Crater accelerates PNG mine

Crater Gold Mine

Esmarie Swanepoel | Mining Weekly | 3 May 2016

Junior Crater Gold Mining on Tuesday told shareholders that gold mining at its High Grade Zone mine, at its Crater Mountain project, in Papua New Guinea, would be accelerated with the installation and commissioning of a new custom-made gold processing plant.

“This marks an important milestone for the company as we transition from [being] a developer to a gold producer,” said MD Russ Parker.

“This newly installed processing plant enables us to work towards full production in the near-term and is expected to deliver strong cash flows on high margins going forward. This, in turn, will allow us to fund further development at the High Grade Zone mine and exploration activities at our other assets.”

Crater was expected to produce some 10 000 oz of gold in the first full year of production at the High Grade Zone mine.

Parker said on Tuesday that, while the company’s current focus remained on the High Grade Zone mine, there remained potential to increase the current Joint Ore Reserves Committee-compliant resource of 24-million tonnes, grading 1 g/t gold for 790 000 oz of gold, at the nearby Mixing Zone project at Crater Mountain.

“Our recent discovery at the South Artisan Workings Zone also highlights the potential for additional mineralisation in close proximity to the High Grade Zone mine and a potentially longer mine life operation.”

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Bougainville’s Vice President raises the question of reopening the controversial Panguna mine

panguna trucks

Nisira insists the majority of people on Bougainville support Rio Tinto reopening the Panguna mine

ABC News | 3 May 2016

Bougainville’s Vice President says deciding on the future of the infamous Panguna mine is one of the major challenges facing his government and the island’s people.

Patrick Nisira recently gave a wide-ranging and frank speech at the Australian National University in Canberra about the many issues his government is struggling to deal with.

Among the challenges he outlined were post-conflict reconciliation, weapons disposal, inadequate funding from the PNG government, gender equality and the upcoming referendum on independence from PNG.

But it will be his comments on the question of whether to reopen the Panguna mine, and to allow other mining developments on the island, that will attract the most attention inside and outside Bougainville.

Listen to Liam Fox’s report and Nisira’s statement that the majority of Bougainville supports the reopening of the Panguna mine.

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Solomon’s mine pact signed without Ministry approval


Bradford Theonomi | Solomon Star

An agreement between AU Capital Mining and Iron Mountain Mining was done outside the government’s normal process, without the input from the Ministry of Mines.

Both are Australian companies and are eying bauxite prospecting at Nende, Temotu.

A reliable source told the Sunday Star the Mines ministry does not recognise the agreement because it was done without the ministry’s knowledge.

The source said the recent announcement through the media has nothing to do with the Ministry.

Currently, it is AU Capital that holds the two tenements and the ministry knows nothing of any transfers of the tenements to Iron Mountain Mining as reported, the source said.

Iron Mountain Mining claimed under the terms of the agreement, it would pay a nonrefundable option fee of AUD$100, 000, and if the company elected to proceed with the transaction, Iron Mountain would issue 20-million of its own shares to Au Capital Mining.

The company said it had signed an option agreement to acquire a 50 percent stake in privately-held AU Capital Mining, which held two prospecting licences in the Solomon Islands.

A further 20-million fully paid shares would be issued to Au Capital Mining on either the first commercial bauxite shipment, or within 12 months of completion of the transaction.

AU Capital Mining tenements include the Nendo project and the Choiseul project.

Iron Mountain Managing Director Robert Sebek, when announcing the takeover,said the projects provided the company with the opportunity to explore for, and potentially develop a low-cost mining operation in a region beneficially situated close to end-users in Asia.

“Our dealings with the people of Nende and officials in Honiara have so far been extremely encouraging and initial support for proposed exploration and subsequent mining operations in this region have been overwhelming.

“The Solomon Islands are ideally located close to Asian markets and potentially offer low-cost development of new discoveries,” Sebek added.

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Pacific urged to be cautious over seabed mining

nautilus machine cutter

Radio New Zealand | 28 April 2016

A new report by the World Bank says Pacific Island countries should be cautious over any plans for mining of the seabed.

Released today, the ‘Precautionary Management of Deep Sea Mining Potential’ report recommends that Pacific countries supporting or considering deep sea mining activities proceed with a high degree of caution to avoid irreversible damage to their ecosystems.

It also stresses the need for strong governance arrangements to ensure that appropriate social and environmental safeguards are in place.  

The World Bank’s country director for the Pacific, Franz Drees-Gross spoke with Koroi Hawkins about the reports recommendations.

FRANZ-DREES GROSS: What we are seeing is whether countries adopt Deep Sea Mining as their development strategies or not That is a decision for National government we would just encourage them to use a precautionary approach if they do exploit those resources. So develop the institutional capacity to mange any financial flows as a result of those activities to make sure they really benefit communities. Make sure we fully understand the ecological impacts especially in sensitive ecosystems and also make sure that any social safe-guards are well managed.

