Monthly Archives: March 2011

Call for new law to cover seabed mining

By TODAGIA KELOLA

THERE must be a specific legislation governing the recent approval by the Government for the world’s first offshore mining project in the country, says senior lawyer Camillus Narokobi.

Narokobi, who has written a thesis on the Bismarck Archipelago seas while doing his Masters degree on the law of the sea, said PNG doesn’t have any legislation governing the mining of our seabed. But PNG is a signatory to the 1982 United Nations Convention on the Law of the sea, and it is obliged under this International law to enact specific legislation in relation to seabed mining and the protection of its marine resources.

He argues that the Mining Act and the Environment Act that are being relied on, may not be adequate for these purposes.

Under the International Convention on the Law of the Sea, PNG has to have some enabling laws so that freedom of navigation, freedom of laying submarine cables, pipelines and scientific research, freedom of fishing in the high seas and the right to transit through PNG waters. We are obliged to enact legislations to provide for this

Another PNG national, a mining expert at the Western Australian School of Mines, Kaul Gena, also supports this call and posed these questions to developer Nautilus Mineral Corporation.

  • What are current ore reserves of Solwara one project and its adjacent areas?
  • What mining methods are they going to use at 1700 metre depth when the ores are hosted by hard dacitic to rhyolitic lava?
  • The ores consist of lead and arsenic bearing minerals, what are the possible mitigation measures that the company will use to avoid environmental contaminations?

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Lawyer warns PNG government on seabed mining

By TODAGIA KELOLA

A SENIOR lawyer has warned that the Government must be very careful in its handling of the world’s first offshore mining project in the country, the Solwara 1 project.

Senior lawyer Moses Murray, who may also be the only Papua New Guinean lawyer that has studied Seabed law, raised this concern saying there is yet to be a proven technological know-how for marine mineral exploration where developing and developed countries are yet to experiment on and PNG might be a guinea pig in this project.

He raised these concerns after Prime Minister Sir Michael Somare announced that Cabinet has made a decision to approve the arrangement for the State to take up 30 per cent equity in the Solwara 1 project.

Let us not be blind by the kind of money to be generated and ask ourselves if we are ready to take control of such an adventure or is owning 30 per cent of the profit good for PNG as a whole. Can we not wait and check this out carefully first.

Is there a country or mining company in the world that has successfully mined the ocean sea bed? Or is PNG a guinea pig in this exercise that has inflated our minds with big bucks and generate employment. What about the negative effects that would be borne on the sea life which in turn will affect the people closer to the sea bed mining?” he asked.

Mr Murray said the international situation on marine mineral exploration at present is unstable, and because of the importance of detailed knowledge of the processes regarding the ocean floor exploration, it requires generous funding. Even national oceanographic efforts at present can be best described as stagnating and somewhat confusing, because very few results are known. Environmental, pollution, and resource studies are needed everywhere, especially following the introduction of an Exclusive Economic Zone around the coastal States.

He explained that because PNG’s knowledge about the oceans and their influence on the earth environmental state as a whole is limited, stimulation and international co-operation are necessary in all sectors of oceanography, including the marine minerals.

It is most important that we increase our efforts on sea-floor inspection

Do we have trained manpower in this kind of sophisticated mining as opposed to onshore exploration and mining?

Do we have our own trained scientists to properly assess and evaluate environmental damage and pollution of our sea waters or are we to use what other scientists tell us as truth?

Do we have our own trained exploration geologist who can understand mineral deposit models, interpreting geophysical and geochemical results, and properly treating large number of data from exploration surveys or are we again to depend largely on explanations given by outsiders who are part of the company conducting the mining?

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Allied eyes restarting Simberi gold production

Mining Weekly is reporting that Allied Gold, the Australia-based mining company, says it would likely resume production at its Simberi gold mine in Papua New Guinea by the end of the week, after the government ordered a halt.

Allied had completed repairs to the tailings facility at Simberi, and expected to receive the green light from the Department of Environment and Conservation (DEC) to restart production by Friday.

The interruption caused the company to cut its output forecast at the mine by more than one-third to 10 700 oz.

