Monthly Archives: April 2012

PNG soldiers deployed at Porgera and Exxon-Mobil sites

Up to hundreds of Papua New Guinea soldiers have been deployed to the Highlands region where security problems are threatening two major resource projects, reports Radio New Zealand.

A month ago, the O’Neill government issued a callout order for security forces in Hela region and Porgera in neighbouring Enga province.

Landowner disputes have disrupted key construction work in Hela’s Hides area for the major liquified natural gas project, while Porgera’s large gold mine has ongoing problems with illegal miners.

Mark Ekepa with the Porgera Landowners Association says the defence force operation has begun.

“They’re sending up all these defence force plus police personnel up to Porgera and Hides. They came up on the 25th, 27th of this month. There were three Fokker 100 flights came up to Hagen and it looks like some will go to the LNG site and some will go to Porgera.”

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Kurumbukari clan queries Hagen meet for Ramu review

By Jayne Safihao

A spokeman representing one of the major clans in the Kurumbukari area where the Ramu nickel mine is situated has spoken against the current landowners association (LOA) meeting in Mt Hagen describing it as “fascinatingly spectacular”.

Ben Bobby Yoga of the Tsirigami clan on behalf of others in the same clan said it was fascinating that the Lands Titles Commission, which was still hearing disputing cases, was being convened while the MoA review was being held concurrently.

“How can these two be held at the same time when landowner issues are still not finalised? Who is representing what clans and where is their legitimacy? he said.

“All the landowning clans are currently at loggerheads over ownership of the special mining lease (SML) area.

“The commission was specifically tasked to sort this matter out but the executives of the Kurumbukari landowners association had quietly slipped out of the province and gone ahead to allegedly represent the people. This is quite absurd,” he said.

He said the Tsirigami clan was not duly informed and shocked to learn that:

  • Landowners were not informed of the MoA with most being isolated and ignored; and
  • Most of the clan representatives and even members of the Madang provincial government, who could not attend due to the current incident and stop-work by the administration, failed to understand the choice of venue for the meet; and

He said the MoA should be shelved until the LTC hearing of disputed clans are finalised.

“Many of those executives of the association are merely disputers and not landowners,” he said.

“It is because of this that we feel such a memorandum of great significance should be put on hold. We all should know the fate of our land and not just a select few”, he said.

Meanwhile the meeting in Mount Hagen was closed off to Mount Hagen based reporters as they were reliably told by various sources that the review, which included various state agencies, was still subject to changes.

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Lihir woes for Newcrest Mining

Newcrest mining chief Greg Robinson has defended the standard of his company’s due diligence, despite a recent acquisition that continues to disappoint, reports The National.

Poor performance at the Lihir mine in Papua New Guinea was one of several factors forcing Newcrest to downgrade its annual gold production target on Wednesday for the second time in six months.

The downgrade sparked another round of market punishment for Australia’s biggest listed gold miner, which shed A$1 to close at A$26.60 – its lowest in more than three years.

After promising to produce up to 2.925 million ounces in the year to June 2012, Newcrest is forecasting production in the range of 2.25 million to 2.35 million ounces.

High rainfall at a mine in New South Wales was part of the problem, but plant breakdowns at Lihir continue to be the major disappointment for investors.

Newcrest acquired Lihir 18 months ago and Robinson said his company’s due diligence had identified some of these problems.

Robinson said he did not expect any future impairment against Lihir and said the asset offered tremendous growth potential.

He said the company’s mines would be upgraded to withstand “extreme” rain rather than “average” rain events.

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Media reports another chemical spill at Ramu mine processing plant

Radio news in Papua New Guinea is buzzing with more allegations of toxic pollution from ships delivering chemicals to the Ramu mine processing plant at Basamuk.

According to the reports the ship Tokyo Marine was discharging chemicals on Wednesday evening when there was another spill. There are suggestions these spills may not be an ‘accident’, but are what happens after every discharge is made as that’s what seems to be happening after every ship comes in to discharge to the mine.

Local people report that the reefs around the wharf that initially turned white after the first spill two weeks ago were struggling to get their normal colors back but the new spill has completely bleached them all over.

Locals say this is the fourth chemical spill into Basamuk Bay since the MCC operated Ramu Nickel Mine was set up.

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Cook Islands: TIS speaks out on experimental seabed mining

In its most recent newsletter Te Ipukarea Society posed a range of questions around experimental seabed mining. The statement is as follows:

“With the passing of the Seabed Minerals Act 2009, the pressure to move ahead with the mining of our deep sea manganese nodules is beginning to mount.

