Monthly Archives: June 2016

Rio Tinto washes its hands of war crimes

Bougainville Revolutionary Army fighters look down on the Panguna mine in 1996

Bougainville Revolutionary Army fighters look down on the Panguna mine in 1996. Now Rio Tinto hopes to wash away its role in war crimes

Rio Tinto ‘gives up’ Bougainville Copper stake

Daniel Palmer | The Australian | 30 June 2016

Rio Tinto has exited its 53.8 per cent stake in the ASX-listed Bougainville Copper after a near two-year review of its position.

The mining giant will transfer the holding to an independent trustee who will distribute the shares to both the Autonomous Bougainville Government (ABG) and the Papua New Guinea government.

It will receive no compensation in return despite the stake being worth over $40 million as of the close of trade yesterday.

The decision by Rio will see the ABG receive a greater proportion of its stock, although both ABG and the PNG government will hold an equal share of 36.4 per cent once the stake is transferred.

Bougainville Copper’s prospects rest on the future of the controversial Panguna copper/gold mine in Papua New Guinea, which has been out of operation since it was central to the start of a 10-year civil war that broke out in 1989.

The Panguna mine was a major producer in its heyday and is believed to still house a very significant 5.3 million tonnes of copper and 19.3 million ounces of gold. However, it could cost up to $10 billion to restart production, while the hurdle of public support will be a challenge to clear.

Bougainville Copper’s rights to the mine were stripped in 2014, which led to the Rio review and while it still hopes to reclaim the licence to develop the mine, there has been no significant change to the state of play.

It does, however, retain an exploration licence.

Rio’s stake was worth $92.5m when it first hinted at an exit, with market interest steadily fading since.

“Our review looked at a broad range of options and by distributing our shares in this way we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna,” Rio Tinto Copper & Coal chief executive Chris Salisbury said.

“The ultimate distribution of our shares also provides a platform for the ABG and PNG government to work together on future options for the resource.”

The deal will see Rio give six months’ notice for termination of its management agreement with the ASX-listed group, while Bougainville Copper chairman Peter Taylor will step aside, with immediate effect.

Should either the PNG government or ABG not accept the stake offered by Rio within two months, it will be offered up for the other party to take control.

The departure of Rio from the project echoes a similar decision to walk away from the Northern Dynasty Minerals project in Alaska in April 2014, as it gifted its stake in that controversial project to charitable enterprises.

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Filed under Environmental impact, Human rights, Papua New Guinea

Logging exposes Frieda river mine lies

sepik logging

The history of the logging industry in the Sepik region exposes the lies of advocates of the Frieda river mine who say the economic returns will improve local livelihoods.

The Sepik region has been heavily logged by foreign owned companies for more than 30 years.

Since 2000 alone, logs valued at more than K3.75 billion have been exported from the region. But the benefits for ordinary people are nowhere to be seen.

Mineral Resource Authority Managing Director, Philip Samar, claims the Frieda river mine ‘would be the first large-scale resource project in the Sepik Provinces’, conveniently forgetting the 10 or more large-scale logging projects that last year exported timber valued at K258 million.

Samar would have us believe the roads of Wewak and Vanimo will be paved with gold if we allow the Chinese to open their mine – thirty years of logging tell us that is a lie!

Frieda raising standard: MRA
The National aka The Loggers Times |June 29th, 2016

THE Mineral Resources Authority says the formal process for the Frieda River project will become operational and be of world standard.
Frieda River Limited (a PanAust Limited subsidiary) and Highlands Frieda Limited (a Highlands Pacific Limited subsidiary), are the tenement holders for the Frieda River Project in West Sepik.
They last Friday registered with the Mineral Resources Authority (MRA) a special mining lease application, along with nine supporting tenement applications. 
MRA managing director Philip Samar said the project would be the first large-scale resource project in the Sepik provinces.
He said the registration of the mining lease was a significant milestone for the companies involved and for the country.
It will be known as tenement SML 9. 
“Once in development, the project will increase national gross domestic product and export earnings and provide a long-term boost to Government revenues,” he said.
“It will also generate benefit streams to landowners and host communities, as well as create employment and business development opportunities during project construction and operation.” 
The pre-production capital cost of the project is estimated at US$3.6 billion (K11 billion) . 
“Following the granting of the lease, a construction period of up to four years is envisaged. Production is expected to commence in the early 2020s.
“The average annual production estimates of metal in concentrate, from the 2.7 billion tonnes of mineralisation, is 175,000 tonnes of copper and 250,000 ounces of gold.
“The initial stage of the mine is expected to be 17 years, with multiple pathways to further expand and extend the initial operation.” 

