chapter 2 project need and alternatives · 2. project need and alternatives ... operations,...

Chapter 2 Project Need and Alternatives

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Table of Contents

2. Project Need and Alternatives................................................................................................................. 1

2.1 Project Justification ........................................................................................................................ 1 2.1.1 Global Nickel and Cobalt Demand ...................................................................................... 1 2.1.2 Sumitomo Metal Mining Company Needs ............................................................................ 3 2.1.3 Benefits Associated with the Project ..................................................................................... 3

2.2 Project Alternatives ........................................................................................................................ 4 2.2.1 The No Project Alternative ................................................................................................... 4 2.2.2 Conceptual Project Alternatives ............................................................................................ 5 2.2.3 Project Detail Alternatives .................................................................................................... 6

2. Project Need and Alternatives This chapter describes the background of the Project, the justification for the Project and the options considered in scoping the Project. The Project facilities and infrastructure to support the mine operations, including mine areas, haul roads, mine industrial area, water storage facility and port areas, are described in detail in Chapter 3 of the EIS. All of the proposed infrastructure and facilities are required to support the Project objective of conducting mining activities, in an efficient manner, to develop nickel resources identified within the Santa Isabel tenements (Isabel Tenement D and Isabel Tenement E).

2.1 Project Justification This section describes the justification for the implementation of the Project based on the global nickel market and SMM Solomon corporate operations. It also describes the economic and social benefits of the Project in a local and national context.

The mineral resources of the Solomon Islands remain largely undeveloped. Development of the Project would assist the Solomon Islands in realising their resource potential. The Project will contribute to supporting and financing the development needs of the Solomon Islands resulting in benefits to the local people through long-term revenue contributions to the economy. It is also anticipated that the Project will generate local employment and small business development opportunities on Santa Isabel Island and other Solomon Island locations.

2.1.1 Global Nickel and Cobalt Demand Primary nickel can resist corrosion and maintains its physical and mechanical properties even when placed under extreme temperatures. When primary nickel is combined with steel, even in small quantities, the durability and strength of the steel increases significantly as does its resistance to corrosion. Nickel was introduced in steel production in the late 1800s resulting in an increased demand. Nickel is now used in the production of many different metal alloys for specialised use with stainless steel being the largest industrial use (refer to Figure 2-1).

The main source of cobalt is as a by-product of copper and nickel mining. It is used in the production of a number of alloys which are corrosion and wear-resistant.

Figure 2-1 Industrial Consumption of Primary Nickel Source: Standard CIB Global Research www.standardbank.co.za

Global demand for nickel has increased substantially over the last 20 years. China’s economic development has driven much of this growth. Table 2-1 presents the global nickel supply and demand balance over the last five years.

The demand for 2011 is a forecast only. It shows that after a surplus of nickel metal in the years 2007 to 2009, there was a nickel deficit in 2010 and this was forecast to continue through the first half of 2011. The deficit was caused by strong end-use demand combined with ongoing supply disruptions (Macquarie Research, 2011). However, rising second half production was predicted to push the nickel market into surplus by the end of the year. Projected increases in global stainless steel production and Chinese nickel pig iron are predicted to support nickel metal prices in the medium term.

Table 2-1 Global Nickel Supply/Demand Balance

‘000 tonnes 2007 2008 2009 2010 2011 (Forecast)

Nickel consumption 1377 1287 1282 1496 1596 Percent change -4.1% -6.5% -0.4% 16.7% 6.7% Nickel supply 1406 1401 1347 1432 1596 Percent change 4.8% -0.3% -3.9% 6.3% 11.4% World Market Balance 29 114 65 -64 -1

Source: Macquarie Research 2011

Russia is the largest nickel producing nation in the world (280,000 t), followed by the Philippines (230,000 t), Indonesia (230,000 t), Canada (200,000 t) and Australia (180,000 t) (2011 data from Maps of World 2012).

