Monthly Archives: March 2013

Interest in experimental seabed mining grows in the Pacific


Pacific Governments are being urged to protect their deep sea mineral resources, reports TVNZ.

Watch the news report:

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Filed under Environmental impact, Fiji, Financial returns, Papua New Guinea, Tonga

Fallacies of neoliberalism: Peter Munk of Barrick Gold in his own words

Sakura Saunders | IndyBay

This video is a speech from Barrick Gold’s founder and chairman, Peter Munk, at the company’s shareholder’s meeting in April 2010. The only thing that we added were the photos from Barrick’s operations around the world, to expose the delusional and misleading nature of Munk’s words.

The photos in this slide show were provided by the communities impacted by Barrick’s operations and journalists who have visited Barrick-impacted areas. If you would like to know more information about any of these photos, contact or visit The following is a summary of some of the images and their source.

Papua New Guinea: Several photos from this video come from Barrick’s Porgera mine in PNG, where several villages rest on a man-made island literally surrounded by an open pit gold mine and its expanding waste dumps. Villagers are seeking resettlement away from the mine site, where mine waste is dumped directly into the river system and mine security have been accused of shooting and killing locals for “trespassing.” In 2009, the Norwegian Pension Fund divested $200 million from Barrick Gold due to the riverine tailings disposal in PNG.

In 2009, Barrick housed police who – based on situation reports from Barrick Gold – burnt down an entire hillside of houses adjacent to their Porgera Mine. Barrick initially denied these allegations, remarking that it was their understanding that 50 temporary shacks were tore down. But, a follow-up Amnesty report showed evidence of at least 130 permanent houses burnt down, while villagers were beaten, harassed, and detained.

Tanzania: In addition to regular confrontations between mine security and locals, often ending in death, Barrick’s North Mara mine in Tanzania has had life-threatening pollution to which Barrick has responded with cover-ups and lies.

There have been two reports confirming lasting negative effects of a toxic spill in Tanzania that occurred last May. The latest report, commissioned by an interfaith committee in Tanzania and written by scientists from Norwegian University if Life Sciences and the University of Dar es Salam, found potential life threatening levels of arsenic around Barrick’s North Mara mine in Tanzania.

The study investigated the area around the tailing dam and the site of an accidental spill that occurred on May 9, 2009. Despite that fact that these areas were tested four to seven months after the spill, this study shows that the water remains toxic for human consumption and grazing use. 

According to Evans Rubara of the Christian Council of Tanzania, “Following the spill in May, 203 people became ill, 43 people died, and 1358 livestock died according to the Ward authorities in North Mara.” The photos featured of the Barrick responded to the report criticizing the integrity of the science, to which the authors responded with a detailed defense of their methodology.

The photos of the people with skin diseases in North Mara (a child and a woman) were taken after the 2009 toxic spill. According to Chacha O’ Wambura of Fundation HELP, the NGO that circulated the photos, “according to those people [in the photos], their neighbors, relatives and their local leaders the rashes developed after using the water.”

Other photos from Tanzania include shots from Barrick’s Bulyanhulu Mine in northern Tanzania. When that mine was operated by Kahama Mining Corporation, it was the scene of one of the world’s most infamous cases of mine-related violence. In August 1996, it is alleged that over fifty artisanal (small-scale) miners were buried alive in a pit by a bulldozer used to construct the mine (photos of the exhumed bodies are in the slide show). The move was seen as a tactic to clear the pits of an estimated 250,000 artisanal miners in the community. The mine was then sold to Barrick Gold in 1999.

Philippines: These photos (as well as many of the photos from Tanzania) were taken by Canada-based Photojournalist Allan Lissner, as part of his “Someone Else’s Treasure” Series.

In the Spring of 2006, when Barrick Gold took over Placer Dome, Inc. it inherited a law suit initiated by provincial authorities on the Philippine island of Marinduque, where 27 years of irresponsible mining by Placer Dome (1969-1996) had caused immense damage to the island of Marinduque and its people. Rather than settle the case, compensating Marinduquenos for lost livelihood and funding efforts to rehabilitate the damaged eco-systems, Barrick is waging an expensive and lengthy legal battle to avoid responsibility. Two rivers remain biologically dead from these disasters, and the mine pit has refilled with toxic water due to over a decade of raid.

