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Banaban Rehabilitation Project Overview

Banaba Rehabilitation Project

Objective

The objective of the project is to rehabilitate the island of Banaba to a suitable condition to support a sustainable small island economy and a healthy community. This would involve cleaning up the island, reforming the land surface and revegetation.  It would also involve re-establishing basic infrastructure on the island including power, a reliable water supply, communications and a ship loading/unloading facility both to service the project and the community living on the island. 

Background

Between 1901 and 1979 the island was subject to phosphate mining, first by the Pacific Phosphate Company and later by the British Phosphate Commission. The British Phosphate Commission was run by three Commissioners appointed by the United Kingdom, Australian and New Zealand Governments.  The purpose of the Commission was to supply farmers in these countries with phosphate. The price was set at cost rather than prevailing world prices, a policy that provided substantial subsidies to farmers in these countries. While the mining agreements with the land owners required rehabilitation of the land, this was not done. For most of the period of mining, royalties paid to landowners whose land could be compulsorily acquired were set at exploitatively low levels. The BPC abandoned the island in 1979 leaving the island in a devastated condition. Since that time, no work has been repair the damage nor to address significant environmental and health hazards that the BPC left behind. Only a small amount of compensation was provided to the landowners following a court case in the United Kingdom, an amount that would finance only a few hectares of rehabilitation.

This project is concerned with the future not with the past. The Banabans have accepted the task to restore their homeland.

Strategy

The rehabilitation of Banaba to a condition similar to its original is a very complex and expensive task. Based on the Nauru rehabilitation project, the cost of rehabilitation would be around $200,000 per hectare or around $100 million in total and the process would take about 10 years. In addition there would be large costs in safely removing the asbestos from the houses and other buildings erected by the BPC and in addressing sources of land and ground water contamination.

 The strategy is to utilise the remaining resources of Banaba (secondary phosphate and pinnacle rock from land subject to past mining activity) to finance rehabilitation.  Secondary phosphate is that which lies between pinnacles and below the depth reached by past mining operations.

Organisational Structure

A Banaba Rehabilitation and Development Corporation would have the responsibility for rehabilitation of the island and for future economic development.  The Corporation would be a private company owned by the Banaban people with a board of directors consisting of representatives from the private sector and from government.

A key feature of this project is the central emphasis on rehabilitation.  Phosphate is only one of the business lines.  This distinguishes the project from past proposals where the emphasis was on mining the remaining primary phosphate resources with no consideration given to rehabilitation.

Approach to rehabilitation

The rehabilitation and secondary mining process would be similar to that being currently undertaken on Nauru, taking into account local conditions.  This involves the following steps:

·         Primary pinnacle removal: an area of primary pinnacle land would be cleared of pinnacle rock to create a working bench or platform. Clearing of pinnacle rock would involve first breaking the rock through controlled blasting and removal of the broken rock using excavators and trucks to a crushing site.  Pinnacle rock would be crushed for later use in the land reformation process and for export as aggregates for use in construction.

·         Once the land is cleared, a secondary phosphate mining process would proceed involving the removal of secondary phosphate using a similar technique to primary phosphate mining.

·          After the remaining secondary phosphate has been removed the area would be filled with broken pinnacle rock, levelled and compacted.

·         On top of this levelled secondary mining area would be placed a layer of crushed rock of various dimensions to form a sub-soil substitute. Next would follow a growing medium consisting of a layer of reject phosphate (phosphate not suitable for export), a layer of topsoil, if available, and compost.

·          A nursery would be established to produce the necessary planting material from seeds and cuttings collected in areas of remnant vegetation.

·         A number of small water storage ponds would be established for watering revegetated areas.

·         The process would involve operating on strips of land with pinnacle removal, secondary mining and rehabilitation taking place simultaneously.

·         The rehabilitated soil profile will differ across the island depending on the intended future use of the land (for example forest, agriculture, residential and commercial).

·         The method would be continually monitored, analysed and adapted to achieve greater efficiency.

The proceeds from the sale of phosphate and aggregates would help to recoup the costs of the rehabilitation and provide some surplus to finance economic development of the island. The financial viability of the project would depend on the secondary mining yield which is very uncertain at this stage. 

The project would proceed in a number of stages, in recognition of the uncertainty about the size of the secondary phosphate reserve, and financial constraints.

Stage 1: Project concept

Over the past two years the project concept has been developed based on the experience of Nauru. A considerable amount of time has been devoted to analysing and assessing available information.  Positive discussions have been held with potential customers and potential providers of finance for the project. Most importantly, the Banaban people have been consulted to obtain their permission to proceed with the project. A project team has been appointed by the Rabi Council of Leaders to progress the project. The support of the Kiribati Government has been obtained and a working group has been established including officials from key Kiribati Government ministries.

This component of the project has been completed and was financed entirely by members of the project team and members of the Banaban and Australian communities who have volunteered their time and expertise to the Banaban cause. 

Stage 2: Pre-feasibility

This would involve an initial visit to the island by a multidisciplinary team to assess the situation and gather further information for a pre-feasibility report. Depending on the availability of funds, this visit would take place in July 2010.

The team would examine physical nature of the pinnacle fields, the condition of industrial buildings, roads, processing plant and options for loading and unloading vessels. The Team would also identify environmental and health hazards.  An area of between five and ten hectares of land would be identified for a trial rehabilitation project to be undertaken at a later stage.  The team would also identify any sources of previously mined phosphate (for example the stockpile, the dry shed and areas of shallow primary mining containing easily accessible phosphate) and potentially saleable scrap metals.

