Category Archives: Financial returns

Man builds gold-dredging machine from scrap metal

The National aka The Loggers Times | November 20, 2017

A man from Aseki in Morobe has built a simplified alluvial gold dredging machine using pieces of scrap metal.
The machine, powered by electricity and water, will greatly assist small-scale alluvial miners.
Sam Sky is a Grade 6 dropout from Asini in Salamaua and Bangulum in Bulolo. His alluvial gold-dredging machine was launched during the 103rd Yabem district conference in Aseki which was attended by 14 circuits in the presence of Morobe deputy governor Waka Daimon.
Daimon last Thursday delivered 44 bags of 10kg rice to support and feed the delegations.
Sky said that his first invention was a machine used to husk peanuts after a woman farmer in Markham requested him to build it.
Sky said that it took him two weeks to design and four months to collect materials and tools and another four months to build the peanut pulper.
Sky later designed and built the alluvial mining machine launched last week.

“My aim is to help small coffee farmers and alluvial miners who did not have easy access to services in Lae,” Sky said.

“I also designed and built another alluvial mining machine, soon to be completed that will be powered by water alone that doesn’t need electricity.”

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Lunch & Learn: Women Miners as Change Makers in Papua New Guinea

Earthworks

Join Earthworks and Community Solutions Program International Fellow, Immaculate Javia, for a Lunch and Learn talk on Wednesday, November 29th from 12 – 1pm.

Immaculate has more than 7 years of experience, training and working with women in the small-scale mining sector in Papa New Guinea.

She will talk about how empowering women through a policy framework can give a voice to women to advocate for change in the ASM industry in Papua New Guinea.

Lunch will be provided, from Taylor Gourmet

LOCATION: Earthworks, 1612 K St. NW, Suite 904, Washington, DC 20006, United States

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K92 first production ready for shipment

The National aka The Loggers Times | November 16, 2017

THE K92 Mining Inc says the first concentrate from the Kora production in Eastern Highlands has been transported to Lae to be shipped overseas.
This is pursuant to a new off-take agreement, with the provisional payment (90 per cent of total value of shipment) received by K92.
According to the company, the new off-take agreement included a provision for a funding of US$15 million (K47.04 million) in non-dilutive financing from one of the world’s largest commodity trading groups, to secure the long-term off-take for production from the Kora Deposit.
The financing is subject to a number of closing conditions, which the two parties have started pursuing.
Prior to the removing of these conditions, K92 will ship the Kora concentrate under an agreement with interim provisions facilitating the same.
K92 expects to use the US$15m to target an expansion of the mining and processing rate to a level envisioned in the preliminary economic assessment.
K92 chief executive John Lewins said the off-take agreement “allows for immediate shipping of concentrate that K92 is producing from Kora”.
“At the same time, it provides a potential path for a non-dilutive financing to target significant production expansion,” he said.
“The off-taker is one of the world’s largest commodity traders, is very active in Papua New Guinea and familiar with K92 and our operations.
“The discovery of the Kora extension area adjacent to our current mining area has been game-changing for the company and we are continuing to drill and mine in this area.”
K92 Mining has begun gold production from the Irumafimpa gold deposit, which together with the Kora gold deposit, is part of the company’s Kainantu gold project located in the Eastern Highlands.
Kora remains open for expansion in every direction and strongly mineralised at the extent of all drilling.

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Can the Solomon Islands’ Gold Ridge Mine serve as a new model for resource extraction in the South Pacific?

The coastline view near the capital, Honiara. Photo by Paul Hilton/Greenpeace.

Catherine Wilson | Mongabay | 15 November 2017

  • After 17 years of foreign ownership and a checkered environmental history, the Solomon Islands’ Gold Ridge mine is now being led by a local landowner-driven joint venture.
  • The company saw its first major test in April 2016, when rainfall triggered a spillover from the mine’s tailing dam. However, independent tests found the water quality downstream remained safe.
  • Though concerns still remain, the new ownership structure could be a model for mining operations elsewhere in the region.

