Lydian has prepared a comprehensive set of documents that address corporate and local HSEC management and potential key environmental and social impacts during exploration. It is aimed at developing best practice and will demonstrate that during both the exploration and development of projects, these greenfield mining projects will be in compliance with the environmental, labor, health and safety regulations respectively of Kosovo and Armenia as well as international good practice under the guidance of IFC Performance Standards. Lydian aims to address these potential impacts as follows:
PS1- Social & Environmental Assessment and Management Systems:
Environmental and Social Assessment -
For both Armenia and Kosovo, a brief description of the environmental baseline studies initiated in 2008 during exploration activities is provided per below. The aim of this work is to collect sufficient information for the preparation of the SEA documentation when required as well as manage on going impacts from exploration.
For Amulsar baseline data collection started with quarterly water sampling in March 2008 as well as a biodiversity study and a landscape study both carried out by local consultants since the weather conditions could not allow any earlier start. Weather and temperature monitoring have been taking place at the base camp since early June 2008 and will be complemented with additional data from Armenian Meteorological Institute. Flora inventory is taking place as well as study of possible migration route for Bezoar Goats and Moufflon through the license area. Bears have also been reported in the area but not yet seen/tracked by the biologist doing the diversity study. This baseline study is expected to be finalized in early 2009. An initial report on environmental progress for 2008 has been prepared. Due to the short working period on the project, the part of the base-line will be continued and finalized during 2009.
For Drazhnje, the biodiversity study and water sampling started in April 2008 with a final report expected to be available in early 2009. The first results of the surface water sampling indicate that the water getting out of the adit has elevated quantities of sulfates, suspended matters and Zn. However, 50 m downstream of both adit water and waste dump leaching, water results only show elevated value as compared with upstream data for Zinc and Sulphates. More data and analysis will be available and discussed in the final baseline study during 2009. First research on Drazhnja biodiversity started in April 2008 and finished in August 2008. It was carried out by local consultants and continued with a first document titled “Report on Initial Ecological Appraisal Drazhnja Project” prepared by Golders Associates made available to regulators in November 2008. All data of water monitoring, air monitoring, weather monitoring etc. will be available and discussed in the final baseline study expected to be finalized late 2009.
A report on Drazjne Environmental Gap Analysis /issues for Drazhnje project scoping incorporating for Drazhnje Pb-Zn-Ag Project was prepared and presented to the Ministry of Environment and Land Planning in October 2008. Baseline study work plan is updated in 2008 in accordance to Report of Drazhnje Environmental Gap Analysis.
Management Programs-
Prior to IFC first Board approval, Lydian had developed a corporate Environmental Policy as well as a specific one on Health and Safety. These documents have been reviewed by IFC and publicly disclosed on the Lydian web site. Lydian management has agreed to post these permanently on their web site.
Lydian has prepared a site specific draft Environmental Action Plan for Amulsar that will be finalized in the first quarter of 2009. A site specific ESMS is to be developed and presented to IFC with an acceptable timeframe for implementation. At the moment, all the various sections that would form an ESMS are in place, either with formal procedures (as for Health and Safety, Standard Operational Procedure for soil and water sampling) or informally (as for drilling pad and road rehabilitation, reporting on a semi monthly basis), camp safety, vehicle maintenance, and this is also regularly inspected by the operational manager. All these have to be put together into a simple management system, with more formal monitoring and reporting procedures as this will provide an easier driving tool for Lydian management to ensure all exploration projects are in compliance.
Similarly Lydian will prepare a site specific Environmental Action Plan for Drazhnje.
Lydian’s senior management is supportive of the need to build local capacity in the areas of HSEC. The company is looking to increase its management capacity in Kosovo and Armenia in the areas of community relations, social development and environmental management during the next phase of exploration activities. In the course of 2008 additional environmental and social staff has been hired to support Lydian efforts on the ground. The responsibility on all environmental, health, safety and community lies with the Corporate Director of Exploration based in Pristina.
