Monthly Archives: November 2014

Talk to landowners before selling PNG

Little Green Palai

nogat miningIn just a few days in a faraway land in Sydney, Australia, from December 1-3, Papua New Guinea’s mining department will be hosting its investment conference.

However, in two rural villages in Bogia and Karkar Island in Madang province they are not pleased that rural lands are being talked about without local people’s involvement.

Karkar Islanders are at the forefront of rejecting seabed mining in the Bismarck Sea and despite their numerous calls to the government to halt seabed mining, Nautilus Minerals has been able to twist the government of Papua New Guinea so that it can dig on the seafloor of New Ireland province.

Seabed mining is not just a Papua New Guinean concern but a regional issue. Nautilus Minerals has produced maps showing tenements across the Pacific and at what stages of development they are at. In the Bismarck Sea Solwara 1 has been given the green light to go ahead with this experiment.

Karkar villagers through their young people and the Lutheran church, which they are members of, are still saying the seafloor should not be touched at all for any reason.

On another front coal mining will be a new thing for Papua New Guinea.

In the villages along the Adelbert Range in Bogia, some rogue scientists have entered claiming they were investigating prospects for coal mining. This has stirred the villagers to start sending messages to their government saying, there will be no such activity on their land.

A placard they held up recently (photo above) said there will be no mining. The land is for food gardens.

Recently the Mineral Resource Authority made an announcement in Kokopo it will be developing a coal mining policy for Papua New Guinea.

Also around the same time an Australian firm Mayur Resources has announced it will do coal explorations in the Gulf Province for coal and iron-sands.

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Industrial mining, investment and impact in Morobe

One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on…

Charles Roche | MPI 

Industrial, large-scale mining has a massive impact on people and place. The more connected you are to country for food, shelter, culture, community and opportunity, the more vulnerable you are to adverse impacts.  This fact was demonstrated to me once again, very powerfully, in recent weeks.  Following an engaging, inspiring and challenging trip up the lower Watut in late September, I attended the AGM for Newcrest on the 31st October.  The difference between the stakeholders; the community on one side and the managers and directors on the other, could not have been more stark. One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on to another project, board or company. It’s striking to move between the groups, seeing the different realities from either side of the divide.

watutOn first impressions, life on the Watut seems simple. It’s slow and connected to the environment, the seasons, and to cultures and practices from millennia past. In that sense, it’s complicated, with elaborate connections between country and community – past, present and future. Connections that industrial mining, multinational big business and far-away investors seem unable to comprehend, let alone respect and value.  Although, if you accepted literally the mantra of corporate social responsibility, then you might believe big business care, or even understand the issues, and are rolling out solutions in the same way they dig ore.  Unfortunately, the drama of industrial mining is more a tragedy than a fairytale, with different languages spoken, one focused on profit, the other on people and place.  Never getting anywhere, like incompatible computer languages – imagine OSX and Windows trying to talk about solutions.

A week along the Watut left me tired. Nightly meetings and presentations, trying to understand the concerns of communities expressed in pidgin, then getting my English answers translated.  I’m not romanticising it, but the unfamiliar diet of taro and boiled green bananas, combined with dirt floors, pit toilets and river baths left me refreshed and inspired. Asked and challenged to help communities respond to mining, to identify and pursue their dreams and plans, to control their own destiny. This is why MPI exists, why we do what we do. The imbalance of power, the inequity of benefits and the injustice of outcomes must be challenged and overcome.

Alternatively, two hours in the Newcrest AGM made me angry, despairing at the lack humanity in industrial mining and in need of a long hot shower. A board and directors saying the right words, the words they say without conviction or understanding, the same words as years before, as at other AGM’s, different names, different faces but the same words. A roomful of retail shareholders, people who have lost up to 75% of the value of their investment. Small investors with few rights and, for the most, little interest in the impacts of the business they invested in.  But the majority of Newcrest is owned by large institutional investors  – were they there? do they care? The tragedy of industrial mining comes from institutions without conscience, mining companies and investors who care little about life along the Watut, all promoted by an unquestioning investment media that can only focus on the dollars.

