Monthly Archives: January 2018

Nautilus in crisis as another exec resigns

Adam Wright is jumping off the sinking Nautilus

Wright resigns from Nautilus

Cedric Patjole | Loop PNG | January 18, 2018

Nautilus Minerals vice president of PNG Operations, Adam Wright, has resigned. The Company announced last night that Wright’s resignation is effective as February 26th 2018.

CEO Mike Johnston said Wright played a significant role over the last three and a half years in the areas of project management, stakeholder and government engagement and corporate social responsibility.

“We would like to thank him for the valuable contributions he has made to Nautilus’ progress to date and wish him well in his future endeavours,” said Johnston.

Wright’s resignation comes at a time when the company is struggling to secure financing to fund its capital working requirements and the completion of its sea floor production system for the Solwara 1 project in PNG waters.

Wright’s resignation from Nautilus is the second to be announced in the last three weeks.

On December 27, 2017, Russel Debney resigned as chairman after a long stint with the company where he joined the Nautilus board in 2006.

The recent events surrounding the company have further raised domestic and international pressure by concerned groups and individuals, calling for the project to be stopped.

Former attorney-general, minister for justice and Madang governor, Sir Arnold Amet, has called on the government to terminate its partnership with Nautilus given the recent events.

The PNG Government owns a 15 percent stake in the Solwara 1 Project.

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New watchdog to investigate Canadian companies for human rights abuses

Hilary Beaumont | Vice News | January 18, 2018

The Canadian government is creating a new watchdog to investigate human rights abuses by Canadian companies operating overseas, fulfilling a Liberal campaign promise.

Canadian companies have long faced accusations of human rights abuses abroad, including gang rapes by security guards at a mine in Papua New Guinea operated by Toronto-based Barrick Gold, and the collapse of the Rana Plaza garment factory in Bangladesh that killed more than 1,000 workers who were making clothes for Joe Fresh, a brand owned by Canadian company Loblaws.

Canadian companies employ workers in developing countries to make clothing and mine materials that end up in electronics, but these mines and factories are often subject to lax regulations. When human rights abuses arise, there can be little recourse for complainants due to police corruption and weak justice systems on the ground, and lack of access to remedies through Canada’s courts.

‘RIGHT THING TO DO’

The new ombudsperson’s office will independently investigate abuse allegations against businesses operating overseas, including in the mining, textile and oil and gas sectors. The ombudsperson will have the power to request documents from companies and the power to gather testimony from witnesses. Canada’s trade minister François-Philippe Champagne said the ombudsperson will have “all the tools and resources to ensure compliance.” The watchdog’s recommendations will be made public, and the ombudsperson’s office will have the ability to withdraw government funding from companies.

There will also be a multi-stakeholder body to advise the ombudsperson and the government. That advisory body will include representatives from the mining, oil and gas and apparel sectors, as well as human rights and labour advocacy organizations, and an Indigenous representative.

“I’m adamant that Canada is to be second to none when it comes to business and human rights,” Canada’s trade minister François-Philippe Champagne said Wednesday. “This is not just the right thing to do, but that’s what Canadians expect from us.”

Advocacy organizations have waited more than a decade for this announcement, calling it “long overdue.” But critics are pointing out that the ombudsperson’s mandate will not include investigating environmental violations, which are often wound up in human rights abuses.

ENVIRONMENTAL QUESTIONS

Liberal MP John McKay, who has pushed for mining industry oversight for years, stood next to the minister as he made the announcement. McKay’s private members bill to create a similar ombudsperson’s office was killed in 2010. It was only six votes short of passing.

Similar to the new ombudsperson’s office announced Wednesday, McKay’s bill called for the ability to withdraw government support and funding to companies found to be breaching human rights.

“The only significant difference is that they’re not going to do environmental investigations,” McKay told VICE News of the new ombudsperson. “Not quite sure why they arrived at that decision, but there’s a lot of interaction between environmental rights and human rights.”

Everlyn Guape, who was brutally sexually assaulted by security guards near the Barrick Gold mine in Porgera, Papua New Guinea, told VICE News she wanted to thank everyone who fought for the creation of the ombudsperson’s office.