A number of potential sources of finance for Stage 1 are under consideration. Funding may be made available by the Rabi Council and some funds may be provided through the Kiribati Government. The Project Team would also seek financial contributions and other assistance from other sources. A budget for this initial visit of around AUD100,000 is needed.

Shortly after this field study, a pre-feasibility report would be prepared outlining the current situation, an assessment of remaining resources, an approach to the task and a preliminary financial and economic assessment. This would include an environmental, social and economic assessment. This report will be used to raise financial support for the next stages of the project.

Stage 3: Capital raising projects

An amount of phosphate and scrap steel exists on the island and this would be recovered and exported to raise working capital for the project to finance the feasibility study. Estimates of the size of this already mined phosphate resource would be confirmed during stage 2 of the project. Scrap steel would be assessed and steel not required for future construction works would be gathered and sorted for export. Discussions with buyers for both phosphate and steel are currently being conducted and work on logistics is well advanced.

The current plan is to ship the phosphate to Nauru for crushing, drying and exporting.  This is necessary as the processing and shiploading plant on Banaba are beyond repair and the cost of installing new plant, at this early stage, would be prohibitive and in any case uneconomic. An agreement for the processing of Banaban phosphate with the Republic of Nauru Phosphate Corporation (Ronphos) is being developed.  This arrangement could take several forms and these are being assessed.  The equipment for these operations would be rented or purchased second hand with a buy back arrangement so as to minimise the initial capital outlays. Working capital would be obtained through advance payments or deposits from customers. A budget of around $2 million would be sufficient to implement the stockpile and scrap steel project. 

A feasibility and project design study for the stockpile and scrap steel projects would be conducted alongside the preparation of the rehabilitation pre feasibility study undertaken during Stage 2. Depending on finance, the stockpile and scrap steel project could commence in early 2011 and be completed within a six month period.

Stage 4: Feasibility, project design and implementation

Alongside the Stage 3 projects, the project team would conduct a full scale feasibility study. This would build on earlier analysis and commence at the same time as Stage 3.

The feasibility study would involve a Trial Rehabilitation of an area of between five hectares, perhaps including the stockpile area and surrounding land.  The Trial would involve total mining of the area to remove both pinnacle rock and the secondary phosphate. The secondary phosphate would be crushed and exported to Nauru while the pinnacle rock could be exported to Kiribati should there be projects requiring this material.  On site crushing of aggregates would be undertaken to provide materials for rehabilitation. For this purpose, the equipment already on the island for the stockpile and scrap steel projects would be supplemented by a mobile crushing plant, a larger excavator, bulldozer and some additional equipment.

The Trial will create a depression that would be back filled and re-contoured with pinnacle rock from adjacent pinnacle fields. This area would then be covered with crushed rock, reject phosphate, any available topsoil and replanted. An alternative would be to first line the depression with an impervious material such as bentonite to create a water storage reservoir to supply water for vegetable gardens and, subject to careful assessment, a source of household water.  The reservoir could be left open or backfilled with rock to avoid losses through evaporation. In the later case the surface could be revegetated.

The trial rehabilitation will provide the information required to produce a bankable feasibility study. This study will inform a decision of how to proceed with rehabilitation and will assist in raising finance for the project. It will create an area of rehabilitated land and perhaps a water resource to supplement existing sources of water.

The start up finance for the Trial and feasibility study would come from the stockpile and scrap steel projects. In addition, sales of phosphate and rock would contribute to meeting the costs of this stage. If the trial rehabilitation proved successful, by definition it would generate profits that could be used to finance the full rehabilitation project.

Stage 4: Project implementation

The financial success or otherwise of the trial rehabilitation project will influence decisions about how to proceed in the long term. If successful, pinnacle clearing, secondary mining and rehabilitation activity would be ramped up to full capacity.  This would involve additional outlays on plant and equipment, possibly including the construction of a processing plant and more substantial shiploading facilities. 

The project will also be exploring a number of potential business opportunities centred on pinnacle rock. While the rock is suitable for the production of aggregates for road base and construction, there may be further value added opportunities in the manufacturing of cut stone products (paving stones, bricks, polished floor tiles etc). 

As land and finances become available, there is the potential to develop small scale agriculture (hydroponics) to supply a source of fresh fruit and vegetables for local consumption and for export to Kiribati.  The potential for commercial development of the fisheries resources would also be explored.  Other industries might include small scale tourism.

Project Development Team

The project is advised by a team of experts, a number of whom have worked and continue to work on the Nauru Rehabilitation and Secondary Mining.  These people are experienced in mining and rehabilitation projects and in economic development more generally.  The Team has been working with the Rabi Council of Leaders to develop this proposal.

Benefits of the project to Kiribati

In addition to the substantial benefits to the Banabans, the project is likely to involve a range of direct and indirect economic benefits to Kiribati.  These include:

·         The economic development of Banaba would present business opportunities for other areas of Kiribati to supply the project and its workers with goods and services;

·         Taxation revenues;

·         A supply of competitively priced rock for sea walls, roads, land reclamation projects and other construction purposes;

·         A supply of fresh fruit and vegetables;

·         The creation of a motivated and highly trained workforce who skills would be applicable in other areas of Kiribati;

·         Improved communications and transportation (shipping and air links);

·         Enhanced standing in the international environmental community for helping to restore an island destroyed by colonial mining interests (this project is likely to be an internationally recognised environmental rehabilitation project).

30  April 2010