The San Antonio Pit contains millions of tons of mine waste being held back by failing dams. According to a leaked document from Placer Dome’s own environmental consultants, “failure of the dam is a virtual certainty in the near term”. When the Philippine government ordered Placer Dome to make the necessary repairs, and clean up the mess from two previous dam failures or face criminal charges, Placer Dome responded by pulling out personnel from the Philippines without a word to anyone.

* note: Barrick does not mine or have plans to mine in Mindoro, Philippines. These photos, also taken by Allan Lissner, are meant to demonstrate the absurdity of Munk’s words, that there is no alternative to mining “development”.

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German research director charts future of undersea mining

Ivan Semeniuk | The Globe and Mail

The ocean floor is littered with hidden treasure including gold and other valuable metals that are in high demand on world markets. This is the undersea realm that most excites Peter Herzig, an economic geologist who supports responsible development of marine resources and who heads GEOMAR, one of the world’s largest centres for ocean research, based in Kiel, Germany.

No one has yet managed, on a commercial basis, to mine the seafloor for precious metals, though Toronto-based Nautilus Minerals Inc. has come close. It is currently pursing a deal to develop the Solwara 1 gold deposit off the coast of Papua New Guinea, which Dr. Herzig first explored about a decade ago. The company (which is not connected to Dr. Herzig) now says the project is on hold while it seeks to resolve a contract dispute with the PNG government. Meanwhile, exploration licences have been granted to various countries interested in mining the central Pacific for its manganese nodules – potato-sized lumps of metal that are widely scattered throughout international waters.

This week, Dr. Herzig was in Toronto to lay out the risks and benefits of mining the ocean for its resources. He also sits on an expert panel currently assessing Canada’s ocean science program. Dr. Herzig’s strong connections with Canada began in 1988 when he was a postdoctoral fellow at the University of Toronto. He spoke with The Globe and Mail about the coming era of ocean resource development as well as the state of Canada’s presence on and under the waves.

What’s the attraction in undersea mining for gold?
Metal prices have increased considerably and there is growing demand from Asian markets. Even thought the deposits are not particularly large, the metal concentrations are extremely high and at current prices, the deposits are commercially viable.

What about the impact to the seafloor environment?
I think it’s possible to do it in a sustainable way because the impact is focused only on the mining area.

How did the gold get there?
In volcanically dominated areas there are magma chambers that lie 2 or 3 kilometres below the seafloor. Seawater is pushed down into cracks near these chambers where it is heated to hundreds of degrees and chemically converted, becoming very acidic. As the water comes back up, it leeches gold, copper, zinc, indium (which is used to make flat-panel video screens), and other metals. At the seafloor the metals combine with sulphur and precipitate out of the water.

Where are the most attractive deposits located?
They are in the western to southwestern Pacific. That includes Papua New Guinea, Fiji, The Philippines, New Zealand, and also Tonga, where the government of South Korea has applied for a licence.

What do you say to people who argue that these deposits should be left alone?
My answer is that in a few decades we will have ten billion people on the planet and the pressure on the oceans for food, energy and resources will undoubtedly increase. We need to be able to reach a balance between the economic use of the oceans and the protection of marine ecosystems.

What about mining for manganese nodules?
That’s more of an ethical question. These things took millions of years to form. Do we want to go and take them? Manganese-nodule mining would mean disturbing something like 200 square kilometres per year, so you can imagine what would happen to the central Pacific. This would greatly influence biological communities and I think it would be totally unacceptable with current technology.

What’s your assessment of the state of ocean science in Canada?
It’s not that visible and it’s poor in terms of support. The people are excellent. The technology developed in Canada, such as ROPOS (Remotely Operated Platform for Ocean Science) is world class. But there was no host institution to run that, so it’s faded from view. And research vessels have never been a strength of Canada, which means researchers here have to go elsewhere. Given that you have the longest coastline in the world and that claiming jurisdiction in the Arctic is a big issue for Canada, I would say there is a lot of room for improvement.

What do you recommend?
I have suggested that Canada set up an ocean research institute. It probably would need $100-million to start and an annual budget of $50-million. And it would need one or two research vessels. The Canadian government has ordered the construction of patrol vessels for the Arctic and the hope of all my Canadian colleagues is that some of those would become research vessels.

This interview has been condensed and edited.

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Experimental seabed mining in the Pacific excites interest in Northern England

Region’s expertise sought for Pacific seabed venture

Yorkshire Post

THE company behind an ambitious project to harvest minerals from the bottom of the Pacific Ocean is looking for Yorkshire expertise to help it inject £40bn into the UK economy.

