Ramu mine MCC pays up for cost blow out in Australia

MCC Contributes $858 Million to Blow Out at Citic Iron Ore Mine

Elisabeth Behrmann | Bloomberg

Metallurgical Corp. of China Ltd., the contractor building the world’s largest magnetite iron ore mine for Citic Pacific Ltd. (267) in Australia, said it would contribute $858 million after construction costs blew out.

Metallurgical will provide the money “to drive the project forward,” the Beijing-based company said late yesterday in a statement. Citic Pacific noted the comment in a separate statement, saying an independent assessor will determine the costs incurred by Metallurgical and “render an opinion on whether they were reasonable.”

Citic Pacific and Metallurgical, known as MCC, have been in dispute over delays and cost increases at Sino Iron, with Citic announcing last year a more than fourfold blowout to the budget to $8 billion. MCC said in a separate statement that the provision will result in a 3.1 billion yuan ($498 million) charge in its 2012 accounts, contributing to a 7.2 billion yuan annual loss.

“The nature of most large-scale projects usually results in certain claims by both the contractor and his employer and these are typically resolved at the completion of the project,” Citic Pacific said in its statement.

The first line at Sino Iron is now producing iron ore concentrate, with the first shipment expected next month, Citic Pacific said. The company aims to complete line two by May. Output was originally slated to begin in the first half of 2011, shipping to steel mills in China. Citic Pacific blamed difficulties in planning, construction and transportation for the increase in costs and delays.
Palmer Dispute

Citic Pacific, controlled by China’s biggest state-owned investment company, rose 2.6 percent to HK$12.84 yesterday, trimming its loss in the past 12 months to 12 percent. MCC fell 1.1 percent, for a decline of 4.4 percent in the past year.

Australian mining magnate Clive Palmer sold the rights to the project to Citic Pacific in 2007 for $200 million. Palmer, who is also developing coal assets in Australia, stands to receive monthly royalty payments from the operation. That relationship has since soured, with Citic Pacific last year winning an injunction to stop Palmer’s Mineralogy Pty Ltd. from terminating mining right and site lease agreements. A court hearing is expected to take place this year.

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Xstrata still delaying over Frieda River as it looks for an exit

Xstrata looks for Frieda River partners

Gynnie Kero | The National

XSTRATA Copper continues the process of assessing the interest of a number of potential investors in the US$5.6 billion Frieda River project in East Sepik, according to an Xstrata spokesperson

“We have confidentiality agreements in place and are unable to mention the number of interested parties,” she said.

Studies on the Frieda River project have identified a potential operation with an estimated capital cost of US$5.6 billion, according to Xstrata’s feasibility study and 2012 study programme report.

According to the spokesperson, the project has an estimated annual production profile of 204,000 tonnes copper and 305,000 ounces of gold, over a 20-year mine life.

“The Frieda River Project is owned in joint venture by Xstrata Frieda River (81.82%) and Highlands Pacific (18.18%),” she said.

“We delivered our feasibility study and 2012 study programme report to our joint venture partner (Highlands Pacific) last month (December 2012).

“The extended 2012 study outlines a project with an estimated initial capital requirement of US$5.6 billion, with a 20‐year open pit mine life capable of producing on average an estimated 304,000 tonnes copper and 451,000 ounces of gold in its first five years.

“A decision has not yet been taken to start mining at the Frieda River project and in 2013 we will progress further technical studies associated to infrastructure for the potential mine.

“Following that, a decision to start mining would depend on the identification of a sustainable profitable project (final execution model), government approvals of the environmental impact statement (EIS), successful completion of land issues, compensation and resettlement agreements, and corporate approvals.”

“At this stage we do not have an expected date for the project to start production. However once construction commences the proposed construction period is approximately four and a half years.

“This year (2013), we are conducting additional infrastructure studies, including a study programme focused on more efficient waste management and associated infrastructure that could potentially reduce the initial capital to US$5 billion.

“We will also continue our comprehensive community affairs activities, environmental baseline monitoring, and of course engagement with the various levels of government to discuss the outcomes from the recently-delivered feasibility study and 2012 study programme.”

