Chinese miners prefer PNG to Australia

Commentator John Garnaut, writing in the Brisbane Times, says Chinese mining companies are shunning Australia, with its strong environmental and other regulations, and choosing to invest instead in ‘more relaxed’ countries like Papua New Guinea.

As evidence Garnaut points to Luo Tao, chairman of China Nonferrous Metal Mining, who this month complained of “bias” against Chinese investors in Australia. China Non Ferrous Metals has recently signed an agreement to build the Yanderra mine in PNG.

Garnaut also says that last month, at a lunch hosted by the Australian ambassador, Geoff Raby, several Chinese executives told the Prime Minister, Julia Gillard, of their concerns about the Foreign Investment Review Board, labour laws, environmental regulations and various approval processes.

According to Garnaut, he previous day Shen Heting, chairman of China Metallurgical Construction Corp, developer of the Ramu nickel mine in PNG with its controversial marine tailings dumping system, put his criticisms of Australia on the record.

Garnaut also quotes advisers as saying Chinese clients are baulking at the ”political risk” associated with Australia, opting instead to pursue opportunities in countries.

“When the phrase political risk is applied to Australia, ahead of developing economies that have only just become democracies, then it is time to look closely at the data”.

“Thilo Hanemann, of Rhodium Group, keeps a file on every Chinese foreign investment in the resource and energy sectors. His data shows that in the space of two years Australia is in danger of tumbling from being China’s preferred investment destination to an also-ran”.

“Chinese companies completed 25 investments in Australia that were announced on or after January 1 last year, which is more than in any other country. But the value of those investments totals just $3.6 billion, which ranks Australia fourth behind Brazil, Canada and Argentina”.

“But the news is worse than that. The biggest of China’s 25 “investments” in Australia was actually a restructuring, where Minmetals transferred assets from an Australian subsidiary to a company in Hong Kong (diluting Chinese ownership of the Australian assets)”.

“After removing that $2.8 billion reshuffle, Chinese companies have invested just $750 million in Australian resource and energy assets since the start of last year”.

“In value terms, Australia drops to fifth place behind the US. Australia is getting many small investments, including by state-owned enterprises and private companies, as joint ventures and acquisitions, but the big money is passing us by”.

“There is a case for discriminating against some kinds of investment by state-owned companies. Any Chinese SOE can potentially be a profit-driven “normal” company or a multi-purpose tool of government policy, depending on the day”.

“Many Chinese investors who have plunged money into Australia only have themselves to blame for cost overruns and delays. They have thrown billions of government money into assets they do not know how to manage in markets they do not understand”.

“The consequences of missing out on investment capital should no longer be ignored. Lower inflows of Chinese investment have reduced the value of Australian assets, reduced mine and infrastructure construction and, inevitably, they will reduce Australia’s export share in the global market long after the boom has ended”.

Advertisement

Claims of sexual abuses in Tanzania blow to Barrick Gold

Geoffrey York – The Globe and Mail

Just two weeks after the fatal shooting of seven people at one of its Tanzanian gold mines, Barrick Gold Corp. is investigating allegations of sexual assault by about a dozen police and security guards at the same violence-plagued mine.

The Toronto-based corporate giant, the world’s biggest gold miner, is already reeling from allegations of gang rape by its security guards at another of its subsidiaries, in Papua New Guinea.

The deaths and alleged abuses at the Barrick sites, which began years ago but failed to gain wide attention until recently, are accelerating Barrick’s efforts to introduce stronger rules for investigating human-rights problems at its 26 mines around the world. The latest case comes as investors have been urging Canadian companies operating overseas in tough and lawless environments to push for more transparency instead of tolerating human-rights abuses.

Barrick recently became the first Canadian mining company to sign up to the Voluntary Principles on Security and Human Rights, an international set of guidelines for extractive industries, which oblige it to investigate and report any credible information about human-rights abuses at its workplaces.

