O’Neill government betrays the people of PNG and backs experimental seabed mining despite overwhelming opposition

The government of Peter O’Neill has shrugged off overwhelming community opposition to controversial experimental seabed mining and signed a new agreement with Nautilus Minerals…

Nautilus Minerals and State of PNG Resolve Issues and Sign Agreement

Nautilus Minerals | Marketwired

Nautilus Minerals announces that the Company and the Independent State of Papua New Guinea have today signed an agreement, enabling the Solwara 1 Project to move forward toward production with the full support of the State.

Under the Agreement, the State shall take an initial 15% interest in the Project. The State has the option to take up to a further 15% interest within 12 months of the Agreement becoming unconditional. The State has paid Nautilus a non-refundable deposit for its initial 15% interest of US$7,000,000.

The Agreement is conditional upon the State, (through a subsidiary of Petromin PNG Holdings Limited), securing by 31 July 2014, the funding for the State’s 15% share of the capital required to complete the development phase of the Project up to first production, being US$113,000,000 (excluding the deposit). These funds will be placed in escrow until Nautilus satisfies the conditions for their release. The funds will be released to Nautilus, and an unincorporated joint venture between the parties for the ongoing operation of the Project shall be formed, if within 6 months of the funds being placed in escrow Nautilus secures the charter of a Production Support Vessel and secures for the State certain intellectual property rights. After first production, Petromin’s subsidiary will contribute funds in proportion to its interest.

If the conditions of the Agreement are satisfied and the State completes the purchase of its 15% interest in the Project, then the Arbitration concerning Nautilus’ claim for damages related to the termination of the State Equity Option Agreement dated 29 March 2011, shall be dismissed. If the State does not complete the purchase, then the position the parties were in prior to signing the Agreement is reinstated.

Nautilus’ CEO, Mike Johnston, said the Company was pleased to have achieved an amicable resolution of its issues with the State.

“This step represents a major vote of confidence in Nautilus Minerals and the Solwara 1 Project. Through this joint venture, the State will provide a significant capital investment and will retain a direct interest in the long term success of the Project. We look forward to working closely with the State and Petromin on Solwara 1, which will generate significant economic activity within the State and the Province of New Ireland,” he said.

“The Company is now focusing its attention on securing a suitable vessel arrangement and is continuing its discussions with potential vessel partners while also undertaking a tender process with shipyards experienced in building offshore construction vessels. The Company intends to have a vessel solution in place before the end of the year,” he added.

Mr Johnston continues to have the support of the Board of Directors of Nautilus with his interim role as President and Chief Executive Officer having now been made permanent.

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Abandoned mine puts 8,000 at risk in Solomon Islands

United Nations team assessing mine tailings dam in the Solomon Islands

UN Office for the Coordination of Humanitarian Affairs

A three-person United Nations Disaster Assessment and Coordination (UNDAC) team has arrived in the Solomon Islands to assess a gold mine tailings storage facility following flash floods and heavy rains in the region.

There are concerns rising water levels in the dam, located about 30 kilometres from the capital Honiara, may have weakened, potentially placing around 8,000 people in nearby villages at risk. In addition, the site contains chemicals common to gold mining facilities.

“We are here to support the Government by conducting an independent assessment of the stability of the dam and by taking samples for chemical analysis,” said Ms. Emilia Wahlstrom, UNDAC team leader. “There are a number of concerns at the site and for the thousands of people who live in neighbouring communities.”

On 14 April, Dr. Melchoir Mataki, Chair of the National Disaster Council and Permanent Secretary of the Ministry of Environment, Climate Change, Disaster Management and Meteorology (MECDM), sent an official request to the UN Resident Coordinator in Fiji to provide technical expertise and support to the Government.

Following the request, the Joint UNEP/OCHA Environment Unit and the European Union Humanitarian Aid Office (ECHO) assembled a team of independent experts to assess the potential dangers of the tailings dam weakening, potentially resulting in a toxic spill of hazardous chemicals from the gold extraction processes, such as cyanide and arsenic.

