Talks on PNG LNG expansion at a standstill – govt

PNG Liquefied Natural Gas Plant near Port Moresby. Photo: Richard Dellman.

Radio New Zealand | 28 November 2019 

Talks with oil and gas giant Exxon Mobil over an expansion of their huge LNG (Liquefied Natural Gas) project in Papua New Guinea are at a standoff, with the company unwilling to negotiate on the country’s terms, says PNG’s petroleum minister.

Kerenga Kua said the state’s negotiating team had set out draft terms for negotiations on developing the P’nyang gas field that were in line with international standards and would ensure a “fair deal” for PNG.

It was disappointing that Exxon has refused to consider the terms and PNG urged them to reconsider their position.

Reuters reports that the new delay to the P’nyang agreement will make it harder for Exxon and its partners Total SA, Oil Search and Santos Ltd to reach a final investment decision in 2020 on their plans to double LNG exports from the country.

Exxon Mobil’s PNG spokesman said discussions with the PNG government were ongoing and an agreement was needed before decisions could be made on preliminary engineering and design for the expansion of its PNG LNG plant.

‘The revolution is ongoing’: Bougainville to revive radical mining proposal

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage. CREDIT: FRIEDRICH STARK / ALAMY STOCK PHOTO

* Bougainville mining proposal to go before parliament in December

* Plan gives a 60% share of mines to Bougainville

* Bougainville is currently voting on independence from PNG

* Proposal was shelved ahead of independence referendum (Adds BCL share price, quotes, context)

Jonathan Barrett | Reuters | 28 November 2019

Bougainville Vice President Raymond Masono said he will revive a plan to overhaul the region’s mining laws after its ongoing independence referendum, which could strip the former operator of the Panguna gold and copper project of its interests.

The proposed changes, which have been criticised by Panguna landowners, would also erase an interest in the project held by the Papua New Guinea government, potentially complicating negotiations between the two governments after the referendum.

Under the proposed mining law amendments, Bougainville would take a 60% share in all projects and retain all mining licences, leaving a 40% share that investors can bid for.

“Panguna is the most likely project that can bankroll Bougainville’s independence from Papua New Guinea,” Masono, who is also Bougainville’s mining minister, told Reuters by telephone from the town of Buka.

“They don’t own the licence and the mine, we own it – they come on our terms. The revolution is ongoing.”

He said companies like former Panguna operator Bougainville Copper Ltd (BCL), which counts the PNG government as a major shareholder and claims exploration rights at Panguna, would not get “special treatment”.

“They can only come in through the new framework. If they have money they can invest as will other investors.”

BCL declined to comment. The PNG government did not immediately respond to a request for comment.

Masono said he would push for the plan to go through Bougainville’s parliament in December, after it was shelved in the lead-up to the referendum amid a backlash from some landowners and government members.

Once the economic engine room of PNG, Bougainville has fallen to the bottom of almost every financial indicator, despite boasting mineral riches, fertile volcanic soil and stunning geography.

The autonomous region is now grappling over how best to re-establish a mining industry while maintaining peace, 20 years after the last shots were fired in a bloody conflict between Bougainville rebel fighters and PNG forces, killing 20,000 people.

As part of the peace agreement, Bougainville is holding a non-binding vote on independence that ends on Dec. 7, with the results to go before the PNG parliament and be subject to negotiation.

BCL is one of at least two companies, alongside a group including explorer RTG Mining Inc , that claims the rights to develop Panguna, with the dispute currently being tested in the PNG courts.

BCL shares had been on a bull run since the start of last week, rising almost five-fold to hit A$0.49 on Nov. 26, underpinned by positive sentiment flowing out of the independence vote.

BCL shares have since retreated to trade just under A$0.30 on Thursday.

Another Australian company, Kalia Ltd, is exploring for gold and copper on land located northwest of Panguna.

The mining law amendments, which have previously been backed by Bougainville President John Momis, were put on hold before the referendum amid concerns that landowner rights would be eroded, with control over assets being handed to the Bougainville government.

“It is totally unacceptable to be trying to steal Panguna from the customary owners,” Panguna landowner, Lawrence Daveona, said in a statement in June.

A Bougainville parliamentary committee was also heavily critical of the proposed changes, and noted that there had been a lack of consultation.

The High-Stakes Race For Bougainville’s Copper And Gold

Satellite imagery of the Panguna Mine located in the autonomous region of Bougainville in Papua New Gunea. GETTY IMAGES

Tim Treadgold | Forbes | November 27 2019

Fat profits are being made by speculators confident they can beat a Chinese takeover of one of the world’s great copper and gold deposits on the Pacific island of Bougainville even though it hasn’t produced a pound of metal in 30 years.

The once fabulous Panguna mine was closed in 1989 during a civil war which pitted locals, fighting as the Bougainville Revolutionary Army, against troops of the government of Papua New Guinea which claimed control of the island.

An estimated 20,000 people died from the fighting and disease in what ranks as the worst conflict in the South Pacific since World War Two.

An uneasy truce in 2001 formally ended the conflict but Bougainvilleans have continued to push for independence which is being tested in a two-question referendum which started this week and will end on December 7 with voters being asked whether they want complete independence or just greater autonomy from Papua New Guinea.

