Monthly Archives: June 2018

Angore landowners set LNG machinery on fire in more PNG unrest

Charred machinery at the PD8 LPG development site in Hela province, PNG Highlands. Image: Michael Passingan/PNG News

Pacific Media Centre | 20 June 2018

In a show of frustration over the nonpayment of a business development grant, Angore landowners in Hela province have set fire to the massive Hides development LNG machinery on PDL 8 site as unrest continues in Papua New Guinea’s rugged Highlands region.

The destruction includes an excavator and a drilling machine while sections of a highway leading to PDL 8 have been dug up, reports the PNG Post-Courier.

In other developments:

  • Prime Minister Peter O’Neill and Members of Parliament, including ministers, will travel to Mendi tomorrow to reinforce the work of the state of emergency team.
  • Local community leaders involved in the failed election petition which triggered the unrest travelled to Mendi today.
  • Police have 15 names to kickstart their investigations into last week’s Mendi rioting, says
    Assistant Commissioner of Police (ACP) Operations David Manning.
  • O’Neill condemned calls for his resignation, saying the country needed strong leadership.

According to the Post-Courier’s Kevin Teme, local sources revealed that the Angore landowners – particularly from the PDL 8 site – are angry over their outstanding business development grant (BDG) which is kept in the trust and is not being released.

While the government has recently released K35 million as project security fees to Hides landowners of PDL 1 and PDL 4, the Angore landowners are frustrated over how Exxon Mobil and the state has dealt with this issue.

‘Rubbish’ claims
Spokesman Max Ekeya said various claims on social media about asking the Prime Minister to step down and others were rubbish as this was not the true information that caused the riot and burning down of the machinery at the PDL 8 site.

“The Angore landowners are showing their frustration because they have not got their BDG while other landowners from Hides PDL 1 and 4 just got K35 million as project security fees in which K20 million went to PDL 1 and K15million to PDL 4,” Ekeya said.

“The landowners are not asking the Prime Minister to step down, but are asking the government to release their business development grants,” Ekeya said.

Part of the excavated road in the Angore area. Image: Michael Passingan/PNG News

In a telephone interview with Tom Homake, a civil engineer with Hides Gas Development Company, he confirmed that all machines, including an excavator at the PDL 8 site, were burnt early yesterday.

“Information on setting alight the Eneria pipeline is not true and that’s just hear say. But I cannot confirm that,” Homake said when asked if the pipelines had also been set on fire.

“Other Hides areas, including the PDL 1 and PDL 4 up to PDL 7 area, are okay as I speak. We are on site doing a road projects from Takali to Komo and I can confirm that on ground,” Homake said.

Homake said this could change.

He said the Angore PDL 8 landowners were now asking the national government and Exxon Mobile to come and make their payment.

Plea for intervention
Meanwhile, spokesman Ekeya has called on the government to quickly intervene as he believes opportunists might take the law into their own hands and this may cause another destruction altogether.

Prime Minister O’Neill and MP plan to leave for Mendi tomorrow.

The Prime Minister expressed disappointment that the Southern Highlands provincial police commander had made statements outside his responsibility.

He urged police to carry out their duty in maintaining the rule of law and investigating offences without interference from politics.

“I am surprised that the PPC appears out of touch as reports are that he was not present in Mendi when the burning of state assets took place,” the Prime Minister said.

Assistant Commissioner of Police (ACP) Operations David Manning told the Post-Courier that at least 15 suspects in the rioting had already been identified to police and would be the subject of further investigation.

Manning said all suspects would be investigated indiscriminately and prosecuted to the full extent of the law.

“In the course of our investigation, we will be looking at all angles, because we need to ensure that anyone who had even the remotest involvement in the incident is investigated,” he said.

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Exxon Mobil ‘has shut down its operations’ – police

EMTV | June 19 2018

Hela Provincial Police Commander, Martin Lakari says Exxon Mobil has shut down its operations today (June 19), after landowners burnt heavy machinery in the early hours of this morning.

Lakari told EMTV News that this is a “landowner related issue.” 

The action is understood to be related to frustrations in a payment delay of a K35 million security fund by Exxon Mobil to landowners. The landowners are from Angore PDL 8 and Hides PDL 1 to 7 

Mr. Lakari said sections of road leading to the Hides Gas are blocked limiting police access. 

ExxonMobil has responded in a statement saying they are continuing to monitor ongoing tension in the Highlands. 