In addition Lydian has prepared in 2007 to IFC satisfaction a Public Consultation and Disclosure Strategy (PCDS) on how to interact with surrounding communities and local authorities. The company will develop a simple monitoring and reporting system for tracking implementation events. Lydian will incorporate contractors'' environmental and social specifications in tender documents for drilling and civil works contracts and insist on compliance with its policies and IFC Performance Standards. The current PCDS will be updated to reflect current development status of each property, and if necessary revise site specific Stakeholder Engagement Plan (SEP)
Lydian will review periodically the PCDS and SEPs Action Plan regularly as projects evolve, after consultations with local communities and other stakeholders.
PS 2- Labor and Working Conditions:
Lydian has prepared a specific Human Resources (HR) Policy to the satisfaction of IFC. A set of procedures on labor issues as well as on community relations are being developed at the corporate level and will subsequently be developed for each country where the company operates. These procedures will include clear wording on managing ethnicities in the workforce, supply chain and surrounding communities. Per the Action Plan, Lydian’s senior management will implement gradually the HR policy and subsequent labor and community procedures. The HR Policy outlines commitments relating to the workforce, including training, grievance mechanisms, and reporting and monitoring. Lydian will make these documents available to their workforce. These plans will recognize freedom of association, occupational health and safety and provide a fair grievance resolution mechanism.
Each project company seeks to implement a non-discriminatory and equal opportunity policy. Lydian’s executives have regional experience in handling labor management and in growing local workforces into active contributors to mining operations.
Lydian’s local subsidiary in Kosovo, Kosovo Resource Company (“KRC”) currently has 17 employees on permanent contracts and around 27 local employees from neighboring villages on roster basis depending on the drilling and support program. Further local employment associated with projects of Drazhnje and Crepulje involve accommodation and meals for geologist at sites, companies that deal with security, maintenance of electricity, fuel, waste collection. KRC encourages all contractors to employ members of the local community. KRC is also using 5 different contractors (mining, drilling, security, supply/catering and construction) employing a total of 35 staff.
Lydian’s local subsidiary in Armenia, Geoteam CJSC (“Geoteam”), currently employs 4 Armenian geologists and 2 international geologists, seconded by Lydian International. All other personnel in Geoteam are Armenian and include 6 Yerevan office based and 3 field camp based staff. In addition Geoteam employs at the moment about 70 persons from the communities in the direct vicinity of the Amulsar project. Further local employment associated with the Amulsar project involves personnel from Geoteam’s subcontractors, like company for catering, cleaning, waste collection, and also includes local personnel working for the drilling company.
With its current multinational management staff, Lydian’s management team is fully aware of the ethnical issues in Kosovo and Armenia. Labor falls under the Exploration General Manager in charge of overseeing labor, environmental and social management. Key members of the local management team have a deep knowledge of ethnic issues in the Balkans and the CIS. The approach is to further build a multinational team in Kosovo and Armenia which includes a wide range of project management skills and mediator experience to stay away from conflict.
As modern geological exploration and industrial mining is quite new in Kosovo and Armenia, it is necessary to have a variety of labor tools and training programs to facilitate labor relations and workforce flexibility. A detailed review of the hiring procedures, labor agreements and contractual arrangements was undertaken by IFC staff in October 2008 in Kosovo. A similar exercise is taking place in Armenia.
In Kosovo, no severe accidents have been reported related to the exploration activities in the licenses area in 2007 and 2008. Employees are instructed to follow standard operating and quality assurance procedures intended to ensure that all activities are conducted safely. Vehicles used at project sites are fitted with fire extinguishers and first aid kits that are regularly inspected. There have not been any incidents involving Lydian International and contractor vehicles and there were no injuries reported among the staff. It is KRC policy to include detailed reports on any incident explaining cause and subsequent measures aimed to prevent reoccurrence.
Emergency Response Plans in exploration camps at Drazhnje and Crepulje are updated regularly; equipment such as first aid boxes, fire distinguishers, communication equipment, and designated emergency response vehicles are regularly checked and maintained. A comprehensive first aid kit is available at Camp Drazhnje, the core shed in Orlhan, and with each drill rig operating in the field; Site Managers, additional staff there and in the main Office in Prishtina have official First Aid Qualifications.
