Monthly Archives: July 2012

South Korea wins right to mine Indian Ocean


South Korea said on Monday it has won the exclusive right to exploit a deep-sea mine in the Indian Ocean that could produce more than $300m worth of minerals a year.

The 10,000-square kilometre site contains hydrothermal vents that could yield metals including gold, silver, copper, zinc and lead, the maritime ministry said in a statement.

The general assembly of the International Seabed Authority last Friday voted to give Seoul the exclusive right to develop the area – around 2,500 kilometres southwest of Sri Lanka – from 2013 to 2027, it said.

The ministry estimated production would reach about 46,000 tonnes, worth $320m, a year.

“This is the result of aggressive efforts by the government and related agencies on investment, research and international diplomacy… amid fierce global competition to secure resources,” it said.

Hydrothermal vents are areas on the ocean floor where water heated by volcanic activity under the seabed gushes out.

Seoul officials and scientists explored the area from 2009 to 2011.

The resource-scarce South has strengthened efforts in recent years to secure raw materials overseas. Including the new mine, it has the right to develop four deep-sea mines totalling 112,000 square kilometres.

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Newcrest output sinks 15% in gold’s record-breaking year

 “Hidden Valley is not where we need it to be – every component of that mine needs to improve”

Rhiannon Hoyle | The Wall Street Journal

Heavy rain and operational difficulties pushed Newcrest Mining’s annual gold output 15% lower, keeping Australia’s largest gold producer by market value from capitalizing fully on a year in which the precious metal’s value climbed to record highs.

Newcrest, which twice revised its production guidance lower during the year through June 30, grappled with bad weather at its Papua New Guinea mining operation as well as a prolonged plant shutdown. A deluge in Australia’s New South Wales state late last year also triggered a landslip at its Cadia open pit, halting mining and temporarily restricting access for heavy vehicles.

“Operations have been put under stress, and there have been hiccups along the way, as miners have tried to capture the rising gold price,” said Tim Schroeders, portfolio manager at Pengana Capital. “This is not a Newcrest-specific issue, though, and is more symptomatic of industry trends globally.”

The spot price of gold rallied to a record high above US$1,920 a troy ounce last September on Europe’s debt crisis and concerns over the U.S. economic recovery. Rising prices prompted miners to ramp up output of the precious metal, widely seen by the market as a safe haven investment.

Newcrest said its full-year production totaled 2.29 million ounces–close to the mid-point of its revised guidance of between 2.25 million and 2.35 million ounces.

Last August, however, the miner had aimed to produce as much as 2.925 million ounces, following total output of 2.7 million ounces in its 2011 fiscal year.

Investors welcomed the production results, which analysts said were largely in line, or slightly above, market expectations. At 0339 GMT, shares in the miner were up 3.1%, outperforming an 0.5% rise in the S&P/ASX 200.

“We believe that Newcrest’s share price has been factoring in a worst-case production and cost scenario for all of its assets for some time,” Macquarie said in a note.

Shareholders are likely to welcome a recent uptick in production, which suggests momentum may be building, said Mr. Schroeders. Gold output rose to 587,310 ounces in the final quarter, up from 532,237 during the previous three months.

“Its fortunes, though, hinge on the gold price and whether it can make continued improvements over the next 12 months,” he said.

Chief Executive Greg Robinson declined to provide much detail on the miner’s expectations for the year ahead–an update on which will be given in next month’s financial results. He said Newcrest is, though, sticking with its 2013 guidance range of 700,000 ounces to 900,000 ounces for its Lihir mine, as announced in April. Lihir produced 604,000 ounces last year.

“We will have a broad range because of the commissioning [of a new processing plant at Lihir]. But we expect more reliability, and we have definitely seen that in the [last] quarter,” Mr. Robinson said in a conference call with analysts.

The miner also retained a forecast that its Cadia Valley operations will produce up to 500,000 ounces of gold, compared with 473,000 ounces last year.

Mr. Robinson said there needed to be improvements at Newcrest’s operations in the year ahead, singling out its Hidden Valley mine in Papua New Guinea.

“Hidden Valley is not where we need it to be–every component of that mine needs to improve,” he said.

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Filed under Financial returns, Papua New Guinea

NAMIBIA: Seabed phosphate mining threatens marine life


Two Australian companies, Minemakers and UCL Resources, acquired an 85% share in the Sandpiper project, which plans to mine phosphate from the sea-bed near Walvis Bay.

They plan to dredge five million tonnes a year from the sea-bed for 20 years. The prospect has environmentalists and critics up in arms. They claim mining phosphate from the ocean will destroy the marine environment and jeopardise the fishing industry. In Australia the Government of the Northern Territory considers all seafloor mining such a threat that a moratorium has been imposed until 2015, while further environmental and risk assessments are conducted.

