Monthly Archives: January 2016

Mine executives escape responsibility for deaths in Hungary

A man walks next to his destroyed house in the flooded village of Kolontar, Hungary October 6, 2010. REUTERS/Laszlo Balogh

A man walks next to his destroyed house in the flooded village of Kolontar, Hungary October 6, 2010. REUTERS/Laszlo Balogh

Hungary court acquits leaders of firm behind toxic spill

Marton Duna | Reuters

Fifteen people tried in connection with a toxic spill from an alumina reservoir in western Hungary that killed 10 people in 2010 were acquitted on Thursday, an outcome a local mayor said would only serve to further traumatize and anger residents.

The spill was one of Hungary’s worst environmental disasters. Toxic red mud flowing from the reservoir destroyed hundreds of homes across three towns, covered the countryside and seeped into rivers as far downstream as the Danube.

It took years to clean up at a cost of about 40 billion forints ($140 million).

MAL Corp, the aluminum smelting company that owned the faulty alumina reservoir was subsequently taken over by the government, which declared it responsible for the incident and began to close it down. It is still under liquidation.

But in a first instance ruling, the court in the western town of Veszprem said executives and top employees of MAL had not been criminally negligent, nor had they committed other crimes they were charged with during the 40-month legal procedure.

“The defendants had no realistic and objective opportunity to discover the hazards that had formed,” the court said in a statement, adding that relevant authorities had signed off on the reservoir’s blueprints and operation, and conducted regular checks.

“The authorities had uncovered no shortfalls and prescribed no additional checks. The catastrophe had no predictable, visible, recognizable prior sign,” the court said.

It was not immediately clear whether prosecutors would appeal the verdict.

Earlier, a local far right politician, Lajos Kepli, protested in the court, holding up a sign showing an image of the devastation. It read: “Is this the worth of ten lives?” He was led out by police, a Reuters witness said.

Karoly Tili, the mayor of nearby Kolontar, the first village that was struck, said locals, many of whom had yet to recover from the disaster, would be devastated.

“I am disappointed,” he said by telephone. “I thought they would set an example in the case. The prosecution needs to appeal this, or people here will be very angry.”

Emotions in Kolontar were running high ahead of the trial. On Wednesday, Jozsef Holczer, 67, whose house was destroyed, cried as he recalled the tragedy which swept away half the buildings in the village.

“I used to come here to sit with my friend Erno Stumpf under a big walnut tree that stood here,” Holczer said. “We would hide from the sun in summers, take shelter from the snow in winters, sit around and drink and talk.”

Stumpf and his sister died trying to save their pigs from the mud, the old man said.


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Gold majors in mix for PNG pit

Another piece of PNG is up for sale on the international market with no say for the landowners or even the PNG government…

Hidden Valley

Bridget Carter and Gretchen Friemann | Business Spectator

Some of the world’s major gold miners could be eyeing one of Newcrest’s troubled Papua New Guinea assets, with suggestions China’s Xijin and South Africa’s Gold Fields may be among a list of bidders for its Hidden Valley ­project should it come up for sale.

However, Australian groups Northern Star and Evolution Mining aren’t expected to be in the mix.

Newcrest yesterday indicated it was mulling options for Hidden Valley, a gold and silver operation about 300km northwest of the PNG capital Port Moresby, that it jointly owns with Harmony Gold Mining.

The mine, one of three owned by Newcrest in PNG, has struggled to turn a profit since it started producing in 2010, and some question whether the asset, which produces more silver than gold, should be shut down rather than sold due to its troubled history.

For the December quarter, 17,000 ounces of gold and silver were produced.

It is understood the mine has operational issues and a cost structure that makes generating a profit challenging.

Still, every asset has a price, and offered at the right price it could prove attractive for an offshore bidder.

Xijin and Gold Fields were both understood to be among the suitors for Newcrest’s Telfer gold and copper mine in Western Australia when it was placed on the market last year through adviser Bank of America Merrill Lynch.

However, it was withdrawn for sale after offers for the asset failed to live up to Newcrest’s expectation, understood to be around $500m.

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Newcrest ponders options for PNG’s Hidden Valley gold operation

Is Newcrest about to sell or close down its Hidden Valley mine?


The Hidden valley operation started producing gold in 2010

Rhiannon Hoyle | Wall Street Journal

Newcrest Mining is mulling its options for a troubled gold operation in Papua New Guinea that it owns with one of South Africa’s largest gold producers, which could include selling or closing the mine.