Foreigners look to profit from PNG resources

Overlooked Opportunity For Emerging Markets Bulls

Brendan Metcalfe | Seeking Alpha

Papua New Guinea is an investment opportunity often overlooked by emerging market bulls. What do they commonly look for? High growth, steady government, abundant resources.

The economy of PNG is steady and growing quickly on the strength of the agriculture, mining, and oil/gas industries. The country is one of the worlds most unexplored and this thought to still be home to numerous undocumented plants, animals, insects, tribes, and languages.

This underdeveloped economy is ready for growth and appears surprisingly open to foreign investment. Like every nation on Earth, there are problems (which I will outline), but what makes investment in PNG special is the how surprisingly overlooked and underdeveloped the country and economy is despite the vast natural resources and economic and political stability.

Pros

GDP Growth
PNG’s GDP was 16.9 Billion in 2011, a growth of 8.9% (12th in the word according to the CIA) from 7.8 and 6.1 percent in 2010 and 2009 respectively. The Debt-to-GDP is a surprisingly low 22.9%. The government is pro-investment in a country that has good reason to want to protect its incredible wealth of natural resources. ExxonMobil recently led an approved 16 billion dollar liquefied natural gas deal.

Chinese investment is “just beginning” according to The Australian, yet state-owned Chinese firms have already broken ground in numerous mining projects including the 1.4$ Billion dollar Ramu nickel project. Malaysian logging companies export to China. Canadian company Talisman Energy is making bets on PNG. The Industrial Production Growth Rate, as measured by the CIA World Factbook, was 10% in 2011. The country is open to development and GDP growth is already excellent.
Sri Lanka is the other country besides PNG revised up 1% from previous projections. PNG was revised up 2.2%.

Geographic Positioning
PNG is neighbors with the Philippines, Japan, Malaysia, and Indonesia (whom PNG shares its sole land border with). Long-term support in trade, defense, and diplomacy is near-guaranteed from neighbors and fellow Commonwealth members Australia and New Zealand. Apmple trade can be expected from all neighbors as well as Russia, India, China. It is clear that Papua New Guinea is well positioned to benefit from rising number of accessible creditors and trading partners in Asia.
Unexploited Resources

The Wall Street Journal writes:

“once a frontier region for exploration, Papua New Guinea has been transformed into a playground for the energy industry’s big beasts seeking gas reserves that can be developed and shipped to Asia’s booming economies.”

The country is known to many mining investors and has huge proven oil and natural gas patches. Papua New Guinea is also still largely unexplored with oil and gas in mind, and more opportunities are surely undiscovered.

PNG also has one of the largest remaining tuna stocks in the world, and is an exporter of crayfish and prawns. Most of PNG is covered in dense rainforest that ranks as the world’s third largest. This is extremely fertile land. The agriculture sector is unsurprisingly subsistence based, and more than most, but we can see this as an opportunity to introduce advanced farming equipment and techniques. The agriculture sector is trending up and the citizens of PNG are set to benefit from their knowledge and expertise; according to the CIA, 85% of the working population works in agriculture.

Commonwealth
The country is one of the few remaining commonwealth realms with considerable land mass alongside Canada, Australia, and New Zealand. One could point to this as a stamp of stability. It is important to note that PNG consists of almost a thousand languages and many ethnic groups. The government is a great unifying element the people need to lead Papua World Guinea into the world economy.

Cons That Aren’t Really Cons

Land issues
Currently 97% of PNG land is on ‘protected reserves’ of hundreds of fragmented tribal communities, but this is changing. The hundreds or thousands of languages and ethnic groups in PNG are rapidly disappearing. People are moving to cities. The tribal land system is written in the PNG constitution, and some foreigners have become entagled in land disputes. The tribal land system, for good or bad, is showing signs of break down or compromise. According to Greenpeace, land is being signed over to investors with relative ease on 99 year leases. Offshore concessions are accessible.

High Crime Rates
High crime rates land the capital city Port Moresby the 139th out of 140 most “unlivable cities” according to The Economist. The government isn’t spending a whole lot of money on infrastructure or relieving social ills, which is good or bad depending on the school of economics you adhere to. PNG is actually paying off its defecits. After a period of sustained foreign investment the improved infrastructure, job opportunities , and standard of living should substantially lower crime rates. Should a stable emerging market be in leagues with the countries below?