Figure 2-2 presents information on the percentage of nickel production in each region.

Figure 2-2 World Nickel Production Source: WBMS www.world-bureau.com

Approximately 70 % of world land-based nickel resources are contained in laterites, however, laterites account for only 40 % of the world nickel production (Dalvi et al, 2004). While the majority of production of nickel is currently from sulphide ores, it has been reported that the future expansion of the nickel market will be through increased production from laterites such as those found within the Pacific Islands such as the Solomon Islands and New Caledonia.

2.1.2 Sumitomo Metal Mining Company Needs Sumitomo Metal Mining Company, SMM Solomon’s parent company, currently owns and operates nickel processing facilities in Japan and the Philippines which are primarily fed with Indonesian nickel ore. The Indonesian government has recognised the economic benefits of processing Indonesian ore in Indonesia which has led to a mandate that mining licence holders in Indonesia should, as of 2015, utilise mineral processing facilities within Indonesia. This mandate may potentially result in a diminishing ore feed from Indonesia necessitating Sumitomo Metal Mining Company to secure new ore feeds from other sources for their processing facilities. The development of this Project could provide a source of ore feed to these processing facilities in addition to the ore supply currently sourced through a number of other Sumitomo Metal Mining Company mining interests worldwide.

The nickel laterites (limonite and saprolite ore) that occur in the Solomon Islands are generally low grade, shallow and dispersed in numerous deposits throughout the tenements, emphasising the importance of the engineering studies in determining the most efficient methods of extracting and processing the nickel ore.

Saprolite ore is suitable mainly for pyrometallurgical processing while limonite ore is suitable mainly for hydrometallurgical processing. The saprolite ore produced by the Project is required by Sumitomo Metal Mining Company’s Hyuga Nickel Smelter located on the west coast of Kyushu in Japan. The feedstock for this smelter must contain high nickel and low iron concentration for the smelter to produce a ferronickel product (alloy made from iron and nickel) which is the raw material to produce stainless steel. This ferronickel product is also supplied to other Divisions of Sumitomo Metal Mining Company for manufacturing purposes, or traded on the global market.

As the limonite ore has to be removed to access the saprolite ore, SMM Solomon considers the use of the limonite ore to be beneficial. The limonite ore could be treated by a hydrometallurgical process either in the Philippines at Taganito or Coral Bay or a purpose built plant in another location. This is discussed further under the conceptual alternatives in Section 2.2.2.

SMM Solomon has undertaken technical engineering studies and environmental impact studies for the Project to further investigate the potential to mine nickel ore from the Solomon Islands. Part IV, Regulation 18 of The Mines and Minerals Regulations 1996 states:

“In the exercise of mineral rights, holders shall carry out operations with due diligence, efficiency and economy and in accordance with good technical and engineering practises generally used in the mining industry so as to (a) conserve and avoid the waste of the mineral deposits of Solomon Islands”.

SMM Solomon is committed to ensuring the mining of the nickel ore within Isabel Tenement D and Isabel Tenement E is carried out efficiently, cost effectively, minimising impacts, and providing the people and government of the Solomon Islands valuable, and long term benefits for their mineral resources.

2.1.3 Benefits Associated with the Project The Project is anticipated to provide a significant long-term economic contribution to the Solomon Islands in general, and Santa Isabel Island in particular. The Project presents an opportunity to reduce the reliance of the Solomon Islands on revenue derived through potentially unsustainable forestry industries and presents a development opportunity that will provide a long-term revenue stream while managing environmental and community risks in a responsible manner.