The Australian gold company runs the Hidden Valley operation, about 300km northwest of the nation’s capital, Port Moresby, jointly with Harmony Gold Mining, but has struggled to turn a profit from the business, which started producing gold for sale in 2010.

The mine–which, at five times higher than its flagship Cadia operation in Australia, is by far its costliest to run–has been hampered by poor ore grades and safety issues.

The mine sits in the mountains near the towns of Wau and Bulolo, at an altitude of roughly 2000 metres, where the terrain is steep, rainfall high and earthquakes not uncommon.

Macquarie in late November valued Newcrest’s Hidden Valley asset at $70 million. Since starting production, Newcrest has written down the value of Hidden Valley by hundreds of millions of dollars.

Hidden Valley has been one of a raft of strains for the gold producer, one of the world’s biggest, which has in recent years faced setbacks of almost every sort: from engineering faults at its mines and rain disrupting operations to unexpected tax bills. It was forced to write down its assets by billions of dollars as gold’s decade long bull-run ended and found itself in a regulatory tangle in 2013 when Australia’s securities watchdog investigated the company’s disclosure practices.

Newcrest’s top ranks have repeatedly bemoaned the “unacceptable” performance of the Hidden Valley complex, singling it out as an underperforming asset and vowing to turn the site around. However, signalling they may give up on that operation to focus on more-profitable mines, the company today said Hidden Valley is under review.

“The joint-venture partners are concurrently assessing all strategic options in relation to the future of the asset,” said Newcrest, which also has gold mines in places such as Australia, Indonesia and Ivory Coast. A spokeswoman said she couldn’t comment on how long the review may take.

Newcrest isn’t alone in reconsidering the future of one of its mines. As commodity prices have plunged and shareholders become pickier about their resources investments, miners around the world including BHP Billiton and gold major Barrick Gold have raced to trim down and focus on the best-performing facilities to protect profits.

At Hidden Valley, the cost of mining remains a big challenge. “Although an improvement on the prior quarter, which had significant production outages due to a fatality, the continued high cost nature of this operation” has led the joint venture to scale back some mining activities there until metal prices improve significantly, said Newcrest. A spokesman for Harmony couldn’t immediately be reached.

Newcrest said it produced more gold overall last quarter, as higher output from its Lihir mine, also in Papua New Guinea, and Telfer mine in Australia offset weaker volumes from its Cadia site, where it ran into difficulties with processing equipment.

The miner reported a 6 per cent on-quarter rise in total gold output, to 620,691 troy ounces, in the three months through December. Copper output, however, fell to 17,581 tonnes from 21,337 tons, it said.

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Fiji tying itself to a failed economic model

Fiji’s Prime Minister Bainimarama claims large-scale mining is the way forward for his country – but maybe the people will not be so easily fooled. A quick glance across the water to PNG should provide a chilling glimpse of what the future could hold if large-scale mining takes off. PNG has been wedded to large-scale mining for decades with devastating social, environmental and financial consequences. Billions of dollars have been made by the big foreign mining companies but local people have only the costs to comfort them…

PM: Mining will take Fiji forward

Aninesh Gopal | Fiji Times

PRIME Minister Voreqe Bainimarama says mining is one of the areas that will take Fiji forward.

Mr Bainimarama made the comment while handing over the lease to Tuvatu Gold Mine in Sabeto, Nadi this week.

“We will be revising our policy and institutional framework for mining and quarrying to update antiquated legislation so that responsible mining and mineral exploration and mining companies will work with us,” he said.

“I hope Tuvatu can be a model of what we can achieve economically, socially and environmentally.”

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Ramu mine workers want executive out and better safety standards

There is a long history of safety concerns

There is a long history of safety concerns at the Ramu mine

The National aka The Loggers Times

 More than 600 workers at Ramu nickel’s Kurumbukari mine in Madang went on a  strike over the weekend to have the mine management address issues.
Workers at Kurumbukari in Bundi supported by their colleagues at the mines refinery at Basamuk in Rai Coast gave a petition to the company management two weeks ago.
Ramu Nickel Workers’ Union vice–chairman Peter Aragaina said the response they got did not go down well so they decided to go on a sit-in strike last Thursday.
Aragaina said the workers pointed out 11 major issues affecting their work in a form of a petition.
One of the 11 points was to have the company vice–president removed from office over claims that local engineers and geologists were having problems communicating with him since he does not speak English or TokPisin.
“Communication is one of the problems we have, that’s why we keep misunderstanding ourselves and continue to have problems at work,” Aragaina said.
He said they also demanded the safety standards of the company should be up to Australian and New Zealand standards.