Inflation Rate
Although inflation was 8.4% in 2011, The World Bank suggested in a report on PNG the same year that “PNG’s inflation has shifted to being domestically-driven, caused by capacity constraints in the face of the large increases in demand, in contrast with the historical pattern of inflation outbreaks being due to rising import prices.” The nation’s currency, the Kina, is also making a consistent and notable rise in value against the American dollar.

Where to Invest
PNG is home to possibly the most rural population in Asia (at 82%) and as more people move to cities there is a need for residential housing, grocery stores, and other service sector opportunities. In energy we can get direct exposure from InterOil (IOC). PT Telekomunikasi Indonesia (TLK) is taking stakes in firms outside Indonesia, and could have good reason invest in its land neighbor. Mining access on the public markets include Australia-based firms like Highlands Pacfic, Peabody Energy Australia, and international firms Papua Mining PLC and Papuan Precious Metals Corp. ExxonMobil (XOM), Talisman Energy (TLM), and Xstrata also have natural gas rights in PNG. New Guinea Energy is more direct. The Papua New Guinean Kina (PGK) could be an option as well, and has made consistent gains against the US dollar (42% over 5 years).

Local agriculture a better option than empty promises from foreign miners

Agriculture offers enterprising Papua New Guinean’s a better future than the empty promises made by greedy foreign miners…

On the ‘kaukau trail’ from Goroka

Malum Nalu | The National

On Tuesday last week, January 15,  I met my good mate, Goroka farmer Tom Solepa, who had just completed selling 156 bags of kaukau (sweet potatoes) at Gordon Market in Port Moresby for K150 each.

Through him, last Friday, January 18, at Gordon Market, I was able to meet some of the growers and traders involved in the intricate kaukau trade which starts in the Highlands, comes down to the port city of Lae, and is then shipped to Port Moresby.

Bags of kaukau being unloaded near Gordon Market after being shipped in from Lae.- Pictures by M. Nalu

Solepa, a graduate economist who gave up a well-paying government job some years ago to return to the land, will use the more than K7, 000 he earned in just two days to pay school fees for his two children who are attending Goroka International Primary School.

He was very proud, as an executive of Highlands Farmers and Settlers Association (HFSA), to have brought his kaukau all the way from Goroka via Lae to Port Moresby.

“It takes courage, patience, to bring our kaukau to market,” Solepa says.

“As a person who has been trying to promote farmer issues, this gives me a lot of satisfaction.

“I want to tell our people that money is on the land.

“The returns are very good.”

Solepa, 38, from Meteyufa village outside Goroka in the Asaro Valley, says kaukau is a “winner”.

“I see the kaukau trade as a big business,” he explains.

“You bring in kaukau from rural areas to urban areas.

“In Goroka, we do sell the kaukau we grow; however, we feel that we can make better money if we sell in Lae or Port Moresby.

“We stopped growing coffee a long time ago.

“It takes us just three months to for kaukau, from growing to harvesting.

“In a year, we make four harvests.

“If we sell 60 bags, we can make up to K11, 000.”

The process, however, can be expensive, as Solepa has had to pay people to tend his gardens, harvest and bag the kaukau, carry them to roadside, road transport to Lae, sea transport to Port Moresby, and several others.

He has also had to pay for his airfares to and from Goroka.

But true to form, Solepa reaped what he sowed, and what he had earned from this latest kaukau sale will go towards the education of his two children at international school in Goroka.

“My kids are at international school so this money is for their school fees,” he said.

“I pay K5, 000 per child per term, so this money will help me a lot.”

Last Friday, Solepa took me to a house opposite Gordon Market, owned by an Eastern Highlands family, which is used as a storage facility for growers from Goroka to sell their kaukau and vegetables in bulk.

Bags of kaukau and vegetables from Eastern Highlands province being stored open-air next to Gordon Market because of lack of proper storage facilities for growers.

Woman trader, Masam Kulo, lives in Port Moresby and sells kaukau that her brother sends in from Goroka.

“When there is plenty of kaukau, we sell a bag for K120 or K130, but when there is a shortage, we sell for K150, K160, or K170,” she says.

“Our customers are from the smaller markets around Port Moresby, who buy in bulk from us and resell.

“When there is an oversupply, we make a loss.