“We are investigating reports of vandalism relating to the Angore pipeline construction project. Host government security forces are in the area and also investigating. Our staff are all safe. 

“Production at the Hides Gas Conditioning Plant is continuing normally. ExxonMobil PNG is committed to maintaining a positive relationship with landowners, the government and the wider community.”

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Angore Landowners Burn Down LNG Machinery At Pdl 8

There have been complaints of a lack of benefits coming from the LNG project Photo: RNZI/Johnny Blades

Kevin Tema | Post Courier | June 19, 2018

In a show of frustration over the nonpayment of the Business Development Grant, the Angore landowners in Hela Province have burnt down all LNG machineries on PDL 8 site.

This includes an excavator as well as the drilling machine while cutting sections of the highway leading to PDL 8.

Sources from ground revealed that the Angore Landowners particularly from PDL 8 are angry over their outstanding business development grant (BDG) which is kept in the trust and is not being released.

While the government of the day see fit to release recently a K35 million as project security fees to Hides landowners of PDL 1 and PDL 4, the Angore landowners particularly in Hides PDL 8 area are frustrated in the way Exxon Mobil and the government of day has dealt with this issue.

Spokesman Max Ekeya said various claims on the social media about asking the Prime Minister to step down and others were rubbish as it was not the true information that caused the riot and burning down of the machineries at the PDL 8 site.

“The Angore landowners are showing their frustration because they have not got their BDG while other landowners from Hides PDL 1 and 4 just got K35 million as project security fees in which K20million went to PDL 1 and K15million to PDL 4,” Ekeya said.

“The landowners are not asking the Prime Minister to step down but are asking the government to release their Business Development grants,” Ekeya said.

In an exclusive phone interview with Tom Homake, a civil engineer with Hides Gas Development Company confirmed on ground that the all machines including an excavator at the PDL 8 site were all burnt down in the early hours of today.

“Information on setting alight the Eneria pipeline is not true and those are just hear say but I cannot confirm that,” the HGDC civil engineer Homake said when asked if the pipelines were also set on fire.

“Other Hides areas including the PDL 1 and PDL 4 up to PDL 7 area are okay as I speak. WE are on site doing a road projects from Takali to Komo and I can confirm on ground,” Homake said.

Homake said this can change as time goes but what he can say from now is that the Angore PDL 8 landowners are now asking the National Government and Exxon Mobile to come down and make their payment.

“The Angore landowners are saying that the K35 million given to Hides PDL 1 and 4 must also be given to them and they will not stop until their claims are being met,” Homake said.

“Yes there were machines burnt down to show their frustration and this has got nothing to do with the SHP issue on hand. This is specifically their landowner issues showing their frustration,” Homake said.

Meanwhile Ekeya has called on the government to quickly intervene as he believes opportunists might take the law into their own hands and this may cause another destruction altogether.

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Resources curse PNG communities’ future

Michael Main | East Asia Forum | 15 June 2018

Two recent reports on the massive ExxonMobil-led PNG LNG project have brought renewed attention to the undesirable economic and social impacts of Papua New Guinea’s largest-ever resource extraction enterprise. This research shows that PNG LNG has hurt, rather than grown, PNG’s economy and that it has inflamed violence and tensions in the PNG highlands region. Papua New Guinea’s so-called ‘resource curse’ has hit local communities the hardest.

Violent conflict in the PNG highlands, certainly among the Huli landowners of Hela Province where PNG LNG is based, has been an almost constant feature since before first contact with colonial forces in the 1930s. Levels of violence have fluctuated markedly in response to historical conditions. The 1970s and 1980s were relatively peaceful, as PNG transitioned from Australian administration into the early independence years. But local political frustrations combined with the introduction of guns led to high rates of violence in the highlands around the 1992 elections.

Since that decade, Papua New Guinea’s government services have been in constant decline. A new generation of Huli has emerged that is less educated than the generation of its parents — Huli who were educated between the 1960s and 1980s are more literate and fluent in English than those who were of school age from the 1990s onwards. Health has deteriorated with a decline in health services and the introduction of store-bought processed food. By the late 2000s, when the PNG government was promoting the PNG LNG project as a looming economic miracle for the country, the Huli population was desperate for a project that they believed would raise them from the state of poverty and neglect that had gradually descended upon them since independence.