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Former PNG PM wants people to control mineral resources

Spotted on Radio New Zealand

A former Papua New Guinea prime minister and now governor of New Ireland province, Sir Julius Chan, says it’s vital the people control the country’s resources.

Sir Julius has been pushing for autonomy for his province, along the lines of what is currently in force in Bougainville.

He also wants the Land Act of 1992, which gives the government sole ownership of whatever is under the ground, re-written.

Sir Julius says one aspect of autonomy is to control the resources and this will also ensure stability and help the people flourish once the mines close.

I actually want to see the ownership of all these resources in the hands of the people, because I really believe if the people own them there won’t be too many of these disputes happening in these mining areas. People will be quite satisfied. It really a case of the same sharing except this time the people get more, the people who suffer get more than the government.

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Who really wants Panguna to reopen?

By Clive Porabou, Mekamui News

In the media there are lots of talks of re-opening the Panguna mine but it is a different story when you are on the ground, you will not hear more of that talk.

Outsiders think that it is very simple and easy to re-open the mine after 20 thousand Mekamuians/Bougainvilleans were killed, wounded and died while closing the mine down.

On the 27th of March a chief of one of the clans in Central Mekamui/Bougainville came to see me and we talked for a while chatting on our interest etc.  Later we went to see a person who I will do an interview with. Fortunately the member for central Bougainville in the PNG National Government, Jim Miringtoro, was there too. He invited us to where he and others were sitting. While chatting on we came across the Panguna mine topic. He told us that Panguna will remain closed till the compensation is paid by BCL.

I asked him if he could talk to me on the camera, he agreed and we did the interview. He told me that 80% of Bougainvilleans don’t want the mine re-opened. He mentioned the silent majority who the mainstream media never talks to: they don’t want the mine re-opened. Every time he visited the rural villages during his constituency visits they voiced out their concern to him.

As we finished the interview with the member, we walked to the mini market at section 15 and we caught up with one of the main characters in the struggle for no mining: Mr Damian Daman. We asked if he could talk on the camera and he agreed. His answer to our question is short: no to re-opening Panguna. When asked what if the ones who are talking about the re-opening go ahead and sign any agreement? He told us something bad will happen.

On our way back we saw the minister for veteran affairs in the Autonomous Government David Sisito. He too agreed to talk on the camera. His stand is for the company to pay the original demand of PNG K10 billion. Without BCL paying the compensation it is a big NO to re-opening the Panguna mine. As one of the founders of the revolution he still maintains the outstanding demand.

Sweat, tears and blood has flown down our brothers and sisters, relatives etc while talking about re-opening Panguna mine we step on our dead leaders and comrades blood and tears. This is not the way to go and very much against our culture and customs.

All of the three leaders, when asked about the economic, had the firm stand that our island will be based on agriculture. We live from the land and we have proved it during the war. They told me that those who are talking about re-opening the mine they don’t care about the land and the future generations: they only worry about money. They told me the Regions member Mr F Semoso is pushing hard to re-open the mine, but that will not happen he will just hand out cash after cash for a speedy re-opening.

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Fiji struggles with the rights and wrongs of mining

By Noelene Nabulivou, DAWN *

There is a need to situate any discussion about mining in Fiji and the Pacific within a deeper and more complex discussion that touches on issues of regionality, trade, aid, militarisation, gender and ecological sustainability.

While this can happen over time, there is currently a more immediate and pressing need. The final public submission process for the planned bauxite mine in Vanua Levu, Fiji is on RIGHT NOW. Provisional mining licences have already been granted to Aurum Exploration Limited, a Chinese mining company.

It is also clear that Fiji, with other Pacific countries such as Papua New Guinea, Solomon Islands and Bougainville are keen to continue and upscale further partnerships with Chinese, Australian and other companies. Harvey Probert, the Chairman of Fiji’s Mining and Quarrying Council has predicted, for example, that mining will be Fiji’s number one export earner within 5 years.[1]

So let’s begin with some information on bauxite mining, itself. This is the first planned bauxite mine in Fiji. What processes does this type of mining involve? [2]

Step 1 usually involves bulldozing large areas of local growth and existing wildlife habitat. Bauxite is the name given to the ore body for aluminium. In order to get to the bauxite deposits, vast areas of forests must be cleared with bulldozers and giant chains.