Two technical experts from the UN and the Netherlands arrived in Honiara on Monday 21 April and a dam integrity expert from Sweden joined the team today. The first joint field trip to the tailings dam is on Thursday 24 April and will include experts from the Environment and Conservation Division of MECDM, an independent Environmental Adviser of the downstream communities, as well as representatives from OCHA’s Regional Office for the Pacific.

The team is supported by the European Commission Community Mechanism for Civil Protection and will remain in the Solomon Islands for two weeks to conduct assessments and prepare a report for the Government.

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DEC approves marine waste dumping for Woodlark mine

Review complete for gold mine in Woodlark Islands

Post Courier

image001The prospects of Woodlark Island gold mine project opening is nearing as review of environmental impact was recently completed.

BMT WBM (BMT), a subsidiary of BMT Group Ltd, a Leading edge consultancy with more than 40 years of experience, has completed an independent expert review of the Environmental Impact Statement (EIS) and Environmental Management and Monitoring Plan (EMMP) for the proposed Woodlark Island Gold Project.

The island is situated in the maritime province of Milne Bay in Papua New Guinea.

Lyn Leger, Senior Environmental Consultant at BMT WBM says: “In the review we undertook independent modelling based on Computational Fluid Dynamics (CFD) and with Discrete Element Modelling (DEM) software to predict the behaviour of DSTP plumes and provide a basis for cross-checking the impact predictions generated by the modelling outlined in the EIS.”

Dr Darren Richardson, Project Director at BMT WBM says: “We are extremely proud to have been given the opportunity to support DEC with this project.  Since presenting our findings to DEC enabling them to put forward a recommendation, the Environment Council has recently provided approval for this project – a true indicator of the confidence our team of experts instilled as part of our thorough, independent review.”

BMT was commissioned by the Papua New Guinea Department of Environment and Conservation (DEC) to provide technical review, advice and recommendations which were then incorporated into the final EIS Assessment Report for the Director of Environment to present to the Environment Council.

BMT’s assessment was undertaken through a staged process which included a detailed technical review of the EIS and EMMP documentation and development of a numerical model to analyse the predictions made in the EIS regarding the behaviour of tailings from the Deep Sea Tailings Placement (DSTP) in the receiving environment.

Another key aspect of BMT WBM’s work included a thorough review of the sedimentation impacts in downstream waterways from the mining activities such as construction and operation of the mining voids.  BMT WBM’s sister company, BMT Cordah also provided support in assessing potential social impacts related to food, water and cultural resources and helping to determine whether or not the local people’s livelihoods would be affected by the associated environmental impacts.

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Barrick-Newmont tie-up could create new top flight Australia gold producer

Mining Weekly 

Australia could spawn a new mega gold producer if Barrick Gold Corp and Newmont Mining Corp spin off their Asia-Pacific assets, heating up competition with the country’s underperforming market leader Newcrest Mining Ltd.

Barrick and Newmont have been holding friendly merger talks, but remain at odds over how to group mines each company owns in Australia, New Zealand and possibly Papua New Guinea and Indonesia into a separate company, sources close to the talks have said.

If the two companies’ Asia-Pacific mines were grouped together, annual output could exceed 2.3 million ounces, challenging Newcrest as Australia’s biggest gold producer and the world’s fifth largest.

The new entity could also potentially gain a higher rating among investors than it would receive within a combined Barrick-Newmont.

“There’s huge investor appetite for an alternative to Newcrest,” said Eagle Mining Research gold analyst Keith Goode.

“The next stages of growth for Newcrest are seen as either risky, as in the case for their assets in Ivory Coast, or too long term. What the Barrick-Newmont assets in Asia-Pacific offer is immediate production and cash flow, with growth through exploration potential.”

Anglogold Ashanti has also considered spinning off its Tropicana and Sunrise Dam mines in Australia into a separate entity to benefit from investor interest in an alternative to Newcrest, but has yet to act.

Newcrest has held the No. 1 spot on the Australian Stock Exchange since 2010, with total production this year seen at about 2.3-million ounces. Number two is Evolution Mining, a distant second at less than a half-million ounces.

