Tag Archives: Newcrest Mining

Papua New Guinea Mining: Risk and Reward in the Land of the Unexpected

Mining opportunities abound despite harsh environment and political unpredictability.

Nathan Allen | Global Business Reports

Credit: Flickr/Tech. Sgt. Tony Tolley

Credit: Flickr/Tech. Sgt. Tony Tolley

Papua New Guinea is one of the mining industry’s last truly unexplored frontiers. Covered by steep, densely forested mountains, one of the country’s most remote communities remained completely unconnected to the outside world until the early 1990s when a chance encounter with a team of anthropologists catapulted them into the international media. Whilst it is increasingly unlikely that any further tribal groups continue to live on in total isolation, there is little doubt that the country’s rugged terrain still holds vast undiscovered mineral deposits. The country’s position on the collision zone between the continental crust of the Australian Plate to the south and the oceanic crust of the Pacific Plate to the north has led to the development of spectacular mineralization in almost every province. However, this same characteristic geology makes navigating certain parts of Papua New Guinea almost impossible, and so the country remains one of the most prospective countries in the world, and one of the most unknown.

Today PNG plays host to eight producing gold and copper mines and, since 2011, the Ramu NiCo nickel and cobalt mine, operated by the Chinese MCC. Australian gold miners Newcrest are the country’s most prolific operators, having operated the Lihir gold mine since 2010 and developed the Hidden Valley mine in joint venture with South African producers, Harmony. PNG has not been immune to the spiraling costs that have afflicted mines all over the world, but over the past 12 months most of the major operations have been successful in reining in operational costs to more reasonable levels.

As for the next wave of producers, the release of a major geological survey at the 2010 PDAC conference served to stimulate interest amongst junior explorers from around the world. However, this flurry of activity was short-lived as the predominantly optimistic climate of the global mining boom gave way to the current downturn. This trend has recently been reflected by the exit of several major players: over the past year, Barrick, BHP Billiton and Vale have all abandoned their exploration programs in the country, leaving some concern about the short-term potential for smaller companies to find development partners.

Nevertheless, Papua New Guinea still boasts a very healthy pipeline of advanced exploration projects now at the feasibility stage, which should enter construction within the next two to three years. It is estimated that by 2020, major mining projects could contribute to the economy in excess of $15 billion in capital expenditure alone. Whilst the vast majority of these investments will focus on the type of copper/gold porphyry deposits that have so far typified PNG’s mining industry, there is also great potential for diversification. Brisbane-based junior Mayur Resources has eschewed traditional exploration paths in favor of proving up their high-grade iron sands precint, which surrounds the Gulf of Papua. The company is also involved in early stage exploration for coal in the same region, and preliminary results suggest that the quality and scale of these deposits could rival those of neighboring Indonesia.

In spite of this encouraging news, working in PNG still presents numerous difficulties to both explorers and operators, including security risks and poor quality infrastructure. In the 2013 Fraser Institute Mining Survey, Papua New Guinea takes third place in the ranking of mining areas purely by mineral potential. However, when other factors are taken into account, the country plunges to 77th place out of a total of 96 nations surveyed.

Perhaps the most serious concern for new investors in PNG is the perceived high level of sovereign risk. After the 2012 general election that brought Prime Minister Peter O’Neill to power, it was hoped that a new climate of stability would descend over PNG politics, and to a certain extent this has proved to be the case. However, two key developments over the past year have brought consternation to the international community. The first is the state’s assumption of the Singapore-based PNG Sustainable Development Program’s (PNGSDP) equity in the Ok Tedi mine, effectively bringing the operation entirely under state control. Depending upon which side of the fence you sit, this either constitutes the expropriation of a foreign-owned asset or simply the redistribution of funds, which already belong to Papua New Guineans, amongst the mine-affected communities. The case is currently under international arbitration, and whilst it is difficult to predict what exactly the outcome will be, mine operators have asserted that there will be no impact on day-to-day activities at the mine. The second issue is the state’s failure to comply with a payment program by which they were contractually obliged to pay $118 million for 30% equity participation in Nautilus Minerals’ Solwara 1 deep-sea mining project. After arbitration ruled in favor of Nautilus, payment has still not been forthcoming and the original partnership agreement with the state has been terminated.