UK Seabed Resources, part of Lockheed Martin, wants Yorkshire suppliers to help get the project off the ground.

Stephen Ball, chief executive of Lockheed Martin UK and UK Seabed Resources, told the Yorkshire Post:

“We are looking for Yorkshire mining engineers to develop this nascent industry.

“Yorkshire has a strong engineering heritage.”

The company is also looking for maritime experts with expertise in the deep sea supply chain.

“We’re looking to pull together a consortium of companies. Yorkshire has a very strong mining and maritime capability and it has been involved in North Sea oil and gas,” said Mr Ball.“We’re creating a new industry here. Mineral and resource prices are going up – that drives the economics.”

The project will harvest mineral-rich “nodules” – rocks the size of tennis balls – in a 58,000 square kilometre region between Hawaii and Mexico.

Prime Minister David Cameron described the project as “an enormous scientific opportunity”, he said:

“The UK is leading the way in this exciting new industry which has the potential to create specialist and supply chain jobs across the country and is expected to be worth up to £40n to the
UK economy over the next 30 years.”

UK Seabed Resources, in partnership with the Department for Business Innovation and Skills, has received a licence and contract to explore the seabed, a move Mr Cameron described as “excellent news for British companies and British scientists”.

The nodules are found “12-and-a-half Shards deep” under the surface of the ocean, according to Universities and Science Minister David Willetts, referring to the height of the new London landmark.

They could provide millions of tonnes of metals including nickel, copper and cobalt to industries.

Mr Willetts described the venture as “an extraordinary opportunity for underwater mining for these valuable and important minerals” and said it could lead to a better understanding of deep sea biology.

He stressed that the environmental goal is to make sure any disruption or slurry from the work does not reach layers of the ocean inhabited by marine life.

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Lihir is Newcrest’s shiniest hope

Glenda Korporal | The Australian

NEWCREST chief executive Greg Robinson has had the dubious distinction of seeing the share price of his company halve since he took over in July 2011.

When he succeeded Ian Smith, the shares in Australia’s largest goldmining company and one of the world’s largest goldminers were approaching $40.

Now, long-suffering Newcrest investors have the rest of the Easter break to decide whether they might regard Thursday’s closing price of just over $20 as one of those “buy on weakness” events or a sign to further exit the company’s shares following the latest piece of disappointing news.

It was only last month that Robinson, on releasing the company’s half yearly results, was assuring investors he was hopeful the company would meet the lower end of its production guidance range of 2.3 million to 2.5 million ounces of gold.

This followed confirmation that the company’s interim profit for the six months to December was only $320 million – almost half the $611m it reported in the six months to December 2011 — on the back of lower sales and lower gold prices.

But the company’s share price rose at the time on words of comfort from management that the current half would be better.

On Thursday, shareholders learned that Robinson was downgrading the company’s production guidance to two million to 2.15 million ounces, mostly because of production issues at its Lihir goldmine in Papua New Guinea.

They reacted badly to the news, wiping off almost $1.4 billion of its sharemarket capitalisation – yet more disappointing news for the company and yet another profit downgrade from a leading Australian Securities Exchange-listed mining company.

A cynic might say this was further bad news from a company that had been a serial disappointer for investors and yet another reason to get out of gold shares altogether.
The immediate reaction by some analysts has been a little more benign.

Morgan Stanley noted that “a downgrade was somewhat expected . . . but the magnitude was greater than we expected. However, key growth projects are on track for significant growth in financial year 2014.”

Credit Suisse estimated that the production downgrade was expected to reduce Newcrest’s net profit after tax for the current financial year by 20 per cent, or $177m, to $716m.

It described the latest issue as “disappointing as it is a new problem with the old plant”.

But it argued that Newcrest’s guidance on Lihir now appeared to be conservative and “from an investor point of view, the issue should not be overstated”.

The latest downgrade has served to highlight again the fact Newcrest, under Smith, overpaid for Lihir in 2010 when it spent $9.5bn buying the operation.

As Morningstar noted in its analysis of the problem, “the Lihir acquisition decimated Newcrest’s returns on capital and sees the company without a moat”.

“Such was the extent that Newcrest overpaid that it’s unlikely returns on invested capital will improve to acceptable levels in the forseeable future,” it said.

But it noted that “the underlying assets remain of reasonable quality and we believe it is unlikely management will repeat the Lihir mistake”.

Mining is always a risky business – just ask former Rio Tinto chief executive Tom Albanese – but the issues also highlight the difficulty of doing business in PNG.