“When there isn’t much kaukau around, we make a profit.”

Another woman trader, Rose Goiya, is blunt in her criticism of government for lack of support by way of freight subsidies and vegetable storage facilities.

“Farmers are the backbone of the nation but we get no support from the government,” she says.

“They give support to other industries but not this.

“There should be proper storage facilities and assistance with transportation in place.

“The department of Agriculture and Livestock doesn’t support us in any way.

“This is an industry with a lot of potential but there is no support from the government.”

Apart from thekaukau growers and traders, there are also those involved in vegetables.

Janet Mose buys bags of cabbages from farmers in Eastern Highlands and transports them at her own cost to Port Moresby, where she sells the cabbages wholesale to Port Moresby buyers.

Janet Mose with her bags of cabbages.

“I buy my cabbages from farmers in Goroka and I pay for the cost of bringing it over to Port Moresby,” she says.

“I pay K50 for a bag of cabbages in Goroka and sell it here in Port Moresby for K150 a bag.

“Sometimes, business is good, but at other times, the cabbages just rot away from not being bought and because of proper storage facilities.”

Patricia Koike, from Iufi Iufa village in the Asaro Valley, grows her own carrots and brings them over to Port Moresby for sale.

Patricia Koike (second from right) with her bags of carrots.

“There is no storage area so our produce can be ruined by sun or rain,” she says.

“The government should look seriously at this and set up a place for us to store our vegetables and sell in bulk.”

Pisin Benjamin, whose family lives in the house used by Eastern Highlanders as a storage area, says it was established by his late father Benjamin Tehe to help growers from their province.

In fact, it started off quite well and even had a cold storage facility, which has eventually broken down.

Pisin Benjamin (second from left) and other family members at their house in Gordon which is used by Eastern Highlanders as a kaukau and vegetable storage area.

“My father established this facility to help the farmers of Eastern Highlands,” he says.

“This has become a wholesale vegetable shop for Eastern Highlanders.

“In 2007, we made a proposal to the Department of Agriculture and Livestock to set up a cold storage facility, however, this was not enough as there were too many vegetables coming in.

“We charge K3 per bag to store in our yard from arrival to sale.

“We have so much kaukau and fresh vegetables from the Highlands coming in

“We have 300-400 bags of vegetables coming in a week, and 400-500 bags of kaukau.

“These are sold out!”

Another large landslide in Hela for Exxon LNG project

Radio New Zealand

A large landslide has occurred at the new Komo airfield in Papua New Guinea’s Hela province.

An estimated 5,000 to 7,000 cubic metres of earth material slipped from an area of the airfield under construction earlier this month.

No injuries have been reported.

The airfield, which is nearing completion, is one of the major infrastructure developments linked to Exxon Mobil’s large Liquefied Natural Gas project in PNG.

The area, in the resource-rich Highlands region, experiences a large amount of rainfall around this time of year.

The landslide occurred near the site of a massive landslide in Tumbi that buried a village and killed at least 25 people in January last year.

The Tumbi landslide was linked by some local communities in Hela to a nearby quarry used for the LNG Project although Exxon and its project partners deny that the quarry operations caused the landslide.

Triple Plate Junction shares fall following Papua New Guinea joint exploration update

Sharecast

AIM-listed gold exploration company Triple Plate Junction has unveiled an update on its Papua New Guinea project prompting a sharp fall in its shares.

The company announced that Newmont Ventures, a subsidiary of Newmont Mining Corporation, would not be allocating a development budget to the joint venture’s Morobe project in Papua New Guinea for 2013.

The company announced that Newmont had decided to terminate its search for large bulk tonnage gold/copper porphyry systems at the JV property, and that Newmont was in the process of exploring its options in consultation with Triple Plate Junction. 

Triple Plate Junction stated that following its own exploration and that conducted by Newmont on behalf of the JV, it had identified “a very significant amount of related data” which Triple Plate Junction was evaluating in order to determine whether there were areas within the JV territory which could be appropriate and suitable for Triple Plate Junction.

The group said that it had found areas containing high-grade targets that Newmont had discounted as too small for their requirements but which could be of “great interest” to the company to develop. 

It stated that it had engaged the services of an experienced team of geologists to commence the process of reviewing project data and added thart the anticipated report would be delivered by the end of February 2013. 