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Fiji: Bauxite exports halted


Joanne Vaetiti | Fiji Times

THE global recession has continued to affect bauxite export with no shipments departing from our shores since last year.

XINFA Aurum Exploration (Fiji) Ltd yesterday confirmed the drop in global demand had continued to affect export.

Company executive Derek Qiu said they hoped to begin exporting this year though he could not confirm a date.

The company only exported two shipments last year.

Mr Qiu said China was the biggest buyer of bauxite.

“Because of the global economy recession, the bauxite mining demand went down,” he said.

Mr Qiu added mining works was still in progress despite the low demand from the market.

Despite the global effect, Mr Qiu added the company focused on its rehabilitation work in Nawailevu, Bua.

He added they had planted 50,000 pine trees so far in the area, and were nursing 150,000 seedlings.

Fiji has exported $48million worth of bauxite so far from the shores of Bua.

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Ramu mine workers stage sit-in protest since Friday

MCC's Ramu mine headquarters in Madang

MCC’s Ramu mine headquarters in Madang

Miner urges staff to resume work

Post Courier

ALL RamuNiCo employees have been advised to resume work immediately by senior inspector with the Department of Labour and Industrial Relations, Paul Wartovo.

Mr Wartovo’s instruction follows a sit-in protest by the workers since last Friday, January 22.

This is after the company management responded to a letter by the unions on January 21, raising 11 points covering the daily management and operational issues of the project.

However, Mr Wartovo said appropriate industrial relations processes and procedures had not been followed before the protest.

“It is advised that all members of the union are to resume work immediately and allow the union executives and the management of RamuNiCo to seek DLIR’s intervention on the matter,” he said in a letter to the president of the union Justin Mende on January 22.

On this basis, RamuNiCo Management Ltd said the industrial action taken is in non-compliance with Ramu nickel project operations industrial award 2014 and directly betrays the trust established between the union and the company.

RamuNiCo has asked its employees to return to work with the commitment to seriously address the concerns raised.

“The company expresses its sincere desire to improve its performances within the context of operating in PNG and all that it entails,” the management said.

The Department representative, RamuNiCo management and the union executives will meet today, Wednesday January 27 for a compulsory conference pursuant to the Industrial Relations Act to arrange for a settlement on the 11 point petition.

Furthermore, the management said that all members of the union must be aware that there were very precise prerequisites in accordance with the “Industrial Organisation Act 1962 (Act) that must be complied with before any such action is taken.

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MGU keen to sell more than Panguna

Bougainville Special Correspondent

Self-proclaimed Me’ekamui Tribal Government of Unity (MGU) and Transpacific Ventures (TPV) entered an agreement in 2013 selling not just Panguna, but the entire island’s mineral rights to the company. Transpacific Ventures, with its Executive Director Renzie Duncan, designed a confidential Memorandum of Understanding (MOU) with the tribal government which virtually holds no authority on Bougainville, let alone Panguna.

Phillip Miriori

Phillip Miriori

The deal was drafted in the hope of utilizing the now Bougainville Transitional Mining Act. Which despite stiff opposition, was passed in ABG’s House of Representatives on 26th of March 2015.

The MGU’s self-declared president Philip Miriori; who has ambitiously pawned the entire island’s mineral rights for economic investment to the illegal government, emits a long trail of smoke that is getting thicker as the PNG Prime Minister is becoming more involved.

Caption from a copy of the MOU signed in 2013

Caption from a copy of the MOU signed in 2013

Now it would be assumed that ABG is aware of this agreement whether by formal means or hearsay, nevertheless both governments have an on and off relationship. But if there can be any speculation to this, MGU might be ABG’s ticket to Panguna. And having the so called tribal government being ‘the voice’ of the people of Panguna, will be a pretext to initially kick starting reopening of Panguna.

MGU is one of the many spent shell casings from the once well organised guerilla government that chased out a giant mining corporation, and out-maneuvered an Australian supplied and trained military. Under Late Francis Ona, Me’ekamui was the deterrent from foreign and corporate vultures. This is not the case today.