Specific benefits to the Solomon Islands resulting from the Project may include:

• peak employment of approximately 500 people during the construction of critical infrastructure over 24 months

• employment of approximately 600 people to operate the Project over the 23 year mine life

• estimated contribution of between US$30 and US$89 million in tax revenues to the Government of the Solomon Islands over the life of the Project (depending on nickel and cobalt commodity prices)

• increased opportunities for education and training of local people with the aim of employment within the Project

• indirect employment and development opportunities for local residents such as purchase of goods and services from local suppliers and small-scale development activities

• other indirect benefits such as infrastructure (port, roads, power generation) which may relieve local economic development constraints related to the lack of critical infrastructure

• benefits to the macro-economy including an increase in the Gross Domestic Product of an average of 0.3% per year over the life of the Project depending on commodity prices

• contribution to increased household income within the Solomon Islands.

2.2 Project Alternatives Alternatives to carrying out the Project were identified during scoping of the Project and included conceptual, technological and location alternatives. The four criteria considered in assessing the preferred options were environmental factors, socio-economic (community) aspects, constructability and operational factors.

2.2.1 The No Project Alternative The potential risks of not proceeding with the Project include the in-situ nickel ore resources not being developed in the short term possibly leading to the government and the people of the Solomon Islands foregoing the benefits the Project could provide and the potential impact on the availability of processed materials (which require ore to produce) that support development around the world.

A high level analysis of the effects on the environment, social environment and the economy if the Project should or should not proceed was undertaken and the results are presented in Table 2-2.

Table 2-2 Comparison of the Project Alternatives

Component No Project Alternative Project Development Environment • Minimal change to existing

environment. • Continuation of land and water

degradation resulting from unsustainable logging practices.

• Absence of SMM Solomon in area may allow prospectors or other developers to undertake activities without strict controls in place to minimise environmental impacts.

• Impact on existing environment with implementation of management controls and monitoring programs.

• Opportunities for rehabilitation of existing disturbances such as old logging roads, where used for Project infrastructure.

Social • Maintenance of existing living conditions and quality of life.

• Maintenance of cultural heritage values.

• Absence of SMM Solomon in area may allow prospectors or other developers to undertake activities without

• Possible changes in social structure and culture.

• Increased opportunities for training and education.

• Increase in household incomes. • Possible improvement of public

services and infrastructure.

Component No Project Alternative Project Development commitment to providing opportunity and long term benefit to local and provincial communities.

Economy • Limited opportunities for economic growth. Continuation of subsistence living.

• Opportunity for spin-off business development.

• Opportunity for business development post rehabilitation (e.g. agriculture).

• Opportunity for local employment. • Increased revenue from exports and

taxes/royalties paid by expatriate companies.

2.2.2 Conceptual Project Alternatives Conceptual alternatives for the Project were considered when the Project was first being scoped. The use of nickel ore resources identified in Isabel Tenement D and Isabel Tenement E in a sustainable manner and the supply of nickel metal to other business units are the primary objectives of Sumitomo Metal Mining Company. A number of combinations were considered in relation to the timing of development and the method of processing and shipping. These alternatives to carrying out the Project are summarised in Table 2-3.

Table 2-3 Conceptual Project Options

Component Option 1 (No Project)

Option 2 Option 3 Option 4

Mining Elsewhere Solomon Islands Solomon Islands Elsewhere Processing Elsewhere Japan/Philippines Japan/Solomon

Islands Japan/Solomon

Islands Shipping Elsewhere Ore from Solomon

Islands transported to Philippines and Japan

Mixed sulphide precipitate

(processing plant product)

transported to Japan

Shipping ore into and processed product out of

Solomon Islands

Option 3 is the preferred alternative of SMM Solomon for carrying out the Project in the long term. Option 3 is a more integrated option for SMM Solomon and would involve the mining of all SMM Solomon owned tenements (including those on Santa Isabel and Choiseul Islands) and the processing of limonite nickel ore within the Solomon Islands. High grade saprolite ore would be shipped to Japan for processing at Sumitomo Metal Mining Company’s Hyuga Nickel Smelter in Japan. Option 3 would involve less shipping than the other options and the reliability of ore supply to processing facilities could be better managed. The potential for localised impacts to the environment and communities of Santa Isabel and Choiseul Islands is greater with this option, however, it could potentially provide increased economic benefits for the people and government of the Solomon Islands.