Strategic Location In The Pacific

Strategically placed to the north-east of Australia, Bougainville commands a large area of the South Pacific Ocean and is seen as a perfect location for China to extend its influence in the region.

The island’s population has closer demographic connections with the Solomon Islands than Papua New Guinea with a culture clash one of the civil war causes.

Another contentious point which help trigger the war was the Panguna mine operated by a subsidiary company of the Anglo-Australian mining giant, Rio Tinto.

In its peak years between 1972 and 1989, Panguna was producing an average of 175,000 tons of copper a year and 18 tons of gold, but the mining and ore-processing methods at the time where not environmentally friendly with heavily-polluted water running off the mine site.

Unfortunately for local residents Panguna was a critically important asset for the Papua New Guinea government accounting for an estimated 44% of national income, which is one reason why the government fought hard to keep the mine operating, a task which proved to be impossible in a war zone.

The promise of independence has sparked interest in the abandoned mine which is estimated to still contain one billion tonnes of ore, an attractive target but one which will be hard to mine, and even harder to process.

High Cost Of Restarting

The first challenge will be the need to mine a large amount of ore annually to compensate for the low grade of the raw material. A second challenge will be spending an estimated $5 billion on a new processing plant because the original has rusted away in Bougainville’s tropical weather.

But the cost of restarting Panguna might be worth it because a “gold equivalent” calculation, which is the combination of the value of copper and gold in the ore, produces a world-class estimate of 45.3 million ounces of gold equivalent (a mix of copper and gold).

Papua New Guinea soldiers guard the Panguna mine. January 26, 1990. (Photo by Miller/Fairfax Media)

It’s the large amount of unmined copper and gold which explains the race which has developed among rival companies seeking permission to redevelop Panguna with companies from Australia and China leading the way.

Interest in the mothballed mine reached a high point yesterday when two were asked by regulators from the Australian Stock Exchange why their share prices had risen rapidly over the past two weeks.

Shares On Fire

Bougainville Copper, a company in which the local government (known as the Autonomous Bougainville Government) has a 36.4% stake is up 200% over the past three weeks with a rise from 6.5 cents to 20c — though at one stage on Tuesday the stock hit a 10-year high of 33c, triggering an exchange “speeding” inquiry.

RTG Mining, another Australian-listed hopeful in the race for Panguna, also received a speeding inquiry when its shares rose by 37.5% to 7.5c. RTG has secured a development agreement over the mine with a local land owners association.

There is a long way to go before Panguna can be redeveloped, if at all, given the history of conflict and fractious nature of the local politics.

The result of the referendum will be a first step in the mine re-start process. Choosing a company acceptable to all Bougainvilleans to do the job will be next, followed by funding and then proving that the mine can operate profitably and in an environmentally acceptable way.

Mining the Deep Sea: Stories for suckers, and corporate capture of the UN

Catherine Coumans | Arena Magazine | 30 October 2019

When I mention that the global mining industry is eyeing the deep seabed as the next frontier in mining I am commonly met with gasps of disbelief and dismay. That gut reaction is often followed up with sensible exclamations about the fact that the world’s oceans are already overstressed by contaminants from human activity, such as plastics, and by overfishing, and, from those in the know, by acidification. Unsurprisingly, these apprehensions do not factor into the rapacious ambitions of industry pitchers for deep-sea mining, nor do they—another gasp of dismay—appear to temper the outright enthusiasm for this new form of mining shown by some highly placed officials in relevant UN bodies.

To overcome the aversion of a public already overwrought by reports of species loss, whales on the brink of extinction and the various horsemen of the climate apocalypse—drought, fires, floods, heat, sea-level rise, food insecurity and forced migrations—deep-sea mining’s frontier investors are surpassing themselves in the propaganda department. The front runner in this regard is a private Canadian company out of Vancouver called DeepGreen Metals Inc.

One of DeepGreen’s early promotional videos, DeepGreen—Metals for our Future, drives home lofty public messages that need to be critically interrogated: deep-sea mining is less environmentally and socially destructive than terrestrial mining; it is necessary in order to save the planet from climate change; and deep-sea mining, and indeed DeepGreen itself, come highly recommended, as both are enthusiastically promoted by the secretary-general of the UN’s International Seabed Authority (ISA). The private pitch of deep-sea-mining promoters is likely more focused on the bottom line: there is untapped wealth in them thar ocean depths for the savvy frontier investor ready to undertake an exciting new experimental mining adventure. DeepGreen’s CEO, Gerard Barron, concluded a sales pitch on the commercial and societal benefits of deep-sea mining in February 2019: ‘…whether you invest in a company like DeepGreen or not, everyone is a sucker for the story’.

DeepGreen’s focus is on polymetallic nodules found on the seabed in international waters of the Clarion-Clipperton Zone (CCZ) of the Pacific Ocean, an area covering some 4000 kilometres and roughly the size of the continental United States. These lumpy baseball-size nodes lie at depths of some 4000 to 6000 metres and contain primarily nickel, cobalt, copper, manganese and iron oxides. The two other targets for deep seabed mining are hydrothermal vents, typically found at depths of 1000 to 4000 metres, and cobalt-rich crusts, typically found on seamounts at depths of 800 to 2500 metres. Hydrothermal vents are believed to have hosted the earliest forms of life on earth and are famous for their abundant array of endemic species that feed on bacteria and other single-celled organisms that, remarkably, do not derive energy from photosynthesis but from the chemicals spewed out by the vents. The massive sulphide deposits built up around these vents contain copper, gold, silver, zinc and lead. Crusts that form on seamounts contain primarily cobalt and also manganese, iron, copper, nickel and platinum.