The country has some of the richest mining deposits on earth and its citizens should be among the better-off people in the world, but for foreign companies operating there it has presented many difficulties.

There are always the memories of the old Bougainville Copper, which operated the world’s largest open-cut mine, producing copper, gold and silver, before it was closed after a long-running dispute between landowners and investors back in 1989.

At its height in the 1970s and 80s, the company’s tax payments made up 20 per cent of PNG’s national budget.

Earlier this year, well-respected economist Ross Garnaut was forced to quit his role as chairman of Ok Tedi Mining, PNG’s biggest earning company, after he was barred from entering the country by the political leaders in Port Moresby.

In Newcrest’s case the issues with Lihir relate to production rather than politics.

And Lihir offers Newcrest large, low-cost gold deposit, much more economical than its operations in Australia.

Newcrest’s operations are focused on the Asia-Pacific region, with Australia and PNG accounting for 40 per cent each, and Indonesia and Ivory Coast in West Africa making up the rest.

If Newcrest can get its production from Lihir on track, it will put the company back on a growth path and help reduce its operational costs.

But the question for shareholders, with the price of gold coming off its peaks, is: how patient are they prepared to be?

As Morningstar says: “Returning to an exploration and development focus rather than acquisitions is correct but the arduous delay between initial discovery and first production means that it will take years to improve returns.”


Filed under Financial returns, Papua New Guinea

From Civil War to the Boardroom

PNG politicians in charge during the country’s decade-long Bougainville war are landing advisory jobs to Australian mining companies, while the victims still await justice, writes Kristian Lasslet

Kristian Lasslett | New Matilda

Internment camps, the mortaring of children, aerial bombardments, assassinations, rape, and the denial of humanitarian aid — these are just some of the criminal state practices endured by civilians during Papua New Guinea’s decade-long civil war on the island of Bougainville (1988-1998). No senior official from Australia or PNG has been formally censured, let alone prosecuted, for their involvement in this dirty war.

To compound matters, over the past two years Australian mining companies have appointed to their boards of directors individuals that headed organisations directly responsible for some of the worst atrocities during this dark period. Universities and the media have played a part too, lending cultural capital to various senior players, without a word on the crimes that occurred under their watch.

Perhaps the most overt example to date involves Sir Rabbie Namaliu, who was PNG’s prime minister during 1988-1992. Under his prime ministership, the security situation on Bougainville gradually deteriorated, after aggrieved landowners shut down the lucrative Panguna copper and gold mine employing industrial sabotage. The mine was operated by Bougainville Copper Limited (BCL), the PNG subsidiary of British-Australian giant Rio Tinto.

Fuelling the violence was a systematic campaign of state terror administered by the Namaliu government. During March/April 1989, state violence was primarily directed at communities believed responsible for the mine attacks — at the time the mine provided 24 per cent of government revenue. Dozens of villages were burnt to the ground by police mobile squad units.

Following these attacks a state of emergency was declared in a bid to combat an emerging insurgency led by the Bougainville Revolutionary Army (BRA). This allowed the PNG Defence Force to come to the fore. In a series of progressively more brutal counterinsurgency operations, homes on Bougainville were bombarded with mortars — which included white phosphorous rounds — and grenades fired from Australian supplied helicopters. Those suspected of BRA affiliation were taken out and tortured, many were killed.

However, arguably the most harmful action taken by the PNG state under Namaliu’s prime ministership, was the decision to place a military blockade around Bougainville in May 1990. Nothing was allowed in, not even medical aid. The humanitarian effects were profound. Drawing on data collected by Bougainvillean doctors, Community Aid Abroad worker, Lissa Evans, warned in 1992 that “over 3000 people have died as a direct consequence of the blockade”.

For the PNG state this was a wholly welcomed effect. Indeed, when the government began experimenting with the strategic use of embargoes during late 1989, a senior civil servant told BCL executives, “when people start to feel the hardships in education and health they may start to turn against the militants”. This view was again reiterated in an internal planning document, authored by PNG’s Department of Defence:

“People are facing hardships as a result of the absence of medical [aid] and basic goods and services … the government should continually push for peace talks outside of NSP [North Solomons Province], at the same time cut off further shipping, deliberately to worsen the hardships people are already facing.”

