MPs: ‘Stop misleading people on environmental pollution’

Frieda river mine camp

Sepik MPs denying history and the lessons learned from pollution at the ‘World Class’ Ok Tedi, Panguna, Porgera and Tolukuma mines…

The National aka The Loggers Times | January 18, 2019

Three Sepik MPs are appealing to East and West Sepik leaders to stop misleading the local people on environmental pollution caused by the Frieda River project.

Yangoru-Saussia MP and National Planning Minister Richard Maru, Telefomin MP Solan Mirisim and Ambunti-Drekikir MP Johnson Wapunai supported development of the project.

They said developer, PanAust, had revised its design to include a 320km pipeline to transport slurry to Vanimo for export.

Maru said he did not support the project at first because the proposal was for copper slurry to go down the Sepik River by barge to sea.

“I did not want to compromise the Sepik River in any way because of the experiences we’ve learnt from the Ok Tedi mine,” he said.

“I am extremely happy that the new developer has changed the development plan for the Frieda mine.

“They will now build a 320km pipeline to take the slurry from Frieda all the way to Vanimo.

“In line with that development plan, our Government has now funded the feasibility study and design of the new Vanimo wharf at a cost of over K30 million.

“The work is going on now.

“We expect that the feasibility study and the design will be completed by around March, latest April.

“Our Government has been proactive in making sure we have a wharf which shall cater for the requirements of the gold mine, Bewani oil palm project and vast economic activities that we want to create in the special economic zone in Vanimo.

“This is for us to trade into Asia using Vanimo as the major export port.

“I would like to appeal to East Sepik and West Sepik leaders to stop misleading the people of West and East Sepik and create unnecessary fear among them.”

Maru urged leaders and the public to get behind local MPs Mirisim and Wapunai and support development of the project.

“We are thankful that the developer has already submitted mine development plan and the application for special mining licence (SML) to the Mineral Resources Authority (MRA),” he said.

“We, as the leaders of East and West Sepik, will get behind this project, work with the NEC (National Executive Council) and the prime minister and not only deliver the Wafi-Golpu mine but the Frieda River mine also.”

The three MPs responded to recent awareness carried out by tertiary students on the environmental effects of the mine.

They said the environment would not be compromised in any way and the benefit streams were far better than what the Government and people have enjoyed in other mining projects.

The total cost of the project is estimated to be US$739 million (K2,443.50).

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Maru Supports Morobe’s Stand On No ‘Fly In Fly Out’

Ummm… “The best resource project that I have seen in my lifetime is the Bougainville copper mining project”.

Post Courier | January 18, 2019

National Planning Richard Maru has come out publicly to support the stance taken by the Morobe provincial government to oppose ‘fly in fly out’ arrangement for workers of the Wafi-Golpu project.

This is the first time a very senior member of Government has come out on the issue that has been a critical mainstay of discussions and forums by landowners and leaders alike in the Morobe province.

Minister Maru said if there was one thing that his government was taking away from mineral development, it was learning from previous Governments mistakes to not getting the best deal for the country.

“In this new deals that we want to put together for this country, under the new mining agreement for Wafi Golpu and Freida and even the second LNG project we are going to make sure that Papua New Guinea benefits more than any other resource projects in the past.

“I want place on record, this morning (yesterday) that I support the position taken by the Governor of Morobe and the people of Morobe that there will be no fly in fly out in the Wafi Golpu project.

“As planning minister we are already planning for a township at Nadzap and long term employees for Wafi-Golpu as far as I am concerned must live in Morobe and the income they generate must be used in Papua New Guinea, spent in Papua New Guinea, so we get back GST and the money must re-circulate within our economy,” Minister Maru said yesterday.

He said the situation where all resources are being depleted, all the monies end up in other countries all contribute to current issues being such as foreign currency shortages.

“As planning minister I do not support that, I want to see maximum benefit, families living here better, schools being built with the support of the resource companies, better towns being built.

“I want to say this and I make no apology to anyone. The best resource project that I have seen in my lifetime is the Bougainville copper mining project.

“They not only built a copper mine, they built a town, the best hospital, a supermarket, they provided international schools and all the families who were there and the benefits trickled around Bougainville.”

He said the model of BCL is need in the country.

“This is what will help to keep up the maximum revenue flows within this country and make sure that our country and this people will benefit of the wealth of our resources.”

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Nautilus remains on life-support

Prospective experimental seabed mining company, Nautilus Minerals, is to remain on life-support after it was rescued Monday by another $500,000 loan from its principal shareholders.

