Mining dilemma for Fiji

Croz Walsh | Croz Walsh blog

Mining, and especially opencast and submarine mining, always raises issues that only specialists can answer. A new mine will create jobs, royalties for landowners, income for shareholders, tax revenue for government, and put more money in the local economy.  But the main benefactors are usually the mining companies that send much of their profits offshore, and the mine may also create costly environmental hazards that far exceed its benefits.

This is the dilemma that Fiji now faces as it seeks economic growth in a depressed global economy. To flourish, it cannot continue to rely on tourism, a recuperating sugar industry, and smaller contributions from remittances, garment manufacturing, timber and Vatukoula gold. The new focus on mining, if successful, will greatly assist Fiji’s economic recovery.

Namosi Copper and Gold

The Tui Namosi has called the proposed copper and gold mine in Namosi “a blessing” but environmental groups and some landowners are far from convinced. The Country Manager of Namosi Joint Venture, Greg Morris, assured the  Namosi Provincial Council yesterday that no cyanide or mercury will be used to produce copper concentrate from the ore. The project still requires landowner and government permission to go ahead, and the company is currently completing  project studies and an Environmental Impact Assessment report for landowner and government approval.

Meanwhile, villagers have already benefited by a $520,000 grant for students from Namosi and tikina Waidina students wishing to pursue tertiary education, from community and infrastructure development programmes paid for by the Joint Venture, and $200,000 have been paid to landowners this year during the exploration programme.  Two thousand jobs will be generated if the construction of the mine goes ahead.

Bua Bauxite Mine

The newly opened bauxite mine in Bua province, Vanua Levu, worked by Xinfa Aurum currently employs 150 permanent and and 250 seasonal workers. Landowners have so far received close to $20,000 a year for leases and $250,000 for compensation. Mine Manager Vanuaca Basilio says about $2,000,000 in revenue is generated into the economy every month.

Ba River Ironsands 

Yet another project is the dredging of ironsands from the Ba River that are to be shipped to Lautoka for export. Australian miner Amex Resources employs 300 people and is estimated to remain profitable for up to 21 years. Dredging will help minimise flood damage but the flip side is that it could also adversely affect fishing and the mangrove ecosystem.

Anti-government blogger Navosavakadua in FijiToday says the company’s 91% internal rate of return is “unconscionable” when 30% is the usual rates hoped for by companies investing in developing countries. He says “the illegal regime was practically giving away the nation’s resources.” I have no way of accessing his claim.

Gold at Wainivesi and Mt Kasi

Two further developments are the small gold mine at Wainivesi near Suva and the reopening of the Mt Kasi gold mine in Vanua Levu.

Whether any or all of these ventures turn out to be “blessings” is too early to call.


1 Comment

Filed under Environmental impact, Exploration, Fiji, Financial returns

One response to “Mining dilemma for Fiji

  1. pd12345

    There is another potential project that needs a mention — another dredging operation close Amex Resources Ba delta project, being in the Nasivi basin close to Tavua. Please see below from an international mining web site:

    Exception to the rule
    Michael Quinn, 21 June 2012

    FAIR to say proceeding with an IPO would not be the first recommendation given by brokers or corporate advisors in the current market environment, but sometimes opportunities present that supersede convention.
    That at least is what Dome Gold Mines would be arguing with its $A7 million IPO now underway.
    The initial opportunity is magnetite and gold from a Fiji delta, the Nasivi Delta, with dredging offering a potential relatively low capital and operating cost scenario. And given iron prices, very profitable.
    According to chairman Garry Lowder, a rough, back-of-envelope estimate, suggests an approximate $A100 million dredging operation could produce 1.5 million tonnes of magnetite product plus 1.5t of gold per annum worth $A200 million or so, offering project payback in as little as 12 months.
    ASX-listed Amex Resources is an obvious comparison, though Lowder notes Dome’s onshore advantage with the Nasivi Delta.
    All going to plan, Lowder believes an initial resource could be calculated by the end of the year, and then firmed up early in 2013 leading to completion of a feasibility study by the end of 2013.
    Assisting with the timely delineation of resources is a “sonic” drill rig, which according to Lowder provides for fast drilling and a sample quality akin to the core produced by diamond drill rigs.
    Taking advantage of the current strong iron ore price environment is the key, and Lowder said investors were interested.
    “People are definitely surprised by this and they can see the logic of it and can see we need to concentrate on this quickly, and very much in the short term, because the potential for value-add is very much there,” he said.
    “We’ve got some people showing interest in a big stake … becoming cornerstone investors … but the money is not in the bank until the money is in the bank.
    “Of course we get told it’s a bad time to be doing an IPO guys and [our answer is] yes it is, but we’ve got an exceptional story.”

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