Monthly Archives: August 2014

Families of missing persons must have answers

International Committee of the Red Cross

The 1989-1997 civil war in Bougainville left as many as 20,000 dead. The fate and whereabouts of many more remain unknown. This causes anguish and uncertainty for families and friends who are often unable to grieve. Under international humanitarian law, families have the right to be informed of the fate of missing relatives. Governments, military authorities and armed groups have an obligation to provide answers.

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Sale of Gold Ridge mine to Solomons nearly done

Radio New Zealand

police confront local people

Police confront local landowners at the mine earlier this year

The Australian based owner of the Gold Ridge gold mine in Solomons Islands, St Barbara, has confirmed the sale of the mine to the Solomons government is being completed.

The company would not disclose the terms of the transfer, saying negotiations are still underway but it says it would not play any further part in the operation of the mine.

The mine has not operated since early April after flooding put it out of action.

Earlier this month, the company laid off hundreds of local workers.

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Mining giant BHP under fire from lawmakers

Gorethy Kenneth | Post Courier

AUSTRALIAN miner BHP came under heavy fire in Parliament yesterday with legislators describing the PNG Sustainable Development Program as only a clever ploy.

The legislators are claiming the mining giant came up with the program to escape prosecution for massive environmental damage from Ok Tedi mining operations.

In 2011, the Government of Prime Minister Sir Mekere Morauta, who is now chairman of PNGSDP, passed a legislation that allowed BHP to exit the mine, with a blanket immunity that protected the company from prosecution for the environmental damage.

The running of the mine was handed to program company PNGSDP, a company registered in Singapore with majority board members nominated by BHP.

The debate, on a statement to Parliament by Prime Minister Peter O’Neill yesterday, was fiery and at times emotional, with calls for Sir Mekere and his appointees to the board to step down voluntarily.

The call by the legislators was unanimous – bring BHP to account and return the PNGSDP and the Long Term Fund to the people of Western province and PNG.

Former Attorney General Kerenga Kua opened the assault on BHP by calling on the PM to fight the global mining giant, and ensure the fund set up and controlled by third parties be returned to the independent state of PNG.

“The setting up of PNGSDP and the long term fund is typical of global multinational corporations around the world, setting up complicated structures to escape responsibilities for damages they do to the environment and the lives of people,” Mr Kua said.

“The real issue was the massive damage done to the environment by its mining activity, and the potential massive liability they faced.

“They forced us into a clever deal, so that Parliament gave them immunity upon exit. But they did not live up to their part of the bargain by paying the compensation they promised. They instead met us halfway, by setting up this fund overseas and placed it in the hands of independent nonelected people who represent no one and report to nobody.”

Mr Kua said BHP and PNGSDP do not need to be compensated. What the government has started, in removing BHP’s immunity from prosecution, and the legal battle against PNGSDP is part of a process to undo a clever and complicated structure.

“The Prime Minister and government have my support to get to the bottom of this, and to return to the State what it deserves,” he said.

Public Service Minister Sir Puka Temu, who was a member of the Eminent Persons Group that negotiated without success with Sir Mekere’s board, told Parliament in one of those meetings he almost leaned over to punch Sir Mekere.

“We were genuine and we made concessions to PNGSDP. But Sir Mekere and his group were not. I don’t know who they represent. “We should have struck a deal in February, but we did not. The people of Western province are still waiting to benefit from what is rightfully theirs. I call on Sir Mekere to step down voluntarily,” Sir Puka said.

He said PNGSDP must be handed back so it can be restructured and run in a way that delivers the aspirations of the people of Western province and PNG. NCD governor Powes Parkop said the government must do all it can to return the assets to the people of Western province.

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Harmony continues to talk up Golpu prospects despite skeptics

Harmony to focus on growing value of PNG assets between 2015 and 2020

Chantelle Kotze | Mining Weekly

Graham Briggs

GRAHAM BRIGGS Hamony Gold believes Golpu will add value to its asset portfolio and be a really sustainable mine going forward. Photo: Duane Daws

Part of gold miner Harmony Gold’s strategy between 2015 and 2020 is to grow the value of its Papua New Guinea assets by completing studies at its Golpu project and building the Golpu mine, despite negative analyst forecasts, CEO Graham Briggs has said.

Speaking at the fourth-quarter results presen-tation, held in Johannesburg earlier this month, Briggs highlighted that a conceptual study report on four high-grade, sublevel cave start-up mine options had been completed and progressed to a prefeasibility study (PFS).