KOROI HAWKINS: Is this of crucial importance given the close proximity of the Solwara 1 project coming into being in Papua New Guinea?

FDG: I think what is very clear about sea bed mining and we are not the first to have worked in this area. SPC’s geoscience division supported by the European Union has been working on it for a number of years. But I think everybody that has been near it agrees that it is a very new sector with a lot of knowns and a lot of unknowns for example and in a number of areas. So very little is known about the resource endowments in the first place. So what minerals are in which economic zones of countries. And then even if you knew the value of those resources very little is known about how commercial (viable) it is actually to extract them. Is it profitable at all? I mean Solwara 1 is the first exploration license that will basically get underway in 2018. So even then you will have only a very small experience on I think a tenth of a square kilometre to even test whether it is commercially viable to basically dredge minerals on the sea bed and transport them up in a slurry to a support vessel on the surface. So this is very new and what we are saying is since it is new and since there are so many unknowns around the resource it’s commercial viability, its potential ecological impacts. Just proceed with caution make sure you have good monitoring regimes. Make sure that you have got good ways to manage the resources but also the environmental impacts.

KH: Would you say that you are comfortable with the level of all of the measures recommended in your report that pacific island countries are at in terms of going into sea bed mining and exploration.

FDG: I think different countries are at different stages right, but what we are seeing right now is that already globally there is about 1.5 million square kilometres of the ocean floor both under national jurisdictions and under the jurisdiction of the International Seabed Authority that already have exploration licenses. So with or without us or without anybody else’s help right now the status quo is there are 1.5 million square kilometres under exploration. So this has happened it has slowed a little bit because of the end of the mining super cycle that lasted from 2005 to 2013 and so there is a little bit of a breathing space right now. And what we are encouraging governments to do is use that breathing space to get ahead of the curve. So put in place the legislative and regulatory frameworks put in place good environmental and social monitoring frameworks and think about regional co-operation on deep sea mining. It is a new area, it requires a lot of specialised expertise. It is very unlikely that one small country will have all of the skills necessary to sit across the table from an international company on these issues. So can countries work together under a regional approach to improve the quality of that oversight. So we see this as a good time to prepare for what we think might in the future be more interest in actual exploitation activities.

KH: There’s a lot of unknowns, that is for sure with seabed mining one interesting factor I notice in the report is that while there is a lot of focus on the environmental impacts social impacts and the like, there is also little know about the fiscal regimes as you put it and whether the whole practice will be actually beneficial to countries or the companies involved.

FDG: I think the point is everybody on the development side ourselves as a development institution of course our focus is the countries how can any mining regime or extractive industries regime on land or on the sea floor how can that be made beneficial for countries and for communities. That is the reason we exist because we want to ask that question. The issue is to do good fiscal regimes for any kind of a mining regime seabed or otherwise you have to have a good understanding of the economics of the business. So what is the value of a resource in a certain area how economical is it, how cost-effective is it to bring it to the surface and then once you have a handle on that and then you can advise countries on what their appropriate take should be so if there is an upside potential there is potential for the earnings by mining company to be large you want the government to be in a position to reap those windfall profits or to cash in on those windfall profits as well. So the IMF has done some work in the Pacific with countries on deep sea mining legislation to craft a fiscal regime. It think that work is really good I think it will be informed and and further refined going forward as people learn more about the commercial viability of the resource. But I think there is a way to do it well in terms of the resource management. Timor Leste is a relatively good example on managing an extractive industry resource well. As you know they have a petroleum fund where all resources that are earned on royalties are ploughed into one single fund. It is internationally invested, it is audited by a third party that information is given to parliament and then parliament decides how much they want to draw down from that fund every year. So there are good examples of how to manage the fiscal flows from this well.   

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Ramu mine still shut down

ramu mine

Temp closure of plant will affect nickel production in PNG

Radio New Zealand | 28 April 2016

Papua New Guinea mineral resource company Highland Pacific says the temporary closure of the Ramu Nickel processing plant in Madang will affect nickel production this year.

The newspaper, The National, reports the company had been advised that operations at the Ramu Nickel process plant would be suspended pending an investigation into the recent death of a worker.

A Chinese employee died three weeks ago when a high pressure steam supply line erupted at the Basamuk nickel refinery.

Two other staff were injured.

Highlands holds an 8.56 percent interest in the Ramu joint venture, which is majority owned and operated by a Chinese corporation.

Highlands said the duration of the investigation, being conducted by the PNG Mineral Resources Authority and the Mines Inspectorate, remained uncertain.

It said the impact of the shutdown on production would not be known until they knew how long it would be for.

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Activists Crash a Shareholders Meeting to Raise Issues of Rape at Barrick Mines

barrick lies

Hilary Beaumont | Vice News | April 28 2016

Four activists crashed the annual general meeting of the world’s biggest gold mining company on Tuesday morning while, outside, around 60 protesters chanted at company shareholders, “Quit while you’re ahead, Barrick Gold is dead.”