Whilst these developments are worrying, it is also important to point out that these two events have done little to stop on-going investments. Australian miner PanAust chose to proceed with the acquisition of Xstrata’s Frieda River assets, even after the takeover of PNG SDP, whilst in the oil and gas sphere ExxonMobil’s mammoth $19 billion LNG investment is forecast to come online ahead of schedule, proving that it is possible to deliver world class projects in PNG. New arrivals must be prepared to take risks and battle with a range of problems, however, for those that stay the course, the rewards can be immense.

This article was written as part of the research being conducted by GBR on Papua New Guinea’s mining industry for Engineering & Mining Journal, which will be published next December 2014. If you wish to contribute with your comments, please contact Pavlina Pavlova at ppavlova@gbreports.com.

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Morobe rules out marine dumping of mine tailings

“Open seas tailing disposals will not be allowed and so every mining companies and various stakeholders must be mindful of how they manage their waste,”

morobe

Morobe Province rich in mineral resources 

Simon Keslep | Post Courier

Morobe Province is rich in mineral resources, a mining conference on exploration project updates within the province was told. Organised by the Mineral Resource Authority, the conference itself highlighted important key factors on how mineral exploration activities have been proven successful by various investors and local small scale mining companies.

Governor Kelly Naru said the province has had a long history in mining of gold, silver and copper and much of these minerals have supported both local economy and also within the international stoke exchange markets. He said with the first gold rush at Wau and Bulolo in the 1920s which made world news headlines, there proves to be airlift records and dredging operations along the Bulolo River apart from the purity of gold.

“We must consider and ask ourselves whether our social, community and environmental responsibilities are being prioritised as well in terms of having this mineral explorations,” said Mr Naru.

He said mining is a very tough business having huge costs of money on royalties, taxes, machines and even takes long hours of exploration and extractions. Mr Naru believes that with this toughness comes a common interest and responsibility to the people, environment and ecosystems that face effects of these mining activities.

According to Mr Naru the Morobe Provincial Government will support miners and mining companies through their responsibilities as mineral extractors and their waste disposal management strategies.

“Open seas tailing disposals will not be allowed and so every mining companies and various stakeholders must be mindful of how they manage their waste,” said Mr Naru.

Waste disposals issues being faced within the Markham River and even by the upper and lower Watut communities were strongly urged by governor Naru not to be repeated but sustainably managed, he said.

Companies who attended the conference include Pacific Niugini Minerals, Katana Iron and Morobe Mining Joint Venture in which they all a fully established at Wafi Golpu and Hidden valley joint venture and even Niuminco.

“Be responsible towards the environment and the people in the discharge of your duty and care,” said Mr Naru.

Mining activities has two sided aspects and so it includes the prospect benefits and even the down side effects on the people and the environment, he said.

Mr Naru said such conference is meaningful and strengthens the progress and partnership between all stakeholders including the government and the people to know exactly how mineral explorations have been carried out within the province.

With Lae being an industrial hub with booming economic activities, a lot has been said about getting the political, social and environmental conditions right so that the city and province can take advantage of the growth.

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Lihir mine to resume operations after police deployed

Post Courier

image001Lihir Mine will resume operation. Officer in Charge of the Mineral Resources Authority (MRA), Nathan Mosusu announced the resumption of operations at the Lihir Gold Mine early this week following the closure of mining operations on 21 March 2014.

The mine ceased operations following the placement of gorgors on mine facilities by Landolam Pit Landowners over a dispute related to the benefits provided under the Lihir Integrated Benefits Package provided by Newcrest Mining Limited – the owner and operator of the Lihir Gold Mine and managed by the Lihir Mine Area Landowners Association (LMALA).