The longer-term future still looks bleak though, with its part-built mining support vessel already sold-off by the ship builder, and $5 million in funding needed before it can resume even basic company operations… 

Nautilus Receives Us500, 000

Post Courier | January 18, 2019

Deep Sea Mining Finance has lent Nautilus US500, 000 (K1.6m) to meet its short term funding obligations.
According to Nautilus’s corporate update this funding now will allow the company to assess its options, including various restructuring options while waiting to receive a US5million loan (K16m).
This loan if received would enable Nautilus to continue operations.
In its last week’s update the company stated that they are still in discussions with an arm’s length party to secure this loan.
The company also advises that a further press release will be made once these funds have been received later this week and further updates will be provided as circumstances warrant.
Nautilus is the first company to explore the ocean floor for polymetallic seafloor massive sulphide deposits. Nautilus was granted the first mining lease for such deposits at the prospect known as Solwara 1, in the territorial waters of Papua New Guinea, where it is aiming to produce copper, gold and silver.
The Company has also been granted its environmental permit for this site. Nautilus also holds highly prospective exploration acreage in the western Pacific (granted and under application), as well as in international waters in the Central Pacific.

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In Papua New Guinea, Exxon’s giant LNG project fuels frustration

Locals walk along a small beach where an LNG) carrier, Kumul, is docked at the ExxonMobil operated LNG plant at Caution Bay, located on the outskirts of Port Moresby in Papua New Guinea, November 19, 2018. Picture taken November 19, 2018. REUTERS/David Gray

Jonathan BarrettTom Westbrook | Reuters | January 17, 2019

From her red-roofed home near Papua New Guinea’s capital of Port Moresby, Isabelle Dikana Iveiri overlooks a giant plant used by Exxon Mobil Corp to liquefy billions of dollars’ worth of natural gas before it is shipped to Asian buyers.

Dikana Iveiri can also see swaths of muddy shoreline, where mangroves have been felled for firewood by locals who don’t have electricity, gas, or money to buy either.

The $19 billion Exxon-led PNG LNG project was supposed to be a game-changer for PNG, a vast South Pacific archipelago beset by poverty despite its wealth of natural resources.

But much of the promised riches, through taxes to the government, royalties to landowners and development levies to communities, have arrived well below Exxon’s own commissioned forecasts, if at all, according to landowners, the World Bank and the PNG government.

“My family has been here a long time,” said Dikana Iveiri, one of several landowners interviewed by Reuters near the PNG LNG plant. “Our royalties are not going well; they are using our land but not paying us properly,” she said referring to both Exxon, which pays the royalties and the government, which distributes them.

Since gas exports began more than four years ago, Dikana Iveiri said she had received just one royalty payment in 2017. She was expecting about 10,000 kina ($2,885) based on information given to her by the government and community leaders. She said she received 600 kina.

Exxon, community leaders and the government did not comment on Dikana Iveiri’s specific situation but in a statement to Reuters, Exxon said distribution of royalties and benefits to the LNG plant site landowners started in 2017. Cash payments to individual landowners would depend on how many landowners were in a precinct and were just one of the benefits communities received, Exxon said. 

The project employs nearly 2,600 workers, 82 percent of whom are Papua New Guinean and Exxon said it has invested $360 million to build infrastructure and pay for training and social programs.

“We could not be more pleased to see how the benefits are flowing to the communities at the LNG plant site, to see how investments are being made in important infrastructure such as schools and health that demonstrates the process is a good one and it works,” ExxonMobil PNG Managing Director Andrew Barry told a mining and energy conference in Sydney in December.

Barry said Exxon was hoping royalties would begin flowing in the pipeline and upstream areas “in the not too distant future”.

The government admits it has made mistakes.

PNG Prime Minister Peter O’Neill, who was part of the government but not the leader in 2009, said many of the disputes around PNG LNG stemmed from the way the government and Exxon proceeded with the project without first resolving landowner claims.

“It should have been done before, it wasn’t only for Exxon and the partners but even the government at the time did not do the proper clan vetting, proper identification of the land owners – they allowed this project to go on without that,” O’Neill told Reuters.

Treasury, the treasurer, and the Prime Minister’s spokesman declined to provide responses to Reuters’ questions about the project.

GAS-POWERED MONEY SPINNER

PNG LNG was completed ahead of schedule and exported 8.3 million metric tonnes in 2017, compared to its anticipated design capacity of 6.9 million tonnes, according to the project’s website.