These geographic features of the deep sea are thrilling would-be miners, as the metals they contain are commonly more highly concentrated than on land, and advancing technology makes them potentially accessible for the first time. The feverish rush to lay claim to large swathes of the seafloor has all the hallmarks of the gold rush that once drew hordes of prospectors to the Wild West, including colourful claims of fabulous treasure lying ready for the reaping on the seafloor. Former UK prime minister David Cameron reportedly pledged to bring wealth from the seabed to the United Kingdom, claiming possible values of £40 billion over thirty years. Not to be outdone, The New Economy claimed that the industry ‘could be worth as much as $1trn to the US economy each year—the value of all the gold deposits alone on the seafloor is estimated to be around $150trn. It’s not hard to see why investors are getting excited’. Indeed, speculators are already making profits without a deep-sea spade in the ground.

To date, twenty-nine exploration licences have been granted in extraterritorial waters, called the Common Heritage of Mankind in UN speak. Granted by the ISA, which has jurisdiction over the seabed in this area, the licences cover some 1.5 million square kilometres in the southwestern Pacific alone (claims also exist in the Atlantic and Indian Oceans). The licences are held jointly by industrialised countries such as China, Korea, the United Kingdom, France, Germany and Russia, as well as small Pacific island countries such as Kiribati, Nauru, Tonga and the Cook Islands, and subsidiaries of corporations, such as Lockheed Martin (UK Seabed Resources), and Canada’s DeepGreen (Nauru Ocean Resources Inc.) and Nautilus Minerals Inc. (Tonga Offshore Mining Limited).

No exploitation, or mining, licence has yet been issued for any of these claims in extraterritorial waters: the ISA is still ironing out some details, such as novel governance regimes and brand-new environmental regulations. The first exploitation licence was issued for a project in territorial waters: the government of Papua New Guinea (PNG) granted Nautilus a mining licence in January 2011, but the company’s Solwara 1 project has already tanked. Faced with concerted, vocal and growing community opposition, and apparently insufficient ‘suckers’ for the Nautilus story, the company is now facing bankruptcy. The state of PNG is on the hook for about US$125 million, which it borrowed after Nautilus used arbitration to force the state to live up to its commitment to assume and finance a 15-per-cent stake in the venture. However, some early investors in Nautilus, such as Barron, made a profit: Barron ‘turned a $226,000 investment into $31 million’ in six years before exiting in 2007. It was the founder of Nautilus, David Heydon, who created DeepGreen in 2011 and brought Barron into that company as CEO.

Perhaps if hydrothermal vents and deep-sea nodules could serve solely as inspiration for speculative investing, all would not be so dire. But investors are applying intense pressure on the ISA to finalise the deep-sea-mining regulations, not simply to create another major bump in their investments—which of course it will do—but to open the door to putting massive mining machines onto the seafloor. The ISA has proved to be an all-too-willing and shadowy agency, as pointed out by the Deep Sea Mining Campaign, and Greenpeace:

The ISA has recently rejected the establishment of an environmental committee to better include environmental considerations in its functioning, and key environmental information is not public. Its Legal and Technical Commission meets mostly behind closed doors, and its composition is such that biological and ecological considerations are underrepresented.

So what is at stake? Each of the metal-rich geological features that are of interest to miners is slowly revealing itself to be an incredible ecosystem. In spite of existing at great depths, under immense pressure, in very cold water and in inky darkness, hydrothermal vents, polymetallic nodules and cobalt crusts host diverse, mostly undiscovered and scarcely studied creatures that have amazed the few humans who have seen them in their natural habitats. Hydrothermal vents and cobalt crusts host an abundance of organisms. Those on cobalt crusts have great diversity; many of these creatures are long lived but slow to reproduce and may exist only in certain areas. Those on hydrothermal vents are abundant, though thought to be less diverse, and are often unique to a particular vent. Polymetallic nodules host a wide variety of species, but they are spread more thinly; very few have been identified, but they are also thought to be long lived and slow growing. The habitats around hydrothermal vents are, according to deep-sea biologist Cindy Lee Van Dover, ‘relatively rare on the sea floor, and they’re different from one site to the next because the animals have adapted to the fluid chemistries’. The deep ocean expanses of polymetallic nodules are among the least-disturbed ecosystems on earth. Each of these geological phenomena of the deep sea have taken a very long time to form. Cobalt crusts grow at a rate of 1 to 6 millimetres per million years. Each polymetallic nodule, commonly between 5 and 10 centimetres in diameter, has grown by 2 or 3 centimetres every million years. Furthermore, as trillions of these baseball-size polymetallic nodules lie spread in a thin layer on the surface of abyssal plains, an extensive area would be disturbed if they were to be sucked up by the huge tread-wheel-driven machines envisioned for this task. While the chimney-like structures associated with hydrothermal vents can grow by 40 centimetres over five days, it is unknown whether vent species can recover once a vent chimney has been removed by mining.