Following the closure, the National Government Team led by MRA and accompanied by officers from the State Solicitor’s Office, held discussions with the disputing landowners to request the removal of gorgors and reach an understanding on a way forward to deal with the disputes.

During the discussions, landowners removed the gorgors which allowed the mine to re-commence operation early this week. Mr Mosusu commended the disputing parties for their cooperation in reaching an understanding and continuing the dialogue on the way forward to deal with their disputes. Mr Mosusu also heaped praise on Chief Superintendent Anton Billy – ACP New Guinea Islands Region, Senior Inspector Elisa Taksir – PPC New Ireland and Inspector Julie Palakai, Lihir Police Station Commander who rapidly deployed additional police manpower on the island to ensure mine operations resumed without further disruptions.

The OIC said the police’s tireless efforts in supporting the National Government team facilitate understanding between the disputing parties and providing a safe and secure environment for discussions to take place must be commended. He further urged the Lihir Gold Mine landowners to cooperate and continue the dialogue towards reaching a satisfactory outcome that would be of common benefit to all Lihirians affected by the mine. Mr Mosusu said placing gorgors on the Lihir mine which could potentially affect the benefits to Lihirians, New Irelanders and PNG as a whole.

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Hidden Valley mine temporarily suspends operations

Post Courier

The Hidden Valley mine has temporarily suspended operations due to illegal [here we go again, mining companies describing anything they don't like as 'illegal' and the media just repeats the lies] strike action by a minority group of employees. The mine us operated by Morobe Mining Joint Venture (MMJV). And it is understood some mine workers have been evacuated because of the tensed situation on the ground.

Reports reaching Post Courier Live at 5pm today has it that workers of the mine were being evacuated because of breakout by the strike workers.

Last week the management of the mine maintained the site was calm and discussions were underway with employees to return the operation to normal as quickly as possible.

The mine workers went on strike two weeks ago over better conditions.

MMJV said the illegal [of course the workers poor pay and conditions are NEVER described as 'illegal'] stop work and the actions of those involved has been condemned in the strongest terms by both mine area community leaders and mine management.

Discussion with the striking employees is ongoing to resolve the situation and return mine operations to normal as soon as possible

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Chan to present Lihir MOA to NEC

Jack Lapauve Jnr | EMTV

image001Mining Minister and member for Namatanai, Byron Chan, will officially present the ratified Lihir Memorandum of Agreement, (MOA) to the National Executive Council in coming weeks.

The copy of the MOA was presented to Minister Chan in front of New Ireland Provincial Assembly members, Governor Julius Chan, and stakeholders in Kavieng recently.

The Revised MOA insists on substantial increases in benefits derived from the mine, to landowners and the province.

New Ireland Government and Nimamar LLG endorsed their joint position in the revised Lihir MOA concluding three years of extensive deliberations with National Government, through the MRA and all Stakeholders.

The revised MoA is a homegrown cure for the complete failure of National Government, over the past eighteen years to the people of New Ireland.

It represents a collective position that insists on substantial increases in benefits derived from the mine that has, for the past eighteen years brought nothing to New Ireland.

Nimamar LLG President Ambrose Silul, said a fair deal was struck for resource owners, stakeholders and the people of the province.

The revised Lihir MOA was approved by the New Ireland Provincial Assembly in its first sitting of 2014 on March 12 in Kavieng.

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Harmony Gold Mining Co Gets Downgraded

NYSE Post

Macquarie has lowered Harmony Gold Mining Co shares from a “neutral” to an underperform” rating in the research report that was released to investors. Recently, numerous analysts have commented on the Harmony Gold Mining Co stock. Analysts at the CIBC firm have upgraded Harmony Gold Mining Co shares from an “underperform” to a “sector perform” rating in the research-note on 11 March. Separately, EVA Dimensions analysts upgraded Harmony Gold Mining Co shares from a “hold” to an “overweight” rating in the research-note on 21 February .