Step 2 usually then involves turning the masses of trees into huge bonfires. It is not yet clear if this will occur in Vanua Levu, or if there will be an alternative clearing process. Much of the land was already monoculture pine plantations, but there are also some pristine areas of indigenous forest that will be affected.  Usually at such mines, forests, flora and fauna are simply regarded as waste, wildlife are killed and/or flee the area if they can, and massive amounts of carbon dioxide are released into the air.

Step 3 generally involves removing topsoil and digging a huge hole in the ground. This is how they get to the underlying bauxite (and the soil is stockpiled for later use in “rehabilitation”, which we will come to later…) The amount of bauxite removed is generally 4 or 5 metres deep, but can go deeper than 10 metres.  So the landscape becomes basically a huge red pit. This affects the way water moves across the land and into springs and streams. The exposed earth also creates problems of erosion and poor water quality.

Front end loaders and dump trucks take the bauxite to processing centres, so of course this puts pressure on local roads, especially in Vanua Levu with its generally single main roads. In other global south mining sites there have also been child deaths from transport accidents due to increased heavy traffic, falls into extraction and tailing pits, and more.

At this point we must note that as much as local employment has been emphasised in public communication on this project, there will come the inevitable concerns about gender based violence and other social issues arising with fast inundations of external short-term workers. It is also unclear how many of these will be Chinese workers specifically brought in for the project, but in the other instances in Fiji and abroad of Chinese initiated infrastructure and development projects the use of Chinese labour is integral to the project contract. Is that the case here? In any case, any large number of male non-local workers into small rural communities has worrying consequences. Will there be trafficking of foreign and local women as sex workers?  Increased sexual abuse and violence against women and children? A rise in sexually trasmitted diseases including HIV as seen in other mining locations around the world? There will definitely be scarce local resources from government and civil society in Vanua Levu to handle any major health and social issues that may ensue. Our health and social welfare sector has its own scarce resources and urgent priorities, as it is.

Step 4 involves massive use of water to process the bauxite. It is still unclear as to the water supply that will be used by the Vanua Levu mine. Is it going to be taken from the existing water table and what is the consequence on local water supply for surrounding villages? How else will it be sourced? How will it be extracted?  And if rivers are utilised, what impact will this have on personal and household washing, drinking water, sewage systems, etc?

At the onsite processing facilities, the bauxite will be crushed, screened and washed with this precious water. The Wilderness Society estimate that Rio Tinto Alcan used about 1,100 megalitres per tonne of bauxite for its operations in Australia, most of it extracted from finite groundwater! Often mining companies also set up huge extra tailings dams to store ‘leftovers’, with further risks of contaminating nearby water sources, and also increased dust.

At Step 5, the bauxite is sent off by ship to aluminium smelting plants. The smelting process is a major greenhouse gas emitter, and consumes major electricity. The mine requires significant port facilities and this pristine area in Vanua Levu could soon be a noisy, smelly, industrial centre. The communities involved in the mining include not just the mine site and accommodation quarters, but also those around the access roads and the port facilities.

Earlier this year at Lovonidalo settlement in the district of Navakasiga the then Minister for Lands and Mineral Development Netani Sukanaivalu presented lease documents to Aurum Exploration (Fiji) Limited allowing for the construction of a wharf.  The 60 acres of pristine land which belongs to the Mataqali Nalutu will now be used to construct an 800 metre wharf where ore will be shipped directly to China.  At a leasing ceremony, Commissioner Northern Lieutenant- Colonel Inia Seruiratu handed over a cheque of FJD$101,930 as premium and lease payment to the Mataqali Nalutu. FJD$275,000 was presented to the Vanua Navakasiga and Vanua Lekutu as compensation for the loss of fishing rights at Galoa Bay, the proposed construction site for the new wharf.  Yes, the profit of the mine will possibly be in the 100s of millions. Yes, the government has arranged Trusts for local landowners. But it is unclear to the public just what future profits will flow to the national government, and of critical importance, to local landowners. Surely this is of urgent public interest.