While mining methods differ for each of these targeted geological features, deep-sea marine experts agree on the following points: crusts and nodules will take millions of years to reform; entire unusual species that we have never had a chance to study will be lost in the mining of all three types of ecosystem; and the dense sediment plumes that will be created as the seabed is disturbed and the pumping back down of process effluent will negatively impact and smother species over many more kilometres. Recent peer-reviewed papers by marine scientists have titles such as ‘Deep-Sea Mining With No Net Loss of Biodiversity—An Impossible Aim’ and conclusions such as ‘Seabed mining will cause irreparable damage to marine ecosystems’.

So, let us revisit the messages in DeepGreen’s Metals for our Future video. DeepGreen maintains that deep-sea mining is less environmentally and socially destructive than terrestrial mining. Nautilus tried the same spin, which the Deep Sea Mining Campaign adeptly refuted as Nautilus fought to counter vehement opposition to the Solwara 1 project by PNG coastal communities—these communities had already noticed a negative impact on their subsistence livelihoods and cultural practices related to marine species such as sharks as a result of Nautilus’ exploration activities offshore. While it is fascinating to see a new breed of would-be miners throw their terrestrial counterparts under the bus and expose the immense environmental and social harm done by mining on land, this is hardly an argument for opening up another entire ecosystem to exploitation by this rapacious industry, especially an ecosystem as immensely fragile and little understood as the deep sea. In fact, the comparison with terrestrial mining provides many arguments to show why deep-sea mining is a terrible idea, including, just as a start: it is much more challenging, technically and financially, to produce comprehensive baselines in the deep sea than it is on land; it is completely unclear how credible toxicity testing could be done in a deep-sea environment; independent scrutiny by communities, NGOs, independent scientists, media and so on would be much more limited; when things go wrong, such as spills, pipe breaks or unpredicted impacts, it would be much more difficult, nay impossible, to rehabilitate the unintentionally impacted area; modelling of the likely impact zones of toxic sediment plumes created by all forms of deep-sea mining is in its infancy; there is zero experience to draw on regarding impacts and mitigation at each step of the mining process; and the impacts of disturbances in the deep sea on critical food security, livelihood and commercial activity related to species such as tuna are not well understood.

DeepGreen maintains that mining the deep sea is necessary to avert the global climate crisis. Barron casts himself in the company’s video not as a mining CEO or a profit-seeking frontier investor but as a humanitarian eco-warrior, concluding, ‘it is a big responsibility on our shoulders’. The argument is simple: the green economy requires metals for such things as wind turbines, solar panels, and batteries for electric vehicles. While this is true, there is currently no global shortage of critical metals and minerals such as cobalt or lithium. Furthermore, technology is rapidly evolving to reduce or replace cobalt use, recycle lithium, develop urban mining of all kinds of waste products and even, according to experts, ‘biomining to extract rare earths from electronic wastes using microorganisms…use of sodium and magnesium in place of lithium, or alternative batteries based on graphene, hydrogen fuel cells, or even water and table salt. BNEF [Bloomberg New Energy Finance] has said new battery chemistries will probably shift to different source materials after 2030’. There are even reports of batteries using hemp rather than lithium-ion.

Finally, the DeepGreen video prominently features the secretary-general of the ISA, Michael Lodge. Lodge is on what appears to be a DeepGreen vessel, he wears a hard hat with the DeepGreen logo on it, and he both makes the case for deep-sea mining and discusses the ‘partnership’ DeepGreen has with the ISA. It is remarkable, and perhaps telling, that the head of this UN agency, which is tasked with environmental protection of the seabed in the Common Heritage of Mankind, and expects to soon become the regulator and issuer of mining licences for a whole new extractive industry, seems to be oblivious to the appearance of conflict of interest inherent in appearing in DeepGreen’s promotional video. Lodge has yet to respond to a recent report that raises concern about corporate capture of the ISA’s mining-code drafting processes.

It should be obvious that we cannot save the planet by continually expanding our exploitation of it and by trashing new, as yet unexploited ecosystems, such as those in the deep sea. It has taken time for communities and governments to become aware of the existential threat to our oceans, to global biodiversity and to life on earth posed by deep-sea mining. Within the last year the call for a ban or moratorium on the development of regulations by the ISA, and on the practice of deep-sea mining itself, has grown louder. The call is being made by NGOs and civil society organisations such as the Deep Sea Mining Campaign, the Deep Sea Conservation Coalition and Greenpeace, individuals such as Sir David Attenborough, and also by governments of Pacific island countries; even the European parliament has called for a moratorium on deep-sea mining.

Critical to the effort to protect the deep sea from mining is the need to review the role of the ISA in governing both the protection of the deep seabed as our ‘common heritage’ and its exploitation by for-profit corporations. This agency and its secretary-general have proven themselves to be deeply conflicted and captured by the corporations they are meant to regulate. It is time for a global treaty that will protect the entire international deep seabed from industrial exploitation.

Bougainville’s Faustian Bargain

Over 2,000 residents, including chiefs, elders, and politicians attended the historic ceasefire signing ceremony on the island of Bougainville, April 30, 1998. Credit: AP Photo/Australian Defence PR

An ongoing independence referendum does not address the key question at the root of the conflict: the future of the Panguna mine.