It is important for the nickel ore identified in the Isabel Tenement D and Isabel Tenement E to be extracted in accordance with the terms of the mining regulations and the governing Solomon Islands legislation. SMM Solomon is seeking to convert the prospecting licenses on Santa Isabel Island to mining leases and obtain a development approval to allow the Project to proceed. SMM Solomon is currently working towards the implementation of Option 2 at this time, which includes the existing Santa Isabel Island tenements (Isabel Tenement D and Isabel Tenement E), and a number of other tenements within the Solomon Islands in order to ensure sufficient ore and feed reliability for the life of any processing facility proposed for the Solomon Islands.

SMM Solomon is planning the Project based on developing the existing exploration tenements. This EIS is based on the mining activities and supporting Project infrastructure development for the Isabel Tenements D and E, which are the priority tenements at this time on Santa Isabel Island. A separate EIS for the mining activities and supporting Project infrastructure for the tenement on Choiseul Island has been submitted to the Solomon Islands government and is currently undergoing public consultation and review.

In summary, SMM Solomon are taking a staged approach to achieving their primary objectives for Project development by pursuing Option 2 in the short term with Option 3 considerations to be further investigated in the long term.

2.2.3 Project Detail Alternatives Technological alternatives for carrying out the activities were considered. The following considerations were made in the assessment of the options:

• Constructability and operational aspects for mining:

physical and mechanical characteristics of the ore deposits

ore body grades

capital and operating costs

mining rate or annual productivity.

• Constructability and operational aspects for ore processing:

capital and operating cost

reliability and efficiency of processing.

• Environmental aspects:

likelihood of significant impacts to the environmental values of the Solomon Islands

influence of environmental fluctuation (e.g. water level, wave action).

• Community and social aspects:

existing land use

availability of land for purchase or lease

opportunity for local, regional and national benefits

impact on local communities

impact on cultural heritage.

2.2.3.1 Sustainable Development Considerations The South Pacific Regional Environment Programme, in its Guide to Environmental Impact Assessment in the South Pacific (1993) defines sustainable development as developing resources in such a way that:

• “avoids major long term or continuing damage to environmental systems

• renewable resources, such as fisheries and forests, have the chance to replenish themselves

• non-renewable resources, such as fossil fuels, minerals and sand and stone, are depleted in a managed way to permit substitutes to be developed

• it will leave the environment for our children in the same or better condition than when the development started.”

The culture and history of the Solomon Islands people is intimately associated with the natural environment. Modern Solomon Islands communities continue to lead mostly a subsistence lifestyle where the interdependence between people and biodiversity is critical.

The Project has the potential to affect this biodiversity both directly (e.g. clearing vegetation for roads, mining and infrastructure and direct discharges to surface water or air) or indirectly (i.e. social and environmental changes) with the potential for cumulative impacts to occur when developing the Project in environments influenced by other developments.

SMM Solomon has recognised that a number of factors can influence their ability to proceed and therefore bring benefits to the local people, the Solomon Islands government and SMM Solomon. These factors include access to land, reputation, investor confidence, relationship with regulatory agencies, risks for permitting, employee and community relations, and partnerships with non-government organisations. In scoping the Project, SMM Solomon has adopted a responsible and sustainable approach to manage the proposed Project activities within the Solomon Islands and minimise their impact on biodiversity.

SMM Solomon has also developed and implemented an ongoing consultation plan and disclosure process to facilitate a greater understanding of the Project and build trust with Project stakeholders. The objectives of the consultation initiatives include conducting all consultation activities in accordance with legislative requirements, minimising Project risk, improving internal company decision-making, facilitating creative solutions to issues, and aligning with best practice standards for social performance. SMM Solomon has to date conducted a stakeholder engagement program that is transparent, targeted, culturally appropriate and inclusive and intends to continue with this program throughout the life of the Project.