KRC is in the process of reviewing current Emergency Response Plans and the creation of Underground Emergency Response Plan at Drazhnje as operations underground develop. In August 2008 KRC staged a first underground rescue exercise at Drazhnje.
In Armenia, No severe accidents have been reported related to the exploration activities in the license area in 2007, Lydian International and Geoteam employees are instructed to follow standard operating and quality assurance procedures intended to ensure that all activities are conducted safely. Vehicles used at the Camp are fitted with fire extinguishers that are regularly inspected. There have been three incidents in 2008 involving Lydian International and contractor vehicles and there were no injuries reported among the staff. In all cases there are detailed reports explaining cause and subsequent measures aimed at preventing reoccurrence.
PS3- Pollution Prevention and Abatement:
Drazhnje prospect in Kosovo -
The license covers an area of 11.625km2 within the Podujevo municipality and includes parts of at least four villages: Drazhnje, Turoqice, Bairaina and Orllan. It is located 35km North-East of the capital Pristina and 5km from the Kosovo-Serbian border. The physiography of the region consists of low to moderate rolling hills (maximum 1015m) with a combination of farmland and forest cover. Watercourses within the license are typically small, and all drain into the Batlava Reservoir which lies along the southern license boundary.
The Drazhnje area has been subject to a long history of exploration. It is locally accepted that the area was first discovered in Roman to Medieval times, though the nature of this work is unclear. The first post-industrial exploration was conducted during the 1920’s by a British company with several exploration adits and a number of small pits. The next period of exploration was conducted by the nationalized Yugoslav company Trepča. Trepča explored the prospect sporadically from the early 1960’s to the late 1980’s. This work included trenching, geochemical and geophysical surveys, exploration adits and drilling, both surface and underground.
KRC, the local Lydian subsidiary has implemented a series of procedures to monitor the impacts of past and current exploration activities. Environmental damage is kept to a minimum: where possible, existing tracks are used and the use of culverts and containment of drilling fluids keeps any effects on the natural waterways to a minimum. KRC also have a quarterly monitoring process in place including sampling and analysis of surface water from four sites around the license to check for contamination. Reclamation and revegetation work is pending the final drill results and future infrastructure requirements for development. KRC will proceed with rehabilitation of any disturbed land that is in excess of its needs.
As part of the Action Plan, a detailed environmental and social baseline study has carried out to include an audit of any past liabilities. The principal environmental impacts relate to surface water, ground water, land use, footprint and vegetation. Additional considerations include terrestrial fauna and flora, aquatic biology, land disturbance, air quality, dust and noise. Sensitive environmental effects include water resource management of local ecosystems, past contamination, erosion and pollution control.
Surface water monitoring:
Surface Water sampling and analysis until August 2008 were conducted in quarterly basis; in 2008 there were three such samplings while water samples taken during summer season are analyzed using more parameters. From October 2008, monitoring of quality and quantity of surface water with is continued in Monthly and Quarterly basis.
Monthly Monitoring of surface water will be analyzed in basic range suite (aprox.16 parameters), and for quarterly water quality monitoring with the extended range analysis suite (aprox.34 parameters). Monthly surface monitoring of water quality and quantity was conducted in October 2008; samples gathered from 8 points are taken to be analyzed chemically and results are expected. Lydian will continuously monitor water in monthly and quarterly basis according to updated Baseline Study Action Plan, till the third quarter of 2009.
Groundwater monitoring:
Groundwater sampling was conducted during August 2008; three water samples were analyzed with extended numbers of parameters. Starting from October 2008 monitoring of groundwater sampling and analyses with be continue on monthly and quarterly basis. Monthly Monitoring of groundwater with be analyzed in basic range suite (appr.16 parameters), and for quarterly water quality monitoring with the extended range analysis suite (apr.34 parameters). Monthly monitoring of ground water quality was conducted in October 2008; samples are being analyzed and results are expected. Measurement of groundwater level was done on 3 ground water sampling points in Drazhnje project area. Kosovo Institute of Public Heath is monitoring the water of Lake Batlava which is located very near to Drazhnje project area since 2001. KRC will find this data to be useful when preparing the Environmental Impact Assessment for Drazhnje project.