Paul R. Williams* and Carly Fabian* | The Diplomat | November 27, 2019

On the small island of Bougainville, a region of Papua New Guinea, voters are currently taking part in a long-awaited referendum on independence that started this Saturday. Twenty years after the end of the deadly Bougainville conflict, this referendum gives voters the chance to decide between substantial political autonomy or complete independence. While the voting period lasts until December 7, early estimates predict that Bougainvilleans will vote overwhelmingly for independence.  

The peace agreement that ended the conflict in 2001 has so far allowed the region to take incremental steps toward enhanced self-government while maintaining a delicate peace. Whether this peace process will result in a durable peace depends entirely on the outcome of the referendum, the final and most important step of the process.

The structure of the referendum, however, renders it an imperfect and perhaps even fatally flawed vehicle for resolving the conflict. Notably, the referendum is not binding on Papua New Guinea, meaning that the outcome will depend on whether Papua New Guinea accepts the outcome of the referendum, or whether it imposes conditions on Bougainville’s independence. Most importantly, the referendum does not address the key question at the root of the conflict: the future of the open-pit Panguna mine on the island.

The Bougainville conflict centered around the Panguna mine, a large-scale copper and gold mine that was built in 1972 amid significant local opposition. During its operation, the mine was responsible for over 40 percent of Papua New Guinea’s national export revenue. The mine dramatically reshaped local society as the mining company clear-cut forests, forcibly relocated villages, and introduced thousands of higher-paid foreign workers to operate the mine. The millions of tons of pollution created by the mine’s operations also quickly contaminated the surrounding bodies of water and agricultural lands.  Collectively, these changes presented what the indigenous Bougainville people viewed as an existential threat to their way of life.

In 1989, Bougainvilleans forcibly shut down the mine. This provoked a harsh armed response from Papua New Guinea.  In response, the rebels declared independence from Papua New Guinea.  Over the next decade, the two sides fought over the future of the mine and, by extension, Bougainville’s political, environmental, and economic independence.  The conflict, marked by atrocities, forced relocation, and a debilitating blockade by Papua New Guinea, resulted in 20,000 deaths, 10 percent of Bougainville’s population, as well as the displacement over another 30 percent of the population.

Somewhat surprisingly, the comprehensive and detailed peace agreement that ended the conflict did not address the future of the mine – the primary conflict driver.  The agreement instead focused on increased self-government and a path to potential independence. This framing has so far allowed Bougainville and Papua New Guinea to maintain a delicate peace as the Bougainville government assumed greater governing responsibility yet kept the mine closed.

At the same time, this framework also presented Papua New Guinea with an opportunity to separate the promise of political independence from Bougainville’s broader goal of protecting the environment and its indigenous way of life. With growing external pressure to reopen the mine, these issues have increasingly been framed as mutually exclusive options that Bougainville must inevitably choose between.

Since the creation of the Autonomous Bougainville Government in 2005, Papua New Guinea and other external funders have provided the Bougainville government with the majority of its funding.  Bougainvilleans have so far envisioned a future economy centered on sustainable agriculture and fishing industries.  It will take significant time, patience, and investment, however, for these industries to produce revenue that could replace the external aid Bougainville currently receives.

To prepare for independence, Papua New Guinea has pressured the Bougainville government to instead achieve fiscal self-reliance by reopening the Panguna mine.  A number of mining companies have expressed an interest in contracting and operating a reopened mine.  Notably, both the government of Papua New Guinea and the government of Bougainville each hold a substantial (36.4 percent) ownership interest in the mine, which was transferred to them in 2016 by the mine’s previous majority shareholder Rio Tinto.

The environmental scars from the mine continue to haunt the island. Cleaning up the pollution that remains would potentially cost billions of dollars, a price far out of reach of Bougainville’s current economy. After the transfer of shares, Rio Tinto rejected responsibility for the mine’s environmental damage.  Today, some parties argue that reopening the mine with greater environmental protections is the only feasible option for generating sufficient revenue to remediate the prior environmental damage.

Strong public resistance in Bougainville has so far kept attempts to reopen the mine at bay.  With the arrival of the referendum date, however, the forces coalescing around the reopening of the mine have redoubled their efforts to overcome this public resistance.  Amid this pressure, rather than resolving the conflict, the referendum’s narrow focus on political independence may instead reignite it.

If voters choose independence, Papua New Guinea may present Bougainville with a Faustian bargain: in exchange for independence, Bougainville will first have to achieve fiscal self-reliance by reopening the mine. If that happens, Bougainvilleans will have to choose between abandoning the promise of political independence, which has underpinned the last two decades of peace, and reopening the Panguna mine, which drove a decade conflict.

Dr. Paul R. Williams is the Founder of the Public International Law & Policy Group, and the Rebecca I. Grazier Professor of Law and International Relations at American University.

Carly Fabian is a Research Fellow on Justice, Peace, and Security at the Public International Law & Policy Group.

Nautilus Minerals: still lost at sea with no life raft in sight

Deep Sea Mining Campaign | 25 November 2019

On 21st November, Nautilus Mineral’s court-appointed monitors, Price Waterhouse Cooper (PwC) confirmed that the relevant legal papers had been filed to assign Nautilus Minerals Inc. into bankruptcy. Whilst this news was expected, there has been no news on their plans for the Solwara 1 deep sea mining project in Papua New Guinea, leaving local communities and civil society who are opposed to the project with many questions.