Was Namaliu aware of the motives underpinning the military blockade of Bougainvlle? As prime minister one would expect so, and his testimony from September 1990 suggests he was complicit. Speaking at a press conference, Namaliu remarked:

“If for instance you look at the situation as it has existed now since March — the level of services in the province has collapsed totally … So in that sense it is difficult to entrench your position if you don’t have the goods to deliver to the people. Eventually the people themselves would get frustrated and will start applying, as they are in fact doing, pressure on you to either resume the services or something else might develop.”

Given that the denial of humanitarian aid was coupled to a systematic campaign of torture and killing, all of which occurred under Namaliu’s watch, the former PNG prime minister would appear a bad choice for any company wishing to display its social responsibility credentials, especially if that company was itself directly implicated in the Bougainville war.

Yet in early 2011 it was announced that Namaliu had been appointed to the board of BCL — the very company which had fed, housed and helped transport troops as they sacked Bougainvillean villages — earning him K120,000 (A$55,000) annually.

Many others organisations also appear to suffer historical amnesia, including AusAID, Interoil, Marengo Mining, Kramer Ausenco, and Kina Securities, bodies which have all seen fit to appoint Namaliu to their boards (in the case of AusAID, Namaliu sits on their Advisory Panel for the Pacific Leadership Programme).

Additionally, Namaliu is a frequent visitor to the Australian National University (ANU), indeed we are told, “ANU is delighted to have the opportunity to host this esteemed leader and analyst”. Namaliu is even part of the editorial team for the ANU journal, Asia & the Pacific Policy Studies.

Of course, were too many fingers pointed in Namaliu’s direction, there is every chance the finger would soon be pointed back at Australia, a country whose government placed inordinate pressure on the PNG state to employ military force against the Bougainville revolt. Nevertheless, for mining multinationals, much less premier universities, to uncritically engage a pacific leader who not only presided over the most brutal campaign of state violence witnessed in the region since World War II, but did so in a bid to reopen a mine, speaks volumes about the veneer of “social responsibility”.

It would be unfair to focus solely on Namaliu. Indeed, others from the period are also in receipt of largesse from Australian corporates. For example, in February this year Australian miner, Kula Gold, announced that the Bougainvillean businessman, Sam Akoitai, would be joining the Board of their PNG subsidiary Woodlark Mining Limited. While two years before Akoitai was made a non-executive Director at Pacific Niugini.

Indeed, for most of the 1990s Akoitai led the Bougainville Resistance. Set up during 1990-91, the resistance was a feared, loosely knit paramilitary organisation loyal to the national government. A senior PNG civil servant remembers: “He came in as the leader of the Resistance Forces, Sam Akoitai … We had to deal with him, we had to encourage him, and give him money. In the end he became the best thing, to have the Resistance Forces”.

Not everyone would agree. Amnesty International concludes that under Akoitai’s Chairmanship the Resistance Forces committed numerous atrocities:

“The Resistance Forces have been responsible for serious human rights violations including unlawful and deliberate killings and “disappearances” of civilians and BRA suspects. They are also alleged to have engaged in intimidation of those wishing to provide information about human rights violations and of government officials over delays in payment of their allowance”.

That is not to suggest that Akoitai necessarily ordered or participated in these alleged crimes. Nevertheless, given his senior position, serious questions remain over his responsibility for resistance atrocities.

That these questions have been forgotten, both in the case of Akoitai, Namaliu and many others, suggest a collective amnesia has set in. On the other hand, people on Bougainville remember the death and destruction well. Their stories, however, are gradually being erased from this historical record through a process of willed omission.

Unlike East Timor, the Solomon Islands, Guatemala, Sierra Leone, South Africa, and many other post-conflict zones, there has been no truth commission for this war, let alone trials, reparations or indeed basic mental health care. Even attempts by victims to obtain legal redress through PNG’s national court system have been blocked, while a class action against Rio Tinto, currently underway in the United States, crawls along at a snail’s pace.

Yet in the absence of truth and justice, those individuals who shoulder greatest responsibility for the “widespread” and “systematic” attacks on Bougainvillean civilians (crimes against humanity), not the individual combatants, but their political and military masters, are free to assume corporate and public office.

Meanwhile, many on Bougainville relive painful memories from the war on a daily basis, seemingly forgotten by a world that would rather not know about their trauma, or those responsible for it.


Filed under Corruption, Human rights, Papua New Guinea

Dear Byron Chan: Letter from Survival International

via Nancy Sullivan | Nineteeen Years and Counting


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Filed under Corruption, Exploration, Human rights, Papua New Guinea