In April 2016, thousands of villagers living in the vicinity of the Gold Ridge Mine in the southwest Pacific nation of the Solomon Islands braced themselves for a major disaster as torrential rainfall triggered a spillover of thousands of cubic meters of untreated water from the mine’s tailings dam.

The Ministry of Health issued instructions to people to cease using water from the nearby Kwara, Tinahula and Matepono rivers for drinking, washing or fishing, due to possible risk of chemical contamination.

The gold mine is situated on the country’s main island of Guadalcanal, 40 kilometers (25 miles) from the capital, Honiara.

Stanley Holmes Vutiande, who lives in Navola village, located along the Gold Ridge Road leading to the mine and 2 kilometers (1.2 miles) from the dam, remembered when it happened.

“We fled because there was water overflowing from the dam and we thought it might burst, so people just panicked and took off,” he recounted. “There was general information to look for safety, for higher ground, but no specific instructions as to what to do.”

Joe Horokou, the environment and conservation director at the Ministry of Environment, said the incident “was bad because it took us by surprise,” even though the company had been given approval to discharge tailings from the dam. “The approval was given with conditions like before it is discharged the water has to be treated to acceptable standards.”

Despite the dire warning, the expected disaster didn’t materialize. The dam held, and stakeholders, including Gold Ridge Mining and the ministries of environment and health, commissioned numerous independent tests of nearby rivers and streams.

“Based on the findings of those analyses we were able to determine that, even if the water was discharged untreated at the time, it caused no immediate harm to the downstream communities … the water quality was safe within the dam,” Horokou said.

Vutiande also said that, at the time, he noticed nothing of concern in the water quality of the Tinahula River near Navola.

A palm oil plantation in the Solomon Islands. The land used to be grassland and bush. Photo by Lorette Dorreboom/Greenpeace.

The incident was the first major test for the new landowner-led company, Gold Ridge Community Investment, which had taken ownership of the mine only the year before. After 17 years of foreign ownership and a checkered environmental history, the Gold Ridge mine is now being led by a local landowner-driven joint venture that is emerging as a potential new mine management model in the Pacific Islands region.

In 2015, Gold Ridge was sold for 100 million Australian dollars ($73.8 million at the time) to Gold Ridge Community Investment (now Gold Ridge Mining), by its Australian owner, St. Barbara. The company decided to abandon the mine, which contains an estimated 3.18 million ounces of gold, in the wake of extensive damage caused by Cyclone Ita and flooding the previous year.

The mine hasn’t been operational since, but following the signing of an agreement with Australia-based AXF Resources, which will provide the majority of investment, plans are now in place to resume extraction by the end of next year.

Walton Naezon, chairman of the landowner-led Gold Ridge Mining, said he is now keen to both reduce any risk the tailings facility poses to the surrounding environment and communities, and to increase public transparency of the company’s environmental processes. The top priority, he said, is dewatering, or emptying out the dam to ease pressure on its wall and decrease the chance of any further overflows.

Naezon spoke to Mongabay about implementing his vision of an extractive project where local communities are part of the corporate structure. About 3,000 to 5,000 people live in villages surrounding the mine, and traditional landowners own 30 percent of the company. They have already participated in making key decisions, such as the selection of an independent environmental consultant. They also observe operations at the tailings dam and take part in the company’s environmental testing and monitoring of nearby rivers and streams.

Larger than life in a blue Pacific print shirt, Naezon is bullish in his drive and optimism about the enterprise when we meet in a Honiara hotel. But he also comes across as astute, widely informed about the industry and its issues, and attuned to the sensibility and needs of his own people. No doubt this is a product of his previous career in politics, as well as skills and grasp of the cultural context as a traditional leader. He was minister of mining and energy from 1997 to 2001, minister for state government until 2003, and minister for commerce for another two years.