Locals near the mine have also accused the company of contaminating their river. Guape added that “humanity depends on the environment,” so environmental abuses should also be investigated.

“This coexistence cannot be deliberately ignored by Canadian corporations and the government of Canada,” she warned.

‘INDEPENDENT AND EFFECTIVE’

Reacting to the government’s announcement, Barrick Gold said it supports the “additional accountability mechanism for Canadian businesses operating overseas, focused on dialogue and conflict resolution.”

“We look forward to engaging with the ombudsperson in a transparent and constructive manner, to assure Canadians that mining activities continue to generate economic and social benefits for host communities and governments, while respecting human rights.”

Advocacy organization Mining Watch Canada has been pushing for an effective ombudsperson since 2005, Catherine Coumans, the group’s research coordinator, said in a statement.

“We will continue to press the government to ensure that the ombuds office is independent and effective, and has adequate resources to do its job.”

Coumans added that additional measures still need to be taken, including allowing complainants access to Canadian courts to sue Canadian companies for rights violations overseas, and allowing communities free, prior and informed consent before new resource projects go ahead.

In a Canadian Network on Corporate Responsibility survey before the 2015 election, the Liberals stated they would “set up an independent ombudsman office to advise Canadian companies, consider complaints made against them, and investigate those complaints where it is deemed warranted.”

The Liberals also committed to act on the recommendations of a 2007 National Roundtable on Corporate Social Responsibility and the Canadian Extractive Industry in Developing Countries.

But they have not committed to making Canada’s courts open to legal action from complainants in other countries.

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The writing is on the wall for Solwara 1

Former Attorney General of Papua New Guinea:

The writing is on the wall for Solwara 1 – PNG should withdraw its investment before it’s too late.

Deep Sea Mining Campaign | Scoop NZ | 17 January 2018

Amid financial strife and looming litigation, Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice advises the PNG Government to terminate its joint partnership agreement with Nautilus, recoup its 15% stake in the Solwara 1 deep sea mining project and decline to renew the licences for Solwara 1.

For Nautilus Minerals a miserable Christmas has just flowed into an unhappy new year. A series of gloomy end of year investor updates confirmed Nautilus is unable to raise the funds necessary to complete equipment for its Solwara 1 deep sea mining project.

Then came the final blow for 2017 – affected communities launched legal proceedings in a bid to obtain key documents that will reveal to them and all Papua New Guineans whether Solwara 1 was approved lawfully and what the true environmental, health and economic impacts of the project will be.

Shortly after, Company Chair Russell Debney resigned. This is in spite of his long association as a board member since the company listed on the stock exchange in 2006 and the chair of the company’s predecessors, Nautilus Minerals Niugini Limited and Nautilus Minerals Oceania Limited.

Due to the high-risk nature of the project, financiers have declined to bail the company out, suggesting the efforts of Nautilus’s two largest shareholders have been in vain. The best they have been able to come up with are bridging loans of USD 7 million to meet immediate needs whilst desperately hunting for another USD 350 million.

Sir Amet stated:

“Investors, financial institutions and even the former chair of Nautilus can see the writing on the wall for Solwara 1. By the company’s own admission the project is an experiment with unknown environmental and social consequences and uncertain profits. The past few months have really shown the extent to which financiers and our own communities in PNG reject this project.”

“This high-risk project is a foolhardy investment when our country has so many pressing needs. In order to acquire our 15% equity, the National Government obtained a loan in 2014 from the Bank of the South Pacific of almost PNG K400 million. It’s also likely that the Government has provided Nautilus with generous incentives, which would further limit the potential to raise revenue from this project.”

“This is irresponsible in the context of our country’s ever-increasing debt bill”, continued Sir Amet. There is little likelihood of a positive return from this project to the balance sheet of the economy. The recent bridging loans for the project are a drop in the ocean – only 1/50th of the total funds required. With an interest rate of at least 8% and a lucrative 5% cash commission going to a previous director of Nautilus, this loan represents yet another expensive debt burden for PNG – especially as the loan is secured against PNG’s equity.”

