Fiji

FIJI Post-Disaster Needs Assessment
Losses to the Mining Sector (F$20 million)
Losses are primarily attributable to loss of earnings, higher operational costs, cleanup costs and lower productivity, which
resulted from flooding at the underground mine and led to a decline in gold shipped. Total gold shipped in February 2016,
the month of the cyclone, was 2,114 oz, which was 1,799 oz less than the January shipment. Table 35 shows the mining
industry’s total loss (including gold shipped and earnings) due to low production.
Table 35: Losses in the Mining Sector
February–March April–June Total Effects
Loss in Gold Shipped (oz) 1,522 6,874 8,396
Loss in Earnings (F$ million) 3.7 16.3 20.0
Source: Estimations by Assessment Team.
Note: Some of the costs (losses) to the sector could not be determined at this early stage of assessment. The average gold shipped per week
is 1,100 oz. Calculations assume that by July 2016, VGM will be back at full capacity and that the average gold shipped per week is 1,100 oz at
the price of US$1,097.40.
Social Impact of Damage and Losses
Despite normal operations at VGM after the cyclone, sector operations were affected by the poor attendance of workers,
the majority of whom were affected by the devastating cyclone in some way (such as damage to their homes).
Much of the damage done to buildings posed a risk to the environment. For example, live electrical wires were exposed to
rain and sun, and the chemical storage facility was damaged, potentially exposing staff to hazardous chemicals. However,
the staff acted quickly to address and mitigate the risks. Structural engineers working within the sector were deployed to
the site to undertake the assessment, and the findings formed the basis for the rehabilitation and maintenance works to
be undertaken.
Recovery and Reconstruction Needs for the Mining Sector (F$11 million)
Total recovery and reconstruction needs for the mining sector (that is, for VGM) are estimated at F$11 million. Approximately
F$6 million is needed to cover costs of operating the mine from February to July 2016, when the industry is expected to be
back at full capacity, and includes costs for repairing minor damage, paying wages, etc., without full revenue while there are
no gold sales. The remaining F$5 million is required for VGM’s first insurance deductible of F$5 million. The assumption is
that the insurance company will agree to pay 100 percent of the claim for F$11.5 million (total damage on physical assets).
Table 36 provides the breakdown of recovery needs that must be met to return the industry to full capacity.
Table 36: Total Recovery and Reconstruction Needs for the Mining Sector (F$ million)
Recovery of lost revenue by increasing gold
production (VGM)
Maintenance/repair of buildings and
infrastructure (Insurance excess)
Recovery Reconstruction Resilience Total
6.0 6.0
5.0 5.0
Total 6.0 5.0 11.0
Source: Estimations by Assessment Team.
Note: A detailed breakdown of recovery needs by sector is included in Annex 2.
VGM is expected to fund the majority of reconstruction requirements. However, more funding may be required for additional
risk management mechanisms and insurance arrangements, which will take into account cyclone risks and support the
industry in BBB. Maintaining well-skilled employees for construction activities is also important.
Tropical Cyclone Winston, February 20, 2016
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