Naezon is visibly relaxed about the attention given the mining industry worldwide by what he refers to as the “greens” movement, commenting that it “makes the developer and company stronger.”

The revived Gold Ridge venture, at this stage, comes across as more than ticking the right boxes in order to be assessed a responsible corporate citizen. There is evidence of an attitudinal shift, a genuine motivation to alter the structure of power, participation and accountability.

The Gold Ridge Mine tailings dam in Guadalcanal Province, Solomon Islands. Photo by Catherine Wilson for Mongabay.

Community Involvement

As I stood in the water treatment plant at the edge of the vast blue expanse of the dam, reflecting the brilliant tropical sun, Gaheris Porowai, the supervisor, readily answered questions. He said that we were looking at 1 million to 2 million cubic meters (264 million to 528 million gallons) of water, with the water level currently 1.5 meters (5 feet) below the spillway. Treated water was being discharged, as permitted, at 500 cubic meters (132,086 gallons) per hour or 12,000 cubic meters (3.17 million gallons) per day, with water testing conducted twice weekly.

This will be done persistently, Naezon said, until the dam is empty.

“There should be no water there. In the next two years, no water, we don’t want to see water there,” Naezon said emphatically, adding that Golder Associates, the company responsible for the dam’s construction has also been reengaged to review its current state and potential future.

Phil Fairweather, Gold Ridge’s general manager, said that he and many other people had been attracted to the venture by the vision of building an enterprise on greater transparency, community inclusion and social and environmental sustainability.

“Any dewatering that is happening at the moment, for example, involves the communities,” Fairweather said. “It actually involves unqualified community people coming and observing the testing, coming and being involved in community awareness prior to any discharge and during.”

Local village chiefs, landowners and students are all invited to visit the tailings dam to learn about the water treatment process and witness its discharge.

“We want to see the mine open, but the health and safety and environmental responsibility is an utmost priority to us,” said Robert Rafaniello, the company’s deputy CEO. “And that is why as we lower the water, we will do more investigations into the stability of the dam, assess it. Does it need any strengthening to future-proof it for any other unknown event? Do we use the tailings dam in its current form, do we look at alternatives?”

Tropical forest, Vella Lavella, Solomon Islands. Forests cover more than three quarters of the country’s land area, but illegal logging remains a serious problem. Photo by Lorette Dorreboom/Greenpeace.

In hindsight, the lack of continuity in the mine’s foreign corporate ownership since the late 1990s — and intermittent periods of closure resulting in inconsistent environmental practices — can be seen as factors in the problems being experienced today.

The start of mining in 1998, by the Australian company Ross Mining, coincided with the stirrings of civil unrest. The mine was forced to close a mere two years later when the violence escalated. While a peace agreement was achieved in 2003, Gold Ridge didn’t reopen until 2010 after acquisition by Allied Gold. The venture changed hands again in 2012, this time to St. Barbara. Then, in April 2014, calamity struck when a cyclone and torrential rain caused massive flooding that damaged mine infrastructure, raising concerns about the stability of the tailings dam and forcing a second shutdown. Losses and damages at the mine amounted to $27.7 million, 26 percent of the total economic impact of the disaster on the country.

Soon after, St. Barbara decided to exit the country, selling the mine and its legal liability to Gold Ridge Community Investment the following year, while the Solomon Islands government declared the site a disaster zone.

A model for the region?

The Solomon Islands is not the only Pacific Island state to experience environmental problems in the mining industry.

Natural and mineral resource extraction has, over decades, generated major revenues in a number of other countries in the region, such as Papua New Guinea and Nauru, while many more are now considering the lucrative potential of deep-sea mineral extraction. But in both island states the extractive industries have been plagued by environmental disasters. Both have failed to achieve environmental sustainability, and the economic windfalls have not led to substantial improvements in human development.