However, the miner’s stock has lost three-quarters of its value over the past three years as it has struggled with high costs, disappointing output at its Lihir mine in Papua New Guinea and a 28% fall in the gold price in 2013.

A sharp drop in half-year profit and a jump in debt also fuelled concerns it may need to tap the market for capital, while it reported an 11% fall in March quarter gold output from the previous quarter on Wednesday, well above the 7% drop forecast by UBS.

Newcrest also said it had cut 208 jobs over the last quarter at its Lihir mine.

ARRAY OF MINES

Australia was the world’s second-biggest gold producer behind China in 2013, with output of 10.5-million ounces, according to ThomsonReuters data, but many of its biggest mines are in the hands of foreign-owned miners.

Newmont owns Australia’s biggest gold mine, Boddington, and is a 50-50 partner with Barrick in the 800 000-ounces-per-year Super Pit lode 700 km (440 miles) away. Other assets include the Jundee and Tanami gold mines in Australia and Waihi in New Zealand. Newmont’s other main asset in the Asia-Pacific region is the Batu Hijau copper and gold mine in Indonesia.

Besides its half-stake in the Super Pit, Barrick could roll its Porgera mine in Papua New Guinea into the fold, bringing with it close to 500,000 ounces.

“If you have an Asia-Pacific-listed demerged asset, you would get strong Asia-Pacific interest and be more competitive for those investment dollars than otherwise in North America,” said Morgans mining analyst James Wilson.

Still, there’s no guarantee a sizeable number of investors would drop Newcrest for a new Barrick-Newmont combination.

“If it was to be listed here (Australia) and it was materially cheaper than Newcrest, then maybe you’d consider it, but I would say from what I’ve seen, Newcrest has the better asset mix than the proposed spin co,” said Darko Kuzmanovic, a portfolio manager at Caledonia Investments. Caledonia does not own Barrick or Newmont shares.

Barrick gained 1.8% to C$19.37 ($17.55)in heavy trade on Tuesday after Goldman Sachs upgraded the stock to a “buy” from “neutral” and investors placed bets on whether it can pull off a bid for Newmont.

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Security guard affected by the thick smoke from MCC refinery

Mystery deepens regarding the story by John Bivi in the National Newspaper about pollution from the Basamuk refinery polluting local food crops and the gardens.

Thick white smoke from the refinery, moving southwards

Thick smoke from the refinery, moving southwards

A landowner at Basamuk has confirmed that not only the food crops were spoilt but a security guard was also affected. The guard is suffering infections in his eyes which he believes are as a result of the thick dark smoke from the refinery factory.

The source added that MCC only release the smoke during night when there are heavy down pours of rain and most likely when everyone is inside their houses. However the poor security guards are outside guarding during night that’s how his eyes are affected.

Tha landowner added a Mineral Resource Authority inspector visited last week during the National Mine Safety week but did nothing on the issues that were raised by locals. They complained about the thick dark smoke which is released during the night and during heavy rain and falls down as fog during the morning to the ground level and the wind helps to spread affecting food crops badly.

The government and MCC are turning are blind eye on to this and the poor people are suffering silently.

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Newcrest Mining Cuts Hundreds of Jobs in Papua New Guinea

Gold Miner Cut 208 Jobs Across Range of Roles at Lihir Site

Rhiannon Hoyle | The Wall Street Journal

firedNewcrest Mining said it cut hundreds of jobs in Papua New Guinea in a push toward austerity. The decision comes after the company launched a raft of cost-cutting projects across its operations last quarter.

The Melbourne-based gold miner, one of the world’s biggest, said it cut 208 jobs across a range of roles at its Lihir site from January to March. Newcrest said it also eliminated another 32 vacant roles at the site, its most expensive to operate.

Newcrest pinned its 11% drop in third-quarter gold production on maintenance work at sites including Lihir and Cadia East in eastern Australia.

Newcrest’s priority is now on bolstering cash flow, “not maximizing production ounces,” said Chief Executive Greg Robinson.

