Gold Ridge in talks to hand mine back to Solomon Islands government

Australia Network News

The sun setting at Gold Ridge mine, Solomon Islands. Photo: Koroi Hawkins

The sun setting at Gold Ridge mine, Solomon Islands. Photo: Koroi Hawkins

Solomon Islands’ Prime Minister Gordon Darcy Lilo says the Australian-operated Gold Ridge mine remains viable despite recent security concerns and mass lay offs.

Unrest around the mine site in central Guadalcanal has escalated in recent days, leading to the evacuation of all of Gold Ridge’s expatriate staff.

Mr Darcy Lilo has told Radio Australia’s Pacific Beat program that Gold Ridge’s owner St Barbara is in talks to hand over the mine to the Solomon Islands Government.

“St Barbara is a very respected company, but up until recently they have now come to a point where they have decided to negotiate with the government to hand over the investment back to the Solomon Islands Government and we respect that,” he said.

Operations at Gold Ridge were suspended in April this year due to torrential rainfall and flooding.

Management has said the security situation around the mine has been a key reason preventing operations from restarting.

But the government says security isn’t a problem.

“We have a respected response that has been able to arrest the situation or contain the situation in Gold Ridge and therefore I don’t see that as a real issue,” Mr Darcy Lilo said.

But the Prime Minister acknowledges that changes need to be made to the mining industry in his country.

“We can work hard to ensure that the regime to regulate the mining sector in Solomon Islands is cleaned up,” Mr Darcy Lilo said.

“We (need to) ensure that all stakeholders can see things in a more transparent and accountable way to give greater confidence for better quality and a strong investor to be able to come and develop this gold mine.”

Mr Darcy Lilo is in Brisbane where he’s attending the Australia Solomon Islands Trade Business Forum and Trade Expo.

He’s the keynote speaker at the event and says there are plenty of opportunities for investment in his country.

“We believe that there is a very important tourism product that can be developed,” he said.

“We have a natural environment that has not been spoilt even though people have raised a lot of concern about the rate of extraction of the natural forest.”

Australian assistance

At the same business event, the Australian Government announced it will be providing Solomon Islands with another $2 million to help in the recovery from April’s devastating floods.

The disaster killed 23 people, displaced thousands and caused widespread damage to infrastructure.

Australian Government Senator Brett Mason said the money will be particularly helpful in repairing damaged roads and bridges.

“I visited Solomon Islands days after the disaster and saw firsthand how Australian support was helping to relieve suffering and contribute to the repair of essential infrastructure,” he said.

“Now we want to support Solomon Islanders recovery from the economic impact of the floods by helping to restore commercial activity in Honiara and surrounding areas.”

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NATIVE BORN

Bougainville

My Island

mekamui | Mekamui News

Oh Mekamui : I care for you,
Sadden by the big hole in you

Oh Mekamui : I would not sell you for a price
I would not strip you off your forest
Or pollute your clear blue sky

Oh Mekamui : I would not desecrate your sacred place.
I would not plunder on your shores
I would not fail your precious waters

For am your native born

Oh Mekamui : where does your caretakers gone,
are they waiting for something call Dollar to destroy you
or are they sleeping in the jungle tonight with dreams of ancient
Songs
or are they drifting in your seas.

Oh Mekamui : Who will hear this call, to keep you safe for us all

Oh Mekamui : I would not desecrate your sacred place
I would not plunder on your shores

For am your native born
For am your native born

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Bougainville Copper maintains inside running on re-opening Panguna mine

Business Advantage PNG 

The Bougainville parliament has just passed an interim mining act, paving the way for its troubled Panguna copper mine to re-open. Even though the new act removes the automatic renewal of its lease to continue, Bougainville Copper Limited is still the preferred mine operator, as Kevin McQuillan reports.

Bouginaville’s mining regime seeks to redress what Dr John Momis, the President of the Autonomous Bougainville Government (ABG), describes as the ‘extremely unjust and unfair Mining (Bougainville Copper Agreement) Law 1967’.

The issues include control over the terms of mining leases and the share of the income from mining.

At the heart of the new mining regime is that:

  • traditional landowners, and not the State, own the minerals in, on or under their land;
  • the ABG will own the minerals in, on or under non-customary land;
  • customary owners will have a right of veto over the grant of any exploration licence over their land. (See box below for further details.)

No independence without revenue

Earlier this month, Bougainville’s Finance Minister, Albert Punghau, outlined Bougainville’s delicate financial situation to the 65-member forum tasked with developing a negotiating position on the future of Panguna.

This year, he said, the ABG will collect revenues of about K25 million—less than 10 per cent of its annual budget—with the rest coming from PNG’s National Government.

‘Without much more revenue, we can’t reach [the] highest autonomy or independence. We cannot meet the increasing needs of our people,’ he said.

John Momis recently told Business Advantage PNG that only the re-opening of Panguna will provide the revenue necessary for economic development: ‘with the way things are going, we don’t have much option, really.’

The vast majority of Bougainvilleans agree the mine should reopen, according to a source close to the ABG.

