The Business Case For [Aboriginal]Respect: [Australia’s] Pluton Resources – by David Hicks (The Global Commodities Report – October, 2011)

Published by New Vanguard Media, The Global Commodities Report is a digital magazine about the benefits of resource business.

With an innovative zero-impact exploration program and a partnership with the indigenous Mayala People, Australia’s Pluton Resources landed both a prestigious Golden Gecko environmental award and an iron ore mining agreement where others had failed: on an uninhabited, culturally significant, island off the northwest Australian coast.

Picture a miner out in a boat fishing off the northwest coast of Australia in the Kimberley region, scanning the iron-red shoreline of uninhabited Irvine Island, knowing that historic mistrust of the mining industry keeps its resources out of reach, and wondering to himself, “How can we make this work?”

Pluton Resources Limited Managing Director, Tony Schoer, had already worked on two nearby mining projects. “I knew this area well because I had worked on Koolan Island in the 1980’s and I was the joint venture representative for Cockatoo Island, so I knew of Irvine Island. We used to go fishing close by and you can see iron concentrations in the cliffs.”

BHP Billiton previously held the exploration license for Irvine with no real success in dealing with the Indigenous people and had moved on. But Schoer decided to give it a go. “It was a huge opportunity but the key was involving the Mayala People, which was where other companies had failed.”

Given the relationship indigenous peoples around the world typically have with their traditional lands, it’s not a great leap in logic that environmental considerations could work hand and glove with Native Title agreements. Respectful treatment of the local environment and the Mayala People’s traditional ownership of the land, along with the cultural significance of the island, led to Pluton’s double win: the Western Australian government’s Golden Gecko Environmental Excellence Award in September 2010, and advancing their exploration license to a mining lease application that December.

The Mayala People are Australian Indigenous people in the northwestern Kimberley region. Their traditional lands are the islands around King Sound in the West Kimberley – Irvine Island is uninhabited and most of the Mayala People live on the mainland 15 minutes away by small plane. “I’m from Darwin, further along the coast, and grew up around Indigenous people,” says Schoer. “The Mayala are a particularly disadvantaged group with very high unemployment, few opportunities and the resulting struggles – in my opinion they just haven’t had a fair deal in life. My experience with Indigenous people is that they are simply looking for respect and the right to have a say.

“But resource companies generally would sort of walk all over Indigenous people and only deal with them because they had to, rather than wanted to. So we went to the Mayala acknowledging up front that it is their land, no-one else’s land, and that if we wanted to get a mine up we had to work in partnership with them to do it. They had never been treated like that before.”

Pluton was listed in 2006 essentially to explore for minerals in the states of Tasmania and Western Australia. Today the company is working to make a project of Irvine Island. But Schoer has been loathe to either over-promise or inadvertently offend the Mayala, so he stacked the nine-employee company with people qualified to navigate those cultural waters. He hired Pamela Kaye, whom he considered the country’s best Native Title lawyer for having worked for both mining companies and Indigenous groups. “She knows the thinking of both sides,” says Schoer.

He also contracted the former premier of Western Australia, Peter Dowding. “He knows the Mayala People well and guided us through the sensitivities to ensure we didn’t insult them. And he was personally motivated to make sure that we were looking out for them.”

Schoer also hired Pluton’s Logistics and Community Officer, Johari Bin Demin. “He’s an Indigenous guy from [nearby] Broome, helping us to make sure that our relationship with the Mayala stays strong.”

The next task was to see whether iron mining on the island and the heritage values could co-exist. “We started to build confidence that we weren’t going to destroy their island. One of the keys to earning their trust was that before doing any major work on the island we gave them the right to say yes or no in decisions on where we could operate. So they are genuinely part of the decision making process.”

Irvine Island is spiritually important to the Mayala. It is men-only, no women go there, with a number of sacred sites, so Pluton had to work out how to protect those while exploring. “So we looked into all the [geological] databases. We found out where their sacred sites were and they turned out to be away from where our exploration would be.”

Pluton has also been doing environmental work for several years now. There were no endangered species on the island “but in the tropical waters there are,” says Schoer. “There are reefs, sea grasses, whales and all sorts of things so we need to be particularly careful. However, having said that, Koolan and Cockatoo have been mined for the past fifty years without creating any problems for the marine life, so we just need to be very careful with our environmental plan.”

