IPA should reject the offer by a junior player PanAust to buy a controlling interest in Freida

Gabriel Ramoi | PNG Blogs

There is an application pending approval at IPA for  junior  Mining Company Pan Aust LTD  to buy majority Interest in the Freida Mine for US$25 million. This development is unacceptable and the Prime Minister and the  Minister for Mines ,Commerce and State Enterprise must summon Xstrata –Glencore forthwith to explain the nature of the arrangement with Pan Aust Ltd  The Government of PNG  by law  has the right of First refusal to acquire the interest of Xstrata – Glencore and must outlay the US$25 million to take over the  controlling interest in Freida now and Develop the mine itself as it is now doing in OK Tedi and safe guard the wealth of the nation and  not allow Foreign Carpet Beggars to pull a wool over our eyes.

It is obvious  what is being schemed here.  Pan Aust Ltd is a company that is under Capitalised and is incapable of raise US$6 Billion which is the estimated development cost in bringing Freida Mine into Production without sovereign backing from the PNG Government. It is obviously a plot by pan Aust Ltd  to basically take over the sunk cost outlayed by Extrata and to on sell Freida back to the PNG Government  in the not too distant future for an exorbitant profit.

The  development cost of Freida is estimated to cost  $6 Billion and the PNG Government is capable of taking 100% Control of Freida and can use a number of Financing Models to get Freida into production and to ensure majority of the Profits remain in the Country to meed the critical social agendas of the Nation.  It can for instance enter into a production sharing Agreement or enter into a Mining Contract with a known Mine Contractor to mine Freida on its Behalf for a fee.

The PNG Government  is also now better placed to utilised export Credit Financing to get Freida off the ground and does not need  companies like pan Aust Ltd  to run rings around it.  This year alone we have witnessed Nautilus Minerals  trying the same trick on the PNG Government and now Pan Aust Ltd . Obviously the view that everything in PNG is available for a price seem to attract the wrong  kind of Resource Companies in recent times to enter PNG and using our  Local compradors to  scheme the nation of its resources.

It is now time for the Government to stand and take control over the wealth of the nation and to tell companies such as Nautilus and Aus Minerals to go and jump. Enough is Enough.