Glaring examples include the Panguna copper mine in Bougainville, Papua New Guinea, where the fallout from the destruction of land and waterways nearly 30 years ago remains unaddressed; as well as the OK Tedi copper and gold mine in the country’s Western Province, where massive discharge of mine waste into local river systems since the mid-1980s decimated fish and animal species and contaminated water sources and farmland. In the tiny state of Nauru, aggressive phosphate extraction has ravaged 80 percent of the country’s landscape.

In the Solomon Islands, the government is looking to mining as the next big revenue earner as it faces the challenges of post-conflict economic recovery and the exhaustion of commercial forestry after decades of unsustainable logging. The country is known to have significant mineral resources, including gold, silver, nickel and lead.

“The Gold Ridge mine reopening is very important for the government and Solomon Islands as it contributes significantly to the economy,” a spokesperson for the Ministry of Mines, Energy and Rural Electrification told Mongabay.

Nevertheless, the economic, social and environmental success of mining ventures over the next generation depends on not repeating the problems of the past.

A 2013 UNDP symposium on managing extractive industries in Pacific Island states highlighted some of the steps needed to overcome the hurdles. These include conducting better consultations with stakeholders and communities, developing a more complex understanding of customary land tenure, improving the transparency of political processes and revenue management, and achieving greater commitment to environmental protection, over and above the basic requirement of developers producing environmental impact assessments.

Expert observers have also expressed concerns about the influence of corruption and limited capacity of the government to manage the demands of regulating and overseeing mining activities.

Logging road in a deforested area in Vangunu Island. Photo by Paul Hilton/Greenpeace.

“Too close an identification of political leaders with resource extraction companies has not served Solomon Islands well,” Graham Baines of the Bergen Pacific Studies Research Group has written (pdf). “The chance to build an economy based on sustainable timber production has been lost. And just as government institutions have been shown to be ineffective in controlling logging abuses, so, too, their role in guiding and controlling mining is weak and compromised.”

Recently the government has tried to address some of these issues with the launch of a new National Minerals Policy (2017-2021). It aims to guide reformed financial practices, industry oversight, and procedures for tailings management, corporate environmental audits, biodiversity management and the mitigation of deforestation and soil erosion.

“With the policy now launched, the ministry is working closely with the World Bank to begin implementing the policy, and this process is already under way, focusing mainly on the regulatory framework,” the Ministry of Mines spokesperson confirmed. This includes reviewing resource and manpower capacity and rolling out public outreach and awareness of the new policy.

Progress in these areas is vital to turning around the suspension of the Solomon Islands by the Extractive Industries Transparency Initiative (EITI), which in March of this year sanctioned the country due to assessed deficiencies in areas including licensing procedures, monitoring and control of production, and revenue distribution.

The revival of the Gold Ridge mine will bear witness to how much progress the government has been able to make in the short term.

In May, the government and company began consultations with landowners about the mine’s proposed reopening next year, seeking to address issues such as royalties and environmental impact.

There is evidence, though, that not everyone is satisfied and local environmental concerns persist.

Vutiande said that in Navola, “the water system was always a long-term concern since the opening [of the mine] by the previous companies. The water issue is an ongoing issue. There were a few times when there were people who found things that have died in the river, such as fish and frogs.”

Despite the company’s stated commitment to transparency, Gold Ridge Mining remains tight-lipped while it considers the range of options for dealing with mine waste. The decision as to whether the dam will continue to be used is still to be made, and the government is still awaiting the environmental management plan.

The contents of these will be the first step in translating the new Gold Ridge vision into reality and establishing, or debunking, its standing as a model for the rest of the region.

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Lihir Royalties on hold

Sally Pokiton | PNG Loop | November 15, 2017

temporary hold on royalty payments from Newcrest Mining Limited, has been ordered by the Waigani National Court today.

The people of Namatanai district, claim they have not received their share of royalties in the last 10 years, an amount that equates to K7 billion.

With the restraining order in place, only the Nimamar LLG and Lihir Landowners will receive their royalties this month.