With millions of dollars on offer, and a national budget deficit, the temptation to open the door to foreign investment in the mining industry is significant.

Even now, the Canadian company Endeavour has a $15 million proposal on the table for government to consider in the sale of exploration licenses.

All this before it is clear what impact seabed mining might have on our environment and society.

While the nodules lie on the surface of the seabed and “mining” is likely to be only to a depth of 30cm, there are still several concerns TIS has regarding this industry.

  • What will SOPAC be doing to assist the Cook Islands with ensuring ecologically sustainable mining?
  • Will there be any serious research to determine the impacts of mining on the ocean ecosystem?
  • How long is sediment that is disturbed on the seabed likely to be in suspension (carried in the water)?
  • How will the nodules be brought to the ocean surface?
  • What will be done with unwanted sediment once it reaches the surface?
  • Where will the nodules be processed and what impact will this have there?

These questions are based around concerns over the impact on our fisheries and environment because of the sediment and the chemical components in the waste of nodule processing.

We also have concerns about management:

  • Will companies be able to on-sell their licenses to another company and benefit from future trading?
  • What will be done with revenue to ensure long term benefits from this non-renewable resource?
  • Are there plans to add citizens and environmental concerns groups such as ours in the Seabed Minerals Committee for improved community and stakeholder consultation?

We are pleased to know that the draft Model Contract Agreement will be a useful tool for negotiating agreements with mining companies.

We already have wealth around us (coral reefs, fisheries, tourist attractions), and we need to be very careful (precautionary principle) that whatever we do does not impact this wealth.”

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Chinese firm invests in Fiji gold mine

The Chinese company, Zhongrun International Mining, has signed an agreement to take a stake of up to 17.6 per cent in Fiji’s Vatukoula Gold Mine, reports the ABC.

It is the first major Chinese investment in gold mining in Fiji.

The deal, announced on the London Stock Exchange, will see Zhongrun take an initial stake of 9.2 per cent in Vatukoula Gold Mines by buying 9 million new ordinary shares for US97 cents each.

The option to buy a further 9 million shares at $1.24 is open until July 23rd.

That would give Zhongrun a total 17.6 per cent stake in Fiji’s oldest gold mine at a time when its share price has been languishing.

Fiji’s coup leader and interim Prime Minister Frank Bainimarama has been working hard to boost trade and investment links with China.

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Media barred from Ramu mine meeting

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Govt tries to reassure Ramu landholders

The state has informed the Ramu Mine review meeting in Hagen that it has completed documentation and instruments for the establishment of a “Future Generations Trust Fund” for the Ramu Mine landowner associations, reports the Post Courier.

Ramu Project co-ordinator with the MRA Carter Oiee told the meeting that the document was with the Office of the State Solicitor which will have to advise the Finance Secretary that the instruments had been cleared legally. The Finance Secretary will then sign the instruments permitting the parties to operate a trust account. Mr Oiee is confident that the account should be opened in two weeks from now.

He said the money that will be parked in this account will be purposely for the general welfare of future generations of LOs and for the specific purpose of improving their education and health.

He said revenues for the account will come from three sources which are royalties, land use payments and social inconvenience compensation packages.

However, Mr Oiee said the money will only be accessible in 15 years from the time the mine commences production to allow for funds to be accumulated.

He said in the near future, an investment component will be included in the trust instruments which will allow the trust managers to invest in business opportunities as guided by the trust deed. Mr Oiee said this will sustain the trust account in terms of revenues after mine life.

Basamuk LO chairman Lima Mulung commended the state adding that he was happy that the state has worked tirelessly to establish the account. He said his plan was to use the money to provide good education for the children of Basamuk.

Meanwhile, landowners of Ramu Mine have requested the Mineral Development Company (MRDC) to make available information relating to their equity share in MRDC. Specifically, they requested that MRDC explain exactly how their equity participation will be managed and realized.

Steven Saud, Treasurer of Coastal Pipeline Landowners Association, asked the MRDC representatives in the Ramu Mine MoA review meeting in Mt Hagen Tuesday), to explain to them what distribution mechanisms the company had and also how MRDC would calculate their dividends once the Ramu Mine starts production.

MRDC have committed to make a presentation during the week to explain to the Landowners the details of the information they have requested.

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Ramu mine: Acid spill reports denied


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More from Nautilus about their experimental seabed mining sales contract

The world’s first seafloor mining is one step closer with Canadian company, Nautilus Minerals signing a deal to sell more than 3 million tonnes of ore from its mine site in Papua New Guinea to China’s, Tongling Nonferrous Metals Group, reports Radio Australia.

