Category Archives: Financial returns

Papua New Guinea, Exxon to start talks on revising P’Nyang gas deal

Reuters | November 15, 2019

Papua New Guinea is set to start talks with Exxon Mobil Corp to negotiate better terms for the state from the P’Nyang Gas Project, Minister for Petroleum Kerenga Kua said on Friday.

“All things going well we can expect to sign a P’Nyang Gas agreement around the end of this month,” Kua said in a statement mailed to Reuters.

The project will help feed an expansion of Exxon’s PNG LNG plant, in which Australia’s Oil Search and Santos Ltd are also stakeholders.

Talks over the project were put on hold earlier this year, when the government sought to revise a separate LNG agreement it has with French energy firm Total in which Exxon is also involved.

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PNG’s Ok Tedi mine disaster money locked in new legal fight

Alex Maun, a landowner who sued BHP in the 1990s, in the dying forest near the Ok Tedi River. CREDIT: ALEX DE LA RUE

Nick Toscano | Sydney Morning Herald | November 3, 2019

A fresh legal dispute has erupted over control of a fund set up to benefit the tens of thousands of villagers affected by mining giant BHP’s environmental disaster at the Ok Tedi mine in Papua New Guinea more than 20 years ago.

The Ok Tedi mine – which BHP co-owned with the PNG government until selling its stake in 2002 – discharged tens of millions of tonnes of mine waste into the local river system during the 1980s and 1990s, contaminating fish and trees and devastating the area’s economy.

A special trust account was created by the mine owners in the late 1990s to accumulate dividends from the Ok Tedi copper and gold mine’s ongoing profits to compensate the 30,000 landowners of the worst-affected communities living downstream of the mine.

Estimated to contain 250 million kina ($106 million), the Western Province People’s Dividend Trust Fund had been managed by PNG government officials until September last year when the Ok Tedi and Fly River Development Foundation, a regional representative group, raised allegations the funds were being “misapplied … causing a diminishment” and won a legal bid to become its trustees.

The newly-formed foundation headed by local leaders claiming to represent 30,000 residents of the villages most immediately impacted by the Ok Tedi mine disaster obtained National Court orders to replace the government as trustees.

But control of the trust is again under a cloud with the PNG government, represented by prominent Australian law firm Corrs Chambers Westgarth, last month obtaining further court orders blocking the ANZ Bank from dispensing the funds.

The Ok Tedi and Fly River Development Foundation has applied to have the injunction set aside, alleging an abuse of process, including claims the PNG government is a vexatious litigant and that Corrs Chambers Westgarth had failed to obtain the necessary certification with PNG’s Investment Promotion Authority to be practising in PNG. The case will be heard in the country’s National Court in December.

A spokesman for Corrs Chambers Westgarth said the firm was “not in a position to comment” as the matter was before the court.

An ANZ spokesman said it would be inappropriate to comment as the matter was before the courts in Papua New Guinea.

BHP, Australia’s biggest mining company, completed its withdrawal from the Ok Tedi mine in 2002, transferring its 52 per cent equity stake to a development fund designed to operate for the benefit of PNG residents, known as the PNG Sustainable Development Program Limited. The fund was to use dividend payments from BHP’s transferred shareholding in Ok Tedi to finance long-term sustainable development projects in PNG, particularly the western province.

The miner also reached an out-of-court settlement with 30,000 landowners represented by Slater & Gordon in a landmark lawsuit in Victoria’s Supreme Court in 1996, which included $110 million in compensation for the affected villagers.

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Filed under Environmental impact, Financial returns, Papua New Guinea

Expert Says Basamuk Spill ‘A Catastrophe’

Elias Nanau | Post Courier | October 10, 2019

An expert engaged by the Madang Provincial Government to investigate possible environmental and health issues associated with the operation of the Ramu Nickel Mine says it’s a “catastrophe.”

Dr Alex Mojon who has done environment impact and assessment studies in Africa, Europe, Asia including China for over 30 years was with Madang Governor Peter Yama yesterday when he made the statement.

A report is expected to be published in less than a week, with two investigations already being carried out by Dr. Mojon collaborating with other scientists. One was carried out before the slurry spill occurred and another recently after the spill of an estimated 200,000 cubic metres of waste turning the sea red.

Mr Yama said his government decided to engage what he described as “impartial experts” because he alleged that the office of the Conservation and Environment Protection Authority (CEPA) has been compromised and the veracity of their report has to be tested.

“The company has a strong influence on the report,” he said.

Mr Yama was irate and stressed that fishery lives were being affected as far as the borders of Morobe and the Karkar, Long and Bagabag islands northwest of Basamuk.

“One or two people have died,” he said, despite assertions to the contrary by a local health worker in the area and supported by the miner MCC.

“One of my ward councilors of Astrolabe Bay is at the intensive care unit.”

