Sierra Club Oyu Tolgoi Press Release

Justin Guay of Sierra Club kindly called my attention to their latest press release, which opposes financing for the Oyu Tolgoi project from the World Bank and the European Bank for Reconstruction and Development on various reasons.

I recall having discussed the excellent new report out from Sierra Club opposing a new coal plant at Oyu Tolgoi. That report shows clearly that the project is in violation of all kind of World Bank rules, and that the World Bank should not consider giving them any money as long as they don’t remedy the situation.

The new press release is also based on that work. It points out that the World Bank has no business financing Oyu Tolgoi as long as they insist on their plans of building yet another dirty coal plant at the site, instead of using this project to kick of a large scale renewable energy project in the Gobi desert.

I agree completely. For the very least, Oyu Tolgoi needs to build at least some solar and wind capacity to supplement their other electricity sources, as they can already do under the current version of the Investment Agreement. Again, here is what it says:

7.5 The Investor has the right to use or develop supplemental power from renewable energy sources such as wind, solar, geothermal and the like.” (Emphasis mine).

No need to renegotiate for that to work.

The press release also addresses the environmental impact expected from using the Gunii Holoi aquifer fossil water reserve.

As blogged before, I think the Oyu Tolgoi project needs to be more ambitious in its environmental impact policy. They should not aim to show that their project leaves the region off not worse. They should aim to show a positive impact.

That could be easily done. No one knew of the Gunii Holoi resource before Oyu Tolgoi came along with the necessary money to find and explore it. Now they want to use 60,134,400 liters of water a day from that. Treating one percent of that to remove the very low salinity and make it suitable for human and animal consumption, as well as for farming tomatoes, would massively increase the water resources of the region. That’s what their goal should be in the first place, but if they get World Bank money, that’s really the very least they should do.

The press release then mentions that a decision by the World Bank on these matters is expected for the end of January, and a decision of the European Bank for Reconstruction and Development in February.

I hope that Oyu Tolgoi management finally wakes up and strongly improves their environmental policy. I also hope that Sierra Club gets a chance to present their objections to the people at the World Bank and the European Bank of Reconstruction and Development who actually decide about this.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

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