Exxon does not disclose the project’s revenue or profits but research house Morningstar estimates it has generated $18.8 billion in revenue for Exxon and its partners since production started in 2014.

The project’s break-even price of around $7.40 per million British Thermal Units (mBTU) compares favorably to an average over $10/mBTU for eight recent gas projects in the region, according to analysis by consultancy Wood Mackenzie and Credit Suisse.

“The plant capacity has performed phenomenally,” Credit Suisse analyst Saul Kavonic told Reuters. “On cost, it’s much lower than peers … it’s got an ample resource base and it’s got a well-disciplined operator in the form of Exxon.”

The project’s contribution to Papua New Guinea’s economy and government finances is less clear.

PNG’s Treasury does not report project income figures, but government budget papers show tax revenue flowing from PNG LNG has been well below expectations.

In its 2012 budget, the PNG government estimated it would receive $22 billion in revenue over the project’s life to 2040.

In November, the government slashed its revenue forecast in half to $11 billion over the life of the project.

It identified 11 tax concessions, which along with a drop in gas prices, amounted to hundreds of millions in kina in annual revenue forgone.

A 2017 World Bank analysis found the project partners had negotiated favorable methods of calculating royalties to the government that allowed them to take various deductions. 

Combined with tax concessions, the project created “a complex web of exemptions and allowances that effectively mean that little revenue is received by government and landowners,” the World Bank said.

Exxon did not respond to questions regarding the World Bank findings and the World Bank declined to provide further comment.

Exxon’s partners, which include Australian-listed Oil Search Ltd and Santos Ltd, and a subsidiary of Japan’s JXTG Holdings Inc, referred Reuters’ questions to Exxon.

Exxon said in a statement to Reuters the project has generated 5 billion kina in revenue for the government and landowners via taxes, royalty and benefit payments. The figure includes revenue to the PNG state-owned stakeholders.

“SOME MISTAKES”

A second LNG project, Papua LNG, led by France’s Total with Exxon and Oil Search as minority partners, is scheduled to finalize an agreement with the PNG government in early 2019.

Papua LNG, a new gasfield using the same but expanded processing plant, could commence production as soon as 2024, according to Total. Analysts estimate it will cost around $13 billion.

“The experience of the first project developed by Exxon and Oil Search, there was some criticism, some mistakes,” Total CEO Patrick Pouyanne told Reuters in an interview in Port Moresby, referring to relations with landowners.

“Some lessons (are) being taken out … around the management of landowners and trying to engage at an early stage with them.”

Total has agreed to an undisclosed annual minimum payment to the government and to reserve some gas for local industry, he said.

Exxon did not respond to requests for comment on Pouyanne’s statements.

In its statement, Exxon acknowledged that “distribution of royalties and benefits in some project areas were delayed since the start of production due to court action by a small number of landowners which prevented the relevant government departments from completing their administrative processes.”

Exxon said it was committed to assisting the government ensure landowners receive royalty and equity dividends as soon as practicable.

Disputes have broken out within communities near PNG LNG facilities as landowners fight to have their claims recognized.

Some clashes have been fatal, said Highlands clan leader Johnson Tape, one of 16 clan leaders with a claim over the Komo Air Field, used by the Exxon project.

“Our clans fought each other, but now there is peace; we are one team fighting Exxon,” said Tape.

Christopher Havieta, the governor of Gulf Province, where gas fields for the new project are located, said locals wanted to avoid the experiences of Exxon’s PNG LNG.

“It was a foundation project and so a lot of exemptions were made and the end result is we have a lot of social problems that have risen up.”

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Police monitor tension at Wafi-Golpu mine

Police Commander : “It appears that all the oil, gas, mining and fishing projects happening around the country are faced with such problems”

Jimmy Kalebe | The National aka The Loggers Times | January 17, 2019

A SECTION of the police Mobile Squad 15 in Morobe has been deployed since last Friday to monitor the situation at Wafi-Golpu mine, Morobe police commander Alex N’Drasal says.

N’Drasal said yesterday that the situation was still tense and police were there to make sure law and order problems and other issues did not get out of hand.

Police were deployed after a stop-work notice was put out by some people claiming to be landowners of the mine.

Employees have not been turning up to work since.

N’Drasal said police would be there at the mine stir until the situation was under control and normalcy restored.

“Police are also there to make sure that properties are not damaged and workers are not disturbed or harassed,” he said.

“The mine site is quiet now and many employees have decamped while a skeleton staff still maintained in the area.”