‘The clear message coming from the Panguna landowners is to resume mining, not because it’s wonderful, but because we’re not going to have economic development and independence which clearly the vast majority think they can achieve,’ they tell Business Advantage PNG.

Re-opening Panguna

While Momis has described the Transitional Mining Bill as ‘stripping’ BCL, the previous operator of the Panguna mine, of its seven exploration licences and its special mining lease over Panguna, the issue is not that clear-cut.

The new Act does not grant any minerals to BCL, but it does give BCL the first right of refusal to negotiate with both the ABG and landowners for a mining licence over the Panguna site, says Momis.

‘Landowners want the devil they know, not a new devil, because the devil they know accepts that it did many things wrong and accepts responsibility for fixing them up and they fear that a new devil would not accept those responsibilities,’ say government sources.

Rio Tinto reviewing BCL ownership

This week, Rio Tinto announced it was reviewing its 54 per cent ownership of BCL, in light of the new legislation.

BCL Managing Director, Peter Taylor, is unfazed by the news, telling Business Advantage PNG that any changes to the ownership of BCL shares will not affect its plans to continue negotiating with the ABG and landowners.

He says he’s still ‘optimistic’ of striking a deal to re-open the mine.

‘BCL will continue to engage and continue in talks about reopening the mine,’ he tells Business Advantage PNG.

Rio is reviewing a whole bunch of projects and BCL is just one of them,’ he said. ‘They might decide not to sell. I don’t want to pre-empt an outcome.’

Other buyers

‘Rio Tinto is large enough to have done their sums, looking at the costs of benefits, so I don’t know if we will see a new player on the scene,’ according to Satish Chand, a finance professor at the University of New South Wales.

Chinese buyers are currently looking at copper deposits in PNG. Guangdong Rising Assets Management Co. has been considering a takeover of Pan Aust, an Australian company poised to acquire a majority stake in the Frieda River copper project in East and West Sepik provinces.

Carpetbaggers?

In the ABG parliament this month, Momis named four companies from Canada, the US and China ‘with very dubious or limited track records in the mining industry’, who were ‘entering into arrangements with Bougainville factions and leaders’.

He also named five local landowners who were bypassing the ABG and dealing with the companies.

‘Very largely opposition to mining has been orchestrated by the Bougainville[-based] partners or agents of outside groups seeking to get control of significant mining resources in Bougainville without any government approval,’ sources advise Business Advantage PNG.

‘The truth is that the Bill is designed to stop unscrupulous and dishonest outsiders who together with a few weak or dishonest Bougainvilleans are the ones trying to both buy and sell Bougainville,’ said Momis.

The cost of rehabilitating the mine is about A$6 billion (K13.72 billion), and revenues for the life of the mine are estimated at $A75 billion in 2014 dollars.

A lot of reasons to attract modern-day carpetbaggers.

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We do not want to be slaves in our own land

Mining Slave | The National aka The Loggers Times

polyp_cartoon_Trickle_Down_EconomicsI WISH to express my views and concerns about expats being the lawmakers of PNG.

I am a mine worker and worked with most expats during my years in several underground mines for the last 10 to 20 years.

I have noticed that they seem to be above the laws of this country which the department of foreign affairs has put in place to guide those expats who later become elected leaders in PNG.

There are also regulations where the departments of mining and petroleum have put in place to guide both expats and PNG nationals.

Most expats come into the country to work, they bring in their family members and use the nationals to train them and in return, they start to criticise and threaten us to get us sacked.

For instance, if a national supervisor makes a single mistake or does not want to follow an idea of an expat to get a job done which is unsafe, they start to kick him or her out because they come in groups and once it comes to decision making, they all come in to compromise in favour of one single expat, even the so-called manager falls into his favour.

The correct procedure is, the expat or national supervisors should contribute ideas to get a job done safely, or if the expat’s ideas are unproductive, the nationals use their own ideas so the job is done safely because in any mine you go around the world, safety is the number one priority.

Please, can the departments or foreign affairs and immigration or our leaders look into this issue because we do not want to be slaves in our own land or spectators of resource development on our land.

We have enough experienced underground miners.

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Mining bill causing mixed feelings

Peterson Tseraha | PNG Loop

panguna

THE latest mining bill that was passed by the Autonomous Bougainville Government two weeks ago was a success to many Bougainvilleans, but some are still confused about the bill and how it will be enforced.

A call has been made for awareness and enforcement for village based people to understand the whole bill, its sections and clauses.

A concerned Bougainvillean citizen who wishes to remain anonymous told this reporter more awareness is needed in order for this bill to be understood.

“It has already been misinterpreted and misunderstood, leading up to a protest,’’ he said.

“Mining still remains a very sensitive issue on Bougainville right now.  Anything done on the floor of parliament has to go down well with the majority of the people, especially the silent majority, and the only way is through awareness,’’ he said.

He said that the bill itself allows for resource owners to own the resources and any interested mining company enquiring for exploration, should come in through the Government, the legitimate authority on the ground  which is none other than the ABG.