While the Golpu resource definition drilling programme was now complete for the 2014 financial year, scalable mine options of between 2.5-million tons a year and 5-million tons a year were selected for progression to PFS level.

Briggs noted that this would be completed when the gated process had been finalised towards the end of this calendar year.

Harmony Gold’s new targeted outcomes from the Golpu study under way are to look at a modular expandable plant solution, a lower total capital cost using sublevel caving, as opposed to block caving to extract the high grade, as well as a scalable start-up mine and infrastructure development that is flexible enough to allow for expansion.

The Golpu project, located in Morobe province, which is jointly owned by Harmony Gold and gold miner Newcrest Mining, is a large and scalable resource of high-grade, low-cost copper.

There have been no changes to the reserves of Golpu since the PFS was completed in 2012. Changes to the resources are as a result of additional drilling and a more robust geological model. On a 100% basis, Golpu continues to host high-grade, quality reserves of 450-million tons, containing 12.4-million ounces of gold and 5.4 million tons of copper.

Golpu will require less capital to start up and has the potential for a long life that will be flexible and adaptable in multiple price cycles.

Harmony Gold is also derisking Golpu’s development through its project development experi-ence, operational base and support services in Papua New Guinea, as well as the orebody’s high- grade zones.

Briggs noted that, although there were a number of sceptics, Golpu was intended as a mine that could be mined at a much higher grade when commodity prices were lower and easily expandable if copper and gold prices increased.

“We believe this asset will add value to our asset portfolio and be a really sustainable mine going forward,” he concluded.

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Work continues on Bougainville’s long term mining law

Sebastian Hakalits | Post Courier

THE Autonomous Bougainville Government’s Mining Department and its partners have been working tirelessly for seven years to develop a policy framework for a long term mining law to meet Bougainville’s special needs.

Last week international experts and their Bougainville counterparts conducted a workshop attended by ABG cabinet members and senior Bougainville public services officers.

The purpose of the workshop was to brief these leaders and senior officers on the long-term and detailed draft act and regulations which would give effect to ABG’s previous decisions on the mining policy to become a best-practice law.

Bougainville is the only place in the world where a local rebellion over mining issues has forced the shut-down of a very large mine of 25 years. These international experts have been in Bougainville and working closely with the Bougainville team on the draft act and regulation and together they have agreed on many improvements which have been agreed upon to by cabinet.

The experts’ team leader, Jeremy Weate and senior expert Professor James Otto, have assured cabinet that they will make agreed changes to the draft act and regulations with the final draft to be delivered to ABG in early November this year.

Acting President Patrick Nisira and Mining Minister Michael Oni both expressed satisfaction on the rapid progress made in preparing Bougainville’s long-term mining law.

They said policy work began in 2007 where many stakeholders were invited to attend workshops and air views as it was ABG’s aim that this new law should address Bougainville’s special needs and should adopt world’s best practice.

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Ok Tedi: Change of ownership ‘misleading’

The National aka The Loggers Times

Peter O'Neill

PNG Prime Minister Peter O’Neill. Picture: AFP

PRIME Minister Peter O’Neill has branded as misleading statements regarding the change of ownership of Ok Tedi Mining Ltd and compensation for the impacted communities in Western.

That includes statements on the setting up of the PNG Sustainable Development Program (PNGSDP).

He presented to Parliament yesterday the report of the Eminent Persons Group set up by the National Executive Council to mediate and facilitate an agreement between the State, PNGSDP, BHP Billiton and Ok Tedi.

O’Neill said the EPG comprised former Prime Minister Sir Rabbie Namaliu, former Lae MP Bart Philemon and Minister for Public Service Sir Puka Temu.

They recommended to the State and PNGSDP that they immediately sign a heads of agreement which set out very clear commitments and actions agreed by the parties.

“Despite the efforts and recommendations of the EPG, the PNGSDP board rejected the recommendations,” he said. “In noting and anticipating this, the EPG recommended that the State has demonstrated very clearly its genuine efforts, and therefore should undertake direct negotiations with BHP Billiton, with or without PNGSDP.

“The NEC, in considering the EPG report on March 5, 2014, decided that any efforts in further discussions with Sir Mekere (Morauta) and PNGSDP will be unproductive as PNGSDP has no intention to reach agreement with the State.” O’Neill said this was not the first time PNGSDP and Sir Mekere “reneged on agreements they have reached with the State”.

“Sir Mekere and I reached the agreement, confirmed by us shaking hands in Majuro, Marshall Islands, in early September 2013 on the sides of the Pacific Forum meeting,” he said.