But inside the meeting in front of about 200 shareholders, Barrick Gold’s executive chairman of the board John Thornton emphasized that “Barrick is back” and “gold is here to stay.”

While the company pushed the message that it was taking human rights seriously, four activists used proxy shares to speak about rape allegations and environmental damage at the company’s mines in Papua New Guinea, Tanzania and Argentina.

Given a chance to speak at the meeting, MiningWatch Canada Research Co-ordinator Catherine Coumans called Barrick’s Porgera mine in Papua New Guinea and its North Mara mine in Tanzania “extremely violent places” where women and men have allegedly been beaten and raped by mine security guards.

At the Porgera mine as recently as December, three men told VICE News they were forced by guards at gunpoint to perform sex acts on one another, despite one man telling the officers he was HIV-positive. More than 120 women have also come forward with rape allegations against security guards employed by the mine. As one of these women told VICE News over the phone:

“Rapes, killing, illegal mining activities are still going on. They haven’t done anything [to stop it].”

In 2010, Barrick acknowledged the problem at the Porgera mine and in 2012 it created a remedy mechanism to compensate alleged rape victims. To receive compensation, alleged victims had to sign waivers stating they would not sue the company in any court in the world.

Coumans said the women are unhappy with the compensation method — a sentiment expressed in a recent report by legal experts at Harvard and Columbia — and asked company president Kelvin Dushinsky whether Barrick plans to consult the women about the mechanism and rescind the waivers they signed.

Dushnisky responded at the shareholders meeting that the company has accepted responsibility for the human rights abuses at both mines, which he called “completely unacceptable.” He called the remedy mechanisms “very successful.

barrick toxic banner

“We are comfortable with the remedy framework that we’ve put in place,” he said.

Another activist used her proxy shares to raise concerns about Barrick’s Veladero mine in Argentina, where an open pipe valve leaked over one million litres of cyanide into a nearby river last September, prompting the local government to issue drinking water warnings.

While locals used to swim in the river, drink the water, and grow some of the best produce in the region, the spill has “dramatically changed” life in the area, the activist said, reading a statement from locals who live near the mine. Now, people are afraid to swim in or drink the water. “Our town will never be the same,” the statement from locals said.

Dushnisky acknowledged earlier in the meeting that there had been “an unfortunate event.” He said the company had acted quickly to contain the spill and work with local regulators to mitigate damage, fix the problem and test the water.

Preliminary testing by the United Nations found the cyanide didn’t affect the local water supply, but that didn’t stop locals from stocking up on bottled water, fearing the worst.

“Extensive water sampling that we conducted showed that we actually posed no risk to human health or to the aquatic environment downstream of the mine, but in any event, an incident like that is entirely unacceptable,” Dushnisky said. “So we’re placing a greater emphasis on environmental performance this year, with higher standards tied directly to compensation, and that goes throughout the company. We can do better and we will.”

Previously Barrick said a faulty valve had caused the issue, but at Tuesday’s meeting Dushnisky said it was an operator error.

Between 2011 and 2012 there were three other cyanide leaks at the same mine. The company told Reuters those incidents were “duly reported to the appropriate authorities.”

Beyond promises to work on its environmental and human rights issues, Barrick announced a first quarter net loss of $83 million this year amid slumping gold prices, but cut its debt load by $842 million in the last year.

To address the losses, Barrick recently sold off non-core assets and shrunk the size of its Toronto headquarters by half — layoffs Dushinsky characterized Tuesday as “unclogging of the arteries.

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World Bank urges Pacific to be cautious over experimental seabed mining

nautilus robot machine

Radio New Zealand | 28 April 2016

A new report by the World Bank says Pacific Island countries should be cautious over any plans for mining of the seabed.

Released today, the ‘Precautionary Management of Deep Sea Mining Potential’ report recommends that Pacific countries supporting or considering deep sea mining activities proceed with a high degree of caution to avoid irreversible damage to their ecosystems.

It also stresses the need for strong governance arrangements to ensure that appropriate social and environmental safeguards are in place.

Papua New Guinea, Fiji, Tonga, Vanuatu and Solomon Islands have all granted permits for deep sea mining exploration and the Cook Islands recently undertook a minerals exploration tender process.

PNG is the only country in the region to have granted a license for ocean floor mining.

It has given approval for the Canadian miner Nautilus minerals to launch its Solwara 1 Project in PNG waters in 2018.

A recent report by the Pacific Community and the European Union said seabed mining could see PNG reap economic benefits of US$80 million over two years.

But the World Bank said not enough was known about the environmental and social impacts of the enterprise and likewise the appropriate fiscal regime and economic benefit to deep sea mining were not yet clearly understood.


Filed under Environmental impact, Financial returns, Papua New Guinea