Nautilus filed for protection from its debts in a Canadian Court in February 2019. The company tried to restructure but it failed to find any buyers for its assets. In August 2019, court approval was obtained for creditors to liquidate the company in order to get back a fraction of what they were owed.

Andy Whitmore of the Deep Sea Mining Campaign stated, “This should be the end of the story, but sadly the liquidation was enacted to give birth to a new, smaller Nautilus.”

“The two main shareholders – MB Holding and Metalloinvest – have effectively taken control of this ‘new’ Nautilus at the expense of major creditors and hundreds of small shareholders. Despite filing an appeal in the Canadian Court, through its company Eda Kopa, the PNG Government remains the biggest loser from the deal holding 15% equity in Nautilus PNG and the Solwara 1 project, effectively losing $US125m.”

“Nautilus gave the impression that the new company was ready to roll. But it has been over a month since the confirmation and there’s been no other information on what Nautilus’ new plans will be.”

“Nautilus stated in court papers that, once liquidation occurs, there may still be a buyer for at least some of the new company’s assets. Does this mean the major shareholders will sell their licences and machinery to make a quick profit and run?” questioned Mr Whitmore.

Local communities opposed to Nautilus’ Solwara 1 project in their seas are still steadfastly opposed to the project, and there are still legal cases in the PNG court system.

Jonathan Mesulam from the Alliance of Solwara Warriors has recently returned to PNG from meetings in Canada where he represented the fierce opposition of PNG coastal communities against experimental seabed mining.

Mr Mesulam stated, “It’s unbelievable for Nautilus to still consider mining the Solwara 1 project. Even if free of its long-term debt, this new company is created on the back of the huge financial loss for our government and the people of PNG. Our people want nothing to do with this company and its lies of prosperity. In Canada I learned that such a project would never be allowed in this company’s home waters.”

This loss adds to PNGs public debt which is at about 33 per cent of GDP. Australia has recently committed a $AUD300 million loan as direct budget assistance to ‘aid its economic reforms and government financing.’

Mr Mesulam continued, “A recent article in PNG Business News seems to suggest the ‘new’ Nautilus has applied to the PNG Mineral Resources Authority to vary the existing mining lease. This is against a background of calls from right across Papua New Guinean society to cancel the licenses.”

An added mystery is that someone is still buying shares in the old, defunct company. When Nautilus was removed from the Toronto Stock Exchange as part of the bankruptcy proceedings, it moved to unregulated trading of the now virtually worthless stock. Yet there has been a recent spike in buying that sent the price up to 0.003 cents per share.

“So many questions, and yet to date no answers. The company still looks to be lost at sea with no life raft in sight” claimed Mr Whitmore.

Nautilus Minerals officially sinks, shares still trading

Amanda Stutt | Mining dot com | November 26, 2019 

Nautilus Minerals, one of the world’s first seafloor miners, officially went bankrupt this week, its court-appointed monitor, Price Waterhouse Cooper reported.

Nautilus filed for protection from its debts in a Canadian Court in February 2019. The company tried to restructure but it failed to find any buyers for its assets. In August 2019, court approval was obtained for creditors to liquidate the company to get back a fraction of what they were owed.

IN THE PROCESS, NAUTILUS HAS LEFT THE PAPUA NEW GUINEA GOVERNMENT FACING A DEBT EQUIVALENT TO ONE-THIRD OF THE COUNTRY’S ANNUAL HEALTH BUDGET

The Vancouver-based company was trying to develop its Solwara 1 deep sea gold, copper and silver project, off the coast of Papua New Guinea (PNG), but the project was plagued with community opposition and financial setbacks.

In June, the owner of the shipyard where the company’s support vessel was being made said it had cancelled the contract with the supplier chosen  to build its ships after Nautilus failed to pay the third installment of the contract price — $18 million before interest.

Local communities opposed to Nautilus’ Solwara 1 project in their seas are still opposed to the project, and there are still legal cases in the PNG court system.

In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing K81.5 million ($24 million) in debt.

“The two main shareholders – MB Holding and Metalloinvest – have effectively taken control of this ‘new’ Nautilus at the expense of major creditors and hundreds of small shareholders,” Andy Whitmore, advocacy officer, Deep Sea Mining Campaign, said in a press release.

Court papers noted that Nautilus had two distinct business units, one dealing with polymetallic nodules, and one dealing with seafloor massive sulphides, which includes the Solwara 1 project in PNG. It is therefore unclear which, if either of the business units, the new company will concentrate on.

“Nautilus gave the impression that the new company was ready to roll. But it has been over a month since the confirmation and there’s been no other information on what Nautilus’ new plans will be,” Whitmore said.

Nautilus stated in court papers that once liquidation occurs, there may still be a buyer for at least some of the new company’s assets.

A PNG Business News report suggests the new Nautilus has applied to the PNG Mineral Resources Authority to vary the existing mining lease.

When Nautilus was removed from the Toronto Stock Exchange as part of the bankruptcy proceedings, it moved to unregulated trading, with a recent spike in buying.

At market close Tuesday, Nautilus Mineral’s shares had been traded 310,769 times on the OTC, with the stock priced at a penny.

Papua LNG Put On Hold By Landowner’s Court Action

Roy Daniel Evara and Roy Evara addressing the media at a press conference convened at the Port Moresby Archdiocese yesterday.