“These bridging loans are from existing Board directors through a new private investment company incorporated in the British Virgin Islands. Such financial structures are commonly known as ways for minimising tax. And because the loan is from a related party, there was no need to even consult the PNG Government as the minority equity holder. If we stay in this deal, it will be the people of PNG who will have to pay.”

“The best course of action now is for the PNG Government to terminate its joint venture agreement with Nautilus before our investment ends up sinking to the bottom of the ocean along with the company. In addition, Nautilus’s licences are renewed every 2 years. The environmental uncertainties surrounding this project call for the Government to decline renewal. Indeed, given the poor financial record of the company, the government should consider suing Nautilus for the recovery of the full K400 million investment as its 15% equity stake is now virtually worthless.”

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Police Officers shot at Porgera

George Kakas

TWO reservists from the police unit at Porgera in Enga Province are in hospital after they were ambushed and shot by gunmen on Sunday, police said.

PNG Industry News | 17 January 2018 

The National newspaper reported that Enga’s acting police commander chief superintendent George Kakas said one of the reservists was shot in the leg while the other suffered a stroke when they were attacked near Wali Creek, a few kilometres from the Porgera gold mine’s township.

The reservists in five patrol cars were going to investigate the aftermath of a violent confrontation between two tribes when they were attacked with automatic weapons, but no major injuries or fatalities were reported, Kakas said.

He said a bullet presumably fired from a high-powered rifle penetrated a patrol car and injured the officer’s leg. The other reservist suffered a stroke during the incident.

The men were flown to Wabag hospital and are now recovering, The National reported.

Kakas said the incident had culminated from a stand-off between two tribes who were claiming ownership of the Mount Kare land where the Pogera mine is situated.

The Porgera joint venture is an open pit and underground gold mine about 130km west of Mount Hagen.

Barrick Niugini is the 95% owner of the Porgera joint venture, and is the manager of the operation. Barrick Gold Corporation and Zijin Mining Group each own 50% of Barrick Niugini. The remaining 5% interest in the Porgera joint venture is held by Mineral Resources Enga and is divided between the Enga provincial government (2.5%) and local landowners (2.5%).

A tribe embroiled in this feud allegedly attacked villagers from a neighbouring tribe, setting fire to some houses at Wali Creek. 

Kakas said the reserve police officers and mine security personnel were dispatched to check on the safety of power pylons and water supply facilities when they were ambushed by gunmen from the surrounding mountains.

A peace and good order meeting was convened on Monday involving the provincial government, police and representatives of the Porgera mine.

Barrick Niugini was approached for comment yesterday but had not responded before this publication’s deadline.

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Chatham has plans for new seabed mining consent

Waitangi, the main town on the Chatham Islands.

Simon Hartley | Otago Daily Times | 16 January 2018

Would-be seabed miner Chatham Rock Phosphate says it is “on track” to resubmit a marine consent application to the Environmental Protection Authority, by the end of the year.

Since November, Chatham Rock has sought to recapitalise. A rights issue to existing shareholders raised $549,000 and it is in the the process of seeking a private placement, in stages, for up to a further $C1.2million ($NZ1.33million), chief executive Chris Castle said in a recent NZX update.

Chatham has held a mining licence since since December 2012, but the EPA turned down its first application in February 2015, after Chatham had spent about $33million on research, development and application costs.

Chatham wants to suction up 1.5million tonnes of phosphate nodules annually from the seafloor, at depths of up to 450m, on the Chatham Rise about 250km west of the Chatham Islands.

It had recently confirmed it will also look at whether it was feasible to separate out any rare earth minerals brought to the surface with the phosphate, as a potentially lucrative byproduct.

Mr Castle said in his market update, which was included in addresses to the Underwater Mining Conference in Berlin last September, the company wanted to move away from being a “one-trick pony”.

Chatham had made “significant progress” in securing marine phosphate opportunities overseas, to secure “alliances” linked to offshore phosphate assets, but structured in such a way so as not to divert funding from its proposed New Zealand operations.

It was about to commission a research project looking at separating byproducts, he said.

