Monthly Archives: April 2019

Gas project pressure rising for PNG’s government

PNG Liquefied Natural Gas Plant near Port Moresby, Papua New Guinea.Photographer: Richard Dellman via ExxonMobil Corp.

Johnny Blades | Radio New Zealand | 16 April 2019

Papua New Guinea’s government is under pressure over its handling of the country’s burgeoning gas sector.

The government last week agreed terms for the $US13-billion Papua LNG project, based on the Elk / Antelope gas field in Gulf Province, to be led by French company Total.

Two days later, PNG’s Finance Minister James Marape resigned, citing a breakdown of trust in prime minister Peter O’Neill and the government’s handling of landowner participation in oil and gas developments in the Highlands.

Along with claims about feasibility, the resignation adds to a sense of uncertainty over the Papua LNG developer which traces right down to the grassroots.

A village leader in Gulf Province said local people had not been briefed yet on what having the project on their land meant for them.

For Solomon Lae, a chief in Kapai Aikavalavi village, the lack of consultation reflects how the nation’s political leaders have long milked the benefits of the country’s resources.

“We have never had the opportunity to be clear on exactly what is going to happen in the province,” he said.

“There are no public servants who can be able to tell the people, the illiterate, the silent majority, what’s going to happen in the gas and oil industry. It’s a new elephant for us.”

Mr Marape, the former finance minister, is the MP for Tari in Hela province, the hub of the PNG LNG Project the country’s first gas development.

Ten years after its project agreement, many of Mr Marape’s constituents are frustrated with the government because they are yet to see promised benefits from the venture.

ExxonMobil officers receive a petition from landowners in Hela Province, Papua New Guinea. Photo: Supplied

Meanwhile, the ‘clan vetting’ process in Gulf Province to establish the rightful landowners to receive benefits and royalties is still not complete.

According to opposition MP and the member for Kerema in Gulf Province, Richard Mendani, instability in the government’s ranks is linked to the way it is rushing through the new gas project without properly consulting all stakeholders.

“The current government is under pressure to improve on this performance. There’s a lot of talk and a lot of political movements within Waigani,” Mr Mendani said.

“I’m so surprised that the current government, the PM and Total have, without any proper consultation, gone in and signed off the project agreement.”

But PNG’s Treasurer Charles Abel said the agreement was only one part of the process and that landowners would later be part of discussions for the Benefit Sharing Agreement.

“The signing of the gas agreement, it just establishes the broad fiscal terms to enable the developer to obtain financing and give them comfort to spend a bit more money into the Front End Engineering Design process,” he explained.

“In the intervening period, they’ve got to complete all the landowner registration and more of that work has been done.”

The state has a 22.5 percent interest in the Papua LNG Project, of which two percent is on behalf of landowners, with a two percent development levy for the provincial government and local level administrations.

According to Mr Abel, other features of the project’s terms include a corporate tax rate of 30 per cent, and obligations to supply PNG’s domestic gas market at a discount price.

Compared to the PNG LNG Project, which began exports five years ago, there are significant improvements from a landowners’ perspective, Mr Abel said.

LNG Project facility, Hela Province, Papua New Guinea Photo: RNZI / Johnny Blades

This time the government has been granted a waiver on immediate payment of its share of project costs, while the venture’s benefits are carefully structured, ensuring revenues even when commodity prices are low, he said.

“The landowners are getting a better benefit but the state is not unduly putting itself into a difficult financial situation,” the treasurer said.

“When the oil price collapsed, there was very little benefit from the PNG LNG Project, and yet we were lumped with all the obligations to meet all the obligations we made to the landowners and then we hadn’t even done the (clan) vetting exercise properly. So, we’ve learnt from this process.”

Chief Solomon Lae, however, is doubtful the government has changed its approach from other resource extraction projects.

“Our people in this country, they never learn from the previous experiences. Southern Highlanders are waiting ten years and are yet to receive royalties,” Mr Lae noted.

“The leaders of this country, they’re elected to represent our people. But that is never the case. They’re milking us. Daylight robbery.”

But Prime Minister Peter O’Neill has said the Papua LNG Project’s expected investment of nearly $US13 billion will benefit local communities and create jobs.

He told local media that the domestic supply obligation was an important step for resources development in the country.

“The petroleum and energy sector looks very bright in PNG,” Mr O’Neill said.