It is also still unclear as to the extent to which local landowners are really, fully aware of the scope of potential changes to the physical landscape of the area, potential biodiversity loss, changed land and shoreline access to ‘iqoliqoli’ (designated fishing grounds), and the huge amounts of water required for processing needs. How full and open were the consultations? Were women part of those discussions as it is they who are the primary fisherwomen of the beaches and coasts?

Step 6. So after the bauxite supplies are exhausted (perhaps after 15-20 years) there will of course be rehabilitation projects. In Cape York Peninsula the stockpiled topsoil was spread back across mining pits, and planted with native trees. But by then the water flows had dramatically changed and the soil structure was degraded. The Wilderness Society states that  the “rehabilitated” forest is prone to fire damage, and completely lacks the old, big trees important for nesting birds and other wildlife. Ecologists in Cape York say that the area has been changed forever.

Step 7 is where the mining company ‘walks away with millions of profits’  The mine in Vanua Levu may only be  planned to last 10-15 years, but the long-term scar it will leave is potentially enormous. What will the people of Vanua Levu walk away with? What will the government and people of Fiji do in 15 years when faced with the consequences of decisions made today?

There are important community dialogues already being held, but as the final weeks of the public submission tick by there is an urgent need for more community submissions to the Ministry for Land and Mineral Resources, from affected individuals, communities and civil society.

Why? This issue of whether to have extractive industries in Fiji is not just a decision about immediate job creation and addressing the national debt. It is not merely about land productivity and landowner compensation. Some see this project as an example of a politically progressive development to provide payments to indigenous landowners after decades of neglect, and internal and external corruption.

But at what cost this so-called development? This struggle to end all extractive industries in Fiji, the Pacific and indeed around the globe is about our ecological sustainability in the face of what global south feminist network DAWN call ‘the fierce new world’ [3] which is one of urgent and interlinked crises of food, fuel, finance and ecology (including biodiversity loss and climate change).

Governments all over the world are struggling to make those longterm economic decisions that do not compromise the future through short-term gains. These are not easy times, nor easy political decisions! Human rights and social justice gains are often sacrificed in the name of profit, and indeed are encouraged by the neoliberalist multilateral systems that always put profit first.  This is made more difficult for communities in times such as this where the state is heavily militarised.

We have not even really hit our stride yet on national and regional dialogues on ecological sustainability, much less plans and policy development reflecting the level of transformation required… But meanwhile the entire globe must already urgently move to development alternatives with a core that is ecologically sound.

Meanwhile Fiji would do well to listen to our Pacific neighbours in PNG, Cape York and Bougainville because many local communities can already show and tell us just how dangerous is this extractive mining path we now seem to be on…We must choose another, safer path.

* DAWN – Development Alternatives for Women with a New Era – www.dawnnet.org

Footnotes:
1. Radio Australia. ‘Mining predicted to be Fiji’s biggest future income earner’. http://www.radioaustralia.net.au/pacbeat/stories/201101/s3110384.htm
2. The Wilderness Society’, Australia. ‘Bauxite Mining Threatens Wild Rivers’. http://www.wilderness.org.au/regions/queensland/bauxite-mining-threatens-wild-rivers [This article draws heavily from yours. Thank you!]
3. Development Alternatives with Women for a New Era (DAWN) http://www.dawnnet.org/research-analyses.php

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Harmony’s Wafi project may be three times bigger than its largest mine

Wafi-Golpu could be one of the biggest, even the biggest, gold mine in the world. But how much of that value will be retained in Papua New Guinea and how much will basic government services improve for ordinary people once the mine is operational?

And should Harmony Gold and Newcrest Mining be trusted to develop the Wafi-Golpu mine when their existing, smaller, Hidden Valley mine is already causing huge environmental problems and negative social impacts?

By Carli Lourens, Bloomberg

Harmony Gold Mining Co., Africa’s third-largest producer of the metal, said the company’s Wafi- Golpu joint venture with Newcrest Mining Ltd. (NCM) in Papua New Guinea may be three times the size of its next biggest mine.