“A lot of people agree with that but the big thing is that a lot of people are interpreting it as the bill is still of relevance to the PNG Mining Act of 1992 and all clauses still relate to the same old Devil which caused Bougainville and PNG a lot of trouble BCL,’’ he said

The concerned citizen also said, people who are educated will understand the bill fully but not the ones who are in the villages and mountains of Bougainville. Those are the ones that really matter,  the people in the village.

He stated that the Autonomous Government under the leadership of Chief Dr John Momis is unique,  straight forward and the government for the people.

But bills have been passed however now has to be the time to enforce those bills, he says.

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Kula starts diamond drilling in Papua New Guinea

Niugini News | Pacific Mining Watch 

Kula

Kula Gold Limited has announced that diamond drilling has commenced at the company’s flagship Woodlark Island gold project.

This is following the processing of the newly acquired helimag data and the identification of additional large scale hydrothermal systems.

Kula Gold has accumulated a significant amount of knowledge during the discovery of the 2.1 million ounces of gold mineral resources at Woodlark Island. Additional resource discovery will add to the profitability and mine life of the 1.8 million tonnes per annum (mtpa) project and potentially enable an upgrade of capacity in a stage two expansion to 4mtpa.

The first phase of drilling has commenced at Kulumadau North, where a geophysical repetition of the 900,000 ounce Kulumadau Mineral Resource has been interpreted to occur, 600m to the north.

Kula Gold’s chief executive officer Stuart Pether said:

“The exciting interpretation of multiple, large scale hydrothermal systems under shallow cover, indicated by the helimag program, has confirmed the company’s view that it can add significant gold resources to the project’s current resource base”

 

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St Barbara’s outdated colonial approach was their undoing

The observations of an investor in developing countries

Concerned Investor | Solomon Star

GRML was wrong all a long…

Photo: West Australian

Photo: West Australian

The abandonment by Gold Ridge Mining Ltd (GRML) of their investment in Solomon Islands comes as no surprise to most critical observers.

St Barbara, the owners of GRML, came into the Solomons two years or so ago, with an ill-conceived concept of how to operate in a developing nation.

Long gone are the colonial days where governments and communities are not treated as equals. From the start, this misconception resulted in them mismanaging their shareholder’s money, the entire mining process and their stakeholders including local employees and those in the community.

firedThe management style of St Barbara (SBM) and GRML show their lack of ability and understanding with regard to developing countries and they tried to manage as they would have in Australia. Report after report including those from Ernst Young and Price Waterhouse show the Australian mining model is the worst run and most expensive in the western world.

Based on this, the poor results from GRML should never have surprised anyone. The Australian mining model continually mismanages its value chain and as a consequence has never been able to manage it or devote sufficient time and effort into understanding its many parts and their interdependence on each other. As with any chain, it is only as strong as its weakest link and simply ignoring or undervaluing an underperforming link lets the whole chain down.

GRML was producing gold at nearly double their selling price! Admittedly SBM did remove the cause of one of their problems by replacing their MD, but the new one has little more experience in these matters and shows no aptitude for this task. The ‘expat management’ sent to Solomon Islands was considered to be abnormally incompetent by many observers. Was the new team picked solely to undertake the restoration work and finalise matters before the obvious planned withdrawal from Solomon Islands? The lack of conviction with which SBM and GRML undertook work pre and post flooding leads one to believe that a commercial decision was made that the insured value of the Gold Ridge Mine project was worth more than the value attributed to it by the Directors of SBM. GRML was in trouble long before the floods in April this year. The floods became a very convenient excuse for them to withdraw from a calamitous operation. Any well run operation would never have abandoned their operations as GRML had… there was an ulterior motive all along.

As an investor in the Solomon Islands as well as other developing countries, we consider the Solomon Islands to be a good safe investment with little or no more sovereign risk than countries such as Australia. The Solomon Islands government and the various ministries have shown a great deal of competence and ease in dealing with them. In fact after years of mismanagement, we only now consider that Australia is less of a sovereign risk and that is only due to the current party that is in power.

It is quite preposterous that the directors of SMB should authorise the release of a document insinuating that the situation in Solomon Islands is dangerous and they  had ‘safely’ removed all their expat employees (SBM recent report on their website). This press release has only been made to allow them to claim under their relevant insurances and save face with their shareholders, at the cost of Solomon Islands. Unfortunately SBM has followed the path of other publically listed companies where bad information is slowly given to market and its shareholders whilst good information is almost instantaneous. Nothing has been said about the dangerous conditions that GRML management left the pit prior to first withdrawal, their failure to secure the site, their failure to maintain their settling dams. All we hear in the press is GRML is working to resolve issues with the Government of SI and how unsafe it is. All problems are caused by others, never by the management of SBM or GRML. Admittedly the GR land owners chairman also pushed the company way too far.

When will these so called business leaders understand that they are responsible, put their hands up and let people who actually know what they are doing get in and fix the problem. The problem was not one of process and equipment but a pure managerial competence issue on the side of SBM. It will not be an easy fix as the amount of “silly” money that GRML threw around will need to be reviewed so that both the project and all its stakeholders have a long-term future there. Therefore it must be fair to all parties and the expectations of all concerned must be one of compromise so that all stakeholders benefit from the resources mined at the project.

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