Weather data-
KRC installed a weather station at Drazhjna Camp that monitors and memorizes the data every 15 min. Weather and temperature monitoring have been taken place at the Drazhnja camp since June 2008. Also the Kosovo Meteorological Institute will provide additional weather data.
Biodiversity/ Flora and fauna-
First research study identified only 11 species of fauna and no more than 30 from floristic list. Number of identified species remains low but the identification process continues. Field Survey aiming to identify important species and habitats, as defined in the Law of Nature Conservation for Kosovo( 2005) ,the Serbian red list ,the European Red list of Globally Threatened Animals and plants and the IUCN Red, has been done and the final report is expected in early 2009. The Initial Ecological appraisal Drazhnje project was prepared from Golder Associates during November-December 2008.
Landscape and Visual Impact Assessment (LVIA)-
The objective of the initial LVIA is to ensure all relevant landscape and visual issues are addressed in the EIA. The initial LIVA takes into account all aspects of proposed options and including the mine, tailings, associated buildings and all rock dump throughout the project lifecycle including: Construction, operation, de-commissioning and closure
Field work is already finished and the final report for LIVA is expected in early 2009.
Air monitoring-
Since November 2008, the company is measuring the following parameters: SO2, NOX and PM10, PM 2.5. The monitoring will be continued till the end of 2009.
Mapping-
The topographic data is digitized and respective data base is already established; the mapping was done with Vector data and Raster including JPG maps.
All data of water monitoring, soil, weather, and biodiversity will be presented on schematic maps as an Environmental Sensitivity Map.
Socio Economic Study-
The objective of this assignment is to conduct a socio-economic baseline study at Drazhnje in order to anticipate the future impacts of project developments on the local population of the Podujeva Municipality and design mitigation measures to minimize the negative impacts while maximizing future economic and social benefits to the local population from this project. The Socio Economic baseline study will be completed by end of 2009.
Reclamation and Re-vegetation-
Reclamation and Re-vegetation refers to the process of returning any natural habitats around project site, affected by exploration, back to their natural state. During last year and 2008 approximately 8600m2 were affected with more than 50% of this area already rehabilitated while the process is still ongoing.
Other activities-
Water treatment equipment is already installed in the Drazhnje Camp. Eco friendly cleaning products are being used at the Camp. KRC remains in contact with Ministry of Environment and Spatial Planning aiming to obtain the Environmental Permit for further development of Drazhnje Project.
Crepulje project in Kosovo:
The Crepulje prospect occurs in north-western Kosovo, approximately 17km west of Mitrovica. The area is heavily forested and dotted with small, isolated farms. The main economic activity is small scale agriculture and logging. The main population centre is Zubin Potok, an ethnically Serbian town. The whole area has very high unemployment and the infrastructure is crumbling. Crepulje is a prospect that was originally investigated by Trepča in the 1960’s. Previous exploration work included geochemical soil sampling, ground geophysics, drilling and a series of exploratory adits and trenches.
Amulsar project in Armenia:
The Amulsar prospect is located in central Armenia some 180km southeast of Yerevan. It is a mountainous area reaching 3000m asl. There is no agriculture land and no privately held land parcels within the license. Two villages are located outside the property on the main road from Yerevan. Exploration, mainly geological mapping, tunneling and trenching, took place between in the 1960’s and 1970’s. Recent work includes geochemical surveys, trenching and detailed soil and rock-chip sampling.
It is not expected that there will be any significant residual risks and impacts from exploration activities at the abovementioned locations after the exploration activities have been completed. Management plans are being implemented to properly address mitigation and monitoring of potential impacts. Lydian has rehabilitated the drilling pads by restoring contours and re-vegetalisation of the area with seeds adapted to the height and climate of the site. RC drilling water is taken currently from melting snow and then from a near by pond regularly fed by local stream and is recirculated. Beside, baseline data collection has been started as shown below.
