AEM - RP - Ortac Resources

Ortac Resources: examining the case for constructive mining

What is the challenge?

In an age of more aware and informed stakeholders, fewer and fewer communities give natural resource companies a social license to operate, if they don’t demonstrate that their projects will protect and add value locally in the short, medium and long term.

In the case of the Kremnicko region – home of the Šturec gold and silver deposit in Slovakia – the community and local authorities of Kremnica had rejected a ‘responsible modern mining’ project proposal from a Canadian company in 2006. A few years later, when presented with a new investment opportunity by the new mining license holder (UK AIM listed Ortac Resources Ltd (‘Ortac’)), interested parties raised some essential questions: “Will the mining result in a steady drain of natural wealth from our community, or will it be a tool to transform the resources into something sustainably useful for all interested parties”? And, in all cases, “how can we trust the investors?”.

 

What solution was adopted?

Ortac approached astoneco in 2011 to develop a better understanding of the causes of the local conflict and help open up dialogue in the region, to see if a win-win project could be created. Following a period of pro-active listening to the people in the region, astoneco’s findings were that many of the problems were rooted in the past and stemmed from the approach that previous investors had used. In short the view was that Ortac was merely just trying to repackage the rejected Canadian project. At the same time, trust between parties was extremely low and dialogue practically non-existent. In this context, the solution adopted was:

  1. Ortac’s management made a public apology for initially continuing the custom of making decisions away from the public eye.
  2. This was followed up by an ever-increasing openness to engagement, transparency, dialogue and partnership with the citizens.
  3. Ortac’s local management and presence was strengthened, as was their engagement with their stakeholders.
  4. Ortac made a public commitment that no project investment decision would be taken without genuine local support, and that mining on its own was no longer being considered; instead, any potential investment concept would be co-designed with local people to ensure prosperity at all stages of its implementation, including long after the silver and gold has been extracted.
  5. Forum Kremnicko was initiated by astoneco to provide a space for dialogue and collaboration to support local sustainable development initiatives and decisions related to the natural resources development in the area. The Forum is open to local citizens, local authorities and investors who wish to transparently examine the proposed investments, with a view to building a win-win project.

 

Key steps along the way included:

  • creating informed and transparent information exchange and decision-making processes, and appropriate channels to communicate decisions in a timely manner;
  • ensuring commitments are respected and expectations are managed;
  • building trust locally through the implementation of small projects conducted in partnership;
  • enabling opinions to be heard and discussed in public (including opinions from the people who most distrust the investor’s intentions, or who don't trust that the mining industry and associated partners will be good local partners).

 

Current status

  • Local engagement so far between Ortac and people from Kremnicko resulted in the Šturecland vision – a working name given to a tentative proposal of a green energy-based tourism project developed by way of the gold and silver in the Šturec deposit. The project would use mining to construct a landform and mobilise financing for a tourism complex combining adventure sports, theatre, geothermal spas and biodiversity trails complemented by easy access to the accommodation, restaurants, museums and other activities available in the area. See http://www.sturecland.sk for more info.
  • Forum Kremnicko was registered as a community-based NGO in August 2013. It has received an initiating grant from Ortac in and hired its local coordinator on a one-year contract from December 2013. It is now focused on facilitating the engagement process around the Šturecland concept and conducting trust and team building exercises, including a mini-grants programme, to foster local participation in the dialogue and co-design process around potential investments in local natural resource development. Its decision-making board, currently members of astoneco management will give way to representatives of the local authorities, local communities and Ortac, with the majority vote going to the community members for all issues that could directly affect them. The hand-over for this is expected to happen during the coming year.
  • Continuous open and transparent engagement by all parties is being promoted, as outlined in page 10 and 11 of the Šturecland brochure version 0.2 (http://www.sturecland.sk/brochure).