Papua New Guinea Prime Minister, Peter O’Neill, meets Total’s Vice-President Mr. Arnaud Breavillac. Photo: Supplied

However, explosive claims have surfaced from a former senior technical officer at the Department of Petroleum that the Elk / Antelope gas field is a very marginal resource, lacking gas volumes to sustain a major project.

This was related in a review by a team of geoscientists and engineers, presented to the O’Neill government and its Papua Project partners, Total, ExxonMobil and Oil Search, in 2017.

Despite this, the government is proceeding with the Papua LNG Project, in which it has a significant financial stake. For over five years, the prime minister has been determined for the venture to go ahead.

The government’s controversial purchase of a ten percent stake in Oil Search in 2014 was an executive decision said by cabinet members to have been made Mr O’Neill without their support.

It sparked a fallout at the time with his former Treasurer, Don Polye, who was sacked for opposing the decision. Mr O’Neill is facing a potential motion of no-confidence next month in parliament, and will be looking to stem the tide of discontent within his government.

Pressure over this gas project is rising, as is the political heat in PNG.

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Criminal case reveals mining company employees were spying and running fake profiles in social media

All around the world we witness mining companies targeting citizens for fighting for the protection of nature. Armenia is in no exception. For years paid media, specialists, as well as recent fake users and pages in social media carried out online discrediting campaigns, especially in Facebook. The case of journalist from Gndevaz – Tehmine Yenoqyan, is extraordinary as the criminal case showed that employees of Lydian Armenia (the Canadian owned company that wanted to exploit gold in Amulsar), were spying on the journalist.

Armenian Environmental Front | 26 March, 2019

Background story

I am Tehmine Yenoqyan, resident of Gndevaz village. For about 8 years I am raising the problems of gold mine project in Amulsar, as well as the rights of the locals. It is no secret that many concerned people, including me, have invested a lot of professional and civic efforts to raise the awareness of the population, to inform about the negative effects of mines, in order the people fought for their rights. All my activities were public.

Since June 22, 2018 the residents of Gndevaz and Jermuk have closed the roads leading to mountain Amulsar this way preventing the construction of the destructive Amulsar gold mine, thus protecting their rights through this direct action. I was at my home in Gndevaz in July-August 2018 and I was actively engaged in community activities for Amulsar’s protection. During that period, as well as before and after it, various representatives of civil, political, cultural spheres and individuals have arrived at Jermuk to show their solidarity with the locals and activists. Many of them contacted me for hosting them or helping them with other issues. I was also member of the working group that was formed under the decree of the Prime Minister Nikol Pashinyan, to study the problems caused by mining projects: the first study of this group was gold mine project in Amulsar. As a member of this working group I was also representing the community’s position on this matter, as well as I recorded and published the meetings. The working group had meetings during July-August-September, and I supported the working group as well as informed the members of that group from Jermuk and Gndevaz to ensure their participation in that group. For these activities my home in Gndevaz was open for hosting discussions since the community building in Gndevaz was not an option as a result of lack of trust towards the village mayor.

Persecution and illegal publication of personal information

In August 2018 a user in Facebook called “Vahagn Hovhannisyan” (this account no longer exists) who was supporting the mine project in Amulsar, started publishing secretly taken photos of my house, as well as people visiting me in my house with discrediting comments interfering with my personal life and space (this user spread slander and offensive comments about other persons as well). One of the photos was showing the car of the head of Environmental Protection and Mining Inspection Arthur Grigoryan parked in front of my house. The latter had come to Gndevaz and Jermuk on July 17 to ensure the participation of Jermuk community representatives in the working group. I agreed to provide my place for holding one of the meetings. The comments published with the secretly taken photographs completely distorted the reality and were discrediting me.

It turned out that my house was continuously targeted with some camera as this photo was not the only one that was published in social media and was discussed there. Thus in September I submitted a report of a crime with the RA Police General Department on Combating Organized Crime. Materials were prepared and a criminal case was launched under the article 144 of RA Criminal Code – illegal collection, storage, use or disclosure of information about personal or family life. It stems from this article that collection, storage, use or dissemination of personal information through public speech, public works or media without approval of that person, if not envisioned by law, is a crime. My demand was to reveal the individuals behind this crime and subject them to liability as prescribed by the law.