“Immediately on return to Port Moresby, Sir Mekere and the PNGSDP board served legal proceedings against the State. At no time in Majuro did Sir Mekere convey any concerns to me.”

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Fly River ‘gone’

Malum Nalu | The National aka The Loggers Times  

THE Fly River in Western “is gone” as a result of the massive damage to the environment caused by mining over the years, according to Environment and Conservation Minister John Pundari.

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He told Parliament yesterday that there was no point in putting up a tailing dam (to withhold the waste) now because the damage to the river by the Ok Tedi Mining Limited “cannot be undone”.

“What difference will it make when we have the damage already? The Fly River system is gone. The livelihood of our people, if any, is gone,” he said.

“We’ve lost it. If we have to build a dam today, just to tell the world and show the world, and tell ourselves that we are doing the right thing for ourselves, and for our future generations, I don’t know what the tailings dam will do.

“What will this tailings dam save?”

He was contributing to the debate on the Eminent Persons Group report tabled by Prime Minister Peter O’Neill.

The group was set up by the National Executive Council to mediate and facilitate an agreement between the State, PNGSDP, BHP Billiton and OTML after differences over the impact of mining on the communities in Western.

“It will take 50 to 100 years for natural occurrences to help rehabilitate it (Fly River). That is a long time,” Pundari said.

North Fly MP Boka Kondra said the people had suffered greatly because of the Ok Tedi mining operation.   In a lengthy and emotional address, he told of the plight of his people, who had silently been suffering from various ailments as a direct result of mine pollution on Fly River.

“People are dying, mothers are dying, children are dying, with not much benefits (from the mine),” Kondra said.

“I brought in a media team from Japan and they went to a village where they found 17 deformed children. When this was shown in Japan, millions of people there were in tears. Look at how many people are dying along the river.”

Sumkar MP Ken Fairweather  said it was ironic for the Government to continue operating the Ok Tedi mine after the huge damage to the Fly River by previous operator BHP Billiton.

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Testing times for Bougainville’s mining future

Autonomous government needs to weigh the cost and benefits of extractive industries

Matthew Allen* | Bougainville News

burnt out truck at the Panguna mine

A lone copper dump truck that was completely burned out during the crisis at Panguna mine. Photo by Ian Booth.

The recent passage of new mining legislation on Bougainville comes at an especially troubling time for large-scale mining operations in the Western Pacific.

One of the first major laws to be enacted since the transfer of a suite of powers to the Autonomous Bougainville Government under the terms of the 2001 political settlement with Papua New Guinea, the transitional mining law is a significant step towards the possible recommencement of large-scale mining on the island.

However, an assessment of how some of the region’s largest mines have been travelling in recent times makes for sobering reading and points to the need for deep and careful reflection as Bougainville contemplates a mining future. The report card reads like this.

In April of this year the PNG government declared a state of emergency at the Porgera gold mine in the highlands province of Enga – operated by the Canadian miner Barrick Gold – and launched a three-month operation to stamp out what it describes as “illegal” mining. Over a hundred police and military personnel were deployed to the region and hundreds of houses allegedly belonging to illegal miners were razed by security forces.

Two weeks ago the Chinese-owned Ramu nickel mine, also in PNG, was reportedly attacked by “armed villagers” resulting in injuries to five Chinese workers, damage to equipment and a three-day halt to mine production.

Late last year the PNG government effectively expropriated the lucrative yet environmentally and socially problematic Ok Tedi mine in Western Province, a move that remains the subject of a court challenge in Singapore.

In neighbouring Solomon Islands, the country’s only mine, Gold Ridge on north Guadalcanal, has been closed since the site was flooded during heavy rains in April. The Australian operator returned staff to the site in June but has recently pulled out again citing a serious escalation in security incidents and the presence of large numbers of “illegal miners” in the mine lease area.

Further south in New Caledonia, the Vale nickel mine in the Southern Province was closed for several weeks earlier this year following a chemical spill that triggered a series of fatal clashes between riot police and Kanak youth.

And so the list goes on.

Unfortunately there is nothing particularly new about this association between large-scale mining and violence in Melanesia (and nor is it peculiar to the region – a 2009 United Nations study found that at least 40 per cent of intrastate conflicts globally are related to natural resources). Gold Ridge mine was a flash point during the so-called “ethnic tensions” that gripped Solomon Islands in the late 1990s, eventually closing down as a result of the violence.

And of course local grievances associated with Rio Tinto’s giant Panguna copper mine on Bougainville were a major contributor to the 10-year civil war in which thousands died. The mine has remained closed since the conflict, but Rio Tinto’s subsidiary, Bougainville Copper Limited (BCL), had, until the passage of the new legislation this month, retained its mining lease under PNG law.