At Barrick’s controversial North Mara gold mine in Tanzania, investigators have interviewed about 10 women who allege that they were arrested at the mine site and sexually assaulted by company security guards or Tanzanian police over the past several years.

The allegations were discovered in the course of a review into a separate human-rights issue at the mine. A preliminary investigation by Barrick’s subsidiary, African Barrick Gold, found that the allegations were credible.

African Barrick has sent in a team of independent investigators, headed by a former Australian police detective, to gather evidence in the case. The company has also given the evidence to the Tanzanian police, who have promised their own high-level investigation. The company says it is insisting on a full police investigation.

In most or all of the cases, the women told the investigators that they were taken to holding cells and coerced into sex by police and security guards, who threatened them with imprisonment if they refused.

In a statement to The Globe and Mail yesterday, Barrick said the allegations were “highly disturbing” and will be fully investigated and publicly reported. It also pledged to dismiss any employee involved in human-rights violations, or any employee who has knowledge of human-rights abuses and fails to report them.

“Barrick is deeply distressed by the evidence that has emerged,” the company said.

“These deplorable crimes, if confirmed, are neither acceptable nor excusable. They send a clear message to us that we have not met the promises we have made to the community, and to ourselves, to pursue responsible mining in every location where we and our affiliates operate. We can, and will, do more.”

For years, thousands of impoverished villagers around North Mara have routinely invaded the mine to grab rocks from its waste heaps, which can be processed into tiny bits of gold. There are daily confrontations between the invaders and the mine’s security guards, usually reinforced by Tanzanian police.

On May 16, when an estimated 1,500 people invaded the mine, police opened fire and killed seven of them, according to a statement by Barrick. Twelve others were injured by the police gunfire. Police commanders have insisted that the police were acting in self-defence.

In previous clashes at North Mara over the past several years, at least seven other people – and perhaps many more – have been shot dead by police, according to Tanzanian media and other reports. Witnesses say the invaders are generally unarmed, although some carry hammers to break up the waste rocks and some throw stones at security vehicles when the guards try to disperse them.

In the remote highlands of Papua New Guinea, where Barrick owns 95 per cent of the Porgera gold mine, a report by Human Rights Watch this year concluded that the mine’s private security force is implicated in “a pattern of violent abuses, including horrifying acts of gang rape.”

The report documented five alleged incidents of gang rape by mine security personnel in 2009 and 2010, and a sixth case in 2008. One woman said she was gang raped by six guards after one of them kicked her in the face and shattered her teeth. Another said she and three other women were raped by 10 security guards, who forced her to swallow a used condom.

After it was contacted by the human-rights group, Barrick launched a series of investigations and eventually acknowledged there was “disturbing” evidence of abuses by some of its security personnel. It dismissed a number of employees, including some who knew of the misconduct and failed to report it. It also requested a police investigation, which led to a number of arrests.

PNG Ok Tedi mine halts production after pipeline rupture

Liam Fox, ABC news

A ruptured pipeline has suspended production at the Ok Tedi mine in Papua New Guinea.

Four “small” ruptures in a pyrite pipeline have caused what Ok Tedi Mining describes in a statement as “spillage in a localized area”.

The 128 kilometre pipeline transports pyrite concentrates from the mine’s tailings processing plant to underwater storage pits in remote Western Province.

The mine says the leaks have been repaired and a cleanup is underway but it is taking a cautious approach.

Production has been suspended until further tests are carried out.

The company has been unavailable to clarify how much concentrate was spilt and over what area.

The PNG Mineral Resources Authority has also been unavailable for comment.

Bougainville landholders sign agreement with Canadian miner

The Market Wire news service is reporting a Canadian resource company, Morumbi, has signed an agreement to be the development partner of choice for a Bougainvillian landowner company, Isina Resource Holdings.

Isina says it represent 15 villages and their traditional land and it is reported Morumbi paid K10,000 (@ US$4,000) on signing the agreement and will pay a further K3,000 every month to Isina.

The agreement means Morumbi will be the first foreign company to explore for mineral resources on Bougainville since the bitter civil war sparked by disputes over the Panguna gold and copper mine.