Pluton’s corporate responsibility convictions also led to creating a new piece of world-leading technology, the Universal Drilling Platform (UDP). It’s a mobile exploration drilling platform that can be helicoptered into place, settled on hydraulic legs, set up in hours by two men, and rotated 360° to drill in multiple directions. The full-size rig was designed and built to Pluton’s specifications by Venture Consultants, a Western Australian technology firm.

Pluton holds the worldwide rights to the UDP and is looking into commercialization. “The beauty of the rig is that it can be set up on virtually any terrain, however remote, diamond drill to normal depths and disturb less than 5m2 of ground, versus the typical 30m2 plus benches and access roads. After the rig is lifted out, within months it’s virtually impossible to tell where it was. Any place you can reach by helicopter, you can explore using this platform.

“And our Mayala exploration personnel have been trained to assemble the platforms and support exploration – they’ve been a key part of our success.”

The UDP was a significant reason for winning the Golden Gecko, but not the only piece. Pluton is also using self-contained Antarctic living and workspace ‘pods’ that are set in place, linked and later removed, again with negligible impact on the terrain. “We haven’t bulldozed anything – everything is built just above the ground so when we remove it all, you wouldn’t even know there was a camp there,” says Schoer. “In terms of disturbing the terrain, our footprint is 1% of what’s often legally permitted. We also have very strong quarantine rules that are self-imposed – everything that goes on the island comes off the island. So really it wasn’t just the platform, it was the whole environmental program that won the Golden Gecko.

“This award is huge for us because it formally recognizes that environmentally we do it better than anyone else. And it really shows that the promises we made – that we would use best-practice exploration techniques – was a promise that we could deliver on.

“It was also important for us to leave the island as pristine as possible, because when you explore there is no guarantee of success – if we didn’t find enough iron ore we’d have to leave the island looking exactly the way we found it.”

Still, you can’t have an open pit iron mine without having noticeable impact, raising the question of whether the Mayala are comfortable with that eventuality. “Yes. Yes, they are,” says Schoer. “They are confident because they have a say and we will use our best-in-class environmental techniques.”

“Obviously, when you mine you build ship loaders and you build processing plants and you make big holes in the ground. But our exploration program validates our commitment to the environment and that we’re in a good position to leave the island in a better condition than anyone else. We will be backfilling as we mine into the pits and making sure nothing gets into the marine environment.”

Happily, it turns out the minerals are there. The exploration program revealed a resource with the potential to produce an average 69.85% iron concentrate from the Hardstaff Peninsula, a promontory on the south side of the island. Pluton has identified a total resource of 547 million tonnes. “Our pre-feasibility study will be finished mid-year,” says Schoer. “We are looking at a variety of options, everything from shipping ore as-is, to processing everything onsite, to making a high quality concentrate and sending it into Asia to be turned into final product.”

With the mine located on the southern edge of the Timor Sea, Asia will be the Irvine Island project’s logical market, e.g. India, China and Japan. Being on the water’s edge, Pluton can ship from the mine with no rail or road construction – shipping is as important to the project’s feasibility as mineral grade for a bulk commodity like iron. “The water is 54m deep right off the edge of the island at low tide. So we won’t need a big port, just a ship loader. So we can park ships right along the edge of the island, load them up and ship.”

In the past, matters of corporate responsibility were seen as regulatory burdens and compromises to business pragmatism and bottom-line returns, leaving it to the largest companies with deep pockets to indulge in progressive, ‘soft’ values. But by aiming higher than compliance, Pluton, an emerging company, has freed up a resource opportunity. “The vast majority of our shareholders are very proud of what we’re doing,” says Schoer. “In fact we have some ethical mutual funds on our register that would not be there if not for our Native Title and environmental record.”

But this is more than means to an end – Pluton is setting a high standard for the mining industry. “Yes, we are, and we don’t apologize for doing that. I don’t think it hurts to raise the bar.

“The mining industry is, and needs to be, getting better at these things, particularly on the Native Title issue. You can go into a project thinking, ‘Native Title is something I just have to get through,’ but at the end of the day the land is owned by the Indigenous people. If you can accept that, particularly at the exploration stage, and do as minimal damage as possible, then I think you get a better outcome for everybody.”

And Pluton’s role in that change is causing ripples in the mining sector internationally. “We presented at the PDAC (Prospectors & Developers Association of Canada) conference in Toronto in March and the PDAC organizers told us that for corporate and social responsibility Pluton is as good as it gets. And since then I have had mining companies contact me to find out how we did this.”
Pluton Resources Limited
Melbourne, Australia
(03) 9820 3802
Stock symbol: ASE:PLV