Bougainville’s political leaders are in the unenviable position of having to weigh the costs and benefits of a mining future. At the forefront of their minds is the prospect of a referendum on full independence from PNG which, according to the autonomy arrangements, must take place between 2015 and 2020. A key question is whether an independent Bougainville can be economically viable without large-scale mining.

The avowed policy of the ABG’s current leadership is to actively explore the possibility of at least one large-scale mine, with the preferred candidate being the mothballed Panguna mine. The need for the ABG to be able to regulate Bougainville’s mining sector has been given added urgency by the increasing activities of foreign investors with questionable credentials and intentions, as well as by the recent boom in small-scale and artisanal mining activities.

There are aspects of the new mining law that are innovative and clearly informed by the problematic history of the Panguna mine and the legacy of the conflict. For example, the legislation vests the ownership of mineral resources in customary landowners, who can veto exploration but not mining once an exploration license has been granted. It also contains provisions for the development of the island’s poorer regions.

That said, the legislation has not been without its detractors – in large part reflecting the highly fragmented character of Bougainville’s politics – with the parliamentary debate and subsequent passage of the bill met with an outpouring of opposition across mainstream and social media.

Opponents claim that the new law gives privileged treatment to BCL, which loses its mining lease but automatically gains an exploration license and therefore the right to negotiate for a new mining lease. Other critics have long maintained that Bougainville should follow a path to development based on smallholder agriculture and artisanal mining rather than large-scale mining.

For its part BCL’s chairman Peter Taylor has described the new legislation as a “set-back” and Rio is to review its majority shareholding in BCL. Whatever the legal status of BCL’s claim, the history of mining on Bougainville and elsewhere in Melanesia shows us that no new mining is likely to take place without the agreement of landowners, and such agreements are open to frequent renegotiation.

One thing we can be certain of is that despite demonstrable economic recovery, Bougainville’s social and economic development indicators remain well below pre-conflict levels. There are pressing human development needs on Bougainville, which only heighten the urgency of the tough choices that must be made about its economic future.

* Matthew Allen is a fellow at the State, Society and Governance in Melanesia program, ANU College of Asia and the Pacific. He is conducting research on mining and political change in Melanesia funded by the Australia Research Council.

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Kainantu LO’s calls on mining Minister to address issue

Post Courier

The Landowners of the Kainantu Gold Mine project area has called on the Mining Minster Byron Chan and Wera Mori to address issues in the project.

A dominant landowner clan Koyafute complained of the unexplained mine closure in 2009 which caused secvere damages violating Mining Act and natural law.

Koyafute clan spokesperson Bernard Kelonti, who has been involved directly throughout the Mine Progress from development forum in 2002, said that all lease renewals to Barrick be suspended until and unless issues are investigated and proven to be allegations or substantive materials.

The call to the Mining minister is to address these issues of landowner 5 percent share equity, HPL sales of Kainantu Gold Mine, Special Land Titles Commission Hearing Appeal, Alleged write – off of the Mine and the Kora Landslip issue.

Related story:  Otterburn to acquire the Kainantu gold-copper mine in Papua New Guinea

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MRA to lift small-scale mining profile

EMTV

miners involved in small scale mining

Alluvial gold and silver generates revenue of over K300 million a year.

The majority of this goes directly to local miners, their families and the community.

Currently, the Mineral Resources Authority is in its’ second phase in developing a document for the upcoming PNG Alluvial Mining Convention in September.

Mineral Resources Authority, or MRA, hopes to elevate the profile of alluvial mining or small-scale mining through the convention, to be staged in Lae from the 24th-25th of September.

The document MRA is working on outlines the proposal for development, compensation agreement and a tribute agreement, which will assist applicants in completing their applications and providing guidance to those operating within the sector.

Prior to this, MRA conducted a review of the tenements involved and undertook a trial assessment as part of its verification process.

From April to June this year, MRA conducted a re-registration process to verify applicants and gather details of their current mining operations and intentions. Of the 304 tenements, only 175 were found to be genuine.

The tenements date back to the early gold rush in Wau – Bulolo. In fact, 95 percent of the historic exploration licenses are located within the Wau – Bulolo area which is home to the most sustained mining of alluvial gold in Papua New Guinea.

Through the PNG Alluvial Mining Convention, it is anticipated that all stakeholders will engage in all aspects and subsequently, double the revenue within the next 5 years.

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