The company stated that it is also in discussions with Barrick Gold Corporation about their future intentions for the joint venture at Wamum, where it said that exploration work over the last two years had been “very limited”.

Triple Plate Junction’s share price was down 12% to 0.55p at 09:52 on Friday morning.

Another Mystery at the Ocean’s Depths: Seabed Mining

Carla O. García Zendejas* | The Ocean Foundation

I am flying at an altitude of 39,000 ft. while thinking of the ocean’s depths, those dark places some of us first saw in rare and beautiful documentaries which introduced us to Jacques Cousteau and the amazing creatures and marine life we have learned to love and cherish throughout the world. Some of us have even been fortunate enough to enjoy the oceans depths firsthand, to gaze at the corals, while surrounded by curious schools of fish and slithering eels.

Some of the habitats which continue to astound marine biologists are those created by the hot eruptions from volcanic springs where life exists at extremely high temperatures. Among the discoveries made in researching the volcanic springs or smokers was the fact that the sulfurous mountains which formed from the eruptions created massive deposits of minerals. Highly concentrated amounts of heavy metals such as gold, silver and copper accumulate in these mountains created as a result of the hot water reacting to the freezing ocean.  These depths, still alien in many aspects are the new focus of mining companies throughout the world.

Modern mining practices rarely resemble the idea most of us have about the industry. Long gone are the days when you could mine for gold with a pick axe, most known mines around the world have been depleted of the ore which was readily available to be mined in this way. Nowadays, most heavy metal deposits which still exist in the ground are minuscule in comparison. Thus the method to extract the gold, or silver is a chemical process which occurs after moving tons of dirt and rocks which must be ground and then submitted to a chemical wash whose main ingredient is cyanide plus millions of gallons of fresh water to obtain a single ounce of gold, this is known as cyanide leaching.  The byproduct of this process is a toxic sludge containing arsenic, mercury, cadmium and lead among other toxic substances, known as tailings. These mine tailings are usually deposited in mounds in proximity to the mines posing a hazard to soil and groundwater beneath the surface.

So how does this mining translate to the depths of the ocean, the sea bed, how would the removal of tons of rock and the elimination of mountains of minerals existing on the ocean floor affect the marine life, or the surrounding habitats or the ocean’s crust? What would cyanide leaching look like in the ocean? What would happen with the tailings from the mines? The truth is that the school is still out on these and many other questions, albeit officially. Because, if we merely observe what mining practices have brought to communities from Cajamarca (Peru), Peñoles (Mexico) to Nevada (USA) the record is clear. The history of water depletion, toxic heavy metal pollution and the health consequences that go along with it are common place in most mining towns. The only palpable results are moonscapes made up of massive craters which can be up to a mile deep and more than two miles wide.  The dubious benefits proposed by mining projects are always undercut by the hidden economic impacts and costs for the environment. Communities throughout the world have been voicing their opposition to previous and future mining projects for years; litigation has challenged laws, permits and decrees both nationally and internationally with varying degrees of success.

Some such opposition has already begun in regard to one of the first sea bed mining projects in Papua New Guinea, Nautilus Minerals Inc. a Canadian company was granted a 20 year permit to extract ore which is said to contain high concentrations of gold and copper 30 miles off the coast beneath the Bismarck Sea. In this case we are dealing with a domestic permit with a nation to answer for the possible implications of this mine project. But what will occur with the mining claims held in international waters? Who will be held accountable and responsible for possible negative impacts and outcomes?

Enter the International Seabed Authority, created as a part of the United Nations Convention on the Law of the Sea[1] (UNCLOS), this international agency is charged with implementing the convention and regulating mineral activity on the seabed, ocean floor and subsoil in international waters.  The Legal and Technical Commission (made up of 25 members elected by the ISA council) reviews applications for exploration and mining projects, while also assessing and supervising operations and environmental impacts, final approval is granted by the 36 member ISA council.  Some countries currently holding contracts for exclusive rights for exploration are China, Russia, South Korea, France, Japan and India; areas explored are up to 150,000 square kilometers in size.