Finally, Zacks analysts have reiterated their “underperform” rating on Harmony Gold Mining Co shares in the research-note on 12 February. They have now set a price- target of $2.75 on the company stock. Six investment-analysts have rated the Harmony Gold Mining Co stock with a “sell” rating, 4 have assigned a “hold” rating and 1 has assigned a “buy” rating to the Harmony Gold Mining Co stock. Currently, the average rating on Harmony Gold Mining Co is a “Hold” and an average target-price is $2.75.

Harmony Gold Mining last posted the company quarterly-earnings results on 3 February. It reported earnings per share of $0.02 for the quarter. Analysts now project that Harmony Gold Mining Co will post earnings per share of $0.16 for the current financial year.

Harmony Gold Mining Co  is a gold mining & an exploration company. It has operations across South Africa & in Papua New Guinea . Harmony Gold Mining Co has 11 different underground-mines, 1 open-pit-mine and several surface-operations, mostly in South Africa’s Witwatersrand Basin, as well as in some areas in the Kraaipan Greenstone-Belt. In PNG, Harmony Gold Mining Co has a 50% JV with Newcrest Mining Limited in its Hidden Valley open-pit gold & silver mine.

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Signed Lihir MOA presented to Minister Byron Chan

PNG Village

image001New Ireland Provincial Administrator Monovi Amani presenting the signed Lihir MOA Review to the Member for Namatanai and Minister for Mining Hon. Byron Chan witnessed by New Ireland Governor Sir Julius Chan.

The motion by the New Ireland Provincial Assembly ratifying the joint position of the revised Lihir MOA, executed between the New Ireland Government and the Nimamar LLG last month was officially presented to the Minister for Mining, Hon. Byron Chan last night for presentation to the National Executive Council by the Provincial Administrator Monovi Amani in Kavieng yesterday in the presence of the Governor, Members of the Namatanai JDP & BPC, Cabinet Secretary Ao Ure, Namatanai District Administrator Linus Yipma, the Provincial Police Commander and other Government Officials.

When making the presentation to the Minister, Mr Amani expressed that this is the joint position of the two Governments in New Ireland, the New Ireland Provincial Government and the Nimamar Local Level Government. These two Governments were signatories to the original MOA on Lihir Gold Mining with the National Government.

When accepting the revised MOA, Hon. Byron Chan expressed his appreciation to the Governor, the New Ireland Government, and Nimamar Local Level Government for taking such a bold decision. He is delighted with the initiative of the two Elected Governments, which will set the pattern for future negotiation of this kind in other resource provinces.

Hon. Byron Chan said, he has been looking forward to receiving such a document from New Ireland. Now that he has received this MOA Review from the New Ireland Government (NIG) the Minister said, this will enable his office to pursue with plans to complete the process of the Lihir MOA Review as well as amendment to the Mining Act 1992.

The Minister said, considerations will be given to the past submissions by the New Ireland Government for certain innovative recommendations to be included.

The Minister added that it is difficult to completely revise the current Mining Laws of PNG as proposed by New Ireland because of the various implications any proposed changes to the Law will have on the Government of Papua New Guinea.

The Namatanai JDP & BPC considered the revise Lihir MOA and unanimously endorsed the signed document by the New Ireland Government and the Nimamar LLG.

The Minister then proceeded to Namatanai on his planned launching of Solar Lights

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Strike in Hidden Valley mine worries mining minister

Post Courier

The Hidden Valley mine has caused environmental problems and failed to make a profit

The Hidden Valley mine has caused environmental problems and failed to make a profit

Mining Minister Hon Byron Chan is greatly concerned about the prolonged strike by workers at the Hidden Valley mine that has lasted for three days now. Mr Chan in a press release said this has been effectively resulted in the shut down of the mine’s operations. The workers are on strike demanding better terms and conditions from the company.

It is not know how much millions of kina.