Marcia Stanton, Director of the Earth Organisation Namibia, says,

“Marine phosphate mining has never been done anywhere else in the world and Namibian coastal waters are now facing the threat of being the testing ground. These concerns have not yet been adequately considered in Namibia.”

She says to date, public and scientific consultation as part of the Environmental Impact Assessment process has been inadequate and not in accordance with Namibian law, International Seabed Authority guidelines, or International Best Practice standards. The Environmental Commissioner of Namibia has also asked for more consultation before consideration of such assessments.

Marine scientists and international experts have expressed concern that the dredging of 3-meters of the sea floor, will cause destruction to the basic building blocks of the marine ecosystem (benthos layer). Scientists are also concerned about the release of hazardous substances, including radioactive materials, which will directly kill off wildlife and cause many commercial fish stocks to be unmarketable and not sale quality.

Stanton says,

“It is extremely important for serious studies to be conducted on all of these major impacts.”

According to Namibian law, damage to the environment must be prevented and activities which cause such damage must be reduced, limited or controlled. Stanton says,

“The fishing industry alone brings in N$4.8 billion dollars in foreign currency and directly employs 13 380 people. Simply put, in no way mustan unsustainable short-term option be adopted at the expense of the sustainable long-term option.”

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FIJI: NJV launches iTaukei language website

Elenoa Turagaiviu | Fiji Broadcsating Corporation

The Namosi Joint Venture (NJV) has launched its i-Taukei language website – becoming one of the first institutions in the country to have a fully fledged website in the native Fijian language.

The website has the same content and complements as NJV’s English language website

Country Manager Greg Morris says it is important that landowners and the Fijian people have access to reliable and accurate information about the project in a language they best understand.

A highlight of the website is the Frequently Asked Questions section where queries and questions that have been raised with NJV are answered and clarified.

NJV says it welcomes feedback from the public with regards to information available on the site.

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No experimental seabed mining for Jamaica

By Petre Wiliams-Raynor | Jamaica Observer

Jamaica is unlikely to join the global race for nature’s treasures at the bottom of the ocean, including nickel, copper and cobalt anytime soon.

These are found in deposits of polymetallic nodules and sulphides, formed over millions of years, on the ocean’s floor.

“Jamaica has no plans at the moment to enter into deep seabed mining (DSM), but through its participation in the finalisation of the mining codes and regulations, it is ensuring that the interests of SIDS (small island developing states) are taken into account in the event that there is further interest on our part in this activity,”

said the Ministry of Foreign Affairs and Foreign Trade, in a written response to Environment Watch queries.

The ministry said that Jamaica is, instead, interested in taking advantage of the International Seabed Authority (ISA) Endowment Fund.

The fund — which received an initial investment of US$3 million — is designed to promote collaborative marine scientific research in the international seabed area.

It does so through its support of qualified scientists and technical personnel from developing countries in marine scientific research programmes and activities. It also provides opportunities for them to participate in relevant initiatives.

“What is of more immediate relevance (than DSM) is the potential for Jamaica to be involved in scientific research afforded by activities in the deep seabed… Regrettably, not many persons from Jamaica or the wider Caribbean have expressed an interest in this type of activity, which would be useful ‘groundwork’ as it were, if Jamaica were to become involved in deep seabed mining,” the ministry said.

Still, it said the University of the West Indies is playing an active role as a member of the island’s delegation to the annual sessions of the ISA — one of which is currently underway in Kingston, where the Authority has its headquarters.

“But,” the ministry said, “there is scope for the involvement of more institutions as well as for more tertiary-level students to pursue interests in issues relevant to the law of the sea, such as environmental engineering, maritime sciences and so on so as to take advantage of such opportunities.”

Meanwhile, other small islands — through partnerships with private companies — are seeking to get involved in DSM, which many believe could be worth billions, given the untapped potential of the ocean to give up its metals.

Counted among them, according to information from the ISA website, is the Republic of Kiribati in the Pacific Ocean. Kiribati was one of the five new applicants for seabed exploration who made oral presentations to the Legal and Technical Commission of the ISA on July 10. The application came through Marawa Research and Exploration Ltd, a state enterprise of that country.

The other applicants were UK Seabed Resources Ltd, which was sponsored by the Government of the United Kingdom of Great Britain and Northern Ireland; G-TECH Sea Mineral Resources NV, sponsored by the Government of Belgium; the Government of the Republic of Korea, and IFREMER, sponsored by the Government of France.

The applications are being considered by the Council of the ISA, which opened its 18th session in Kingston last Tuesday. If approved, they will bring to 17 the number of active contracts issued by the ISA.

It was not immediately clear why Jamaica would not pursue partnerships with a private organisation to engage in deep seabed mining, which is a hugely expensive venture, requiring specialised equipment and technical expertise.

Meanwhile, the ministry stopped just short of saying whether it shares the environmental concerns of groups, such as the Deep Sea Mining Campaign, about DSM.

