This week, a Canadian mining company called East Asia Minerals Corporation, signed a Memorandum of Understanding to buy 50% of Carbon Conservation Pty Ltd. East Asia Minerals’ aim is simple: “Through the acquisition of a 50% equity interest in CC, the Company will develop a ‘green’ mining project which will use carbon and biodiversity offsets and the latest in environmentally friendly mining practices.”
Under the MoU, East Asia Minerals will pay US$500,000 and issue 2.5 million shares to Carbon Conservation. In return, East Asia Minerals is hoping for one thing: Greenwash. In a statement, East Asia Minerals explains that,
“the Company will participate in developing a “green” brand for its Miwah project which will potentially allow it to command a premium for its product in the market as well as to potentially facilitate a smoother process for approval of, and support for, mining permits.”
Carbon Conservation and its CEO, Dorjee Sun, are famous for setting up the Ulu Masen REDD project in Aceh Province, in the north of Sumatra. Although the project started in 2006, the boundaries of the project are still not clear. According to a recent article in Environmental Finance,
The boundary of the project has yet to receive final approval from the Indonesian and Aceh governments, so there is a possibility it may end up covering 20-25% less than the originally envisaged 750,000 ha.
In 2010, Carbon Conservation announced a project with Asia Pulp and Paper, one of Indonesia’s biggest forest destroyers.
In February 2011, Dorjee Sun told Environmental Finance that his company had raised raised US$2 million in a second funding round. Environmental Finance reported that “A second round of finance was needed because the partners had underestimated how long and complex developing the project would be.”
Sun gave a presentation at Qi 2010, titled “Win-win carbon trading solutions.” Having listened to the presentation it’s difficult to see where the win-win comes in, although Sun seems to have had a lot of fun travelling around the world. Early on in the presentation, Sun explained why he has decided to “dance with the devil,” and work together with destructive companies:
“I kind of feel like I’m being tempted by the dark side. You know, like, the force, you know? You try to do the good shit, right, working with cool people like this, like-minded, you know, good souls. But then you walk into a board room and you get your arse handed to you, you know by bankers who say like where’s my return, where’s my money, where’s my security? So now we’re starting to work with mining companies.”
Of course, Carbon Conservation has always worked with mining companies. Its first project was a A$3 million deal with Rio Tinto aimed at protecting 13,000 hectares of forest in Australia.
Greenomics Indonesia questions whether Carbon Conservation is involved in a conflict of interest with the involvement of East Asia Minerals. In a press release (pdf file 57.7 KB), Greenomics Indonesia National Coordinator Vanda Mutia Dewi, states that:
“On the one hand, East Asia Minerals Corporation has a commercial interest in gold mining in Aceh’s forests, the Miwah project, while on the other hand Carbon Conservation has been granted exclusive rights by the Aceh Governor to sell and market carbon credits related to more than 700,000 hectares of Aceh forest located in the Ulu Masen forest block. Why are Aceh’s forests being used as an asset by Carbon Conservation to obtain funds from a share transaction with East Asia Minerals Corporation? This clearly involves a conflict of interest. Carbon Conservation has misused the agreement it entered into with the Government of Aceh. This share transaction must be rejected outright.”
In fact, East Asia Minerals has plans for several mining projects in Aceh, as shown on the map to the right (click on the image for a larger resolution version). The map is taken from this East Asia Minerals presentation about the Miwah project (pdf file, 7 MB). East Asia Minerals describes the Miwah project as its “flagship, multi-million ounce potential Miwah gold project.” The company’s 2010 Annual Report describes the project as follows:
Similar to 2009, much of our 2010 effort was focused on our flagship Miwah high sulphidation epithermal gold deposit. Miwah continues to yield an exceptional drilling success rate, and as we have gained confidence in the geometry of this huge gold system we have systematically increased the number of drill rigs on site. With four rigs on site we are now accelerating toward delivery of the maiden resource for Miwah.
Our 2010 drilling has also been successful in increasing the footprint of the Miwah gold system, and has substantially established the continuity of gold mineralization toward Moon River. Indeed our improved understanding of the system also points to potential links between the Miwah system and the Sipopok project, approximately 1.5 km to the north. As we explore more, and understand the system better, we continue to find more gold, and to grow the system substantially. We are therefore confident that in Miwah we may have one of the larger gold discoveries of this exploration cycle.
Flora and Fauna International helped to develop the Ulu Masen project. FFI is currently advertising a full-time temporary position, to work on the Ulu Masen project. Among the successful applicant’s responsibilities will be to “Coordinate the completion of relevant community sections of a Project Design Document (PDD) under the Climate, Community, and Biodiversity (CCB) standards,” and to “Support Government of Aceh in drafting a Governor Regulation (Peraturan Gubernor) that ensures that Ulu Masen carbon credits can only be sold if accompanied by a PDD under CCB.”
The deal between Carbon Conservation and East Asia Minerals reveals the sordid underbelly of REDD. East Asia Minerals gets to paint its mining operations green. Carbon Conservation gets to keep its bankers happy. Meanwhile Flora and Fauna International helps produce carbon credits from Ulu Masen that will be sold to polluting companies, ensuring that pollution elsewhere continues.
UPDATE – 27 January 2012: REDD-Monitor would like to thank Down to Earth for translating this article into Bahasa Indonesia: “Perusahaan tambang akan membeli 50% saham Carbon Conservation: Akankah REDD membantu greenwashing (klaim hijau) pertambangan?”.