HONIARA – A landowner company in Solomon Islands has bought the troubled Gold Ridge mine for just $100 from Australian gold miner Saint Barbara.

Production at the mine has been suspended since April last year after it was found to have an extremely high level of contaminated water in its tailing dam following flash floods.

The sale of the mine to Gold Ridge Community Investment Limited includes all of the mine’s liabilities and a promise by Saint Barbara to fund the construction of a new water treatment plant.

“The Saint Barbara board made the decision to leave the mine and we negotiated to take over,” the chairman of the landowner company, Walton Naezon, told Radio Australia’s Pacific Beat programme.

“A lot of people questioned what experience a local company has with mining.

“You don’t need to know mining to own a company.”

Naezon said the mine’s water issues would be dealt with.

“We have already engaged overseas companies who have been conducting dewatering in the past with Gold Ridge,” he said.

“We got Saint Barbara to agree to meet all the costs of the water treatment plant and costs to deliver it on site.

“So we are confident of doing the dewatering, getting the environment cleaned up and preparing to seal another agreement with another mining company.”

In handing ownership of the Gold Ridge mine to the landowner company, Saint Barbara has off-loaded its responsibility for the potentially catastrophic consequences of failure of the tailings dam.

The dam is full, but the Solomons government has rejected recommendations from scientists to allow a release of polluted water.

Monash University environmental engineer, Dr Gavin Mudd, said it was good to see the landowners potentially getting access to long-term benefits.

But he said they also faced big risks and big costs to deal with the threat to their environment.

“The risks around the potential tailings dam and collapse, for example, are extremely serious,” Dr Mudd said.

“Whether that’s effects on the river and sediment, on water quality and chemistry, or risks around people who are able to be notified.”

He said natural disasters, such as earthquakes and floods, would also pose the new owners a problem.

“An earthquake could lead to the risk of a collapsed side wall and therefore the tailings dam failing and the tailings escaping out off site,” Dr Mudd said.

“The other one is rainfall risk. If you’ve got a one-metre gap between the water level and the tailings dam and the top of the wall, then obviously you’re concerned if you’re going to get a cyclone that comes through and dumps half a metre or a metre of rainfall through the area.”

Gold Ridge is a mine on Guadalcanal, Solomon Islands, about 30 km south east of the capital Honiara.

The Gold Ridge mine was operated by Ross Mining N.L. and Delta Gold Ltd between 1998 and 2000 but had to be abandoned because of civil unrest.

In 2003 it was acquired from the political risk insurers by Australian Solomons Gold. Allied Gold acquired the company in 2010 and subsequently rebuilt the mine.

Production was restarted at the end of 2010. At the end of August 2012, the assets of Allied Gold were acquired by St Barbara Limited, including Gold Ridge Mining Limited.

St Barbara is an Australian-based gold mining company, with gold mines in Western Australia and the Simberi mine in the New Ireland Province of Papua New Guinea.

In April 2014, St Barbara shut down the Gold Ridge mine following flash floods.