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Filed under Environmental impact, Financial returns, Papua New Guinea

Rio Tinto dumps its Panguna responsibilities

panguna trucks

Rio Tinto is walking away from Panguna without paying any compensation for the death and environmental destruction it caused

Rio Tinto Media Release | 30 June 2016

Rio Tinto has today transferred its 53.8 per cent shareholding in Bougainville Copper Limited (BCL) to an independent trustee.

Equity Trustees Limited will manage the distribution of these shares between the Autonomous Bougainville Government (ABG) for the benefit of all the Panguna landowners and the people of Bougainville, and the Independent State of Papua New Guinea (PNG).

Under the trust deed, the ABG has the opportunity to receive 68 per cent of Rio Tinto’s shareholding (which equates to 36.4 per cent of BCL’s shares) from the independent trustee for no consideration and PNG is entitled to the remaining 32 per cent (which equates to 17.4 per cent of BCL’s shares).

The ABG and PNG will both hold an equal share in BCL of 36.4 per cent if the transfers are completed. This ensures both parties are equally involved in any consideration and decision-making around the future of the Panguna mine.

Rio Tinto Copper & Coal chief executive Chris Salisbury said “Our review looked at a broad range of options and by distributing our shares in this way we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna. The ultimate distribution of our shares also provides a platform for the ABG and PNG Government to work together on future options for the resource.”

In accordance with the existing management agreement with BCL, Rio Tinto will today give the required six months’ notice to terminate the arrangement. Although Rio Tinto will no longer hold any interest in BCL, Rio Tinto will continue to meet its obligations under the agreement during that period to ensure an orderly transition in the shareholdings of the company. BCL chairman Peter Taylor will resign with immediate effect but he will continue to be available to provide services to the board during this transition period.

Note to editors

The Trust Deed determines that should either beneficiary of the trust not apply for the transfer of the BCL shares attributable to them from the trustee within two months, then those shares will be made available to the other party.

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Frieda miners play their billion dollar bullshit card

frieda lodges application

Just like Ok Tedi, Porgera and Panguna, Frieda river mine could add billions to GDP – but what does that really mean and haven’t we heard the same bullshit before?

Freida mine to generate billions

Gorethy Kenneth | Post Courier | June 28, 2016

ONE of Papua New Guinea’s major mining projects will generate more than PGK39 billion and increase real income by PGK11.8 billion once it starts.

The Frieda River Project in East Sepik and West Sepik Provinces will generate PNG’s real GDP by a cumulative total to the year 2040 of PGK39 billion and increase real income by PGK11.8 billion.

For the West and East Sepik Provinces, the Project would increase real GDP by a cumulative total of PGK36 billion and increase real income by PGK5.2 billion.

Everyone from the World Bank and the United Nations to the PNG government acknowledge previous large-scale mines in PNG have not delivered better lives for ordinary people and have instead left terrible environmental and social problems. The mines were approved on the basis of the same ‘billion $ bullshits’ we are now hearing once again…

Last week, the Government officially announced Frieda River Limited (a subsidiary of PanAust Limited) and Highlands Frieda Limited (a subsidiary of Highlands Pacific Limited), the tenement holders for the Frieda River Project in East Sepik and West Sepik Provinces, officially registered a Special Mining Lease (SML) application, along with 9 supporting tenement applications, with the MRA, Papua New Guinea’s regulatory authority for mining last week.

Can someone please let Gorethy and the Post Courier know that PanAust is in turn owned by the Chinese State through Guandong Rising Asset Management – just like MCC and its faltering Ramu nickel mine in Madang

PanAust has devoted over 235,000 man-hours and invested US$65 million to advance the Project. This has been achieved with no lost time injuries, an excellent outcome for a Project that is located in a remote area with limited access.