President Philip Miriori, who has come out as a sleazy operator; has been in the business of forking out from ‘investors’ like as Tall J, United Resources Management, Bill Wang and TPV. His motives may be for personal gain or so to speak, because he has not been able to initiate anything apart from bringing in the district government into Panguna. Presumably his hidden work may be coming undone with the recent spate of activities by the PM O’Neill.

The MOU has virtually signed away Bougainville's mineral rights

The MOU has virtually signed away Bougainville’s mineral rights

The speculation is Philip Miriori is working closely with TPV as the mining company and the PNG government as a potential funder for the reopening. Hence, the PNG PM is looking at purchasing the 53.83% shares from Rio Tinto, not only that, but has appointed himself as the Minister for Bougainville Affairs.

If this is the case, it is logical to predict repercussion of instability on the island. There are well armed factions that still exist and very much tainted by the issue of mining.

The people of Panguna, since pre-crisis have been misrepresented by their own leaders, relenting too much against the people’s cries on the degradation and destruction of their environment. It is important to note that Bougainville is predominantly matrilineal, and landowner representation at that time were representative-wise contrary. It was not until late leaders, Francis Ona and Perpetua Serero took over the Panguna Landowners Association.

Lest should it be forgotten that men took to arms under Francis Ona as a measure of deterrence and defense. Perpetua Serero’s inspiration had as much influence as well. Women had had enough and demanded their men to take action. And customarily, men are responsible for defending the land of their mothers and daughters. This has been the practice of the people for thousands of years.

What happened afterwards is a history that exposed BCL’s arrogance and embarrassed a government.

Importantly, what can be defined from the region’s past to todays are the same issues of misrepresentation, greed and arrogance. These were key issues that led to the crisis. It is a no brainer to point out these issues with the current leadership.


Filed under Corruption, Financial returns, Papua New Guinea

Warning over PNG PM’s Bougainville manoeuvres

panguna wcf

Radio New Zealand

A Papua New Guinea opposition MP Sam Basil has warned about the prime minister Peter O’Neill’s interest in the Panguna mine in Bougainville.

Mr O’Neill last month met with the president of the autonomous Bougainville region, John Momis, over a reported government proposal to purchase 53% of Rio Tinto’s shares in Bougainville Copper Limited.

Mr Momis, whose administration has been in recent discussions with BCL about a possible re-opening of the mine, rejected the proposal.

The prime minister has since denied that the government is interested in buying in on Panguna.

But Mr Basil says Mr O’Neill’s latest move to appoint himself Minister for Bougainville Affairs is ominous.

“With his actions, in terms of dealing with other mines – Tolukuma and Ok Tedi – I think the people of Bougainville should be very wary of the prime minister’s actions, and they should be very careful on how they allow the prime minister to deal with their mine. So we should be very careful with Mr Peter O’Neill. He has lied to us many times.”


Filed under Financial returns, Papua New Guinea

Bauxite in Malaysia: The environmental cost of mining

malaysia bauxite

Bauxite mining has become a controversial political issue in Malaysia. As the government implements a temporary ban on extracting the aluminium ore, BBC South-East Asia correspondent Jonathan Head visits the most-affected area.

Amid the monotonous dark green lines of Malaysia’s endless palm oil plantations, there are now vivid red gashes in the hills behind the east coast town of Kuantan.

These have appeared only in the past 18 months, as a frenzy of open-cast bauxite mining gripped Pahang province.

Tonnes of bauxite are being transported out of the region. It is the world’s main source of aluminium so is vital for the construction of everything from airplanes to saucepans and cooking foil.

The numbers are staggering.

Annual output of bauxite ore has increased from a little over 200,000 tonnes in 2013, to nearly 20 million tonnes last year. Malaysia is now the world’s top producer, accounting for nearly half of the supply to China’s massive aluminium industry.

What is bauxite?


  • It is an aluminium ore and the world’s main source of aluminium.
  • Not a mineral itself, it is a rock comprised mostly of aluminium hydroxide, typically alongside small amounts of silica, iron oxide and other impurities.
  • It is used mostly to make aluminium but other uses include making sandpaper, polishing powders, and in hydraulic fracturing, or “fracking”, gas and oil from shale rock.
  • There are plentiful reserves of it, which should allow hundreds of years’ more use even before recycling is taken into account.
  • The top producers are Australia, China, Brazil and India.
  • Commonly found near the surface, it is typically strip-mined – a practice sometimes criticised for its environmental impact.
  • The subsequent production of aluminium involves electrolysis and is usually located in countries where electricity is cheap, such as Iceland.