During the first few years of the PNG LNG project’s construction, it looked as if all its grand promises were being fulfilled. ExxonMobil and its partners invested US$19 billion — a staggering amount for a country whose GDP was a little over US$8 billion in 2009 (just before construction began). Cash was everywhere in the project’s area, and this cash was accompanied by plentiful jobs and shiny new land cruisers. Large machines and heavy equipment were flown into a purpose-built international airport in one of the remotest and most neglected parts of Huli territory.

During these construction years there were significantly lower levels of violent conflict in Huli society. People were living in conditions of hope, and they felt that the material conditions of their lives were undergoing much-desired change. Fighting men had things to do with their lives other than fight. Huli children now expected to grow up to experience a higher standard of living than their parents. In short, Huli society became oriented towards the future, and its history of warfare was part of a social logic that was no longer relevant.

In 2014 construction of the PNG LNG project finished and production of liquefied natural gas began. Jobs disappeared and money dried up, revealing a corrupt elite that had little concern for the impoverished landowners.

Crucially, the landowner beneficiaries of the project had not been identified prior to construction, despite urgings from the companies’ own consultants for them to do so. This has meant that no landowner royalties have been paid. Nothing has come to replace the money that was flowing in during the construction phase — a large portion of which had been invested in the expectation that the new airport would bring in tourist dollars. Guest houses and eco-tourism lodges were built, but the airport remained in the private and exclusive hands of ExxonMobil, guarded by ExxonMobil-funded PNG Defence Force personnel and police. The promises contained in the Landowner Benefit Sharing Agreements with the PNG government began to languish, and frustrations simmered.

By 2016 it was clear that ExxonMobil and the PNG government were systematically breaking these promises and there was a widespread view that the state had little interest in fulfilling its obligations to the Huli landowners. Since 2016 there has been a steady increase in levels of violent conflict across Huli society.

In February 2018, a magnitude 7.5 earthquake devastated communities in the PNG highlands, including those in the PNG LNG project area. This disaster has only compounded frustrations, especially as the PNG government has little capacity to distribute aid and the project’s operator is perceived as being more concerned with protecting its assets than assisting affected communities. Aggravating the situation is the fact that most locals are of the belief that the PNG LNG project itself was the cause of the earthquake.

Hopelessness, frustration and intense anger at the unfulfilled promises of the project’s owners and the government have combined with an ever-growing arsenal of military-style weapons in Hela Province. The viability of the PNG LNG project itself, and along with it the economic viability of Papua New Guinea as a whole, are at risk.

Michael Main is a PhD candidate at the School of Culture, History and Language, The Australian National University. He is co-author of the report On Shaky Ground: PNG LNG and the consequences of development failure, published by the Jubilee Australia Research Centre in May 2018.

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Bougainville Copper remains confident of Panguna backing

An abandoned building at Panguna mine site in Bougainville

Radio New Zealand | 13 June 2018

Bougainville Copper is rejecting claims it lacks backing among landowners for a re-launch of the Panguna mine.

Two companies have been pushing to reopen the Papua New Guinea mine which was shut down when the Bougainville civil war broke out nearly 30 years ago.

The Osikaiang Landowners Association, from the site of the mine, is with a rival mining company and it has written to the Australian Stock Exchange claiming BCL doesn’t have the backing among local landowners which it claims.

But BCL secretary Mark Hitchcock said they are confident they have strong support and that it is the leaders of the Osikaiang Association, Philip Miriori and Lawrence Daveona, who are misleading people.

“The two purported leaders of the Osikaiang Landowner Association don’t represent the actual land title holders.”

“Those landowners are quite frustrated that these two gentlemen purport to hold themselves out as their spokesperson when they don’t have the powers to do so, he said.”

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The Next Gold Mine in Tropical Paradise Obtains $40 Million Financing

Lion One Drill Pad, Tuvatu

Two projects on a mining-friendly tropical island are moving forward, one in the final ramp-up to production and one at a very early stage.

Streetwise Reports  | 12 June 2018

Thoughts of Fiji conjure up the tropics, beaches and sunshine, but the island nation is also noted for its mineral production. The Vatukoula mine, in operation for over 80 years, has produced more than seven million ounces of gold.

Vying to join its ranks on the politically stable and mining friendly island are Lion One Metals Limited  and Thunderstruck Resources Ltd., two companies at opposite ends of the spectrum.

Thunderstruck Resources is an early stage exploration company with an extensive portfolio of properties on Viti Levu, the main island of Fiji. The company is conducting exploration activities at its large land package—covering 4% of Viti Levu—of “100% owned high grade zinc, copper and gold assets,” it reported in mid-May. According to Thunderstuck, it is “building on extensive prior results that point to the potential for large mineralized systems.”