We are making progress, however, and together with the communities along the Watut have the opportunity to effect change. MPI’s decision to pre-empt a new mine, rather than just focus on what has gone before, has and will continue to provide opportunities to influence the way mining is, or not done in Papua New Guinea.

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BHP’s legacy of environmental ruin remains for South Fly

Radio New Zealand

Landowners in the South Fly region of Papua New Guinea’s Western province are unsatisfied with the compensation given for environmental devastation caused by the Ok Tedi mine.

It’s the latest call for a more comprehensive compensation package from the operators of the mine and the PNG state for extensive and long-lasting damage to major river systems, including the Ok Tedi and Fly, from the discharge of mine tailings over decades.

A landowner representative from South Fly, Pastor Steven Bagari says that since taking over the mine last year, the government has been unresponsive to the call.

He says local people are paid up to 32 US dollars per person annually in compensation.

“To us in South Fly and people of Western Province that are affected by the mine, this is not money, it has no value… to the damage it has done to our environment, our livelihood, our culture, our heritage and our identity as the people from Western Province and mine-affected villages.”

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$113m to be released to Nautilus next month on completion of State agreement

Leani Kolver | Mining Weekly

Prospective seafloor miner Nautilus Minerals on Friday announced that $113-million that had been placed into escrow in May, would be released to the company on December 11, on the completion of the sale of 15% of its Solwara 1 project, offshore Papua New Guinea, to Eda Kopa (Solwara), which had been nominated by the State of Papua New Guinea to take up this interest.

Nautilus had, on November 6, entered into an agreement with Marine Assets Corporation (MAC) for the charter of a vessel to be deployed for use at the Solwara 1 project.

Under the terms of MAC’s agreement with Nautilus, it undertook to sign a contract with Fujian Mawei Shipbuilding for the design and construction of the vessel and to pay the first instalment of the purchase price by no later than November 28, 2014.

As this had occurred according to plan, Nautilus could now complete the sale to Eda Kopa.

“We are excited that the shipbuilding contact has been signed for the construction of the vessel and the first instalment paid, which now allows for the release of the State nominee’s funds from escrow and the formation of the Solwara 1 joint venture,” Nautilus CEO Mike Johnston commented.

 

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No need for Ok Tedi tailings dam, Pundari says

Sadly a deformed infant a mother in the Middle fly area Western province. The Child deform situation resulting from BHP Billiton operation in OK tedi and direct discharge of toxic mine waste into the fly River system

Sadly a deformed infant and mother in the Middle Fly area of Western province. BHP Billiton owned and operated the Ok Tedi mine which directly discharged toxic mine waste into the Fly River system

The National aka The Loggers Times

ENVIRONMENT and Conservation Minister John Pundari says there is no need to build a tailings dam along the Fly River because damage to the environment had already been done.

He said in Parliament during debate on the Mining (Ok Tedi 11th Supplementary Agreement) Bill:

“We might have to reconsider a tailings dam going forward. I do not undermine the bill that is before us. I am in support of it.

“The environment damage is not a new thing (along the Fly River) for so many years, the damage is there.

“I am in total support of a tailings dam, but I just want to see a better way, going forward.

“Given the fact that the damage is there, I’m just thinking that if BHP had earlier built a tailings dam, the impact of the damage that is there would probably be different now.

“Give that the damage is done, would a tailings dam create a miracle for us?

“How many years would it take, even after a tailings dam is built, for natural occurrences to recover? I’m just posing this thought for us. ?Is there a better way forward with a tailings dam, or without a tailings dam?”

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Brief on Frieda and on issues of ownership and control and the pre-emptive rights of the State in resource projects.

“… be mindful of the growing disillusionment by the majority of our people and our Land owners in particular about the way we have dealt with the exploitation of our non renewable resources which continues to treat our people as mere spectators in this sector… “

Frieda_River_Mine_PNG

Gabriel Ramoi | PNG Blogs

As the Market awaits the Decision of the International Tribunal to be handed down early next year  in London in the case referred by Oil Search Ltd against Interoil on its rights as an existing Partner in the Elk LNG project to be offered the first right of refusal to purchase any shares on offer by the project developer, the States own interest relating to pre emptive rights needs to be clearly  stated to avoid the situation that has landed the Prime Minister before the Leadership Tribunal with respect to the UBS K3 Billion loan from ever rising again.

