Monthly Archives: November 2011

Nautilus celebrates a resource upgrade

Nautilus Minerals, the pioneer of experimental seabed mining in Papua New Guinea and the Pacific, is celebrating an upgrading of its resource estimates for the Solwara 1 project.

The company announced the upgrade to the stock market, as that is what the controversial mining project is all about – making money for shareholders in North America, Europe and Australia and the companies senior executives.

Nautilus also declared a first inferred resource at the nearby Solwara 12 project which is 25km northwest of Solwara 1 – in fact Nautilus has numerous exploration sites dotted all over the Bismarck sea.

The company plans to start production from the world’s first experimental seabed mine by the fourth quarter of 2013, despite the concerns of scientists, environmentalists and local indigenous communities.

Under-water and remote-controlled mining equipment for Solwara 1 are currently being manufactured in England, according to Nautilus vice- president investment relations and communications Joe Dowling.

The company says its total indicated resources had increased 18% to 1.03 million tonnes and total inferred resources had risen 36% to 1.8 million tonnes.

The contained copper in indicated resource at Solwara 1 has increased 25% to approximately 74,000 tonnes and contained copper in Inferred Resource at Solwara 1 has increased 28% to approximately 125,000t.

The contained gold in indicated resource at Solwara 1 has increased 23% to about 166,000 ounces and contained gold in Inferred Resource at Solwara 1 had increased 5% to about 317,000oz, and

The first inferred resource for Solwara 12 is 230,000t, grading 7.3% copper and 3.6 grams per tonne gold.

Nautilus Minerals president and chief executive Steve Rogers said:

“Importantly, the declaration of a maiden resource at Solwara 12 begins the process of building a pipeline of projects for Nautilus in the region, and confirms the prospectivity of the Bismarck Sea, where we have identified another 16 prospects for further evaluation.

“Nautilus will attempt to build on this base in the coming year, through on-going exploration activities in PNG and elsewhere in the western Pacific”

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A commentary on the PNG Chamber of Mines and Petroleum Seminar

About 500 people attended the start of this week’s industry lobby group organised 2 day festival at the Gateway Hotel celebrating the work of the exploiters in PNG.

At least 90% of the participants on day one were white and male – which gives you a good idea of who is making money out of PNG minerals.

A few government people attended but where were the indigenous landowners, where were the women, where were the indigenous mine workers?

They, of course, cant afford the K1,400 registration fee on top of the expensive Port Moresby accommodation and airfairs.

It is the meeting of all the Devils in PNG to discussed their success in exploiting and cheating the locals.

Ila Temu, from Barrick Gold and President of Chamber of Mines and Petroleum told the seminar he and the Chamber are totally against any change in the ownership of minerals from the State to Landowners – said it would be unworkable – what is needed instead is better landowner and government managment of landowner and government benefits.

Of course he would say that! If the landowners had a say the foreign exploiters (miners) wouldn’t get given all the minerals for FREE when they get their mining licence. Much easier to fool a few government officials in Port Moresby than have to deal with savvy people who live on and from the land.

Ok Tedi boss was next up on the pondium. Telling how fabulous Ok Tedi has been for PNG – and what an amazing feat it was to build a mine there. Not one mention of being the worst mining environmental disaster in the world. Oh – and they are really working on a tailings dump for an extended mine life – working on it!

How fracking long have they had to work on it? 35 years so far.

He also talked about the confidence the “mining fraternity” has in PNG….. and, pass the sick bucket, OK Tedi and its new era of Social Responsibility…….  It’s like union carbide giving grameen bank microloans!!!  Wonder how all those old white men would have reacted had they been told it was Ok Tedi water they were drinking from their table pitchers….

The President of the Chamber of Mines and Petroleum also said how fabulous the mining industry has been in giving jobs to women ? Really ??? Really ??? Well they weren’t visible at the Seminar – unless he was referring to the waitresses pouring the water!!!

Oh sorry – you’ve given a few truck driving jobs and a couple of apprenticeships to females. Good for you. There he was in a men only meeting and talking of the acceptance of women in the mining industry!!!!!

All the rest of the talk was of course about $$$$$ – which is the real reason the mining industry exists in PNG, to make money for neo-colonial exploiters, the new super-powers of the 21st century, global mining and petroleum companies.

Of course there was nothing about how local people in PNG are being screwed by their own political leaders, their so call intellectuals living in urban ares and also the few money hungry locals living like wolves among the sheep in individual project area who think of no one else but themselves…..

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Filed under Corruption, Environmental impact, Financial returns, Human rights, Papua New Guinea

Our natural resources sold cheaply

By Waliya

THE proposal to hand ownership of mineral rights to landowners in PNG would split national unity and devastate the country’s vital mining sector, the PNG Chamber of Mines and Petroleum said.