Morumbi describes Bougainville as ‘one of the worlds best endowed gold and copper districts; largely unexplored since the 1960’s discovery of Panguna’.

Market Wire says this is the first time in the history of Bougainville that an area, ‘until recently aggressively opposed to mineral exploration’, has formed its own development company and invited a foreign partner to jointly explore for and develop mineral resources located on their traditional lands.

The Company’s Chairman Stephen Shefsky and Chief Executive Officer Mark Brennan participated in the signing ceremony which took place at Tunania village on the Isina Lands on the east coast of Central Bougainville.

The current LOI covers approximately 5,000 hectares that extends from the East coast up over and beyond the Crown Prince Range. Bougainville, although long regarded as having great gold and copper potential based on early work done by German explorers, has a unique history with respect to Mining in that no exploration has been carried out since the 1960’s.

Satellite imagery, together with the results of a German Government sponsored Aeromag and geochemical survey over Bougainville carried out by the Federal Institute of Geoscience and Natural Science Hannover and published in 1990, together with the 2007 discovery of extensive alluvial fields in the creeks and rivers of Isina that are now being worked by villagers, single out this area for high-priority exploration programs for gold/copper epithermal and porphyry deposits.

About Morumbi

Morumbi Oil & Gas Inc. is a public company with light oil exploitation opportunities in northwest Alberta, and, through its recent acquisition of Rockwell, it is actively undertaking programs to develop existing assets and conducting activities to acquire additional high impact Oil/Gas and Mineral assets – http://www.morumbi.ca.

Mineral boom but PNG fails on Millenium Goals

From Radio Australia

A major symposium on Australia’s relations with Papua New Guinea, held in Melbourne last Friday, was told repeatedly that Australians knew very little about PNG apart from the Kokoda legend and the fact that PNG is one huge mining quarry.

But there should be more to the relationship with the country Australia nurtured to independence in 1975.

One of the people attempting to broaden the knowledge about Papua New Guinea is Professor David Lowe, the director of the Alfred Deakin Research Institute, part of Deakin University.

Presenter: Geraldine Coutts


Speaker: Professor David Lowe, director, Alfred Deakin Research Institute, Deakin University

COUTTS: Now did we learn anything more from this symposium?

LOWE: Oh yeah, I think we did, I think it was an incredibly timely event. We’ve all got a sense in terms of those big kind of national indicators, in terms of how a country is tracking, PNG is a place of extremes. We know it set for incredible economic growth generated by the mineral resources wealth, but we also know that it’s tracking very poorly in terms of those Millenium Development Goals. So for Australians to try to get their head around some of the opportunities and the challenges ahead was really important. We also thought it was very timely because we sensed a certain slippage in Australian consciousness there. We know that the press are pretty good at coming up with stories that highlight instances of corruption and problems of governance and those problems certainly do exist. But we also sense the need to engage and the need to get below the surface in order for Australians to have a slightly richer and more kind of engaging relationship with PNG seems to be thing that we need to do right now.

COUTTS: Well foreign aid and development has come under the microscope quite often, particularly in Papua New Guinea and boomerang aid, the fact that advisers get a chunk of the money and aid isn’t as effective as it could have been. Did that also get mentioned?

LOWE: Yes it did. Yes, I mean there are a couple of very rich do put big question marks over the effectiveness of Australian aid, but these question marks are just calling out for more research rather than drawing tremendous conclusions quickly. One of the common themes that I think emerged was that the decline in PNG spending on public sector was a real issue in terms of how we might look to the future, because it’s all very well to anticipate wealth coming from mineral resources and of course the liquefied natural gas project we’ve mentioned quite a bit, but if that’s not matched by increased amounts of public sector spending, then we’re not going to see some of the improvements in terms of the health and well being indicators flowing through society. So in terms of aid, the linkage between that and public sector growth to date has been to some minds it’s been appropriate, but to other minds it’s been at the expense of increased levels of investment and promoting private opportunities.