Malaysia has a long history of mining, especially tin, but until very recently it scarcely registered on global markets as a source of bauxite. That changed suddenly in January 2014, when, in an attempt to boost its own aluminium-smelting industry, Indonesia banned exports of bauxite ore.

Up to that point Indonesia had been China’s major supplier.

Several Indonesian mining companies then started looking at the hills above Kuantan, where the plentiful bauxite was of a lower quality than that available in Indonesia and Australia.

Fleets of lorries have been abandoned as the ban on mining takes hold

Fleets of lorries have been abandoned as the ban on mining takes hold

‘Mad rush’

Much of the land in Pahang province has been redistributed to settlers so they could cultivate it with rubber, palm oil or fruit orchards. So all the companies had to do was approach smallholders whose properties contained bauxite, and offer them substantial sums of money to allow their land to be mined.

Most of the plots were quite small, allowing the companies to exploit a loophole in Malaysian law, which only requires an environmental impact assessment for plots larger than 250 hectares.

The little country roads winding through the hills were suddenly clogged with huge lorries carrying the ore to the port in Kuantan. The rivers ran red with bauxite sediment, staining the sea as they flowed out. Some of the mines had licences; many did not.

“It became a whole mad rush,” says the opposition member of parliament for Kuantan, Fuziah Salleh. “There were 44 companies with export licences, and they were all rushing to get as much as they could get from anybody who was willing to sell their raw ore.

“The greed, the need, of certain people, outweighed welfare of the common people and the authorities allowed it. And I think there is a lesson to be learned.”

The lesson has perhaps been learned. The federal government has ordered a halt to all mining while it rethinks the regulation of the industry. Seven people have been detained on suspicion of corruption. But the damage to the environment and future health risks remain unknown, and worrying.

How badly has bauxite polluted the water?

malaysia bauxite pollution

I watched a team from the Malaysia Nature Society (MNS) taking samples from the Sagu River, at the point where water is pumped out for Kuantan’s domestic supply.

They collected bottles of water and trays of alluvial mud, and analysed them to detect the presence of heavy metals, arsenic and mercury, which typically exist in bauxite sediment.

Government officials are already doing similar tests, but the failure to regulate the bauxite industry has damaged public trust in its efforts; the MNS volunteers said they wanted to do the tests themselves to ascertain how badly polluted the water supply is.

Marine scientists have also warned of possible catastrophic damage to the ecosystem off the coast of Pahang.

Volunteers test water pollution near mines, instead of trusting government readings

The official who ultimately bears responsibility for what has happened in Pahang is the state’s Chief Minister Adnan Yaacob. A veteran politician from the ruling UMNO party, he has been in the job for 16 years, and under Malaysia’s federal system chief ministers wield a lot of power.

He turned down the BBC’s request for an interview. But he has since acknowledged that the state government failed to control bauxite mining, and that he had not sought central government help because he believed he could handle the situation locally.

Demanding compensation

Che Long bin Che Ali is one of the residents in the bauxite zone who refused to lease out his land, where he cultivates fruit trees. He worries about the impact on the health of future generations.

But his house is right next to one of the roads used by the ore lorries; everything inside and outside his home was covered by a thick film of red dust, and the trees started to die.

He began stopping the lorries and demanding compensation payments from them.

He took me to what had been a durian orchard a few hundred metres down the road. The home of the orchard-owner now lies abandoned and propped up on a high slab of red-brown earth.

All around, the excavators have dug out a desolate moonscape of earth piles and gaping holes.

“This has not helped us,” he told me.

“I am not angry with the bauxite industry. I know it brings income for the government, but it must follow proper regulations. Don’t pollute our roads, don’t pollute the rivers.

“A handful of people enjoy the profits, but in future many people could suffer.”

As the three-month moratorium took hold, fleets of lorries were left idle in jungle clearings, next to stockpiles of ore that have not yet been exported.

Once the moratorium expires, it is not clear what will happen. Many residents want mining to be banned permanently. The state is thought to have only 10 years of bauxite reserves left.

Perhaps just a few hundred settlers got rich from the bauxite boom, and a few dozen well-connected companies. The state collected a 5% royalty on exports, but opposition politicians argue the federal government could have imposed a 10% duty, but did not do so.

Whatever the benefits were, they do not appear to justify the enormous environmental damage that has been done.

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