Criminal case and disclosure of fake accounts

The investigation lasted from September 2018 to March 2019, during which the Investigative Committee of Yeghegnadzor and Police Department of Jermuk interrogated neighbours living in front of my house and as a result received self-confession testimony from Anna Nersisyan (the inhabitant of the front house, employee of Lydian Armenia) who had photographed my house and illegally collected my personal information. The photographs were then transferred to Hovsep Asoyan through Hripsime Khachatryan. Hovsep Asoyan is also Lydian Armenia employee. I found out from the investigation that the employees of Lydian Armenia carried out organized persecution and illegally collected information about me. According to the testimony, Anna Nersisyan aimed at showing the link between me and Arthur Grigoryan and thus, according to her, the bias of Mr. Grigoryan in the case of Amulsar project. She sent my photographs through Viber application to Hripsime Khachatryan and then they reached Hovsep Asoyan. The latter confessed that he was behind the fake user page “Vahagn Hovhannisyan”, through which he published the photographs and comments. Starting from September when the case was launched, this user was no longer in Facebook.

I am suspicious whether it was Anna Nersisyan’s personal interest to show the so called “link between me and Arthur Grigoryan and the latter’s bias”, or she became a tool in the hands of Lydian Armenia. I must highlight that both as a civil servant, as well as in his previous role as the head of an environmental NGO refuting the licences given by the state to this mining company, Arthur Grigoryan had always pursued the public interest and had the official license to  check the legality of mine project in Amulsar. During the time when the photographs were taken he ensured the participation of the community and coordinated this process.

The investigation revealed that employees of Lydian Armenia and most probably the company itself are behind a campaign in social media through users serving the interests of the company, often times fake users, which create false public opinion and therefore serve for the PR campaign of Lydian Armenia. For months the fake page of Vahagn Hovhannisyan published degrading information about environmentalists, residents of Jermuk and generally individuals concerned with this issue. There are other similar users and pages sadly continuing disseminating slander, while the official page, Facebook page and Youtube channel of Lydian Armenia share information of different quality.

RA Investigative Committee, however, has terminated the case on the grounds that I was engaged in public activity and that the law on Freedom of Information was applicable in regards with the publication of the photograph and thus the case is liable to termination as a result of absence of crime. I insist on the opposite and have appealed the decision to terminate the case with the RA General Prosecutor’s Office.

Conclusion

Similar persecutions by Lydian Armenia are continuous and have affected other citizens, while employees of the company have often provoked the locals, created hostility against environmentalists and protectors of Amulsar, incited conflicts between communities, terrorized and tried to create atmosphere of fear in Jermuk and Gndevaz. During these months locals and environmentalists have implemented the state’s regulatory functions i.e. protection of nature and their rights, for which they have been oftentimes targeted. Lydian Armenia has filed a lawsuit against geographer, member of Armenian Environmental Front Levon Galstyan, lawyer Nazeli Vardanyan, environmentalist, member of Armenian Environmental Front Ani Khachatryan, Hayk Grigoryan and myself, demanding one million AMD per case as a compensation for “expressions that have damaged their business reputation”. The company filed cases against residents of Jermuk and Gndevaz as well.

My case showed that employees of Lydian Armenia are themselves using the method of disseminating fake information, and therefore proper investigation should be carried out both in regards with my case, as well as against other users and pages that share discrediting information in social media. This is not only a matter for holding the company reliable for its actions, but also a global issue of protecting the public from discrediting activities of private companies.

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Coal too dirty for our good

Rugeley power station in the UK is being demolished in phases until 2021. Coal plants are being retired at a record pace globally. Photograph: Christopher Thomond/The Guardian

The National aka The Loggers Times | April 15, 2019

COAL is a cheap hydrocarbon fuel and can be used in the production of goods and services, such as electricity.

However, this cheap hydrocarbon fuel is also the No.1 cause of environmental pollution and other issues.

Coal mining and its use in Papua New Guinea should be banned.

The following direct and indirect costs of coal use support the ban.