Tongling is China’s largest importer of copper concentrate.

The company has agreed to buy over a million tonnes of ore a year for 3 years on a take or pay basis.

First shipments are due to leave PNG at the end of next year and other Pacific countries with similar mineral deposits are watching closely.

Nautilus’s Chief Executive Officer says the deal is an exciting development for his company and the region.

Presenter: Pacific Economic and Business reporter

Speaker: Stephen Rogers, CEO of the Canadian company Nautilus Minerals

ROGERS: It is the first time ever that a sales agreement has been signed for seafloor massive sulphide products, and it’s a significant milestone for the company.

GARRETT: How much of your expected output from the Solwara 1 mining site will Tongling take?

ROGERS: Approximately one-point-one million tonnes per year. But we do have a tolerance of plus or minus 20 per cent variation allowed on that targetted delivery.

GARRETT: So is that expected to be all the output or just part of it?

ROGERS: It’s a significant element to the output. We’re targetting around one-point-three-million tonnes per year when we get into production so it is a significant element of our production target.

GARRETT: The price to be paid by Tongling will be based on the quality of the copper concentrate that it produces back in China. How much do you expect Tongling to be paid?

ROGERS: Look I can’t really comment on the value, this will ultimately be dictated by the commodity markets. But what I can say that securing this deal where the capital at Nautilus and its partners have to invest is limited to a guarantee amount of 11-and-a-half million dollars. That was a significant driver for Nautilus in negotiating this agreement but to minimise the amount of capital we had to put in, in order to extract value from the Solwara 1 product.

GARRETT: Now that 11-point-one million dollars, that’s going to go towards a plant that Tongling is building, is that correct?

ROGERS: The final decision hasn’t been made on building a plant. They’ll consider modifying an existing plant or building a plant, both of which can be done in the timeframe that we have left before we start production.

GARRETT: Just how much copper, gold or other minerals do you expect Tongling to produce as a result of this deal?

ROGERS: The expected amount once we reach peak production will be in the order of 60 to 75-thousand tonnes of copper per annum. And we would hope to realise value from around 150-thousand ounces of gold approximately.

GARRETT: This sort of mining is new and untested. How much competition did Tongling face to win this contract?

ROGERS: Quite significant, Nautilus conducted a global review of concentrated and smelters around the world. We narrowed the field down into Southeast Asia, and in fact there were three or four parties in the final run before we selected Tongling.

GARRETT: How soon is it likely to be before the Papua New Guinea government starts to see some of the revenue from this deal?

ROGERS: As soon as we move into production we will have to pay a royalty to the Papua New Guinea government, so they’ll start receiving that very soon after production starts. And of course the Papua New Guinea government is a 30 per cent partner in the project, and so they’ll see proceeds from the sale agreement with Tongling as well.

GARRETT: One-point-one-million tonnes a year is a substantial quantity of material. How will you transfer that from your seafloor mining site to ships bound for China?

ROGERS: The current plan is to transfer the material from the production support vessel into barges. The barges will move the material into a stockpile area in Papua New Guinea, in the port of Rabaul in fact, and once there they’re to be uplifted every seven to eight days by bulk carriers and taken off to China for the concentration and treatment process.

GARRETT: What risks do you see in terms of spillages and other environmental impacts as a result of that process?

ROGERS: We have a robust set of procedures that we’ve put in place and are developing with our newly formed operations group. We’ll be adopting world’s best practice in everything that we do, and we’ll be minimising the opportunity for spillage of materials during the process. One of the positive benefits of the arrangements with Tongling is that there’s very little waste at the end of the treatment process. We’re able to roast the material in China producing sulphuric acid and gold and remaining material can actually be sold as iron ore fines or for cement manufacturing. So the actual waste at the end of the day is going to be very, very small. This course is consistent with our environmental commitments to minimise impacts to the environment.

GARRETT: The actual mining site of course is very much out of sight of the general public in Papua New Guinea. Will there be independent monitoring of the mining process?

ROGERS: In fact the government through the Mineral Resources authority will have observers onboard the vessel at all times. We have obligations to record everything that we’re doing using video cameras. And there will be quite considerable transparency to what’s actually happening on the seafloor.

GARRETT: It’s still just over a year before you begin commercial mining. What hurdles do you need to get over before then?

ROGERS: The key challenges for us now are to maintain the perfect progress. Our target is to move into production by the end of next year. And as such we have to complete the build of our equipment, integrate it onto the production support vessel, test all of that equipment, and then move into a commissioning program in Papua New Guinea itself.

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