Some of the world’s largest resources companies, including BHP Billiton Ltd. and Anglo American PLC, have been cutting spending, shelving major projects and looking to run existing operations harder after pledging better capital discipline after years of heavy investment in new mines. This has resulted in hefty job cuts across the industry.

Commodity prices from coal to gold slumped as mine supply increased, the U.S. moved to tighten monetary policy and economic growth in China cooled.

Newcrest has curbed spending over the past 18 months, which included closing its Brisbane office in Australia’s Queensland state. This came after a sudden halt to a more-than-decade long bull run for the gold market. Spot gold prices are currently down about 25% from 2013′s highs.

In February, Newcrest reported a slide in first-half net profit—to 40 million Australian dollars (US$37 million) from the A$323 million in the same period a year earlier—as it posted write downs against exploration assets and extra tax charges tied to research and development.

“I think there is more room for us to move,” said Mr. Robinson of the company’s ability to cut costs further, on a call Wednesday with analysts and investors. He said the Lihir mine would be a focus for cash savings and productivity improvements in the period ahead.

It costs the company A$1,344 an ounce to sustain operations at Lihir, compared with A$875 an ounce at its Telfer mine in Australia, and A$381 an ounce at its Cadia Valley site.

Newcrest separately confirmed Mr. Robinson would stand down in early July, and will be replaced by Sandeep Biswas. The former Rio Tinto PLC executive joined Newcrest as chief operating officer in January with the expectation he would take over Mr. Robinson’s role in the latter half of 2014.

Shares in the company were recently up 1.5%, outperforming a 0.5% rise in the broader S&P/ASX 200. While third-quarter gold output fell to 551,590 ounces from 621,125 last quarter, production was still up 7% compared with a year earlier.

The company also stuck to earlier estimates that gold output would reach the higher end of its 2.0-million ounce to 2.3 million-ounce guidance range this fiscal year.

Still, some fund managers are cautious. “Its balance sheet remains quite constrained, burdened by too much debt, and some of its major assets are simply being run for cash generation, which I believe is a very short-term approach,” said Ben Lyons, a Sydney-based portfolio manager at ATI Asset Management, who sold his fund’s holdings in Newcrest about 18 months ago.

In its half-year report in February, Newcrest said its operational cash flow had nearly halved, while debt-to-equity level jumped above 30% from 17% in the same period a year earlier.

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Exposing the ugly truth about Rio Tinto

IndustriALL Global Union

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IndustriALL Global Union has produced a new report: “Unsustainable: The Ugly Truth about Rio Tinto” highlighting the multinational’s global practices. IndustriALL is calling for Rio Tinto to live up to its claim to be a sustainable company including by respecting workers’ rights.

Kemal Özkan, assistant general secretary of IndustriALL says:

Rio Tinto’s blind pursuit of profit at any cost has caused disputes with numerous unions as well as environmental, community and indigenous groups. IndustriALL has launched a campaign working with civil society organizations to defend against Rio Tinto’s abuses. Through demonstrating that Rio Tinto does not operate in a sustainable manner, we aim to force the company to live by its own claims.

The report exposes Rio Tinto’s performance on areas including environmental, economic, social and governance issues which the company claims to be key areas for its sustainable development .

Economic
• Rio Tinto took huge losses on its investment in Mozambique, while at the same time forcing people off their land.
• Rio Tinto took huge losses on its Alcan acquisition, while at the same time laying off thousands of workers and provoking a costly labor dispute.

Social
• 40 workers were killed at Rio Tinto fully or partially owned operations in 2013. In the case of a disaster in Indonesia that killed 28 of the workers, a national human rights commission found it could have been avoided.
• Over one-third of the company’s workforce is continually exposed to work noise levels at which hearing loss can be predicted.

Governance
• Rio Tinto consistently refuses to seek free, prior and informed consent from communities before mining.
• Rio Tinto says that closure costs of its operations represent a significant financial liability, however they publish little detail on how they calculate those liabilities.

Environment
• In a single month last year, Rio Tinto had uranium spills at both of its uranium operations.

http://www.industriall-union.org/sites/default/files/uploads/documents/Rio_Tinto_Campaign/a4_rio_tinto_report_final2.pdf

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