  • Coal is an unsustainable source of energy and it cannot be replaced once it has been used;
  • carbon emissions from mine blasts and machinery used in mining coal will cause irreparable environmental damage;
  • environmental damage and carbon and heat emissions from coal mining and the industrial use of coal will contribute to global warming and exacerbate the problems we are facing with adverse weather conditions and rising sea levels globally;
  • adverse weather conditions damage roads and highways which are expensive to build, repair and maintain. They also cause major traffic delays at sea ports and airports affecting international trade and the movement of people locally and internationally;
  • adverse weather conditions are causing extensive damage to food gardens and cities and towns, as well as dislocating residents of cities, towns and villages, causing hardship and inconvenience;
  • it is costly to provide assistance to people affected by natural disasters, which are being made worse by global warming;
  • coal mining will result in the loss of the value of forests to local communities because when communities lose their forests they also lose food, shelter, and other things they depend on as people of the land; and,
  • Smog produced from the industrial use of coal in cities will increase respiratory and lung problems. Of course, the medical cost of treating the diseases is another consideration against the use of coal. PNG has so much natural resources that can be harnessed to produce cheaper, dependable and clean electricity. Coal is not one of them.

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Change mining laws to give ownership rights

Landowners suffer the consequences of mining while outsiders take the benefits

Reuben G. Elijah | Post Courier| 15 April 2019

The laws on mineral rights must be changed to give real ownership rights to the inhabitants upon where the resources are found and extracted.

The mining law gives rights of ownership to the state, and the state, in turn, delegates that ownership right to the developer.

After the developer fully exploits the resources and destroys the surface land and all its natural surroundings, it gives it back to the state who then hands it over to the local inhabitants in its useless destructive form, expecting that the inhabitants will use it for subsistence survival.

In the whole equation, benefit proceeds are divided as 80 per cent to the developer and 20 per cent to the state. For the landowner inhabitants, there is nothing.

All that happens is that out of the state’s 20 per cent, a mere 2 per cent is given as a ‘token’ to the local inhabitants. So you see, there are ethical questions to ask on the formulae of benefits. This also clearly shows that local inhabitants (people) are not recognised as stakeholders at all.

The evidence of such unethical law and its aftermath consequence can be seen on Misima Island, after the so-called gold mine project from 1989 to 2004.

Our policy experts have to start thinking seriously and to give good advice to our parliamentarians to change the mining laws and the benefit formulas.

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Outrage: deep-sea mining poses an existential threat

Seabed mining machines

Stephanie Hessler | The Architectural Review | 11 April, 2019

The greed for ever more and ever cheaper minerals drives seabed mining – but at what cost?

At the height of the Cold War, in a top-secret mission titled Project Azorian, the CIA tried to retrieve Soviet submarine K-129, which had sunk in 1968. Under the auspices of the billionaire Howard Hughes, in 1974 a US ship was sent to recover the vessel with the hope of gathering valuable intelligence. The Agency needed a cover-up story to deflect from its actual target, so the public was told that Hughes’ ship was a commercial deep-sea mining vessel. After a series of mishaps, however, journalists broke the story in 1975, and the CIA aborted the mission.

It is no surprise that a cover-up story was used to distract the public from the actual aims of the mission. Misinformation is often paired with greed. The greed for ever more and ever cheaper minerals, used in devices such as the computer I am typing on, but also in ‘green’ technologies, drives seabed mining. Today, the minerals ostensibly targeted by the CIA mission have become subject to real prospecting. In oceanic resource grab, imperial and colonial asymmetric power relations of the past are reinforced. And so is the ecological and social havoc it will cause. –

The scientific and technocratic apparatus surrounding the world’s hydrosphere is largely governed by research institutes and companies of the Global North, which have at their command the know-how, technologies and financial means to engage in these highly complex and costly projects. The insights emerging from research at, for example, the Norwegian University of Science and Technology (NTNU) in Trondheim, are employed by businesses such as the Canada-registered international company Nautilus Minerals. ‘The first company to commercially explore the seafloor for massive sulfide systems, a potential source of high grade copper, gold, zinc and silver’, as its website reads, Nautilus struck a deal with the Papua New Guinea government to mine minerals in the country’s national waters.

Mining in international waters, beyond a country’s exclusive economic zone (EEZ) of 200 nautical miles or up to the margin of the continental shelf, is unlikely to begin in the near future. However, the International Seabed Authority (ISA), a UN body to administrate resource extractions in international waters, has started distributing claims to prospecting countries such as France, Germany, Japan, Singapore, Russia and the UK, as well as the Pacific Island states of Kiribati, Nauru and Tonga. The claimed areas are in the Clarion- Clipperton Zone spanning 4.5 million km2 in the North Pacific Ocean, an area deemed to hold vast and unmatched potential for minerals. As of today, the holders are entitled to explore, not yet exploit. Yet this is the first move towards extraction in the so-called ‘Area’ beyond national jurisdiction defined by the UN Convention on the Law of the Sea as the ‘common heritage of humankind’.