So what when we own these resources?

PNG is currently selling its na­tural resources cheaply while the chamber and the government are sleeping.

Copper and gold are traded in US dollars and mining companies pay the government and land­owners in lousy kina. For example, an ounce (32gm) of gold is about US$1,700 which means US$50,000 a kilo. In a year, a company produces about 100 tonnes, so do your maths.

These companies are ripping our natural resources cheaply and with the weak kina, these companies are laughing all the way to the banks.

So what is K12 million royalty paid to Ok Tedi landowners. That is just like giving some a one toea change from K100.

An apprentice diesel fitter in a BHP-owned mine in Australia would be paid A$14,000 or K52,000.

Our workers working in PNG mines are a cheap labour compared to our Australian counterparts even though we do the same jobs. Is this in the best interest of Papua New Guineans?

I say go ahead with your bill, Boka Kondra and Sir Julius Chan. The grassroots support the bill.

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Momis in epic return to Panguna

By Gorethy Kenneth

Bougainville’s’ president John Momis will now go back to Panguna 21 years after his abduction in 1990 by the Bougainville Revolutionary Army.

President Momis’ visit to Panguna will be historical as he has never stepped on Panguna soil since his abduction by the late Francis Ona’s commandos from Tinputz in the mid 1990s.

He was taken hostage to Guava and kept there in captivity before being released some months later. The story of Mr Momis becoming a Prisoner of War (PoW) in Guava village is such that a reconciliation is still pending.

He was kept a prisoner for almost six months in Panguna by the late Ona and his men. One of Bougainville’s instrumental leaders (named) was handed a gun to kill Momis but he let him escape after several pleas by Mr Momis.

Mr Momis was a priest at that time and to date his “legs” have never set foot in Panguna.

Mr Momis also, had never visited Panguna even when he was the Regional Member for Bougainville in the National Parliament.

He is now going back there early next month to see his people and to further negotiations for the development of Bougainville, because that is where the heart of the Panguna Mine lies.

The Bougainville administration is now in preparation to facilitate his visit to Panguna tentatively before the JSB meeting in Buka.
The JSB will be held on December 5.

The people of central Bougainville specifically Panguna and Guava have invited Mr Momis to visit the place and address his people in that part of the world.

The Panguna management consultative committee meeting held recently in Buka was briefed of the planned visit by the president.

“This is a long overdue matter that must take place as soon as practically possible,” the meeting was told.

“At this meeting an official invitation was extended to President Momis and he accepted and preparations will now begin by PMCC stakeholders in consultations with ABG Administration officials to make this event a reality.”

On the same note, Bougainville Copper Limited chief executive Paul Coleman is now being invited officially by the PMCC and specifically the people of Panguna to visit the area where the giant mine pit lies idle. Mr Coleman’s visit will happen after Momis’ official trip. Mr Coleman already visited Panguna but that was on an invitation by those who were involved in the Panguna Scrap Metal operations, which BCL has been facilitating.

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Two parts to Bougainville Copper Agreement review

The Bougainville Copper Agreement (BCA) review process will take on two phases as explained by the legal brains behind the planning.

Autonomous Bougainville Government legal chief executive officer and Tony Reagan, the Australian legal adviser in a recent meeting on the review of the BCA, explained that phase 1 would include preparation now until 2013 and this would involve the following:

  • Incorporation of individual Lease area associations and the umbrella landowner association;
  • Conflict resolution work in central and south Bougainville;
  • Conduct of baseline studies on Environmental, social, health and other baseline studies in the Mine Lease areas;
  • Public Awareness throughout the region and development of appropriate capacity and negotiation position by each party including a joint position by the ABG and Panguna Landowners Association and;
  • * Reaching an agreed process for conduct off negotiations and conclusion of agreement.

Phase two (2) will include Conduct of Review and negotiations which will also include:

  • Each party to be represented by a negotiating team, led by an appropriately authorized lead negotiator;
  • ABG/PLA joint negotiating team;
  • Each team to be supported by appropriate technical advice;
  • Separate negotiation tables to deal with environment, social, and the financial aspects of negotiations.

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Further report raises serious concerns about Nautilus and experimental seabed mining

A further report has surfaced that raises serious questions about the propriety of the  experimental seabed mining project Solwara 1 and points out that it is not supported by local people and has the potential to be socially, economically, and environmentally destructive.

The report, Nautilus Minerals Inc,  prepared in 2008, finds that it is abundantly clear that local and regional leadership have inadequate information regarding both the Nautilus company and its explicit technical plans.

The report also finds that the awareness of local biological diversity and its documented (and in some cases, expropriated) uses is inadequate to insure any appropriate oversight and management of indigenous resources by the Government of Papua New Guinea

Further local people are not aware of the degree to which the proposed operation is likely subject to significant international intellectual property considerations that are neither owned nor overtly documented to have been licensed to the company.