“This is an industrial matter currently between the workforce and their management to sort out. I am appealing to all parties to work towards an amicable solution as the prolonged closure of the mine is not in the best interest of all stakeholders including the workforce itself,” said the Minister

Mr Chan expressed his disappointment also at the manner in which the striking workforce conducted themselves by going on a wanton destruction of company property and where a number of employees received injuries. He said he does not condone the actions of such employees saying that police should be brought in to investigate and to deal with such individuals and if they are suspected of crime, appropriate actions should be taken.

The Minister also understands that there are rumours that gold has been illegally smuggled out of the mine. These are merely rumours and until a dedicated investigation has been carried out, he has appealed to the workforce not to use such unfounded allegations as a cause for their strike action.

“I want to assure the workforce that any gold lost through the system and not accounted for is a loss to the people of PNG and the MRA has been requested to establish the credibility of these claims and to advise me as Minister responsible so that appropriate actions can be taken by government. In the meantime, however, you as workers should not use this as an excuse to continue your strike action”.

Hon Chan is appealing to the company Morobe Mining Joint Venture to engage with the workforce and to commit to providing a detailed response to the workforce on their demands. If they are unable to resolve this matter then they should seek the intervention of the Industrial Registrar.

If the matter does get to the Industrial Registrar, then the workforce should return to work and allow the parties under the Registrar’s guidance to resolve these issues but the workforce must return to work.

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MMJV says site is calm as workers continue strike

Post Courier

The Hidden Valley Mine run by Morobe Mining Joint Ventures is losing millions of kina as its workforce continue their strike over better working conditions. The mine in a press release stated a small group of employees were involved in an altercation with mine security at the Hidden Valley mine on Friday evening which resulted in injuries to several employees and minor damage to company property.

The majority of the injuries were minor with treatment received at the mine site however two employees were referred to Lae for further treatment and are in good condition. The mine management requested police assistance to help control the disturbance and police units from Bulolo and Lae were dispatched to the mine site. According to Hidden Valley spokesman David Wissink:

“There are formal grievance processes in place for mine employees to use but it is unfortunate that those mechanisms were not used by the employees who took matters into their own hands and injured fellow employees.”

Mine management wish those injured in the altercation a speedy recovery from their injuries and investigations are underway to determine the cause of the incident. The site is calm and discussions are underway with employees to return the operation to normal as quickly as possible.

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Wissink quiet despite police increase at Hidden Valley mine

Police always quick to respond to mining company requests – shame they are not so ready to protect the public against mining company abuses and illegal logging…

Julianna Waeda | PNG Edge

182444_457796220959055_558932331_nMore police are being sent to the Hidden Valley Mine area today despite assurances from the management that the situation is okay.

Morobe Provincial Police Commander Kaiglo Ambane says that apart from the 15 MS 13 Squad members he sent up on Saturday morning he will send additional police today as well.

PPC Ambane says this is on request from the mine management citing the risk of opportunists taking advantage of the current tensions between staff on site.

Ambane says he will be sending 10 more police to join the 15 at the mine, adding that he is awaiting a full report into the incident and the situation.

Meantime, MMJV spokesman David Wissink would not comment on the situation but says that management will have a meeting to determine the cause of the fight that took place on Friday night and carry out appropriate actions.

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Lihir: Say nothing, Chan warns

The National aka The Loggers Times

NEW Ireland Governor Sir Julius Chan has advised provincial and administration officials to refrain from commenting on allegations made by the Lihir Mine Area Landowner Association.

He told a recent provincial executive council meeting that there were many misleading statements and petitions from the association.

Sir Julius advised council members and provincial administration officers not to pursue any allegations coming from landowners, Dennis Gati and Peter Suar.

Sir Julius said the elected government of New Ireland and the Nimamar LLG were the signatories to the Memorandum of Understanding in 1995 and therefore any review of that agreement would comprise the two governments.

He said the association representing some of the landowners entered into the Integrated Benefit Package with the company and the provincial government had nothing to do with it.

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