Wafi may yield as much as an annual 700,000 ounces of gold and 320,000 metric tons of copper, Harmony told analysts at the site, according to a copy of the presentation posted today on its website. The company is still working on establishing the size of the resource, the Johannesburg-based mine operator said.

Harmony, which produced 1.43 million ounces of gold last fiscal year, is digging mines abroad as depleted South African reserves become more difficult and dangerous to excavate, and as labor and electricity costs rise. In the financial year ended June 30, Harmony’s Tshepong mine yielded about 217,000 ounces.

The company climbed 2.66 rand, or 2.7 percent, to 99.61 rand, the highest level since April 2, 2009, by the 5 p.m. close of Johannesburg trading, giving Harmony a market value of 43 billion rand ($6 billion). Wafi may add $1.5 billion to $2 billion, or about 40 percent, to the value and make the company a takeover target, RBC Capital Markets said last week.

Wafi’s content is estimated at 16 million gold ounces, 4.85 million metric tons of copper and 55,000 tons of molybdenum, or a total gold equivalent of 38.5 million ounces, according to the presentation, which added that only Freeport-McMoran Copper & Gold Inc. (FCX)’s Grasberg mine in Indonesia and Ivanhoe Mines Ltd.’s Oyu Tolgoi deposit in Mongolia have higher gold equivalent grades. Harmony’s management last year estimated the cost of building a mine at Wafi at $2.5 billion to $3 billion.

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MCC denies second spill

By JOSHUA ARLO

CHINA Metallurgical Company (MCC), developer of the Ramu Nickel mine had denied allegations of a second chemical spill in the waters of the Basamuk area recently. Unverified reports coming in from Madang claimed that a Chinese mine worker was injured as a result which had resulted in the locals raising concerns that the government was yet to show up and address their safety concerns.

MCC General Manager, Corporate Officer, Wu Xuefeng said that although he was ‘aware’ of the reports, he stated that it was not true. He alleged that it was just part of a smear campaign to sabotage the mine operations by the mine’s ‘invinisible friends’ from the ‘Mine Watch’.

According to Terry Kunning of the Mindre village in the area, he was told about the second spill by a visiting Australian safety officer and a Dr George Wang of the MCC Ramu Nickel mine, along with some locals who were working with the mine as Community Affairs officers.

Mr Kunning claimed he was told that workers on a second ship, that was also transferring chemicals to the mine’s storage tanks for the Deep Sea Tailing Operation (DSTP) while rushing to flee out to sea following the tsunami alert on the night of March 11, had disconnected the clip hose used in the chemical transfer when the pump wasn’t properly turned off, and this caused the chemical alleged to be sulphur, to spray into the air and back into the sea.

A local security officer on duty at the time is alleged to have told Mr Kunning, that a Chinese worker from the mine was in the way when the spraying occurred, and was rushed to the hospital with skin burns. However he was unable to say what was the current status of the injured worker. Mr Kunning was however unable to reveal how long the liquid chemical was left ‘spraying’ into the air before it was turned off, but said he hoped it did not exceed the ‘only’ 2 litres that was spilled into the Bay by a ‘leak’ during the first transfer.

So far no government agency had visited the Basamuk men, women and children, since their calls for a study to assure them that the sea water and corals were safe right after the first spill, when the reefs turned white and now, the second spill.

He alleged the company was saying the sea would not be affected and the reefs turning white still stands as ‘nature taking its cause’, despite that happening coincidently after the first spill.

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PM confirms stake in deep-sea mine

CABINET has approved the arrangement for the state to take up equity in the Solwara1 project to mine the seafloor.

The project, by Canadian developer Nautilus Minerals, involves mining for gold and copper found in high concentrations in massive sulphide deposits over a 59km2 section of the Bismarck Sea, at depths of about 1,600m, 50km north of Rabaul.

Prime Minister Sir Michael Somare’s announcement yesterday of the cabinet approval followed an earlier announcement last month by Mining Minister John Pundari that the government would take its full 30% stake in the venture – more than US$100 million.

Sir Michael said in a statement that Solwara1 was among the priority projects to create jobs, increase revenue earnings and boost foreign exchange.