COUTTS: And in terms of aid still, the question has always been as you’ve just described, it doesn’t get to where it needs to be and may be Australia’s approach has been more bureaucratic than it needs to be. But are they looking, apart from doing yet more research, are there answers?

LOWE: Well yes I suppose so. In terms of answers, I think it’s across the board. One of the things that came out was just how many opportunities there were in the private sector, anticipating this growth, anticipating a stronger governance that we hope might emerge in PNG in the wake of forthcoming elections and in the wake of the tremendous interest in the economic growth occurring. There is as we know a trend for NGOs to play a big part in the way in which aid is delivered and perhaps to make sure that it does flow out into different parts of the society. The other thing that came out very clearly though is that in order to measure how effective or otherwise it is. We’re still grappling with the fact that PNG at the provincial and regional level is extremely hard to measure. It’s very hard to measure what’s happening. So when I say the need for more research. We still really need very good quality indicators to see how things are tracking in the Highlands versus the capital district and so on and that’s something that’s starting up. 

Dr Thomas Webster from the National Research Register of PNG spoke about the progress in this field. I think until you see some better progress in this area, we’re still going to be scrambling a little bit in some of our debates about the effectiveness of aid.

COUTTS: And mining in general obviously got a mention and the best approach, because there are some question marks as to how many jobs will go to locals and how many will be brought in and the fly in and fly out concept as well?

LOWE: Yes, and a couple of things there and that is an issue and one of the things that everyone wants to see of course is the heightened degree of training that goes on for PNG residents and in terms of the plan for that liquefied natural gas project. There’s some encouraging signs about the scale of training being offered both close to the site in Port Moresby, in terms of the chain as to how the liquefied natural gas works. But there still is this issue of the portion of population as it currently stands is about 80 per cent employed in the agricultural sector and the non-mining sector if you like and that is a theme which came up in the symposium. We really need to ensure that this huge bulk of population is addressed more squarely than simply thinking about the wealth flying through to people purely for mining base.

Me’ekamui invites stakeholders to Panguna mine talks

By AL*

Me’ekamui Tribal Government has insisted it will not allow anyone to reopen the Panguna mine until all outstanding issues are resolved.

President Philip Miriori said today that as opposed to reports by Australian newspaper on May 19 that BCL owns the Panguna mine, “BCL – Rio Tinto has no rights to Panguna and any discussions or commitments with anyone including PNG or ABG was counterproductive.”

He added that the Me’ekamui government who control the assets at Panguna and all natural resources within its borders, refute Bougainville president John Momis’ authority to enter into any understandings or agreements with Me’ekamui owned land.

Miriori personally invites the Acting PM, Minister for National Planning, Minister for Mining, Minister for Foreign Affairs and Chief Legal Counsel from the PNG Government, ABG President, Vice President, Minister for Mining and Legal Counsel and BCL-Rio Tinto chairman, Secretary and Legal Counsel to an open-dialogue meeting at Hilton Hotel in Cairns, Australia, to settle all unresolved issues.

He urged that the individuals attending the meeting planned for June 14 to 17, must bring with them all licenses, documents and relevant materials to enable all parties to discuss all issues with truth and honesty.

Miriori urged that all parties act wisely in their pursuit of closure and future promise.

He added that the meeting is not a media event but an honest effort to bring all parties together in gaining resolve.

Miriori asked that the stakeholders email their RSVP to Me’ekamui Foreign Affairs minister Pius Taboa on cefeida1taboa@gmail.com by June 3.

* Mekamui news 

Newspapers confirm Ok Tedi leaks and shut down

Both Papua New Guinea’s daily newspapers have today published articles (see below) confirming the shut down of production at the Ok Tedi mine, as reported on Papua New Guinea Mine Watch yesterday.

Both newspaper articles are based on a company statement about the leaks and shut-down and uncritically parrot the company line that the leaks are small, ignore any possible toxicity problems, environmental damage or health dangers and reassure readers that the leaks have been repaired and clean-up program implemented.