He said he became ill after eating contaminated fish,” Yama said.

Dr Mojen believes evidence strongly point at contamination being the cause of a number of medical conditions.

This included deformity in babies born around the vicinity, saying his investigations focused on the Kurumbukari mine and tracked the pipeline to Basamuk Deep Sea Tailing Disposal set up less than 500 meters from the sea, he interviewed villagers and flew to areas as far as Karkar.

“I was shocked,” he said. “We found it to be a catastrophe. There is evidence that Ramu Nickel Mine is not managing waste well.”

According to him, the samples were tested at a laboratory in Munich, Italy.

An irate Mr Yama said yesterday he would protest by not attending Parliament sessions and he will demand Prime Minister James Marape to intervene.

“We can’t gamble with the lives of the people,” he said firmly.

He said based on financial reports, the Mine has made K27 billion since its operations and the Madang Provincial Government received only K5 million.

Mr Yama said the Kurumbukari mine is on tax holiday.

According to Mr Yama, Lomai and Attorney has been engaged to act swiftly based on additional credible evidence before it to file a lawsuit on environmental issues and an Australian QC is likely to be involved.

Mr Yama’ stance yesterday was; “We will go for the closure of the mine.”

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Muthuvel Opts To Stop Solwara 1

Gorethy Kenneth | Post Courier | October 7, 2019

The government is faced with a major challenge on the country’s Solwara 1 project of which K400 million had already been spent while it faces legal implications in the Canadian Court.

State Owned Enterprise Minister Sasindaran Muthuvel in his recent press conference told reporters that the State was faced with K1.8 billion debt to commercial banks and other service providers and that his personal view was to discontinue the Solwara 1 project.

“You see, B-Mobile owes BSP K96 million and KCH owes ANZ another K130 million, first and foremost, we need clarity on this in order to deal with those costing us millions,” he said.

“Then we have another K375 million that has sunk into the ocean – the Solwara 1 project. The government has already spent over K400 million on this Solwara 1 project and as you know, in the recent news, we lost the case with the developer Nautilus in the Canadian Court and we need to take our next course of action,” Mr Muthuvel said.

“Although they have written to the Prime Minister James Marape to see that they are still keen to work with the government, but my personal view is that we have already lost about K400 million, and my personal fear is that of we continue to engage in the project we are going to be forced to further cash calls to invest in that project.

“It is a pity, in fact that project from day one it started came with a negative impact. We are not going to support a project that doesn’t have a net positive income and that doesn’t have the minimum rate of returns. There are other SOEs that we need to concentrate on like the BMobile and that has to be a collective effort and we prioritise to sell off those not making money.

“If we continue to fund this, there is no satinity we can get and we cannot invest in a project that doesn’t have minimum rate of returns… We need a turn around.”

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Filed under Financial returns, Mine construction, Papua New Guinea

Axiom sues Tovosia and Solomon Islands mining board 

Solomon Star | 3 October 2019

AXIOM Mining Limited (AML) says it has initiated legal proceedings at the High Court over the government’s handling of its export permit application.

General Manager Dr Phil Tagini said they’ve filed a claim for judicial review against the decision of the Minerals Board, as well as a misfeasance claim against the Minister of Mines Bradley Tovosia and Director of Mines Nicholas Biliki for failing to properly exercise their powers under Regulations 70 and 71 of the Mines and Minerals Regulations pertaining to the company’s export permit application. 

“Furthermore there are subsequent requests for materials by the Ministry of Mines which the law does not require for the consideration of an export permit,” Tagini explained.

He said the application has met the requirements of the Mines and Minerals (MM) regulations and thus the company should have been granted an export permit to ship out its nickel ore products to its United States-based buyer, Traxys.

However, Tagini said Minister Tovosia in a letter dated July 18 this year informed Axiom that the Minerals Board following its extra-ordinary meeting on July 5, had decided to reject the company’s export permit application on the basis that it did not possess a business licence from the Isabel Provincial Government (IPG). 

The Board had maintained that this is a requirement even though it is not required in the Act or Regulations. 

Tagini explained that Axiom’s non-possession of a business licence was not deliberate on its part but was rather due to failure of the Isabel Provincial Government to respond positively to its numerous applications and attempts to obtain a business licence.

He said Axiom has come to a stage where it could no longer tolerate the overreach of the Board and must bring the matter for an independent interpretation by the Courts.  

He added Axiom’s nickel mine project on San Jorge is projected to contribute up to 15 to 20 percent of Solomon Islands Gross Domestic Product (GDP) when in the full exportation phase. 

“We are surprised that with the current state of our economy that a company that has been granted a Mining Lease and has been mining for a year is being refused to export their ores for reasons that we believe are not according to law. 

“We have complied with all requirements under the law so it is very concerning to us that this situation is preventing more employment opportunities for Solomon Islanders and much needed tax revenues into our government coffers.   