“Given our intrinsic link to oceans and the sea, through our location in the Caribbean Sea, Jamaica has a vested interest in ensuring that any activities in these areas, including the deep seabed, are undertaken in an environmentally sustainable manner,” the ministry noted.

“Part XII of the Convention does speak to the Protection and Preservation of the Marine Environment which in Article 192 indicates that States have the obligation to protect and preserve the marine environment,” it added.

In addition, it said that the island has a “robust legislative framework which addresses the various issues that can result from deep seabed mining”.

“Jamaica implemented the Maritime Areas Act and the Exclusive Economic Zone Act (1991) which cover most of the aspects of the Convention. In addition, some aspects of the Convention are covered in the Shipping Act and in the Fisheries Law,” the ministry said.

Of concern to groups, such as the Deep Sea Mining Campaign — which last October released the report Out of Our Depth: Mining the Ocean Floor in Papua, New Guinea — is the potential for the destruction of the “habitat for thriving communities of organisms” including some 500 species, which, up to a few years ago, were unknown to man.

Notwithstanding its lack of interest in pursuing deep seabed mining, the ministry said that Jamaica’s participation in ISA Assembly meetings is critical.

“…Given that the provisions of the Convention (United Nations Convention on the Law of the Sea) — the constitution of the ocean which safeguards and designates the resources of the Area as the “common heritage of mankind” — it is important for Jamaica as a small island developing state, to maintain an active interest in these issues,” the ministry said.

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Indochine Mining ‘hits heights in PNG’

Proactive Investors

Indochine Mining says it is currently discovering high grade gold in almost every drill hole from drilling at the company’s Mt Kare gold silver project in Papua New Guinea.

They say comparisons are odious, however intervals of almost an ounce per tonne gold are strikingly similar to the initial grades at the nearby highly controversial Porgera, one of the world’s Top 10 gold mines.

Porgera is a 28 million gold ounce mine and owned by Barrick Gold.

Highlights of drilling include; 53.9 metres at 8.2 grams per tonne (g/t) gold and 18g/t silver from 30 metres, including 13 metres at 29.0g/t gold and 19g/t silver; and 35 metres at 8.1g/t gold and 19g/t silver from 11 metres.

The importance of the continued flow of discoveries is that they provide the basis for the Pre‐Feasibility Study due for completion at the end of August – with the public release towards the end of September after discussions with the regulatory authorities in Papua New Guinea.

Considering these intersections are just from the ninth and tenth drill holes – the results from an additional 40 holes are certainly highly anticipated – which will be delivered to the market in coming months.

These holes are part of a much broader campaign of over 400 diamond holes for around 67,000 metres, which has helped to delineate a JORC Resource of 28 million tonnes at 1.9g/t gold for 1.8 million ounces and 20 million silver ounces, with a higher grade zone of 3.7 g/t gold for 700,000 ounces.

Comparisons to Porgera, a 28Moz mine

Barrick’s 28 million gold ounce Porgera mine is one of the tenth largest gold mines in the world, having produced 17 million ounces in the past 21 years.

Another plus for Indochine, is that Mt Kare is hosted in the same host rocks / ore types as Porgera.

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Filed under Exploration, Papua New Guinea

Stevie Nion Marengo’s PNG country manager

Post Courier

Marengo Mining Limited has appointed Stevie T.S. Nion as PNG Country Manager, as it moves towards possible development of its Yandera Copper-Molybdenum-Gold Project in the country

Mr Nion is a geologist by profession and has more than 30 years experience in the PNG mining industry. During that time he has held a number of senior government positions, including Chief Government Geologist and Director of the Geological Survey, Deputy (and Acting Secretary) with the Department of Mining, and since 2007, inaugural Deputy General Manager – Minerals for Petromin PNG Holdings Limited. He holds a Bachelor of Science (Geology) from the University of PNG, a Master of Science (Geology) from Sydney University and a Master in Management Studies from the PNG University of Natural Resources and Environment.

Commenting on Mr Nion’s appointment, Marengo’s Managing Director and Chief Executive Officer Les Emery, said “we are very pleased to have Stevie join the Marengo management team at a crucial phase in the Company’s development, as it moves to complete the Feasibility Study on its Yandera Project. With extensive experience in the PNG mining industry, particularly as a senior public servant in the mining sector, Stevie will add a new dimension to the skill base of Marengo’s management,” he added.

Reporting to Marengo’s MD, Mr Nion is based in the Company’s recently opened office in Port Moresby. He will be responsible for managing Marengo’s corporate affairs in PNG, including progressing matters with National and Provincial Government departments, and agencies, strategic partners, and other stakeholders.

The opening of an office in Port Moresby complements Marengo’s other PNG bases at the Yandera Project and Madang, both located within the Madang Province.

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Filed under Mine construction, Papua New Guinea