OTML suspends production to fix ruptured pipeline

OK Tedi Mining Ltd has temporarily suspended production at the Ok Tedi mine following concerns over a series of SMALL ruptures in the company’s pyrite pipeline.

The pipeline, commissioned in 2008, transports pyrite concentrates 128km from the tailings processing plant at the mine, along the Tabubil-Kiunga highway and on to Bige to underwater storage pits. Four SMALL ruptures occurred in some sections of the pipeline in the past weeks causing spillage in a localised area along the highway.

Although the ruptures had been repaired and a clean-up programme implemented, OTML board and executive management had decided to take a cautious approach and have suspended ore production at the mine and mill to allow further investigations and tests on the pipeline.
This would determine the cause of the problem and provide information for redesigning and upgrading of the pipeline to prevent these failures occurring again.

OTML environmental science officers and community relations staff were engaged in testing and monitoring the environment surrounding the ruptures in addition to supervising the clean-up operation.

Managing director Nigel Parker said yesterday: “We are taking a careful, responsible approach to managing the situation and are consulting with affected communities and with regulatory authorities including the Western administration and the Mineral Resources Authority.

Ok Tedi shuts ops after Fubilan spill

OK TEDI Mining Limited has temporarily suspended production at its Mt Fubilan mine in Western Province following spillage of treated tailings at four locations along its pyrite pipeline.

A statement issued by the company yesterday said it suspended production following concerns over a series of SMALL ruptures in the company’s pyrite pipeline which was commissioned in 2008 to transport pyrite concentrates over 128km from the tailings processing plant in the Star Mountains to Bige in the Lower Ok Tedi area where it is stored in underwater storage pits.
The pipe runs alongside the Tabubil-Kiunga Highway.

“Four SMALL ruptures occurred in some sections of the pipeline in the past weeks causing spillage in a localised area along the highway,” said OTML Managing Director Nigel Parker.

“Although the ruptures have been repaired, and a cleanup program implemented, Ok Tedi Mining Limited Board and Executive Management have decided to take a cautious approach and have suspended ore production at the mine and mill to allow further investigations and tests on the pipeline.

“This will determine the cause of the problem and provide valuable information for redesigning and upgrading of the pipeline to prevent these failures reoccurring in the future.
“OTML environmental scientific officers and community relations staff are fully engaged in testing and monitoring the environment surrounding the ruptures in addition to supervising the clean-up operation.

“We are taking a careful, responsible approach to managing the situation and are consulting with affected communities and with regulatory authorities including the Western Provincial Administration and the Mineral Resources Authority,” Mr Parker said.

Ok Tedi Mining Limited is a 100 per cent Papua New Guinea-owned company producing 160,000 tonnes of copper metal and 500,000 ounces of gold a year.

Damaging toxic leaks shut production at Ok Tedi

Reports are emerging from credible sources that the Ok Tedi mine in Western Province, Papua New Guinea, has been forced to shut down production after a series of ruptures were identified in its tailings pipeline.

Initial reports suggest the mine could be closed indefinitely and mine staff may be sent home.

In the meantime, local communities are very worried by reports that toxic mine tailings from the leaking pipeline are flowing towards the Fly river and could cause another environmental catastrophe.

The Fly river has already been very severely impacted by toxic tailings from the Ok Tedi mine.

In August 1999 the mine’s original owners, BHP, announced that the environmental impacts of the Ok Tedi mine on the surrounding environment “would be far greater and more damaging than predicted” and none of the solutions it had studied would adequately solve the mine’s environmental problems.

BHP admitted that, “From BHP’s perspective as a shareholder, the easy conclusion to reach, with the benefit of these reports and 20/20 hindsight, is that the mine is not compatible with our environmental values and the company should never have become involved.” 

The latest leaks and any consequent environmental damage will likely reinforce recent calls for the mine to be closed down.