Surface water monitoring:
Surface water sampling and analysis were conducted from 10 sampling points around the project in quarterly basis. The samples were analyzed for approximately 26 parameters. Q3 (summer) analysis covered extended number of parameters of around 60. From January 2009 Geoteam is planning to continue monitoring in monthly basis. The monthly monitoring will cover around 20 parameters. Quarterly the samples will be analyzed for extended number of parameters and will cover around 35. And annually the samples will be analyzed and will cover around 60 parameters.
Drilling waste water-
Two samples were analyzed in Autumn 2008.
Sewage treatment-
Geoteam CJSC installed a sewage purification system Aquamax in Amulsar camp. Before the installation of the system the company had an agreement with local municipality and the sewage was collected on weekly basis.
Potable water-
Based on complaints from local village (Gorayk) for drinking water quality, the company analyzed all 3 drinking water sources of the village. The results showed high concentrations of microbiological organisms in all samples.
Weather data-
Geoteam CJSC installed a weather station at Amulsar Camp in July 2008. Additionally Geoteam was provided 40 years weather data from ArmStateHydromet service.
Soil quality-
The soil sampling is done from the 40 sampling points. Local authorities required to analyze additional 10 control samples in the laboratory of ArmStateEcoMonitoring Service. Thus, in total 50 samples were collected and sent for the analyses. The samples are being analyzed for about 55 parameters. The chemical analyses are already done as well, the soils were analyzed for around 15 natural and artificial radio nuclides.
Air quality -
Geoteam contracted ArmStateEcoMonitoring Service to conduct background levels of air quality in the license area. The results are already ready. The background parameters are: dust, nitrogen dioxide, sulfur dioxide and carbon monoxide.
Biodiversity-
Environmental base-line studies also include biodiversity research. Current research identified already 55 families of plants, and respectively 248 types of plants. The research also identified 6 plants that are included in Armenian Red Book as 3rd category plants. The research is being done for fauna as well. The research has identified over 60 species of mammals, 12 types of reptiles, 2 amphibias, and 5 pisces. The identification process is still in place.
Mapping-
The topographic data was digitized and respective data base was established. Scheme-maps for water monitoring, soils, state reserve and community land types within license area, slope inclinations, slope expositions and geomorphologic peculiarities totaling 32 scheme-maps are already done.
Reclamation and Re-vegetation -
The total hectares disturbed this year are 1395 ha. The rehabilitated land up-to-date are 800 ha.
PS4- Community Health, Safety and Security:
The major community health and safety issue is the additional road traffic, transportation, handling and storage of hydrocarbons and chemicals, as well as dust and noise generated by exploration activities which can affect nearby communities. Lydian is committed per its policy to properly address and mitigate these impacts.
The potential impact on community health from the influx of people during exploration and potential development will be addressed through a policy of local hiring (to minimize the influx) and a health awareness program for both workers and the communities.
On Emergency Preparedness & Response, Lydian has already developed a preliminary emergency plan for the Drazhnje and Amulsar projects. As part of the Action Plan, IFC has asked the company to broaden the scope of its emergency response and contingency planning to include the transportation, handling and use of chemicals/hydrocarbons. Lydian established procedures to identify potential emergency situations, to respond to emergencies and to mitigate any resulting safety, health and environmental impacts that could affect local communities as well as workers.
Lydian has agreed to prepare a comprehensive Underground Health and Safety Plan for the Drazhnje underground operation.
Lydian subscribes to the UN Voluntary Principles on Security and Human Rights and will ensure that any contracted security personnel will abide by these principles.
PS5- Land Acquisition and Economic Displacement:
Land acquisition issues identified at each of the exploration properties at this stage do not require economic displacement or physical resettlement of farmers from project lands. It is estimated that the exploration work will have no impact on food security, loss of farm lands, scarcity of alternative arable land and water resources. In Kosovo the dislocation of the former Yugoslav mining sector has resulted in many workers without a salary, and it is expected that the recruitment of the workforce will be focused on local hiring.
Any additional land acquisition and economic displacement required when each project moves into development will be carried out in full compliance with IFC PS5.