The Environmental Management Plan, included as Chapter 5 of this EIS, identifies many examples of how sustainable development principles are integrated by SMM Solomon in scoping the Project. The sustainable development initiatives by the Project include:

• placing infrastructure in areas already disturbed where practicable, such as using existing logging roads or siting accommodation camps and ports at the sites of old logging camps and wharves

• progressive rehabilitation of all mine areas as they are completed throughout the Isabel Tenement D and Isabel Tenement E

• avoiding mining in existing conservation areas where relevant

• identifying areas that need to be conserved and protected from the Project activities such as significant ecological, cultural or community sites

• continuing public consultation and stakeholder engagement throughout the life of the Project.

2.2.3.2 Alternative Mining Methodology The ultimate goals of determining the preferred mining method are to maximise recovery of the nickel resource, provide a safe environment for miners, minimise costs and minimise impacts to the community and the environment. Many aspects must be considered in order to choose the method with the least challenges among the feasible alternatives. The selected methodology must be technically feasible based on the ore geometry and ground conditions, while also considering the associated economic, political, environmental and social impacts (Bitarafan and Ataei 2004). Each ore body is unique and the mining method chosen for the Solomon Islands Nickel Project may need to be adapted in several locations to adjust to localised conditions if required.

The major parameters used to determine the preferred mining methodology within Isabel Tenement D and Isabel Tenement E are:

• the shallow and variable thickness of the deposits

• haul and working surfaces which have the potential to be significantly compromised by the intense rainfall. Specific methods to ensure the facilitation of efficient mining of the deposit are required

• the assumed in-situ soil moisture content of 30% to 60% presents issues for trafficability and mining conditions

• the low dry bulk density of the limonite of approximately 1.0 t/m3 and of saprolite of 1.2 t/m3

along with the swell factor (1.3) which impact on the effective capacity of the mine haul trucks.

The preference for mining on Santa Isabel Island is to use a conventional strip mining methodology to mine the limonite and saprolite ore along benches. The high rainfall, seismicity, mountainous terrain, high moisture content and rock strength has led to the determination that mining from bottom to top of natural slope may open potential for instability due to the soil composition, thus increasing safety and environmental risks. Top down mining has been chosen as the preferred mining methodology working from the top of slope down throughout the mining block. The potential benefits to implementing the top down mining methodology include:

• The area of disturbance is kept to an absolute minimum as areas to be mined are only disturbed immediately prior to mining and are progressively rehabilitated once mining in the area has been completed. Progressive rehabilitation assists in the prevention or minimisation of potential sedimentation or erosion issues.

• Progressive rehabilitation of the mining areas once mined out allows for the timely completion of mine closure and rehabilitation at the end of mine life, greatly reducing potential closure costs.

2.2.3.3 Alternative Ore Processing Methods Ore processing technologies have not been investigated extensively as this phase of the Project concentrates on mining with export of all the ore.

Hydrometallurgical processing of limonite ore is an emerging technique for the production of nickel metal (Golder Associates 2012). The process uses acid to dissolve the iron rich rock and then limestone to assist the re-precipitation of the constituent elements in series. The mixed hydroxide product can be refined or sold on the international market. This technology requires tailings disposal. Sumitomo Metal Mining Company Limited has successfully constructed and operated a HPP facility in the Philippines at Coral Bay and are nearing completion of construction of their second plant in the Philippines at Taganito.

SMM Solomon’s preference is to use this same proven processing methodology as the basis for a potential HPP operation in the Solomon Islands. A HPP facility would be capital intensive and would require a long processing life to guarantee return on the capital investment. Therefore, sufficient resources to feed the plant must be secured before a decision on such a significant financial investment can be made by SMM Solomon.

2.2.3.4 Alternative Support Infrastructure Locations General criteria considered in determining location or site alternatives for supporting infrastructure are listed below.