Mineral Resource Authority boss Philip Samar in a statement said last Friday that the commencement of the formal process for the Frieda River Project to become an operational mine of world standard.

How can Philip Samar know the mine will be of “world standard” when they haven’t yet revealed how they will manage the toxic tailings and have not submitted any environmental plan?

“Frieda River Limited (a subsidiary of PanAust Limited) and Highlands Frieda Limited (a subsidiary of Highlands Pacific Limited), the tenement holders for the Frieda River Project in East Sepik and West Sepik Provinces, have today registered a Special Mining Lease (SML) application, along with 9 supporting tenement applications, with the MRA, Papua New Guinea’s regulatory authority for mining”.

“The project will be [will be? oops, sounds like Samar has already determined the outcome of the application?] the first major, large-scale resource project in the Sepik provinces of Sandaun and East Sepik, a least-developed area of Papua New Guinea. Registration of the SML is a significant milestone for the companies involved and for Papua New Guinea, coming at a time of cyclical downturn in the mining sector. The lease will be known as tenement SML 9. This application provides confidence for the future of the mining industry, which has long been the mainstay of PNG’s economy,” he said.

“Once in development, the project will increase national gross domestic product and export earnings and provide a long term boost to government revenues. It will also generate benefit streams to landowners and host communities, as well as create new employment and business development opportunities during project construction and operation”.

Yes Philip, we have heard the same bullshits before, but how will Frieda be any different from Ok Tedi, Porgera, Panguna and all the rest….?

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Filed under Environmental impact, Financial returns, Mine construction, Papua New Guinea

Company Boards still to approve Wafi-Golpu commitment

Hidden Valley

With their Hidden Valley mine unable to return a profit do Harmony and Newcrest really have the stomach for another JV?

Joint venture prepares for mining [really?]

Gedion Timothy | The National aka The Loggers Times | June 27, 2016

THE Wafi-Golpu Joint Ventures, since the announcement of the findings of its feasibility study, is focusing on preparing an environment impact statement and a special mining lease application.
General manager Sustainability and External Relations David Wissink said the impact statement and the mining lease application would be submitted to the Government after the approval of the Newcrest and Harmony boards before the start of the next phase of development.
“The proposed mine development is underground, targeting the rich Golpu copper-gold porphyry ore body. Feasibility study investigated the establishment of two block caves – block cave one BC1 and a deeper block cave two BC2  –  along with associated infrastructure, processing plant, roads, electricity, water management and port facilities,” Wissink said

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Assess environmental damages, Bulolo LOs tell Pacific Niugini

Bulolo township

Bulolo township

Joan Bailey | Post Courier | June 24, 2016

LANDOWNERS from Kusi village in Waria local level government, Bulolo District have appealed to Pacific Niugini Minerals and MGL Limited to sort out the environmental damage caused to their environment.

Chairman Simon James and his assistant Sakixy Kabre told Post-Courier that the two companies started exploration drilling for minerals at their village in 2010. They said the exploration work progressed really well with the developers excited with the results where evidence of gold, copper and silver was discovered only seven metres deep into the earth and of high grade.

Pacific Niugini exploration licences around Bulolo

Pacific Niugini exploration licences around Bulolo

“Due to the fact that we lack government services, we offered our land that is rich in minerals to the developers to be extracted and bring in developments into our villages in order to increase our living standard,” Mr James said.

However, Mr James said they were shocked that the PNM and MGL Limited just left in 2014 without any proper explanation given or conversation held with landowners on their reasons to cease work. He said until now, they are still awaiting the response from the two explorers on the future plan of the Kusi prospect and also environmental damage caused.

Mr James outlined the environmental damage included deep trenches cut into the earth of two to three kilometres, several drill beds created, large surface clearance where forest are cleared chasing away all forest habitat, landslides, destruction of kawiwi (betelnut) plantation, bringing water supply from the mountains to their campsite doesn’t have a proper drain and it flows free so its continuous flowing runs into food gardens causing soil erosion.

Mr James appealed to PNM and MGL Limited to immediately consult the Kusi prospecting area landowners and solve the issue with them.