All Hydro Carbon resources found beneath the surface of the earth and on our sea bed belongs to the State. Mining Exploration Licences and petroleum Retention Licences are the property of the State which reserves the right to enter into and to invest in these licences if it chooses too. While the Mining Act and the Oil and Gas Act allows the State to exercise its rights to take up to 30% Equity in Mining Projects and 22.5% in all hydro carbon Projects, these Acts do not prohibit the State from making  commercial investment decisions for the National Good.

There is a misconception that the Government of PNG cannot enter into any  major resource project until  after the completion of the Bankable Feasibility study by the licence holder and only at the commencement of negotiations on Mine or Petroleum Development Contract between the Developer and the State. This view is not only misconceived but is dangerous as it perpetuates neo colonialism.

With respect to  the case of Elk neither the State or its proxy  Oil Search were made an offer to inject additional capital into the Elk LNG project and ultimately on whether Total of France should be the development Partner in the Elk and Antelope Gas Fields. While Oil Search has gone for Arbitration the Government of PNG has been forced to enter into a Commercial  decision to enter into the UBS  loan to participate in the Elk Project via Oil Search Ltd. The important question that will still be dealt with is the State’s 22.5% interest in Elk and the value of that interest and for the State to enter the project now and participate in the decision as to whether Exxon or Total is made the developer of the PNGs second LNG project.

On this note we also remind our own senior Bureaucrats heading down to Sydney for the biannual shopping and Mining Conference at the Sydney Hilton not to mislead the Australian Mining  Community  in particular on another similarly large project , the Frieda Gold and Copper Project and the intent of the Government of PNG with respect to the issue of Ownership and Control of  our  country’s  biggest mining project. We remind our Sydney Mining Conference Participants to be aware of  NEC decision  265/2014  and to take note in particular to the contents of NEC Policy Submission 242/2014 which gives rise to the said decision.

Let me again caution our leading citizens that while making the case for Foreign Direct Investment in the PNG resource sector in a foreign land that they be mindful of the growing disillusionment by the majority of our people and our Land owners in particular about the way we have dealt with the exploitation of our non renewable resources which continues to treat our people as mere spectators in this sector and not to concede too much to investors whose main driver for investment is guided only by profit motive and not the improved quality of life for our people.

It would appear that while Total has been endorsed as the preferred developer of the second LNG project  no such endorsement has been given to Pan Aust Ltd to take on the responsibility of developing the Frieda Gold and Copper project on the contrary the State is desirous of owing and developing this massive deposit itself  jointly with Land owners and the two Provincial Governments of East and West Sepik  Province and that Pan Aust Ltd and Xstrata-Glencore would do well in accepting the offer made by the State to Xstrata Glenocre to acquire their interest in EL58 on the same terms as reached between Xstrata and Pan Aust Ltd on the 30th of September 2013 and that this is the position of the PNG Government unless overturned by Cabinet.

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Western backs Ok Tedi bill on mine life extension to continue

The National aka The Loggers Times

WESTERN Governor Ati Wobiro says his people fully support the Mining (Ok Tedi 11th supplementary agreement) Bill.

He said that yesterday during debate on the bill allowing for mine life extension to continue.

Wobiro commended Prime Minister Peter O’Neill for his efforts in addressing issues of the people of Western relating to the Ok Tedi mine.

“I’m totally in support of the 11th supplementary agreement which has now been tabled before this Parliament, which will address a lot of our concerns,” Wobiro said.

“I’m very pleased that the government is taking a very strong view with regards to addressing the tailings issue.

“The people of the Fly River and the whole of Western province have been crying to the government to do something permanent.

“As the House knows, Ok Tedi will go on for a long time, may be another 50 years.

“It is important that this issue of the tailings dam be addressed and I’m pleased that the Prime Minister is addressing this through the 11thsupplementary agreement.”

Wobiro said another major issue was that of direct equity in the mine.

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