Is ISA equipped to deal with the growing demand in seabed mining, will it be capable of regulating and supervising the increasing number of projects? What is the level of accountability and transparency of this international agency that is charged with protecting most of the earth’s oceans?  We could use the BP oil disaster as an indicator of the challenges faced by a large well funded regulatory agency to oversea national waters in the U.S. What chance does a small agency such as ISA have to deal with these and future challenges?

Yet another issue is the fact that the U.S. has not ratified the UN Convention on the Law of the Sea (164 nations have ratified the convention), while some think that the U.S. does not need to be a party to the treaty to initiate seabed mining operations others disagree wholeheartedly. If we are to question or challenge proper implementation of oversight and environmental standards to avoid damaging the oceans depths, we will have to be a part of the discussion. When we are not willing to abide by the same level of scrutiny internationally we lose credibility and good will. So while we are aware that deep sea drilling is a hazardous business, we must concern ourselves with deep sea mining because we have yet to grasp the magnitude of its impacts.

* Carla García Zendejas is a recognized environmental attorney from Tijuana, Mexico. Her knowledge and perspective derives from her extensive work for international and national organizations on social, economic and environmental issues. In the past fifteen years she has achieved numerous successes in cases involving energy infrastructure, water pollution, environmental justice and development of government transparency laws. She has empowered activists with critical knowledge to fight environmentally damaging and potentially hazardous liquefied natural gas terminals on the Baja California peninsula, the U.S. and in Spain. Carla holds a Masters in Law from the Washington College of Law at American University. She currently serves as the Senior Program Officer for Human Rights & Extractive Industries at the Due Process of Law Foundation a non-profit organization based in Washington, D.C.

Curse or blessing of natural resources in Papua New Guinea

Patrick Nicholson | Caritas

“After washing in the stream, our faces became swollen and we developed a rash,” said Veronica Pili. She shows the red marks down her arms. The same spots cover the children.

Her village in the Highlands of Papua New Guinea sits high up a mountain, covered in thick forest and jungle. “We went to the local clinic, but they just told us we needed to go to the hospital. It’s a couple of hours away and we can’t afford the transport or the treatment even if we could reach there,” she said.

Caritas Papua New Guinea’s Director Raymond Ton leads the way to the stream that villagers say is polluted. It’s very murky, but what concerns him the most are the tiny bubbles he says are not normal.

Skin rashes aren’t the only problem facing Veronica’s village in Heights 1 in Hela.  She shows the stunted Popo fruit (a kind of Papaya) hanging limply off the branches. Their trees don’t produce any fruit anymore, their potatoes don’t grow and recent deadly landslides scar the mountainside. The villagers say that these problems began with the start of a project to extract natural gas from the mountain.

Heights 1 sits on top of a multi-billion dollar gas deposit. The Liquefied Natural Gas Project (LNGP) is a joint venture that began in 2010 to explore extracting that gas and exporting to overseas markets.

The initial investment phase is estimated to be US$19 billion. It is expected that over nine trillion cubic feet of gas will be produced and sold, generating over US$200 billion in its 30 years lifespan.

The Liquefied Natural Gas Project (LNGP) promises to transform the lives of the local with investment in infrastructure, jobs and services. Landowners will receive cash benefits once the gas starts to flow in 2014, such as royalties and equities. It will double the GDP of Papua New Guinea, improving the development prospects of not just the residents of Hela but the whole country where 4 out of 10 people live in poverty.

“We see the helicopters, the workmen and the construction but we don’t see any of the promised development,” said Beth.  Her village is typical of the Hela region, where only 40 percent of children go to school and under 40 percent of adults can read and write. The local midwife says most of the babies are delivered at home.  Child mortality is 15 percent higher in Hela than the national average.

People were expecting schools, hospitals, the dust roads to be covered with tarmac, electricity and clean water. “We were promised everything except a highway to the moon,” says one landowner.

Peter Don Topi is a clan leader. He has been negotiating on behalf of his clan with the LNGP company. He’s also works in construction and is a Catholic Catechist (he built the local church).  “At first people were filled with high expectations,” he said. “The discovery of oil and gas was a good thing. People were promised a much better way of life. Three years later, many of the good things haven’t happened.”