• Environmental:

presence of existing disturbance

impacts on surface or groundwater (marine and fresh) resources

land topography

sensitive habitats or conservation areas

potential for rehabilitation

influence of environmental fluctuations (e.g. water level, wave action).

• Community:

existing land use

availability of land for purchase or lease

impact on local communities including water supply

impact on cultural heritage

opportunity for local benefits.

• Constructability:

sufficient access

sufficient area available

availability of fill material and earthworks required

exposure to climatic conditions

distance to port

catchment and in-flow volume (for water supply and sediment dams)

capital cost.

• Operational:

serviceability

connectivity or proximity to other project components

ability to navigate

operating cost

exposure to natural hazards such as earthquakes and tsunamis.

A multi-criteria analysis has been undertaken to assist in determining the preferred location for each of the major infrastructure items, specifically the major port site and the mine industrial area (MIA).

A rating of 1 to 3 was used for each criteria with 3 assigned for the preferred aspect of the criteria and 1 assigned for the least preferred. For example, where there were sensitive habitats that potentially could have been impacted, a rating of 1 was assigned (as this is not preferred), and a 3 rating where no sensitive habitats were potentially impacted. Similarly, where there was suitable access to the site, for example, it was assigned a 3 as this is preferred and assigned a 1 where the access was difficult. A rating of 0 was given to criteria that were unknown or not relevant to the infrastructure item.

It should be noted that only preliminary ground investigations were completed at the concept phase of the Project and no geotechnical or environmental surveys were carried out at the alternative locations. This limited onsite data is a key factor in the low rating scores in the analysis compared to the total scores possible.

All ratings were totalled with the highest total becoming the preferred site. No weightings were assigned or statistical analysis completed on the ratings.

Figure 2-3 shows alternative locations considered for major infrastructure facilities. These sites are discussed in more detail below together with the results of the multi-criteria analysis.

Figure 2-3 Alternative Locations for Major Project Infrastructure

2.2.3.5 Port sites Operational requirements will govern the design aspects of port facilities for this Project. There is no significant port infrastructure currently available at any site, therefore all operational requirements must be met by new facilities. This includes:

• a wharf allowing access for small coastal vessels and barges throughout the construction period

• a barge loading ramp to load ore for transhipment to Ocean Going Vessels (OGVs) moored offshore

• a ferry terminal to provide general passenger ferry/transfers.

Selected port sites must have sufficient land-side area to allow stockpiling of ore, lay down of materials and equipment, and construction of supporting infrastructure. Four potential port site options were identified based on the general selection criteria. Three of the sites are located within Thousand Ships Bay and one in Huali Bay, as shown in Figure 2-3. There are coral reefs and shoals present in these waters and also fast flowing sea currents and upswelling of waters from the off shore deeps.

Thousand Ships Bay is located between Santa Isabel Island and San Jorge Island. The OGVs should not experience any difficulty navigating in the main part of the bay (based on assessment of the British Admiralty Chart 3996 and Chart 1747). Port Option 1 is located on the western peninsula of Takata Bay, on the southwestern coast of Santa Isabel Island. The site is approximately 3 km southeast of an existing community jetty near the village of Leleghia, at the mouth of the Ortega Channel in water ranging in depth from 6 m to 15 m. Port Option 2 is also in Thousand Ships Bay, on the southern edge of Tanabosu Point and is located approximately 3 km west of the village of Havihua. Port Option 4 is further southeast at the entrance to Lepi Bay and has a number of small villages located within 2 to 3 km.

Port Option 3 is located in Huali Bay, on the east coast of Santa Isabel Island and contains numerous small community wharfs. There is potential to develop a semi-open port protected by significant high ground in this location. Marine access to the harbour by OGVs would require significant removal of rock and coral in the approach. Dredging, and rock/reef removal would be required to create a safe navigation channel and swing basin within the bay.