Post Courier | November 27, 2019

A Landowner Umbrella Association on where [sic] the Papua LNG project is situated has successfully taken out a temporary court order, stopping the progress of any development on the US$10 billion project.

The landowners of Baimuru through their Umbrella association Purari Development Association (PDA), obtained the stay orders through a challenge of a decision by the State to cancel their Special Agriculture Business Lease (SABL) title.

The lease, according to the association, covers the project area.
In a press conference organised at the Port Moresby Archdiocese, the president Roy Evara, his son Daniel Evara his vice president Poroa Kaia and leaders of the nine tribes of Baimuru applauded the court decision saying, “No Papua LNG Project – Not until a new gas agreement is negotiated under a new Oil and Gas Legislation”.
“

We want, in fact, we demand the fast-tracking of a new oil and gas law that Prime Minister James Marape and his government foreshadowed recently, to be enacted.”

The three main issues to be addressed in the new law according to the landowners are a guarantee for full involvement and participation of landowners in all aspects of project development; the use of production sharing model for all oil and gas development projects in the country, starting with Papua LNG Project; and a new increased level of equity of up to 50% of State’s total equity and other benefits for landowners under such production sharing model, before the Petroleum Development License Agreement is negotiated.

The restraining orders were taken out from a court challenge to judicially review the decision of the Registrar of Titles for the cancellation of their Special Agriculture and Business Lease (SABL) title.

“Let me be clear to all who care to listen – we will not be an unfortunate bunch of landowners that will stand condemned for missing out on more superior benefits that a new production sharing model arrangement promises, when change for such law is foreshadowed to be around the corner. Indeed, we will not allow that to happen and now call on the State, the developer and its partners, and other stakeholders that we all go back to the drawing board and negotiate in good faith something that is a win-win for all parties, “ said Mr Evara

They also stated that the government has been ignoring them for too long.

“Despite our existence and our God-given rights to our land and resources, we have never been acknowledged nor respected, through any meaningful engagement at any time during the gas agreement negotiations by the O’Neill government, nor in the recent review by the Marape government. For all intents and purposes we just don’t seem to exist at all.

“We refuse to be taken for granted anymore. More importantly we are resolved that the Papua LNG Project will not progress any further, until the landowners aspirations and desires are heard and that legislative and policy changes that protect the interests of landowners and the country as a whole are fully enacted by law so that we are not to be bullied by corporate giants and made to look as beggars in the development of our scarce resources.
”

The effect of the Interim Court Orders according to the landowners basically means that the State is restrained from entertaining and approving a PDL license.

Bougainville’s gold mine sparked a war that killed 20,000 – now it could be reopened

Panguna. Stefan Armbruster/SBS News

The people of Bougainville will vote in a referendum this weekend that will decide on its independence from Papua New Guinea. Here, SBS News visits the mine that ignited its decade-long civil war.

Stefan Armbruster | SBS | 23 November 2019

Almost 20 years ago a brutal civil conflict ended in Papua New Guinea in which one in ten people on Bougainville died – but the war set the island on the road to independence.

The conflict was sparked by an Australian-run gold and copper mine, then the world’s largest. It had promised much but delivered very little for the local people.

The Panguna mine’s profits funded Papua New Guinea’s independence from Australia in 1975 and made Australian company Rio Tinto rich, but the Bougainville landowners saw little of the wealth and their rivers and lands were devastated by mining waste.

“What upset the landowners was Panguna mine,” said Sam Kauona, who as a general was the commander of the Bougainville Revolutionary Army, or BRA.

“Panguna mine was creating social disparities, environment problems, social issues and problems, unfair distribution of wealth by the company, that sparked off the sentiments, the desire for independence of Bougainville.”

Bougainville’s rivers and lands were devastated by mining waste. Stefan Armbruster/SBS News

The war started in 1989 when the impoverished people took up arms. The BRA was not highly thought of by outsiders but it shut down the mine and brought the local economy to its knees.

Over the next 10 years, during the ‘Bougainville crisis’, up to 20,000 people died either from fighting with the PNG defence force and its local collaborators or from disease and starvation.

Despite backing from the Australian government and Rio Tinto subsidiary Bougainville Copper Limited (BCL), the PNG government was brought to the negotiating table by the BRA and a peace agreement was signed in 2001.

“When I look at that, it was BRA that won the war,” Mr Kauona said.

“The point of defeat was when the PNG army didn’t have any strength any more, when we went for negotiations we came out with a stronger position, not in a loser position where we’d have to negotiate terms below what we have now.”

Stefan Armbruster/SBS News

The mining legacy has scarred the landscape as much as it has the people of Bougainville in PNG.

At the mine site, Moses Pipiro lives amid the mining facility ruins with about 500 traditional landowners in what until recently was still considered a no-go zone.

“We feel proud, we are happy, and also we are united now, [a] unified position now,” he said.

“But the people, they still cry. We fought to preserve our land and our environment, [and] the PNG defence force, they kill many people here.”

Moses Pipiro lives amid the mining facility ruins. Stefan Armbruster/SBS News

About 200 of their weapons, a mix of homemade guns and captured defence force arms, are secured at the Panguna mine in preparation for the referendum.

“Okay these weapons are here, but the war is over, no more war in Bougainville, they are for monumentation but we have no money,” he said.