Long-term effects of deep-sea mining are devastating. Extractivist enterprises are likely to cause unprecedented damage to marine environments in directly affected zones as well as in neighbouring areas. In Papua New Guinea, where extraction in national waters is about to commence, land-based mining is already threatening ecosystems, lifestyles and health as well as economic and political self-determination. The deal with Nautilus Minerals bears the promise of short-term profit, but neglects the long-term ecological, social and economic consequences. It demonstrates the foreign dependency of economically deprived regions such as Papua New Guinea, pointing to the distributed complex of infrastructural and legal systems that the architect and researcher Keller Easterling has called ‘extrastatecraft’.

Not only resource extraction, but also tensions caused by territorial claims today gain further urgency. As sea levels rise, the baselines of island states such as Kiribati face dramatic change. International bodies discuss whether baselines should be frozen and, if so, when to set the starting date. This not only affects future access to essential foods such as fish, but also raises questions of nationhood and land rights. Does a country with no surface area above water cease to exist? What happens to the spiritual legacy, the graves and sacred sites, if they are submerged in water and disappear?

Deep-sea exploration and exploitation prospects utilise tropes reminiscent of the ‘new frontier’ rhetoric in previous imperialist endeavours. Using concepts of distance – often employed in colonial projects and environmental extraction alike – seabed mining will supposedly take place ‘far away’: deep below the ocean surface and in geographically remote areas. Clearly, the oceans are an intricately connected complex ecological system, and impacts in the seabed will not remain isolated and contained. And, importantly, such viewpoints are blatantly Eurocentric, begging the question: remote for whom? Technologies such as underwater cameras and scuba diving equipment have made what lies below the ocean surface visualisable, revealing the diversity of subaquatic life. This could contribute to the protection of the oceans.

Yet as depictions of the sea have moved from the impenetrable surface of a monstrous Leviathan to a space that can be seen, studied and conquered, techno-scientific advancements have also contributed to its exploitation. As anthropogenic actions affect ecosystems above and below water, often with the aim to extract resources and ameliorate human livelihoods, these projects deplete rather than augment, and close in rather than expand life worlds.

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Another ‘World Class’ Mining Company in ‘World Class’ Coverup

Rio Tinto’s QIT Madagascar Minerals mine in southeastern Madagascar. Image courtesy of Google Earth.

Madagascar: Rio Tinto mine breaches sensitive wetland

Edward Carver | Mongabay | 9 April 2019

  • A large mineral sands mine in southeastern Madagascar has trespassed into a “sensitive zone,” violating national law and raising the possibility that radionuclide-enriched tailings could enter a lake that local people use for drinking water, two recent studies confirm.
  • Rio Tinto, the London-based multinational that owns the mine, acknowledged the breach for the first time in a March 23 memo, more than five years after the breach initially occurred.
  • Rio Tinto will hold its annual general meeting April 10 in London.
  • The director of an NGO that commissioned one of the studies is a shareholder and said she hopes to speak about what’s happened at the lake.

A large mineral sands mine in southeastern Madagascar has trespassed into a “sensitive zone,” violating national law and raising the possibility that radionuclide-enriched tailings could enter a lake.

There is no evidence that radioactive elements or mine tailings have entered the lake so far, but two recent studies confirmed the encroachment of mining activities into the lake. Rio Tinto, the London-based multinational that owns the mine, acknowledged the breach for the first time in a March 23 memo to the Andrew Lees Trust (ALT), a social and environmental advocacy group that commissioned one of the studies.

The breach raises health and safety concerns in one of Madagascar’s most impoverished regions. The lake, part of a forested estuary system a few miles from the city of Tôlanaro, commonly known as Fort Dauphin, serves as a fishing and foraging ground for people in nearby villages.

“It would be a human rights and environmental catastrophe if you flood that estuary with radioactive water,” Steven Emerman, a Utah-based geophysicist and hydrology consultant who authored the 2018 study commissioned by ALT, told Mongabay.

Emerman said he worries that a cyclone could cause tailings in the mining basins to overflow into the lake or seep in if the water table level changes. The mineral sands being mined have high levels of uranium and thorium, and the removal of the mine’s main product, ilmenite, can increase the concentration of radioactive elements. Ilmenite yields titanium dioxide, used as a whitener in products like paint and toothpaste.