“Successful recovery of even a small proportion of these [unnamed rare earth] byproducts could add significantly to our future revenue and profitability and also establish a strategic ocean-floor based asset for New Zealand,” he said.

The private placement, which closes on Friday, was undertaken in stages to partially reduce shareholder dilution of value, given the placement involved 4million shares, Mr Castle said.

“We still anticipate completing the [EPA] reapplication process and hearing by early 2020, he said.

The country’s other seabed mining project, separate to Chatham, is Trans-Tasman Resources’ development to mine ironsands from the seafloor off the southern coast of Taranaki, which gained EPA approval last year.

Two High Court appeals have since been lodged against the EPA decision, by Kiwis Against Seabed Mining and Forest and Bird. They are yet to be heard.

Trans-Tasman wants to take 50million tonnes of seabed material annually, to extract 5million tonnes of ironsands, for 35 years. Its first application was turned down by the EPA in 2014.

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Mercury kit study work for small-scale miners

alluvial miners at work

Alluvial miners at work on Bougainville

ONE PNG  | 15 January 2018

A recent mercury research study conducted at the small scale mining branch in Wau, Morobe Province is a collaborative work between the mining engineering department of Papua New Guinea’s University of Technology, the Mineral Resources Authority (MRA) through its small scale mining branch and the University of Kyoto-Japan through the leadership of Professor Takaiku Yamamoto, has released its findings.

The use of mercury has become very popular among artisanal and small scale miners because amalgamation is known to efficiently extract fine particles of gold from concentrates obtained by panning and sluicing operations. Gold alloys with mercury to form an amalgam from which the gold can subsequently be separated by evaporating the mercury.

The simplicity of the technique, low investment costs and its comparatively high gold recovery rate has made the mercury amalgam method an integral part of the artisanal and small scale gold mining operations.

In Papua New Guinea, most of the gold deposits worked by the artisanal and small scale gold miners are alluvial deposits in which the gold particles are liberated from gangue particles. It is customary to use riffled sluice-boxes to recover the liberated gold particles.

However, some of the gold particles, particularly the fine gold, does not settle in the riffle compartments but flows over to be discarded as tailings. In the hope of trapping these fine gold particles the artisanal miners frequently place some mercury in between the riffle compartments.

Then in recent years some semi-mechanised and mechanised alluvial mining operations used grinding mills or amalgam barrels for amalgamation of concentrates derived from their recovery systems before putting it through the knelson concentrators or shaking tables for cleaning.

Due to shear force between centrifugal force and drag force in knelson concentrators or the stratification action of the shaking tables, mercury is easily dislodged from the gold and is lost to the tailings. This is because the bonding mechanism holding gold and mercury together is weak and doesn’t require much force to sever the gold particles from the mercury, and because of size and density differences, mercury ends up in the tailings and eventually in the river systems.

However, by far the most dangerous practice adopted by the miners is the gold recovery process from the gold mercury amalgams. Gold is recovered by evaporating the mercury from the amalgam over an open fire

This process is commonly known as “cooking.” The mercury vapour, which includes fine globules, is partly inhaled while the remainder is released into the atmosphere, which returns as part of the “mercury cycle.”

Methods introduced to avoid the practice of releasing mercury into the atmosphere and which can reduce the mercury loss to less than 0.1 per cent are available but have not been so popular amongst miners due to the discolouring effect on the gold after distillation in a retort.

This discolouration is caused by the presence of iron and arsenic compounds and results in a lower price being offered by gold buyers for the product.

One such device is the “Mercury Retort” which evaporates the mercury in a closed cycle and recovers it by condensing the vapour with cooling water.

Mercury is toxic and an environmental pollutant which drew world attention in 1953 after it was reported that a large number of people living in the Minamata bay area in Japan developed symptoms of disease which affected their central nervous system after consuming fish.

The fish in the bay were contaminated with methyl-mercury as a result of mercury being released into the bay by the Chisso Corporation, a chemical company operating on the shores of the bay. The mercury poisoning was responsible for a variety of clinical symptoms which included speech impediments, failure of muscular coordination, and contraction of visual fields in the eye, disturbance in smooth eyeball movements, enteral hearing loss and unbalance of body. The disease is now commonly known as the “Minamata Disease.”