Port options considered for Santa Isabel Island are summarised in Table 2-4. Criteria scores and total scores may be compared to gain an understanding of where the preferred site is stronger relative to the other sites considered.

Table 2-4 Port Site Analysis

Alternatives Environmental Community Constructability Operational Port Option 1 Takata Bay

Mangroves present in proposed area; surface

water catchment minimal

Approx. 3 km from Leleghia; potential for

local benefits

Easy access; suitable area available; moderate weather exposure

Central to activities on Isabel Tenement D; moderate ability to

navigate to port Total Score: 26/69

Environmental Score: 9/18

Community Score: 3/15

Constructability Score: 8/21

Operational Score: 6/15

Port Option 2 Tanabosu Point

Coral removal required; surface water catchment

minimal

Approx. 3 km from Havihua; potential for

local benefits

Outside existing tenement area; suitable area

available; moderate weather exposure

Can service activities on Isabel Tenement D and E; moderate ability to

navigate to port Total Score: 23/69





Port Option 3 Huali Bay

Coral and rock removal required; surface water

catchment minimal

Numerous community wharfs

exist in bay and may be affected; potential

for local benefits

Outside existing tenement area; suitable area

available; moderate weather exposure

Can service activities on Isabel Tenement D and

E; low ability to navigate to port

Total Score: 19/69





Port Option 4 Lepi Bay

Coral removal required; surface water catchment

minimal

Villages of Lepi, Japuana, Valaaroe,

Tapipile, Midoru and Sesedo within 2.5 km;

potential for local benefits

Easy access; suitable area available; moderate weather exposure

Central to activities on Isabel Tenement D; moderate ability to

navigate to port

Total Score: 24/69





The following additional criteria were considered in the process of selecting suitable sites for a major port facility:

• access to deep water to minimise dredging requirements

• navigation accessibility through the reefs

• sufficient space for a vessel swing basin (2.5 times vessel length)

• protection from the open sea

• sufficient large open area on land side for storage and lay down.

The following studies and investigations need to be undertaken at the preferred site, prior to detailed design, to confirm port selection and design requirements:

• detailed geotechnical investigation (both on-shore and off-shore)

• seismic and tsunami investigation

• acid sulphate soil investigation

• bathometric survey

• collection of wind, wave and ocean currents data.

The preferred main port site on Santa Isabel Island is Takata Bay (Port Option 1). This site will service construction and operation activities undertaken on Isabel Tenement D. Mining activities on Isabel Tenement E will only occur over a couple of years during the 23 year Project life. Barge facilities for the transfer of ore from Isabel Tenement E to the main port facility at Takata Bay will be required.

Port Option 4 (Lepi Bay) is in a good position for a secondary port location and is the preferred option. Other options, such as Port 2, may be considered should other tenements on Santa Isabel Island be included in the Project at a later date.

2.2.3.6 Mine Industrial Area The MIA should be sited to minimise earthworks and maintain the natural topography. Once detailed geotechnical information is available, the following will be assessed to confirm the location is suitable for its purpose:

• the nature of the foundation material

• slope stability

• availability of suitable fill

• spoil disposal.

The coastal and alluvial plains, which lie adjacent to the port sites, are potentially underlain by very loose, to loose, fine grained silty sand which have a very high potential for liquefaction under the design seismic loading. To avoid this, three options were considered in siting the MIA:

• location of structures away from the coastal and alluvial areas

• requirement for ground improvement such as compaction grouting or vibro-compaction

• if MIA is located on alluvial/coastal plains, potential to construct facilities and buildings on piles.

All critical structures will be located at least 25 m above sea level such that impacts from tsunamis will be minimised. The preferred MIA location will be as close as possible to the mining centroid area in order to service the mining operations. Environmental considerations included visual, noise, water and air impacts from the activities being carried out at the MIA.

The three MIA site options considered for Santa Isabel Island are described in Table 2-5.

