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Miner Digs in Over Gold

[The Australian; November 1, 2000.]

By LYNNE O'DONNELL

01 Nov. 2000

AN Australian company, partly owned by the Chinese Government, is coming under fire from environmental and pro-Tibet campaigners over plans to develop a gold mine on the Tibetan plateau.

Sydney-based Sino Mining has joined the ranks of some of the globe's biggest energy players facing criticism for involvement in projects with the potential to damage the region's delicate ecology and displace nomads who have no say in how the land is used.

Activists accuse the company's Australian executives of colluding with Chinese plans to exploit gold deposits in Qinghai province, formerly part of Tibet.

But Sino Mining chairman Nicholas Curtis says Australian involvement will raise mining standards closer to international norms.

The Australia Tibet Council says development of the Tanjianshan gold deposit near the Tsaidam Basin would accelerate migration of Chinese to the region and cause irreversible environmental degradation.

This, in turn, would force Tibetan and Mongolian nomads to move higher into the mountains, as has already happened to people in other parts of the region who now live in absolute poverty, a report by the council, compiled by Melbourne University academic Gabriel Lafitte, says.

Sino Mining last year signed a 30-year contract under which it agreed to raise funds to develop the existing Tanjianshan mine. The mine is Qinghai's largest and by the end of 1999 had produced 1400kg of gold, government reports say.

As China moves closer to World Trade Organisation accession, and the Government loosens its grip on the metals sector, Sino Mining has become the interface between the international mining industry and China's need for foreign capital.

China is planning to establish a gold exchange and ease controls on the domestic gold price to reflect the world market more closely.

Gold output in the first nine months of this year was 20.8 tonnes and reserves are around 2400 tonnes.

With an eye on the low cost of extraction and the ease of disposal - the Chinese central bank compulsorily purchases all domestically produced gold - Sino Mining has touted its government connections to draw investors to fund the development of the Qinghai mine.

The company is 35 per cent owned by Beijing and 65 per cent by Australian and US investors. Mr Curtis, who had not seen the ATC report, said yesterday that the Tanjianshan mine accounted for 60 per cent of the GDP of the surrounding country.

"Practices, labour conditions and environmental planning are not up to international standards and international capital won't invest in assets that are managed in this manner," he said.

"Anything that can be brought to bear to make the mine adhere to international standards should be encouraged because you will upgrade the labour conditions, the skill set and the environmental standards for an existing operation."

Activists are increasingly targeting international companies to focus attention on what they regard as China's illegal colonisation of Tibet.

China invaded Tibet in 1959 and redrew its borders, incorporating vast areas into neighbouring provinces and renaming the remainder the Tibet Autonomous Region.

Beijing has attempted to legitimise its oft-criticised rule of Tibet by transplanting poor Chinese and Moslem farmers and claiming that its sovereignty dates back centuries.

The Government has recently sought to fund plans to exploit Tibet's oil and mineral resources by attracting investment from such firms as BP Amoco, Shell and Exxon Mobil. But the companies have been forced on to the defensive amid accusations that they are funding activities that do not conform with internationally accepted standards.

Sino Mining's project is part of an array of activities on the plateau which, according to a variety of reports, include plutonium production, missile testing, satellite launches and plans for the use of nuclear explosives to dam rivers.

With government controls lax at the best of times, the potential for malpractice is high.


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