A different study published today by ALT found safe radionuclide levels in rivers and lakes in the area. It also found that the area around the mine, including river water, had high levels of uranium that could pose risks to local residents, although it’s not known if these levels are naturally occurring or caused by mining activities. The author of the study noted that she had to rely on “limited” and “questionable” data provided by Rio Tinto, and called on the company to improve its monitoring and management of radioactive materials. In response to the study, Rio Tinto maintained that the high uranium levels were naturally occurring and cited a baseline study as evidence.

Emerman and Rio Tinto have sharply different opinions about how best to protect the lake from mine tailings. Rio Tinto has set a barrier in place, but in his study, Emerman writes that the safety criteria that the company used to build it would be more appropriate for “storm drains at a shopping mall parking lot” and that reading Rio Tinto’s reports leads him “to believe that the dam was not designed to meet any safety criteria, but was simply ‘designed’ by piling up sand with a bulldozer.”

Emerman expressed further concern that the dam itself was made largely out of tailings — a fact acknowledged by Rio Tinto. This could contribute further seepage into the lake that the dam is meant to protect. “If you build the dam out of tailings, what good is the dam doing?” Emerman said to Mongabay.

Rio Tinto has initiated an action plan to assess and possibly redesign the dam (or berm — there’s debate about what to call it) before the end of the year, the company said in the memo.

In 2018, Rio Tinto commissioned Ozius Spatial, an Australian consultancy, to determine whether mining activities had breached the lake and buffer zone, as ALT had claimed. Like Emerman, Ozius found that the company’s mining activities had encroached not only all the way through the buffer zone on one side of the lake — littoral forest made up of unique evergreen species — but onto the lake bed.

Rio Tinto declined to publish the Ozius study and has not acknowledged the breach publicly, aside from its communications with ALT. The company did provide a copy of the Ozius study to ALT so that Emerman could use it is in his work. Neither Rio Tinto nor Ozius responded to requests for comment for this article.

It is unclear whether Rio Tinto’s encroachment into the lake was intentional. In its recent memo, Rio Tinto called the breach an “unintended occurrence that has produced several important learnings.” However, the company had been aware of the possibility of a breach for several years. In 2014, it asked Madagascar’s National Environment Office (ONE), a regulatory body, for permission to change the buffer zone around the lake from 80 meters (262 feet) — the standard, per national law — to 50 meters. ONE granted the request. Yet the Ozius study shows that by the start of 2014 Rio Tinto had not only already worked its way through the buffer zone but had encroached 52 meters into the lake itself, according to Emerman, who reproduced this finding in his own study

ONE inspected the breach in August 2018, deemed its impact “negligible” and chose not to take regulatory action, according to Rio Tinto’s recent memo to ALT.

Financial considerations appear to have driven Rio Tinto to mine near the lake, where the highest-quality ilmenite in the area occurs. In a 2017 memo to ALT, Rio Tinto explained its actions from a dollars-and-cents point of view. “The impact of complying with the 80m buffer zone would be 1) A 9 % loss of Reserves; 2) a non-optimal life of mine plan, the higher grade and lowest cost ore to the North East would only be accessible at the end of the mine life.”

In Madagascar, Rio Tinto operates through QIT Madagascar Minerals (QMM), which is 80 percent owned by Rio Tinto and, at least on paper, 20 percent by the government of Madagascar. QMM is the second-largest mining operation in the country. Rio Tinto has invested more than $1 billion in the project and sends most of the ilmenite to be processed in Canada. The company shipped its first batch of ilmenite in 2009 and operations could continue for 40 years across three sites, including places that border protected areas. Operations are currently underway only at the Mandena site, which breached the estuary system. (The estuary system is now a freshwater wetland, as Rio Tinto built a weir to close it off from the ocean before it began mining.)

Critics have questioned ONE’s independence and ability to act as a neutral regulator. ONE’s website lists Rio Tinto alongside the World Bank and the European Union as a financial backer. And because of government funding issues, Rio Tinto has to pay for the regulatory body’s staff to fly down from the capital, stay in local hotels and monitor the company.

“This sets up an obvious conflict of interest that no one is happy with, including QMM,” Pete Lowry, a Paris-based botanist with the Missouri Botanical Garden who has decades of experience working in southeast Madagascar and sits on QMM’s biodiversity and natural resource management committee, told Mongabay. “But the reality is that if monitoring is going to get done, QMM is going to pay for it.”