Table 2-5 MIA Site Options

Alternatives Environmental Community Constructability Operational MIA Option 1 Over 300 m above sea

level; located on top of ridge in upper catchment

of the Loalonga River

Approx. 4 km from Leleghia and 3 km

from Fanavi

Access from Port Option 1 (10 km); close to potential

water supply options

Access from Port Option 1 (10 km);

close to potential water supply options

Total Score: 27/69





MIA Option 2 Elevation varies between 300 m and 360 m above sea level; located on top

of ridge dividing catchments of

Ghaghahlo and Loalonga Rivers

Approx. 4 km from both Koisisi and

Fanavi

Access from Port Option 1 (15km); close to potential

water supply options

Access from Port Option 1 (15km); close

to potential water supply options

Total Score: 26/69





MIA Option 3 Elevation varies between 40 m and 100 m above

sea level; potential surface water quality and aquatic ecology impacts

from major bridge crossing of Rotue River

Approx. 2 km from Takata, 3 km from

Kasarongo and 4 km from Leleghia

Access by short road cut into hillside with major bridge crossing over the

Rotue River; close to potential water supply

options

Access by short road cut into hillside with major bridge crossing over the Rotue River;

close to potential water supply options

Total Score: 23/69





The least preferred location for the main MIA for the Santa Isabel Island activities is MIA Option 3 as it requires a major bridge crossing and potentially impacts on a number of villages. MIA Option 3 is also not central to potential mine areas. MIA Option 1 and MIA Option 2 both have similar potential impacts and constructability issues. The preferred site for the MIA is MIA Option 1 as shown on Figure 2-3, because it can be accessed by the primary haul road from the preferred port location and is closer to the water storage facility and accommodation camp.

A number of other potential MIA sites were also investigated but were located outside the tenement boundary and considered not central enough to the mining activities proposed for Isabel Tenement D and Isabel Tenement E.

2.2.3.7 Accommodation camp An accommodation camp is required for both the construction and operations personnel. The preferred location for the accommodation camp would be a suitable residential environment easily accessible to the worksite and personnel transport, taking into consideration local community activities and customs.

A number of potential locations for the accommodation camp were considered, including a satellite camp on Isabel Tenement E and locations between the Isabel tenements.

Additional considerations included access to the ferry terminal and work locations and potential impact on local community activities. However, a formal multi-criteria analysis was not undertaken as the preferred site for the accommodation camp is a location close to the preferred MIA site as it will be close to the main haul road leading to the port, and utilities (e.g. power, water and communications) may be shared between the MIA and the accommodation camp.

2.2.3.8 Roads The development of the road network and traffic flow should enable connectivity and operational reliability. Existing roads in the Project area are predominantly temporary logging roads built to enable the removal of timber. These roads are currently in poor condition and there are currently no logging roads available for use by SMM Solomon.

New roads will be required and criteria such as grade, cut and fill, location of sensitive environmental and cultural values will be considered before finalising the design and location. The river and creek crossings will be designed and constructed to minimise impacts and where possible maintain natural drainage patterns. The main access road from the preferred Port on Isabel Tenement D was relocated from the west side of the ridge to the east side in order to reduce visual amenity, noise and air quality impacts to local communities.

Further information on measures to minimise impacts is provided in Chapters 4 and 5 of this EIS with specific detail provided in the Impact Assessment Reports appended to the EIS document.

2.2.3.9 Water supply Water demand for the Project includes fire fighting, vehicle wash down, dust suppression, and potable water. Raw water will be supplied by a water storage facility, and then treated for potable water uses. Potable water will be trucked to mine areas and port areas and stored in tanks for use as required.

Only two rivers on Santa Isabel Island in the vicinity of proposed activities have been identified with large enough catchments to potentially supply the Project. The preferred water storage facility site is located on the Rotue River although this catchment will have to be further investigated for suitable construction locations.

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