Instead of visible development, the locals are left just with their complaints about the environmental and social impact. “The teachers have all left for higher wages in the gas company,” said Peter Don Topi. “Because there are no teachers, the children have given up going to school. Wages have increased, but because the nearest bank is 5 hours drive away, people tend to spend it quickly. Even though alcohol is prohibited, they buy it illegally.”

A frequent complaint is that there has been little community awareness and relations in the villages. This has led to feelings of exclusion and frustration. When six young men from the village protested about the pollution in the water, they were arrested by police.

A coalition of aid agencies including Caritas Australia warned last year of continuing major concerns that need to be addressed around the LNPG. In their joint report The Community Good – Examining the Influence of the PNG LNG Project in the Hela Region of Papua New Guinea, the aid agencies recommended proper transparent landowner recognition, community outreach, livelihoods and skills training for residents,  education to be made a priority and the establishment of community planning committees

The report says LNGP should help take people out of the poverty they currently face. Whether it does so still remains to be seen. Papua New Guinea has a long and painful history of seeing its abundant natural resources exploited by the mining industry with little significant benefit to the majority of the population.

Many in Hela believe they will see their traditional way of life gone forever but will not receive their fair share of the profits. Suspicion that others are getting a better deal is rife. People fear corruption or favouritism. Tension is high, optimism low. “It’s a great blessing from God,” said a local priest. “It’s the people who are turning the blessing into a curse.”

Newmont ends PNG gold/copper search

StockMarketWire.com

Triple Plate Junction said joint-venture partner Newmont Ventures, is terminating its search for large bulk tonnage of gold/copper porphyry stems at their project property in Papua New Guinea.

Newmont, which is a unit of Newmont Mining Corp, is in the process of exploring its options in consultation with Triple Plate Junction.

In December last year, Newmont said it would not be allocating a development budget to the joint venture’s Morobe project for 2013.

Meantime, Triple Plate Junction said there was a significant amount of related data that it was evaluating in order to determine whether there were areas within the JV territory that may be appropriate and suitable for it.

“Of particular interest are areas containing high grade targets that Newmont have discounted as too small for their requirements but which could be of great interest to the Company to develop,” Triple Plate Junction said in a statement.

“Whilst recognising that the costs of exploring in Papua New Guinea are very high, Triple Plate Junction has engaged the services of an experienced team of geologists to commence the process of reviewing the project data,” it said.

“The anticipated report is expected to be delivered by the end of February 2013, and a further announcement will then follow.”

Triple Plate Junction also said it was in talks with Barrick Gold about their future intentions for the joint venture at Wamum, where exploration work over the past two years has been limited.

The Company was also awaiting the results of Newcrest Mining’s drill holes at Arie which have now been due for a mont

Troubled Hidden Valley under review

Blair Price | MIning News

NEWCREST Mining chief executive officer Greg Robinson expressed frustration with the performance of the Hidden Valley gold and silver mine in an analyst webcast yesterday.

This mine in Papua New Guinea is yet to hit nameplate capacity of 250,000 ounces per annum gold since it started production in September 2010.

A belt failure on the overland conveyor in March of 2011 was a big setback that forced the mine to rely on trucks to haul ore.

In the webcast, Robinson said Hidden Valley was “really our most disappointing asset”.

“Its production guidance is reduced for the year,” Robinson said, with Newcrest’s quarterly suggesting it would come in below guidance at 90,000oz for the financial year.

“The crusher installation at the top of the overland conveyer is two months late and that is a key for us to demobilise expensive trucks that are taking ore to the mills and we won’t really improve that production or that cost performance until that crusher’s in place and that overland conveyor is ramped back up,” Robinson said.

“So that is now scheduled for April and we expect the performance to improve in that last quarter.”

The CEO revealed that the mine’s half owner, Harmony Gold, was also scoping out remedies.

“Newcrest and Harmony are reviewing at the moment all aspects of this operation in the next month ahead and that includes the entire cost base, to really look at what we can do there in a shorter-term basis.”

Gold production at Hidden Valley was 20,649oz in the December quarter, which was a 6.7% drop from the previous quarter. The lower production helped push up cash costs 17% quarter-on-quarter to $A1584/oz.

Meanwhile, Newcrest’s Lihir gold mine in PNG produced 147,126oz in the December quarter at $649/oz – with production up 14% from the September quarter.

Newcrest shares dropped 1.3% to $23.66.