A ONE representative did not respond to a request for comment for this story.

Rio Tinto will hold its annual general meeting in London on April 10. Yvonne Orengo, ALT’s director, owns one share of the company and said she hopes to speak about what’s happened at the lake.

“It’s taken the Trust [ALT] two years and a huge effort to get Rio Tinto to admit the breach,” she told Mongabay in an email. “This highlights just how difficult it is for local people to hold QMM to account when it does wrong or fails in its obligations.”

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Donald calls on govt to review oil, gas act

The National aka The Loggers Times | April 11, 2019

NORTH Fly MP James Donald, pictured, has called on the Government to review the Oil and Gas Act before it signs agreements on petroleum resource development.

Donald said certain provisions of the Oil and Gas Act 1998 did not serve or protect the interests of Papua New Guineans, especially the project area landowners, and should be amended.

For example, he said the legislation failed to provide for the landowners, provincial governments and local level governments to be involved in the consultations and negotiations right up to the finalisation of the agreement.

Donald said they were key stakeholders even though they only owned a 2 per cent stake in equity when it came to benefits distribution.

“The landowners are given 2 per cent under the current act, which is less when what they should be rightfully getting – 10 to 12 per cent equity or more,” Donald said.

“So really when you look at it closely, it (the current Act) is of no real benefit to Papua New Guinea landowners, the host provincial governments and local level governments.”

He said the 2 per cent equity for landowners should be increased.

“Why continue to keep a law that does not serve our people’s interest?” Donald said.

He called on the ministers for petroleum and energy to work on amending certain sections of the legislation before going ahead with agreements on gas development. He said if not amended, the current legislation would only cause problems for future projects.

“In my view, our government should review and amend the law to give better deal for our people in terms of resource ownership by law because they deserve better from their government,” he said.

Meanwhile, Donald has written to the Constitutional and Law Reform Commission to support him in sponsoring a Private Member’s bill to review and amend certain provisions of the Oil and Gas Act.

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Kikori MP opposes coal mining

MP is against coal mining and has no interest in having it in the Kikori District

Loop Business | April 11, 2019

The Member for Kikori Open has expressed disgust and total dissatisfaction with the manner in which Mayur Resources has failed to consult him or his office regarding their coal development ideas in his district.

Soroi Eoe, who is also Minister for Community Development, Youth & Religion, said since Mayur Resources began operations in country and more so in their plans for the Kikori District, in Gulf Province, “the company hasn’t initiated any dialogue with my office nor had the courtesy to consult me on my views regarding coal development”.

“The cheap energy argument pushed by proponents (including national politicians) for coal development in my district need to be weighed against other relatively cleaner and healthier options that are available – alternative energy sources that my District is richly blessed with, such as: Small- Medium Hydro, Wind and Solar energy,” said the MP in a statement.

“Furthermore, on behalf of my people and the State, I am involved right now in the process of and negotiating a decent DMO (Domestic Market Obligation) component in the Papua LNG project agreement and I cannot entertain coal development for energy use at the same time on exactly the same strip of land. This makes little sense.

“I am against coal mining and have no interest in having the project in the Kikori District.”

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Papua New Guinea minister resigns over vast gas contract

One of Asia’s most impoverished nations, Papua New Guinea is rich in natural resources including large gas fields.

AFP | Daily Mail |11 April 2019 

Papua New Guinea’s finance minister resigned on Thursday, days after the country signed a multi-billion dollar gas contract with energy majors Total and ExxonMobil.

James Marape, who also leads the government in parliament, resigned citing the failure of the government to ensure national firms and locals benefit from the contract.

On Tuesday Prime Minister Peter O’Neill announced the $13 billion project that includes the extraction, pipelines and an upgraded LNG facility to ship the gas overseas.

The leading companies involved are France’s Total, US firm ExxonMobil and Oil Search, a firm partially owned by the Papua New Guinea government.

Peter O’Neill and James Marape in happier times

“This decision is not easy to make,” Marape said in a statement obtained by AFP, adding that trust between him and the prime minister was at its “lowest.”

“Whilst we don’t have any personal differences, we do differ on some work and policy related matters,” he said, citing the need for more local “participation in our gas, oil sector” and mining industry.