In the vast pit nearby, it is thought there is still $85 billion worth of copper and gold, enough to fund a fledgling independent state, but Panguna’s troubled past means the mine has an uncertain future.

The mine oozes blue polluted water and just downriver a devastated landscape unfolds where the tailings were pumped.

The mine oozing blue polluted water. Stefan Armbruster/SBS News

“It destroys everything, like fish, we used to catch fish here before,” said Barnabas Piruari, a downstream villager who blames his skin disease on the pollution.

Their livelihoods gone with the water and land spoilt, people scratch a living by panning for gold amid the mine waste and reopening the mine is not popular.

“Make some kind of different mining, not the one they’ve done before,” said Salithia Bitanuma, another downstream villager.

Villager Barnabas Piruari says the polluted water “destroy everything”. Stefan Armbruster/SBS News

On the other side of the Crown Prince mountain range that runs the length of the island, there is a fire burning in the heart of Bougainville, no longer to wage war but to exploit their abundant resources.

Former combatant Jose Nouibiri smelts gold, a booming business in the former BCL mining town of Arawa, once the island’s capital.

“We were the first ones to establish this business, now some companies start up here, business is very good now but we have competition but we make 200 grams or 300 grams a day,” he said after melting down a customer’s gold dust.

The lump of gold is the result of weeks of backbreaking work by the villager in the tailings waste of the Panguna mine.

“During the crisis I was one of the fighters and helped the BRA,” Mr Noubiri said proudly.

“After the crisis I left Bougainville [for Port Moresby] to go find a job to support family and children get an education.”

The Bougainville conflict was sparked by an Australian-run gold and copper mine. Stefan Armbruster/SBS News

Three decades ago Awara was a thriving town with a population of 12,000 people but was physically and economically destroyed after the world’s largest copper and gold mine was shut down.

A decade of civil war saw it burned to the ground and abandoned.

“That was here and also other parts of Arawa town, this was a battlefield,” said former mayor and peace broker Theresa Jaintong, reflecting on the war and running gun-battles on her street.

Twenty years of neglect under the 2001 peace agreement has left Arawa, like much of Bougainville, impoverished. There are few businesses and jobs, limited health and education services.

Ms Jaintong’s grandchildren are part of Arawa’s booming population and reopening the Panguna mine is seen by many as a controversial choice but a vital one for the economic future.

“They’re talking about the economic side of agriculture and fisheries but we cannot do it quickly because we have to turn it into cash, Panguna is readily available,” Ms Jaintong said.

Stefan Armbruster/SBS News

With Bougainville expected to vote for independence this weekend, there is a new generation of leaders emerging with hopes for a return to the good times in Arawa.

“My vision for Arawa is it’s going to be the capital of the new Bougainville,” Arawa deputy mayor Genevieve Korokoro said.

Tens of millions in Australian infrastructure aid has rebuilt roads, schools and hospitals in the past decade.

More changes are coming to the town where it is sometimes impossible to get better than dial-up speed internet, a digital future.

“Oh yes, there’s a fibre optic cable coming in from Huawei China,” deputy mayor Korokoro said with a smile.

It will still be a long way from the golden days in Arawa.

Awaiting another customer, Mr Noubiri has changed his mind since he fought to shut down the Panguna mine.

“When we are independent we don’t need money from the outside, we use alluvial mining and pay tax to the government and give money to develop education and health and everything,” he said.

“I support the opening of the Panguna mine because it’s going to generate revenue for our government to stand up and look after our people.”

Up at the Panguna mine, Moses Pipiro is taking a more cautious approach.

“After the referendum, we shall see, if we talk about opening the Panguna mine, we create division again, because now we are focused on the unity on Bougainville,” he said.

“If we try to talk about opening the mine, we create the other monster again”

Change may be coming to Bougainville but its future, like its past, will be determined by what’s in the ground.

Landowners ‘Ready To Reopen Panguna Mine’

Panguna landowners showing clearly which option they will vote for at the mine site up in Panguna.

Post Courier | November 25, 2019

Landowners of the decommissioned Panguna copper mine are now prepared to reopen the mine as soon as the next Bougainville House of Representative is installed.

Seeing that as the only means of generating income for Bougainville as soon as it gains independence status, the landowners have agreed that Panguna will finance Bougainville like it financed Papua New Guinea back in the 1970s and 80s.

Special Mining Lease Osikayang Landowners Association (SML-OLA) mobilised all landowners from different parts of Panguna to gather at the edge of the mine pit to show that they were now one and ready to re-open the mine when Bougainville gained its independence.

SMLOLA chairman Philip Miriori and chief consultant adviser to the association Lawrence Daveona told the Post-Courier in Arawa that the landowners were now one and that there was no differences among them anymore.

“We are now united as one and we, re ready to re open this mine to finance the Independence of Bougainville, culturally and symbolically over to the government the new government that will be in place next year,” Mr Miriori said.

“This will be proof to the PNG government and also the international community that we can also be economically independent now, and right now Panguna mine is the only answer because it will not need exploration.

“We are now very positive that this mine will be reopened soon, we are working together with our developer RTG to reopen the mine and we have made a very strong commitment and stance that we do not want BCL back ever again into Panguna or on this island.”

He said the landowners were the people to have and to make the final say on the mines re-opening and now they had made a final say, to reopen the mine, to cater and finance the Bougainville independence.