Chinese GRAM gets funding for PanAust’s Frieda River copper mine study

See, its not Papua New Guinea’s Frieda river mine: First it was Xstrata’s and then PanAust’s and now another bit of PNG is owned by the Chinese…

But when did the landowners ever give their consent to the loss of their land and their rights?

And when we will stop letting the industrialized world get ever richer by taking our resources while we just get worse and worse off as we deal with all the environmental and social costs…


Peter Ker | The Age

PanAust suitor Guangdong Rising Asset Management has secured funding to complete a feasibility study into the Frieda River project in Papua New Guinea. 

The Chinese company behind the $1.4 billion takeover of PanAust Limited is set to move quickly on the copper miner’s prize asset, with a preliminary funding deal for the Frieda River project set to be announced as early as Monday.

Guangdong Rising Asset Management’s (GRAM) ownership of PanAust rose to 87.38 per cent by Friday afternoon. The Chinese group will unveil a memorandum of understanding with the Bank of China on Monday as it seeks to convince remaining shareholders to accept the offer.

Under the non-binding agreement that will be announced in Sydney, Bank of China is expected to provide funding to complete the $50 million feasibility study for the $US2 billion Frieda River project, located in the highlands of Papua New Guinea. The bank is also expected to be involved in funding the eventual construction of Frieda River, as well as other PanAust assets around the world.

Officials to attend signing

The agreement is expected to be inked in front of a Chinese delegation to Sydney led by the governor of Guangdong province. GRAM chairman Wei Zhu is expected to attend the event along with officials from PanAust and Bank of China.

GRAM’s offer to pay $1.85 for each PanAust share is scheduled to close on Wednesday. The group requires a further 2.62 per cent of PanAust shares to accept the offer to move to 90 per cent ownership and compulsory acquisition of remaining shares.

GRAM’s move on PanAust is another demonstration of China’s strong interest in copper deposits, following MMG’s purchase of the Las Bambas copper asset in Peru last year and China Molybdenum’s purchase of the Northparkes copper and gold mine in NSW in 2013.

A copper shortage is expected to emerge by the early months of 2017 and is expected to push copper prices higher. The red metal was fetching $US2.79 per pound on Sunday.



Filed under Exploration, Financial returns, Human rights, Mine construction, Papua New Guinea

3 responses to “Chinese GRAM gets funding for PanAust’s Frieda River copper mine study

  1. Kenneth Unamba

    The way we should be thinking is, we own the land, the government is the custodian and the miner is the developer who is licensed by the government to dig the dirt is the best possible way and sell it. This is a business where the investor put up risk funds to develop a project, markets the product, makes a profit and we get a share of the profit. We need foreign investment to drive our economy and mining is a risky business where not many people will want to invest millions of dollars to fund a project. Everything else falls on the government and the people to negotiate a better deal for the resource we own instead of crying about foreigners destroying our environment and getting billions out of the country and leaving nothing behind. What I will propose here is that:
    1. The government takes up the 30% stake in the project.
    2. 50% of the 30% (15% each of total) goes to the West Sepik Province
    3. 50% of the 15% (7.5%) goes to the subdistrict where Frieda is
    4. 50% of the 7.5% ( 3.75% of the project) of the district share goes to the land owners.
    5. Local labor will be 80% of total work force
    6. 50% of all taxes to go to the province and split as the 30% stake in the mine ownership
    7. All spin off business must have 50% or more local ownership
    8. Government must negotiate higher royalties on metal marketed
    9. Company to have up 2.5 to 5% of operations budget for social impact projects, ie roads, schools clinics, etc for the impacted villagesand managed by the company
    10. Government must have firm and decisive environment dept to monitor and implement vigorous standards.
    Many more good can be thought of and the list can go on and there will be no mining if these conditions are not met. The provinces and the people should fight for these rights and mobilize to get the government to re-look at the benefits sharing agreements before any more new licenses are issued.

    • Two quick points:
      1. Who says we need foreign investment to drive our economy? This is what the colonial, neo-liberals have been telling us for 30 years and where is the benefit for ordinary Papua New Guineans? Strong economic growth does NOT equal a better standard of living for rural people!
      2. A 30% stake in what? Most of these local mines never make a profit! The profits are made offshore by the foreign mining companies – not by the local ‘project’ that the government wastes tax payers money by investing in…

      • Kenneth Unamba

        I would argue on both of your points.
        1. Strong economic growth has direct and immense impact on communities depending on how the benefits are managed. ie. if the profits and the taxes goes to one men’s pocket then definitely not all will benefit. PNG has no capacity to put up risk capital, hence you need others who will take that risk.
        2. 30% stake in the LNG project is slowly seeping into the Gov coffers, the Government decided to sell its 30% stake in Porgera JV years back, Porgera has been making millions in profit for Barrick since, otherwise it would have been shut down long ago.
        What I’m saying is the people on the ground must get their share direct and that is from the projects which will have some impact on their community. The people on the ground have to participate openly thats when you have a positive impact on the rural community.

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