Support at EBRD’s Environment Department,
Michael Green, Senior Banker at Department of Natural Resources,
and Biljana Radonjic Ker-Lindsay, NGO Relations Advisor at EBRD
Communications Department. The discussions were held in the frames
of the round table.

In the course of the discussions the outcomes of the public monitoring
over Deno Gold Mining Company’s activity in Kapan were presented,
the issue on compliance of the company’s activity with EBRD’s social
and environmental policy in regard to the allotted loan of 4 million
USD, Ás well as issues on the company’s negotiations with the bank
in regard to future probable loans were raised.

An opinion was expressed that Deno Gold Mining Company’s activity
doesn’t comply with international standards, the national environmental
legislation and violates right to health and healthy environment.

In particular, the following facts were submitted as evidence:

1. Right to public participation in decision-making is violated in
Geghanush Village where the residents collected 134 signatures against
the construction of 2 tailings.

2. The right of residents in Syunik Community is violated, as their
land areas are contaminated by the dumps from Kapan Combine emissions.

3. There are risks for life in Shahumyan Region located above the
galleries where underground ore development is carried out. The
residents have sued to get protection.

4. The Company’s Environmental Actions Plan doesn’t comply with any
standard, either international or national.

Dr. Dariusz Prasek noted:

* Dundee Precious Metals has a good image and works at high standards,

* the bank directs its funds to, first of all, solve the problem of
working places in the countries in transition period even though with
use of old technology,

* in the frames of small loans it’s impossible to solve global
environmental issues,

* on EBRD’s loan, a certain issue such as prevention of river pollution
and the company’s drainage outlet in the new tailing in Geghanush
was solved.

He also assured that in the frames of the bank loan the bank was
submitted both the social program and environmental actions plan
different from the one presented. In his turn Michael Green announced
that the negotiations with the company on allotting a new medium-term
loan of 25 million USD were broken off and won’t be resumed at
official level.

The participants of the public monitoring expressed an opinion that
social responsibility means not just employing. Just the opposite,
such notion for responsibility puts the people employed by such a
town-forming enterprise as Deno Gold Mining Company in dependable
situation and these employees have to agree with any conditions set
by the company, only let the company not close down. A wish is also
expressed that the bank would pursue the social and environmental
policy it declared and didn’t allot any loans in case of any
incompliance to this policy.

Coordinator of CEE Bankwatch Net Work in Balkans Fidanka McGrath
commented the London Wotkshop and outlined, that EBRD"s portfolio
of mining projects gives the bank little to be proud of. "EBRD chose
Dundee Precious Metals as the only mining company from its countries
of operation that could show good practice from Chelopech. But in
fact Dundee"s projects in Bulgaria have been delayed for years,
and even now when they obtained the permits, Bulgarian environmental
organisations are appealing in Bulgarian court and at the European
Commission. The Bulgarian court canceled the EIA, and we hope that the
EC will start an infringement procedure on the IPPC permit (Intergated
Pollution and Prevention Control), because these proposals were not
consulted properly with communities living downstream from the mine,"
said Fidanka McGrath.