The report was prepared by M Cam Financial and Management Advisors and is based on extensive research and consultation in the Rabaul region, Port Moresby and Fiji.

The report author, Dr David Martin, concludes

There is sufficient opacity so as to preclude entering into full-disclosure binding agreements regarding Nautilus access to land and sea resources to commence operations.  The leadership of the Komgi Village has unanimously voiced its opposition to authorizing any use of, or access through, lands under their common control at this time pending the adequate addressing of all concerns regarding guaranteed and absolute preservation of all marine and terrestrial ecosystems.

On Friday a separate report, Out of Our Depth, was published which details the serious environmental and social impacts expected as a result of the unprecedented experimental mining of the ocean floor in PNG.

Professor Richard Steiner has also published a devastating analysis of Nautilus Minerals deeply flawed Environmental Impact Statement – EIS not fit for its purpose.

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Second guessing the Mining Act

By Phil Fitzpatrick*

EARLIER IN THE YEAR, Mines Minister Byron Chan peremptorily announced that the government planned to hand state-owned mineral rights back to traditional landowners.

Amid the uproar, prime minister Peter O’Neill managed to reassure the miners that this was not the case and apologised for the sudden dents in their shareholder’s wallets.

It was the first of several cases of government ministers jumping the gun.  Hopefully, after the last instance involving the Supreme Court, the message has got through and O’Neill’s stress levels have returned to normal.

There is no doubt that the Mining Act will either be rewritten or amended.  The current one goes back to 1992 and is not really up to dealing with the massive resource development and all the associated problems that are going on in Papua New Guinea at the moment.

If the Act is amended or re-written there are a number of key elements that need to be addressed.

Social mapping and landowner identification studies, just like those required under the Oil and Gas Act, need to be introduced. Under the latter Act preliminary studies are conducted before a company is allowed entry onto an exploration tenement and in detail if the project proceeds to the production stage.

These studies provide the company with an appreciation of the people in the area of a tenement and allow landowners to have an input into the exploration and development process.  At the moment the inconsistency between the two Acts simply serves to confuse people.

Despite the earlier announcement it is very unlikely that landowners will get ownership of the minerals under their land.  It is unfortunate that their expectations were unnecessarily raised but in reality the complications, legalities and inequities inherent in such a system are too great to be practical.

This doesn’t mean that there should not be provision for landholders to have greater equity in mining projects over and above any proportional royalties they might normally receive.

The way to do this would be to legislate so that they can negotiate deals over equity directly with the mining companies.  It would also be good if the provinces, and even local level government, could get a cut of that action too.

The money would still have to be controlled  through a trust arrangement but it would be a great way to get kinas out to the people.

Something should also be done to improve the process of dispute resolution between companies and landowners.  At the moment the companies are being accused of bully boy tactics and the landowners of making spurious claims.

Claims by fake landholders are also ruining what should really be a mutually beneficial two-way street.  A logical way of doing this might be to broaden the role of the Mining Warden.

The take-up of land for the purposes of mining is done on a leasehold basis from the state.  The conditions for the return of rehabilitated land to the traditional landowners once a mining project runs its course should also be clarified in the Act.

Peter O’Neill has embarked on a campaign to tackle political and bureaucratic corruption. It would be useful if the Act reflected this in some way; possibly legislating so that people in public office, including their immediate families, involved in dealing with mining projects are not allowed to derive any financial benefit from insider knowledge or through bribery would be good.

This should be extended for some time beyond the life of both the project and/or the person’s tenure in their position.

Offshore mining, of the sort envisaged by Nautilus and other companies needs to be incorporated in the Act.  Issues like the disposal of tailings will need to be addressed, either in the Mining Act or through a related Act.

The logical way to do this would be to extend the way in which Environment Impact Studies are conducted prior to the development stage.

There probably also needs to be some re-jigging and streamlining of the way royalty payments are calculated and paid.  At the moment payments are made following a serious of regular production reports submitted by the companies.  Quite often these are disputed.

A simpler method must be possible.  Perhaps the companies could make royalty payments based on their own internal book keeping. Inspection and appeal provisions would keep everyone honest and it would take a big load off the government.

Finally, the maximum equity available to the state in a mining development needs to be fixed.  At the moment it is more or less negotiable and, as has been clearly demonstrated, the government is short of skilled negotiators.  A rate in the 25 – 35% range would seem appropriate.

When and if any of this might happen is anyone’s guess but it is an urgent issue and sometime before or immediately after the next election would be ideal.

The next cab off the rank could be the 1992 Forestry Act.

* spotted on PNG Attitude

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