N’Drasal said on Monday that two opposition clans fought each other after one group tried to burn a stop-work banner that was placed by the other last Friday.

“It appears that all the oil, gas, mining and fishing projects happening around the country are faced with such problems,” N’Drasal said.

He said all the members of parliament, leaders and representatives in Morobe should work together to address the issue.

“In many cases, it is the leaders who create the situation and allow for such inconveniences among the Government, developers and the landowners.”

N’Drasal said the Government had to be very careful when making decisions in relation to such impact projects, because when not careful, such problems arise.

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Governor: ‘The safety of the Sepik River is non-negotiable’

East Sepik Governor, Alan Bird

Bird Needs More Views On Frieda Mine

Post Courier | January 17, 2019

EAST Sepik Governor Allan Bird will be seeking wider consultations on the proposed Frieda Mine for a more informed, truthful and transparent decision.

“Before we talk about Frieda consultations, I want everyone to know that I have listened to both sides of the argument and I have decided that the issue is too important for a small group or individual to take a decision in isolation,” Mr Bird said yesterday.

“Let us start by thinking about the Sepik River people for a moment, more particularly where we see them in 20 or 30 years time. Where do they see themselves in that timeframe?

“Will they still be fisher folk? Living a semi subsistence life, selling carvings and other artifacts and performing traditional dances for tourists? Or will more of them desire a decent education, a career or start a business and move to live in a town or city? The current generation might be happy living the traditional lifestyle but what about the younger generation? Is it fair to them that those of us on land see them as suppliers of fish for our sustenance? Is that where they should remain?

“Would a large scale mine, managed safely and properly add value to this process of change or badly managed do the opposite?

“There are no easy answers. Perhaps the answer lies in between. I have no doubt the River people are best placed to tell us their views of the future.”

Mr Bird said that he expected the East Sepik provincial government to do the right thing by everyone, to be fair and transparent, to give each stakeholder an opportunity, without fear, without intimidation to discuss their concerns (pros and cons) regarding Frieda Mine.

He said the provincial government would to take into account the desires of Telefomin Sepiks, Kopar Sepiks and every Sepik in between. “Let us not exclude PanAust as a stakeholder,” he said.

“This year we will have a team of experts look at the EIS and the mine development proposal. On a personal level my only concern is the safety of the river. Anything else, be they benefits for river people, landowners, etc are negotiable.

“The safety of the Sepik River is non-negotiable.”

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21st Century slavery in PNG

Martyn Namorong via Twitter | January 15, 2019

This is 21st Century slavery where, in 2018:

PNG Workers paid K3.8 Billion in taxes

Companies paid K1.7 Billion in taxes

And mining and petroleum companies paid JUST K774 million

IRC exceeds 2018 target

Carmella Gware | Loop PNG | January 11, 2019

The Internal Revenue Commission says 2018 was a successful year for them as they had exceeded their tax collection target.

K7.9 billion was the 2018 budget target for the Internal Revenue Commission, or IRC.

The Commissioner of Tax, Dr Alois Daton, said the IRC successfully collected and transferred K8 billion to the Waigani Public Account last year.

The total gure is 8.4 percent higher than government projections at the time of budget 2018, and 5.2 percent higher than government’s revised projections in the Mid-Year Economic Fiscal Outlook.

“In terms of corporate income tax, we brought in K1.7 billion and that is 8 percent above 2017 collections,” outlined Dr Daton.

“In relation to salary and wages tax – this is where good employers pay their money in – we brought in K3.8 billion, which is 3 percent above the 2017 collections.”

Similarly, a rebound in global oil prices saw the IRC collect K774 million in mining and petroleum taxes compared to K113 million in 2017.

Dr Daton said however, income from areas like partnerships and personal income tax did not do too well, falling by 34 percent.

Apart from that, strong growth rates were registered in other forms of income, where dividend withholding tax increased by 12 percent, interest withholding tax by 25 percent while royalty withholding tax increased by 20 percent.

“There was also a massive increase in departure tax; departure tax is paid by international travelers and it’s APEC-related travel that was able to push the departure tax up. So that was double the amount we collected in 2017.”

Tax collections were also higher for bookmakers and gaming companies, indicating higher disposable incomes amongst the public in 2018.

“It appears that there is a lot more disposable income so Papua New Guineans had a lot more money to go and spend.”

The IRC said negative growth was recorded in management fee withholding tax, training levy and other sundry IRC receipts.

Their outstanding performance was attributed to the rst year of reforms under the Medium Term Revenue Strategy, where the Commission increased its service capacity and public engagement.

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