Marape’s departure could prompt further cabinet resignations that are problematic for the government and may spur local protests against the gas projects.

He represents a district in Hela Province that an oil pipeline traverses.

The project would almost double Papua New Guinea’s gas exports, but local communities have complained bitterly about not getting benefit from similar deals in the past.

One of Asia’s most impoverished nations, Papua New Guinea is rich in natural resources including large gas fields.

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Bank of Papua New Guinea urges tougher stance on new resources projects

PNG’s economy has surged but tax revenue has not. Source: Department of Treasury and BAPNG

Implicit in the Central Bank’s criticism is that those who negotiated and signed off on the Exxon-Mobil LNG and Ramu nickel mine agreements etc, were NOT acting in PNG’s national interest.

So who are these people and where is the accountability? 

David James | Business Advantage | 10 April 2019

The March Monetary Policy Statement from the Bank of Papua New Guinea has urged the government to rethink the way it negotiates tax concessions and exemptions with new resources projects. Adopting a strong stance, it points to how previous agreements have been a factor in foreign exchange shortages and adverse trends in government finances.

The statement says that the ‘current policies in relation to the extractive industries give a lot of tax concessions to the project partners for the development of major projects in PNG.’

These tax concessions, it says, has resulted in less availability of foreign exchange and has not strengthened tax revenues.

PNG in 2018 had a large current account surplus, indicating greater trade and finance outflows than inflows. This would normally result in strong demand for the kina, but it ‘did not translate into sufficient increase in inflows to the foreign exchange market’.

A trade performance that normally would have meant foreign exchange was easy to obtain, did not have that effect because of exemptions and concessions to resources projects.

‘If a significant portion, or all, of the export receipts were brought into the country, it would more than adequately cater for all the demand for foreign currency in the foreign exchange market,’ the Monetary Policy Statement (MPS) said.

‘This is not happening because most of the export earnings in foreign currency are held in offshore foreign currency accounts.’

Mineral GDP has risen, but tax from mining has fallen. Source: Department of Treasury and BAPNG

Backlog

The statement does note, however, that the situation in the foreign exchange markets is improving.

‘The outstanding backlog declined significantly from K1.739.3 billion in December 2017 to K445.4 million at the end of 2018, and to K320.1 million in February 2019.

‘The average time taken for the orders to be served has declined from 5 months to less than 3 months over the same period.’

But it says that the State Negotiation Team (SNT) should ‘push for the country’s national interest’ when negotiating with developers, pointing especially to the Papua LNG and Wafi-Golpu projects.

The Bank of PNG proposes:

  1. The introduction of a Capital Gains Tax on real property including mining and petroleum licenses
  2. Reform of the current Extractive industries fiscal regime
  3. Review of tax incentives
  4. Meeting of Domestic Market Obligations (DMOs) to secure gas for domestic uses
  5. Third Party Access to allow development of other resources

The MPS points to ‘serious concerns’ about the ‘broad exemptions and concessions’ given to the PNG LNG Project.

The report said it ‘rendered the Central Bank ineffective in the enforcement of certain provisions of the Exchange Control Regulation, and consequently the PNG economy has missed out on foreign exchange inflows, tax receipts, and other matters of national interest.

PNG is in the black on trade flows (current account) but in the red on financial flows (Capital and Financial account). Source: BAPNG

Budget deficit

In 2018, there was a budget deficit of K2.048 billion or 2.5 per cent of nominal GDP, according to the reportwhich expressed concerns about the level of public debt.

‘Over the last seven years, the budget deficits under the Government’s expansionary fiscal policy have been financed by increased borrowing, as revenue did not grow sufficiently to meet increased expenditures.

‘As a result, total public debt continued to increase in 2018 to K25.606 billion, or 31.1 per cent of GDP, and is planned to increase further in 2019.

‘The continued high budget deficits and debt level are a cause of concern for fiscal sustainability and its impact on macroeconomic stability.’

Annual headline inflation has declined from an average of 5.4 per cent in 2017 to an average of 4.5 per cent in 2018.

It is forecast to be 3.5-4 per cent for 2019.

The Bank said it expects to keep interest rates steady for the next six months.

The kina depreciated against the US dollar from US$0.3095 at the end of December 2017 to US$0.2965 in the March quarter, reflecting high import orders.

Against the Australian dollar, the kina appreciated from A$0.3967 at the end of December 2017 to A$0.4195 in the first quarter of 2019.

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