“It is unfortunate that every citizen and the landowner and our loyal suppliers have to suffer for this poor governance. 

“Axiom is left with no other option but to have the matter rectified in the courts,” Tagini said.

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Filed under Corruption, Financial returns, Solomon Islands

Illegal Porgera mining fuels lawlessness

Bid Ambassi | Post Courier | 1 October 2019

Both government and the operator of the Porgera mine, have to be blamed for not taking tough measures in stamping out illegal mining activities in the Porgera mine. The effect of not addressing the illegal mining activities by the government is contributing to the lawlessness and social problems in the communities.

Law and order problem is increasing in our communities.

Tribal fighting is a major problem that is costing a lot of human lives. There is no peace and harmony in the communities we are living Government properties worth millions of kina, and properties worth thousands of kina and food gardens that are suppose to sustain the livelihood of the people in the communities are being destroyed due to unncessary lawlessness issues caused by drinking.

Illegal mining activities are contributing to social and moral decay, rise of HIV and AIDS diseases, sexually transmitted infections, divorce, multiple marriages, killing, un-necessary untimely and avoidable deaths, unfaithful marriages, laziness and many other related issues.

According to PNG’s Mining Act 1992, it states that all minerals existing on, in, or below the surface of any land in PNG, water lying in any land in PNG, are the property of the State.

But this Mining Act 1992 be comprehensively reviewed and amended, specifically such that ownership of all minerals on and below the sea is vested in the province in whose waters minerals are located.

And maybe to minimise such illegal mining activities that will lead to reduction of social problems, landowners be given greater responsibilities over their resources. Such issues are not addressed effectively and on time, we are leaving the door open for illegal miners, risking their lives at all costs, trying to grab a share of the benefits through stealing.

This is like a survival-of-the fittest game where only the strongest and the bravest men used to enter the state fortified positions and grab themselves a gram of gold. According to the law of man and of God, stealing is sin. And sin is the transgression of the law. The wages of sin is death.

Many of our illegal miners have been killed by the security forces at the mine site.

Many illegal miners are creating social havoc in our communities.

Getting money through stealing has caused so much damage in our communities.

Getting money through stealing, buying beer and drinking, we are not responsible in our drinking behaviour.

We are getting drunk and behaving like animals with no human senses.

We are creating unnecessary avoidable problems that are damaging our social harmony.

Such issues needs urgent attention by the government.

More and more awareness needs to be carried out, educating people on how to respect the law and to behave responsibly.

Many are stubborn because there is no proper education.

On that, our illiteracy rate is very high and people do not know what appropriate actions to be taken.

Therefore, my life saving advice to the illegal miners is that it is better we refrain from risking our own lives and also we need to think about the greater good of our communities.

Finally, the Government needs to urgently address this illegal mining issues because the longer it delays the more problems are created by the illegal miners in our communities.

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Illegal Intrusion Deaths Self-Inflicted – Barrick

Barrick Gold engages in some nice victim blaming rather than addressing the bigger question of why people have to resort to illegal mining to try and survive…

Post Courier | October 1, 2019

Barrick Niugini Limited (BNL), operator of the Porgera gold mine in Enga, reported that a number of illegal intruders have been seriously injured after falling from height in the open pit area of the mine.

Mine management reported that during the night of Sunday September 29, several large groups of unauthorised intruders, believed to be illegal miners, gained access to the mine’s open pit, and that a number of the intruders were injured after falling from extremely steep inclines while climbing through the area.

While separate from the earlier incident the same night in which a Porgera asset protection officer was shot and seriously wounded, all of the incidents underscore the danger to life created by illegal intrusions and the flagrant disregard for private property and law and order.

BNL executive managing director Tony Esplin confirmed that two of the intruders suffered fatal head injuries and several others have sustained serious injuries requiring urgent medical treatment, which the mine is providing.

“There were at least two separate incidents during the evening where large groups of intruders moved through extremely steep parts of the open pit that are prone to instability,” Mr Esplin said.

“Initial reports indicate that several intruders have lost their footing in these areas, with tragic consequences.

“These incidents highlight the enormous risks that intruders and unauthorized persons face when they seek illegal entry to the operational areas of the mine.

“The PJV has repeatedly warned these intruders, many of whom are from areas outside of Porgera such as Kandep, Laigam and Tari, of the hazards of conducting illegal mining in the operational areas of the mine, but sadly our warnings are not heeded.”

Mine management has noted that local reports alleging that the injured were shot or injured by police or mine security are not true, and that all of the injured had fallen from height.

“The injured persons are currently receiving medical treatment at the mine medical centre, and following further assessment by medical staff, those with more serious injuries may require transfer to hospitals elsewhere,” he said.

Barrick (Niugini) Limited has advised relevant authorities about the incidents, and will be working closely with the police and others as they investigate these events.

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