The recent study conducted at theMRA small scale mining branch in Wau was a collaborative work between the mining engineering department of Papua New Guinea’s University of Technology, the University of Kyoto-Japan and the small scale miners in Wau/Bulolo was to trial a an Amalgam retorting machine from Kyoto University-Japan.

The objective was to test run the Japanese mercury recovery kit, a prototype amalgam retorting machine for the recovery of mercury and critically assess the overall performance, its efficiency and ease of operation of the device.

The promotion and use of the retorts would be very beneficial in the long term as they are capable of reducing discharge of mercury vapour into the atmosphere and the environment. It can also recover bulk of the mercury for recycling which would be a potential economic gain for the small scale miners and the chances of them being poisoned can be minimized through the establishment of central facilities in alluvial mining active areas which will alleviate the more dangerous practice of ‘cooking” amalgams.

A batch of mercury gold amalgam samples were provided by the miners from around Wau/Bulolo mining areas for over a period of one week to conduct the research activity by retorting them in the furnace at four different temperatures (300-500 OC, 300-600 OC, 300-700 OC ,300-800 OC) and the mercury recovery results observed ,recorded and calculated.

From this activity, it is noted that mercury which was emitted during the process was mostly trapped in the condensers 1 and 2.

The carbon filter indicated zero mercury which concludes that the air released at the vacuum pump has zero mercury vapour.

From the results obtained, the research team concluded after careful assessment of the overall performance and efficiency of the mercury recovery kit that it is an appropriate technology and should be promoted and used in Papua New Guinea’s artisanal and small scale gold mining industry for mercury and recycling recovery.

MRA managing director, Philip Samar, who was instrumental in introducing the technology, said the purpose of this collaboration was to reduce and mitigate the increased use and disposal of mercury into the environment and increase alluvial gold production, resulting in the health of both the environment and people plus improving the wellbeing of ordinary PNG alluvial miners.

The MRA through its small scale mining branch in Wau would like to thank its research partners for the collaborative work undertaken.

This has set a milestone in being proactive in reducing and controlling mercury contamination to the environment and the users in the artisanal and small scale mining industry.

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Mining exploration in Bougainville led by LOs

Cedric Patjole | Loop PNG | January 15, 2018

Landowners in the Autonomous Region of Bougainville are partnering with investors to conduct mineral exploration in areas sanctioned by the Autonomous Bougainville Government.

Prospecting has started since the introduction of legislation allowing landowners complete ownership of customary land, and the lifting of the moratorium on specific localities for mineral exploration.

However, the ABG is making sure the exploration is done in the best interest of the people.

ABG Treasury and Finance Minister, Robin Wilson, said currently there is a moratorium on Panguna Mine due to its history and sensitive nature, which is being carefully addressed.

However, exploration has been allowed in other parts of the island.

“So far we have lifted the moratorium on three areas in Bougainville. That’s Mt Ore, Isina in Central Bougainville and the Arawa-Panguna area,” said the Minister.

“So this are the areas where mining activities are going on, and it is driven by the landowners themselves. It’s not government-driven.

“It’s the landowners and the investors they found and have brought them over.

“We are just making sure the investors are genuine investors. We’re making sure that they are not coming up with contracts or agreements that will make the landowner suffer.”

The Minister said the lead taken by landowners follows legislation giving LOs complete authority and ownership over clearly de ned customary land.

He said by giving the power back to landowners, they can either accept or reject the prospects on their land.

“The landowner now owns everything. In terms of alienated land the government still owns the resources. But where it’s clearly customary land, it is landowner-owned.

“So we believe that by giving the power back to the landowners, the landowners now have a say in whether exploration happens or mining happens,” Wilson said.

“In that way we are not forcing the issue on them. The landowners have to accept the development prospects that happen on their land.”

Wilson revealed that currently the island has been tagged as a high risk area by many international observers.

However, he said with any successful explorations and discovery, this could trigger more investment in future, as the ABG aims to rebuild the island’s local economy.

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