In all locations OZ Minerals adheres to laws and regulations regarding compensation payments. Where these are not in place, compensation is determined in consultation with land owners, land users, community and other representative groups and governments.

At our Sepon operation eligibility for compensation for land impacted by OZ Minerals’ activities is established under the 2005 Lao PDR Decree on Compensation and Resettlement for Development Projects. The decree applies to all development projects within Lao PDR. Rates and schedules for payment are established by the Provincial Administration Authority (Savannakhet Province). Sepon works in partnership with the local administrative authority (Vilabouly District) to establish eligibility for compensation and rates. All compensation agreements are assessed and authorised by the local administrative authority. Disputes over access to land or compensation rates are resolved through the Community Information and Consultation Committee (CICC) or escalated through provisional or national levels of government. Sepon continues to work with the Government of Laos in supporting the country-wide land use registration program. It is hoped that this registration process will facilitate better and more accurate land access and acquisition negotiations and secure equitable and sustainable compensation for parties.

At the Martabe project land compensation rates were determined through extended negotiations between the project and the affected Land Owners. The process was mediated by a Government Land Committee (GLC) formed under Bupati (Regency) Decree. The GLC could not "veto" the compensation rate and acted as an impartial guide for local land owners. By way of example the parties used existing records of land sales and the local market price as mechanisms to establish a fair market price.

The area around the mine has historically been characterised by food insecurity and extreme poverty. The operations presence has to a great extent relieved poverty among a large proportion of the District's population and will continue to do so for as long as it operates. However, our acquisition of land has the potential to exacerbate long-term food security issues.

In 2008 LXML established a Land Committee to rigorously review all operational demands for access to land previously untouched by our activities and implemented a number of agricultural programs targeting development of new or improved forms of agricultural production. A land offset and land-for-land program is also being reviewed to compensate for the loss of communal or individual resources. To date land-for-land has not been attractive to villagers, since replacement land located further away from the operation and villagers wish to close to maximise employment opportunities. People losing land, to now, have been keen to take monetary compensation despite offers to provide them with alternate land. It is anticipated that the longer the operation is in place, the land-for-land solution will become increasingly popular and so is being reviewed.

Forest areas within the original mining area (SPDA) were generally of very low biodiversity value, while in the expansion area there are significant tracts of land with good or high potential. This has created a need to compensate communities as a whole for the loss of such land and the compensation of people who rely on forest products as essential part of their livelihoods.

Laos regulation states that all lost or damaged assets shall be compensated for including the vitally important forest products that are a critical component of household subsistence in this and many other areas of Laos. This is more difficult to achieve since the compensation must be communal and, since poorer people depend more on forest gathering than richer ones, must tend to favour poor members of the community rather than richer ones. The strategy adopted (and agreed with government regulators) is that where communal bush or forest land is lost to the project, Sepon negotiates in an open forum with community leaders to provide compensation that is both communal and appropriate to the affected community's situation. To date only two such 'community compensations' have been so negotiated (one at Ban Vang Ngang and one at Ban Namkhip). In one case an extensive package of community facilities was agreed upon, in the other case (where losses were less) a community reservoir to provide both water for domestic consumption and drinking and irrigation as well as fisheries was agreed to.

Resettlements

OZ Minerals’ approach to resettlement is guided by the World Bank Operational Directive on Voluntary Resettlement. There have been no involuntary resettlements as a result of our operations during the reporting period.

However, the Government of Lao has a nation-wide policy of relocating villages short distances so that they are nearer centralised rural service points. This policy is followed in the area of our Sepon operation.

Two villages close to our Sepon operation (Ban Nava and Ban Namkeun) were in process of moving at the end of 2008 to main roads partly in line with the government policy and partly on a voluntary basis. The District Government, in following the national policy of improving rural peoples’ access to infrastructure and resources, is gradually amalgamating villages across the District; two villages just beyond our direct impact area, Nakasin and Kengkeuk, were combined in this way in 2008. Three houses/villages (one from Vilabouly District, two from Saybouthong District (Khammoune Province) were relocated as a result of a powerline being built by Electricite du Laos (EDL) as part of an Sepon Project Development Group (SPDG) project. Households moved voluntarily having negotiated compensation as dictated by Lao legislation and World Bank guidelines.

At OKvau, Cambodia, a key issue presently under investigation is the challenge posed by unlicensed miners. Serious consideration is currently being given to their future relocation. Their activities, carried out without any licence, are increasingly an impediment to normal exploration activities and are causing significant environmental damage to the surrounding area through the use of cyanide.