MCC admits landholders have not benefited from Ramu mine

After nine years of operation, the stakeholders have not seen the benefits

After nine years of operation, the stakeholders have not seen benefits from the Ramu mine says Chinese mining company MCC…

Post Couruer | November 18, 2016

RAMU Nickel developer Ramu NiCo has expressed concern that since the project inception in 2006, the landowners were off-loaded numerous business opportunities.

But these had not prospered due to lack of competent management acumen.

“The business development opportunities that have been given to landowners will need to be properly managed to ensure stakeholders benefit from these opportunities.

“Unfortunately, after nine years of operation, the stakeholders have not seen the benefits of their investment and this is a very serious concern for us,” Ramu NiCo Management (MCC) said in a statement.

It was responding a threat by landowner groups to close down the mine over failure by the Government to honour commitments to development assistance, including a K10 million grants.

MCC also said the royalty payment would be made soon while the K10 million business grant was a political commitment and outside of the company’s responsibility.

Mineral Resources Authority managing director Philip Samar warned the landowners not to unnecessarily disturb the Projects’ normal operation as this would be illegal under the Mining Act 1992 and perpetrators can be seriously punished.

Under the Ramu NiCo Project MOA, all parties including the four landowner chairmen, Ramu NiCo, the State and other stakeholders must resolve any disputes and misunderstanding amicably and not to take actions that would impact the normal operation of the Project.


1 Comment

Filed under Financial returns, Human rights, Papua New Guinea

One response to “MCC admits landholders have not benefited from Ramu mine

  1. Hans Mollinger

    Social License is a Capital Funding Item

    Ramu Nico has lauded its own generosity in providing K60 Million contracting activities since the project began (9 years ago), to mine area landowners. From your article, Ramu Nico state they regret the lack of fiscal prudence, or real appreciation shown by the landowners. In exchange, the landowners were expected to not complain about a denuded landscape, colored coastal estuaries, lack of social infrastructure developments, and patiently wait, for their overdue mining royalty payments.

    It reminds me a little of the ‘Disney Mary Poppins’ movie. The banker tells his son that 2 Pence (2 toea) a day saved, will grow into pounds (Kina) over the years, with interest earned, (as long as you don’t spend it). Now mind you, the nanny ‘Mary Poppins’ was imbedded in the family, at a paid wage, to ensure the savings could be achieved and good governance taught in the formative years. Was this the case with Ramu Nico imbedded management for the landowner business contracting?

    Ramu Nico generated revenues of close to $1billion a year. Ramu Nico spent more than $2 billion on developing up the project. How much of this project budget was set aside for local business and social development, to ensure the landowner companies benefited in equal largesse from construction and maintenance contracts being handed out? Was it 5%, 10%, or, 20% of all budgeted contracting activities? I think not…otherwise the contract values for landowner company contract services would have been K100 Million, or K200 million or even K400 million and include maybe, K50 million a year ongoing.

    A mining development license in PNG is a statutory process requiring formal application within government laws…easy to navigate when you pay the fees and meet the environmental regulations as they fall due. The granting of a social license is not government law…and to accept an intruder upon your ancestral lands requires a mutuality of trust, honesty, acceptance of paternalistic concerns for real social welfare developments, and delivery of unwritten, but expected obligations, covertly negotiated, to include economic fairness in building future enterprises for the landowners, that will exist beyond the period of the mine life.

    Foreign Investment is paramount to growth in PNG, as is cultural investment and maintaining the social license for the growth of local micro economies. PNG political leaders need to mandate intellectual capacity transfer between developers and grass root people, for mine right benefits, and developer agreed contract quotas, that require project committed, competent Joint Venture Contractors, with Landowners, for every mining development.

    The spirit of the land is not sold, only lent for specific purpose and required back again in the same pristine state from which it was borrowed. Responsibility by landowners can be an acceptance in social mutuality, if the developer includes real and visible, economic fairness benefits.

    It appears that Ramu Nico should get their social and cultural license landowner relationships in order, for their own good, and for all Papua New Guineans.

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