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Filed under Environmental impact, Human rights, Papua New Guinea

Experimental seabed mining… out of our depth

Mission Blue | June 23, 2016

Aliens finally made it to planet Earth. And it just so happens these aliens value — above all else — the American quarter, those shiny metal pieces emblazoned with George Washington. Upon surveying the planet, the aliens note that the highest concentration of quarters are located on Manhattan Island. So, they deploy enormous mechanical arms that raze New York City, destroying icons of culture and human achievement hundreds of years in the making. What’s left is rubble strewn with quarters, which the aliens methodically gather up and stockpile. The aliens congratulate themselves on the efficiency and handsome profitability of their operation.

If this sounds like an absurd manner in which to value one of the greatest cities on Earth, that’s because it is. And while this story is fantasy, sadly the same mentality is playing out now on the floor of the ocean. For the better part of a century, humans have scraped the ocean floor with massive trawlers that level hundred-year-old corals and destroy diverse and unknown ecosystems in the pursuit of a singular, short-term value, whether it be cod, squid or shrimp destined for a plate thousands of miles away. The UN Secretary-General reported in 2006 that 95 percent of damage to seamount ecosystems worldwide is caused by deep sea bottom trawling. Now, in 2016, a new threat is emerging to the benthic ecosystems deep within the blue ocean: deep sea mining. According to our partners at the Deep Sea Mining Campaign, “the focus of deep sea mining (DSM) is the deposits laid down over thousands of years around underwater hot springs, or hydrothermal vents. For example Nautilus, a DSM project in the Pacific has secured or is in the process of applying for the exploration rights to 534,000 km2 of the sea floor in PNG, Tonga, the Solomon Islands, Fiji and New Zealand. In addition, many other companies are waiting to see how Nautilus fares before taking the plunge themselves.

DSM-infographic

The Deep Sea Mining (DSM) Campaign is an association of NGOs and citizens from the Pacific Islands, Australia, the US and Canada who are concerned about the likely impacts of DSM on marine and coastal ecosystems and local communities. The DSM Campaign started in late 2011 in response to the frenzy of sea bed exploration in the South Pacific. Approximately 1.5 million km2 of ocean floor is currently under exploration leasehold for deep seabed mining.  The world’s first license to operate a deep sea mine has been granted in the Bismarck Sea in Papua New Guinea to Canadian company Nautilus Inc. The DSM Campaign’s unique approach combines regional policy interventions, human rights, science based advocacy and working with local NGOs and community in PNG and the Pacific. 

seabed mining

Those quarter-loving aliens might have said, “What’s the big deal? We can’t see the harm here.” Indeed, that’s the same tune that DSM interests are humming: the upside is huge, environmental concerns are overblown, operations will be safe, what could go wrong? The truth is no one — neither oceanographers or DSM companies — know very much at all about deep sea ecosystems.

Remember, only 5% of the ocean has been directly observed by anyone. Some scientists believe that hydrothermal vents are where life first started on earth. If so, these environments and these ecosystems could provide insights into the evolution of life. This means that in the Pacific many species could become extinct before they have even been identified. And what about the potential toxicity of metals that will be released into the ocean water from DSM operations? Might they find their way into the food chain and contaminate seafood eaten by local communities? At the minimum, more study is needed to answer this basic and critical question.

Resource hungry nations are viewing Deep Sea Mining as the next gold rush. And momentum is building by the month. For example, check out these recent digital newspaper clippings:

Any observer to the Deepwater Horizon catastrophe knows that corporations focused on profit from resource extraction cannot be relied upon to self-regulate for safety and responsible environmental stewardship. Deep Sea Mining is no different. Dr. Sylvia Earle has perhaps put it best: “It’s like a land grab. It’s a handful of individuals who are giving away or letting disproportionate special interests have access to large parts of the planet that just happen to be underwater. The vast expanses of the central Pacific seabed being opened up for mining are still largely an unknown. What are we sacrificing by looking at the deep sea with dollar signs on the few tangible materials that we know are there? We haven’t begun to truly explore the ocean before we have started aiming to exploit it.”

To join in the fight against Experimental Seabed Mining, sign the petition. Another good backgrounder is this Huffington Post article by Phil Pauley.

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Filed under Environmental impact, Financial returns, Human rights, Pacific region, Papua New Guinea