At the end of May, Thunderstruck closed an oversubscribed private placement, raising over $200,000, selling 2.2 million units at $0.09 each. Each unit contained one common share and one share purchase warrant, with the option to buy a common share for $0.15 until May 2021.

Lion One’s 100%-owned Tuvatu project is at a much more advanced stage and is on track to put into production Fiji’s next mine. The company just announced a US$40 million debt financing package to develop the mine and build a processing plant for its fully permitted project. The financing is with Sinosteel Equipment & Engineering Co. Ltd. and Baiyin International Investment Inc. Sinosteel will be the EPC (Engineering, Procurement and Construction) contractor for the project, and Baiyin will be the gold doré offtaker.

The agreement is for a five-year term at a 7.5% interest rate. There will be a principal holiday and capitalized interest for either the earlier of two years from first draw, or three months after achieving commercial production. There also will be a Net Smelter Return (NSR) royalty of 2.25% on the first 350,000 ounces of gold produced. There is also an option to increase the financing by US$10 million.

Analyst Derek Macpherson of Red Cloud Klondike Strike Inc. noted on June 4 that with the debt financing in place, Tuvatu construction is expected to ramp up and views this as “very positive.”

Macpherson also noted that the “PEA (2015) outlines initial capital investment (excluding working capital) for Tuvatu at US$48.6M. With exploitation permits in-hand and C$21.6M (US$16.6M) in cash, the company is well positioned to continue on the path to construction and production.”

Analyst Mike Niehuser of Scarsdale Equities wrote on June 6, “The PEA assumed modest capital costs and efficient mining of high-grade gold resources, resulting in significant cash flow, which may rapidly repay capital and fund mine development and additional exploration of prospective gold targets.”

Niehuser also stated, “We expect that Lion One will announce an updated capital cost budget that should be within expected variances of the PEA. It appears that the facility should be adequate to cover the construction and capital costs with cash on hand. The terms appear to be competitive and do not include hedging or prepayment fees. Lion One continues exploration activities for which we believe could be a long-lived mine.”

Scarsdale Equities maintains a Buy rating and a target price of CA$1.40 on Lion One, which is currently trading at around CA$0.63.

While Lion One has been securing financing for the project, it also has continued exploration activities. Following the release of an off-the-charts surface sample of 502 g/t gold over 0.70 meters in February, on June 7, the company announced that follow-up work has mapped “more than 20 previously undefined mineralized structures at the Jomaki-Ura Creek prospect areas and identified potential geological extensions on the main mineralized zones inside the Tuvatu Mining Lease.”

Stephen Mann, Lion One’s managing director, stated, “In the Tuvatu resource area, approximately half of the 40 veins identified to date have sufficient sample data from drilling to merit inclusion in a resource estimate. We’ve now identified more than 20 mineralized veins at surface in the Jomaki-Ura Creek area where strong multi-element anomalism suggests potential scale and signature comparable and possibly larger than the main resource area at Tuvatu.”

Lion One has about 102 million shares outstanding, 109 million fully diluted. Management owns 22% of the shares and Donald Smith & Co owns 14%, Franklin Precious Metals Fund 9.99% and JP Morgan Asset Management UK 6%.

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Group scotches Bougainville Copper claims of support

Radio New Zealand | 12 June 2018

Bougainville Copper (BCL) is making misleading claims about the support it has for re-starting mining at Panguna, a landowner group says.

The company ran the massive Panguna mine before it was shut down by the civil war on Bougainville more than 20 years ago.

The Osikaiang Landowners Association at the mine site has taken its concerns to the Australian Stock Exchange and the Australian Securities and Investment Commission.

Its chairman, Philip Miriori, said BCL claimed to have strong backing from Bougainville landowners, but he said a survey of them undertaken by Osikaiang, which has links with a rival mining company, proves otherwise.

“With that 400 number, the number I am telling you, we don’t want BCL coming back. That is straight forward you know. We don’t want BCL to come back. That number speaks for itself, 400, – they’re the ones with me saying ‘No BCL’. BCL never to come back.”

BCL had asserted that the 367 authorised customary heads of the 510 blocks of land within the special mining lease area of Panguna do not recognise Mr Miriori as the Osikaiang chair, and back BCL’s exploration licence.

But Mr Miriori said the Osikaiang survey covered this same group of landowners.

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