Intending candidates warned off Watut River issues

By Watut Reporter

President of the Union of Watut River Communities(UoWRC) Association Inc, Mr Reuben Mete, has brushed aside criticism made against his organization (UoWRC) and warned recycled politicians intending to contest the Watut and Wampar LLG President seat not to use Watut River Issues as a campaign platform to lure peoples support for the next years Local Level Government Council Election.

Mr Mete made this known today when addressing the members of the UoWRC in Middle Watut Region, The President of UoWRC was responding Mr Gewisa Tukwund of Leklu village and Markham Bridge Councilor Douglas Gedisa statement published in the National Newspaper earlier this week.

Mr Mete has claimed that both Tukwund and Gedisa have recently formed and are heading two new organization duplicating the work of the Union of Watut River Communities Association Inc and warned communities of Watut and Wampar to be careful of other political leaders establishing organizations after organization and should study well the person they are following. Mr Tukwund is the Chairman of the recent launched Upper Watut Impact Association and Mr Gedisa is the Chairman of the newly formed Wampar Union.

“The Middle Watut communities are very much affected by these mining operations in Hidden Valley and I invite Mr Tukwund and Mr Gedisa to visit the place themselves before making unsubstantial statement to the media.  The UoWRC has initially trying to work hand in hand to assist the Wampar Union faction to see its establishment however this shall not continue anymore” Mete said.

In addition to that, Mr Mete has thanked Hon Pundari in trying to address mining related issues around the country including the Watut River Pollution  and assures the representative to the recent meeting were Executive Members of the UoWRC organization and not for any family affairs. He also thank the Mineral Resources Authorities and the print media to publicize the meeting resolutions so that transparency and honesty will prevail and that self centered leaders cannot have rooms for misleading the people.

Solwara MOA talks begin

The government needs to ensure that the ownership of the Solwara Project straddles both New Ireland and East New Britain.
Governor of East New Britain, Leo Dion said the Solwara Project was a significant development, but the East New Britain Provincial Government (ENBPG) anticipated that certain issues were addressed and reflected in the Memorandum of Agreement (MOA).
Mr Dion made these remarks at a two-day consultation meeting between parties to the Solwara Project that began yesterday in Kokopo.

A draft MOA was presented by the State to the parties at the meeting to seek the views and positions of the various parties. The meeting began initial discussions and negotiations on the MOA for the project and discussed royalties, tax credit scheme, business development plan and Special Support Grant and other issues.

Mr Dion also highlighted two other important issues; the State’s capacity to monitor technical and environmental aspects of the project and that the State needed to seriously consider equity participation of the two Provincial Governments; New Ireland and East New Britain.

The ENBPG team leader Bernard Lukara reaffirmed Governor Dion’s position, emphasising that some of these concerns were about ownership of the area between NIP and ENB where the mineral resources was located, equity participation and effective monitoring of the environment. He urged all stakeholders to seriously address these issues.

The parties at the meeting were the state, represented by the Mineral Resources Authority (MRA), Departments of Commerce & Industry, Treasury, National Planning & Monitoring, Provincial and Local Level Government, Mineral Policy & Geohazards Management (DMPGM) and the Office of the State Solicitor. The other parties included the operator of the project Nautilus Minerals Inc, New Ireland (NIPG) and the East New Britain Provincial Governments (ENBPG).

Chairman of Mining, Commerce and Trade for the NIPG Marius Soiat expressed his concerns on environmental issues, saying that the government needed to seriously address the issues before mining could begin. He reiterated that unless the National Government addressed these concerns, the New Ireland Provincial government would not be party to the MOA.

Country Manager for Nautilus, Mel Togolo, said the company was keen to ensuring that issues raised by parties were addressed and concluded in a way that was mutually beneficial to all parties involved.

State team leader Philip Samar said that the state would take all comments into consideration and address them (issues) appropriately and in the interest of all the parties concerned. He explained that this was the first meeting for the parties to consult on the benefit sharing agreement and that subsequent forums will then be organised to consistently address the provisions under the draft MOA.

Spotted in the Post Courier