The project will be mining very rich seafloor massive sulphide (SMS) deposits and will generate over US$140 million directly into the economy

The approval of the arrangement has preserved the right of the state to acquire up to 30% equity in the whole value chain of the project

Being the first offshore mining project to be granted to mine massive sulphide systems on the sea floor, the government had ensured that the people of Papua New Guinea benefit through the state’s participation in the whole value chain of this milestone mining project.

He said the state’s right for equal participation would be exercised through its nominee Petromin PNG Holdings Ltd. This was consistent with current policy and law that Petromin was the state nominee for designated mining and petroleum projects.

Sir Michael also said Solwara1 was a first of its kind, involving an equity position by the government.

This is the first time that the government has taken an equity position in a medium scale mining project that will be developed under a mining lease

This now sets a policy precedent that the state will take equity participation in future mineral projects that are to be developed both under special mining lease and mining lease, for both onshore and offshore mining developments.

Nautilus Minerals capital investment in the project would be about US$387 million over the lifetime of the mine.

Early this year, the government granted a 20-year mine lease for the project as well as set certain conditions in the mining lease to guide and control development.

“I must commend Pundari, for successfully securing the project development as well as ensuring the state’s equity participation in this project,” Sir Michael said.

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Barrick says chief’s comments ‘taken out of context’

Spotted in the Post Courier

MINING Minister John Pundari is angry over comments by Chairman of Barrick Gold Peter Munk that “gang rape is a cultural habit” in the Porgera gold mine area which had been attracting international attention particularly among the NGOs in Canada.

But Barrick Gold which owns majority shares and is also the operator said at the weekend that the Canadian newspaper ’Globe and Mail’ which reported the issue had taken Mr Munk’s comments out of context and reported only a small portion of the whole interview.

Mr Pundari said the comments were unwelcomed and insensitive.

It was reported in the Post-Courier on Tuesday January 18. that police had began arresting terminated employees of Barrick at the Porgera Mine who were implicated in alleged sexual assaults against women.

“Barrick conducted its investigations and subsequently invited the Chief Ombudsmen and the Police Commissioner to conduct their own investigations into these allegations of human rights abuse and the Police chief was very vocal and firm with the issue and those involved,” Mr Pundari said.

Mr Munk, the founder of Barrick commented in Globe and Mail in defence of his company by stating that firstly, it would be impossible to police the behaviour of 5,500 employees and secondly, that it was so particular in countries “where gang rape is a cultural habit.”

Mr Pundari said Mr Munk comments that this was a cultural habit was totally insensitive and disrespectful to the country that Barrick operated in.

Barrick Gold’s Australia-Pacific President, Gary Halverson, said at the weekend that the recent comments attributed to Mr Munk did not fully represent his complete view on the subject of human rights and the Porgera Joint Venture.

Mr Halverson said that Mr Munk strongly condemned the allegations of rape as unacceptable to Barrick, and expressed his desire to see anyone guilty of such a crime brought to justice.

During the interview with the Globe and Mail Mr Munk repeatedly condemned human rights abuses, but regrettably, only a small portion of this conversation was included in the resulting article.

I can reassure the people of Papua New Guinea that everyone at Barrick, from the chairman to our frontline employees, condemns human rights abuses in the strongest possible terms. Such behavior is completely incompatible with our values, and our commitment to responsible mining with respect for human rights and human dignity.

We fully acknowledge that such abuses are as unacceptable to the peoples of Papua New Guinea as they are to us, and we recognise the deep respect with which women are held within traditional PNG society.

Furthermore, we have publicly applauded the response of PNG authorities to these matters, and our officers in PNG continue to work closely with police and others in their work in this regard.

Mr Halverson said that the company continued to advance and implement a wide range of measures to ensure human rights compliance at the Porgera Joint Venture.

To help address this problem, Barrick and the Porgera Joint Venture are funding research and expanding services for victims of violence through the creation of an independent Women’s Welfare Liaison Officer based in the Porgera community.

We are also evaluating further initiatives aimed at tackling violence against women in the country.

Everywhere in the world where Barrick Gold operates, we remain fully committed to a zero tolerance policy when it comes to human rights abuses.

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