Kavieng and Namatanai districts and the New Ireland Provincial governments will not receive any payments until parties present their case, on how much they should be paid, and get a clarity on the gures in court next month.

Member for Namatanai, Walter Schnaubelt and member for Kavieng Ian Ling Stucky led a case in the National court, against Sir Julius Chan as Governor for New Ireland Province Government, and Lamiller Pawut as Acting Provincial Administrator of New Island Province.

The sitting MPs are seeking clarity on all the past payments, and how much should have been paid between the New Ireland Provincial Government and the two districts as per the Lihir MOA.

They want an account of all those monies and how much should have been paid to them through the Provincial Treasury accounts.

Schnaubelt said the Provincial Government received K168 million under the governorship of Sir Julius Chan, from 2007 till now.

“I’m fighting for my people’s share. As a district, we never received our portion for the last 10 years. Hopefully the National Government can give us what we deserve initially, in accordance to the Lihir MOA, where Namanatani district is supposed to receive 20% of the Lihir royalties,” he said.

The Lihir Landowners and Nimamar LLG gets 50% payment. From the other 50%, Kavieng and Namatanai districts are to receive K20% each while the 10% is retained by the provincial government.

“The Lihir MOA was very clear, outlining the recipients but unfortunately, Namatanai district has not been receiving its share for 10 years, and that equates for K7 billion years, hence why Namatanai district is in the state its in, a total neglect.

“Hopefully all these corrective measures will now be put in place, and the challenge is now on me as member to deliver the services I promised during the election,” Schnaubelt said.

The two members believe the Lihir MOA is unfair, as royalties have been unfairly administered among the two districts, and they want an account to be given on the payments that should to be received on behalf of the two districts.

In the meantime, their royalty payments will be made to the National court trust accounts. Whether the orders will continue, that will be determined on December 4.

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MP Samb defends Asidokona failure

Samb clears air on mining delay

The National aka The Loggers Times | November 15, 2017 

THE operator of the Tolukuma Gold Mine Limited in Central has been delaying operations for the past two years because a business partner was pulling out, according to Goilala MP William Samb.
He said the Asidokona Mining Resources Pty Limited was to have restarted the mine which Central was a shareholder in.
In a statement, Samb said the delay had caused inconvenience to the company management in settling outstanding salaries of employees and resuming the operations at the mine.
The Tolukuma Gold Mine Limited is under care maintenance.
This was revealed during a recent meeting Samb had with Asidokona’s executive director Vincent Siow who confirmed the challenges.
Samb said a stakeholders’ meeting to be held this month will be to revise the agreement. They will discuss the production phase, scale of the mine, construction of the road from Doa to Tolukuma, establishment of the infrastructure development committee, and proper landowner business plans.
“Siow has assured that Asidokona is here to stay and continue with operation of the mine despite the few challenges,” Samb said.
“One of those will be to build a road linking Tolukuma to Port Moresby so it can cut back on the high operational costs.”

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Australian govt using ‘aid’ money to promote their mining industry

Bruce Davis, left, and Fred Hess signing a memorandum of understanding at Frieda River last week. Looking on are East Sepik Province Governor Allan Bird, Ambunti-Drekkir MP Johnson Wapunai, Vice Mines Minister Bari Palme, women’s mentor, Fredah Wantum along with women from Paupe village and PanAust employees

Approval processes for any Frieda river mine have not yet been completed – but the Australian government is already spending ‘aid’ money to help ensure the mine does go ahead.

PANAUST, the beneficiary of this ‘aid’ subsidy, is, of course, an Australian company…

Long-term plan for women at Frieda River

PANAUST and the Australian government are working together to empower women through the Frieda River copper-gold project under a new initiative called the Papua New Guinean Women in Mining Project.

In terms of an agreement signed at Frieda River last week, the partners say a three-year work program will strengthen the participation of women in the development forum process and ensure women receive lasting benefits over the life of the mine and beyond.

“The project will provide a mentor to work with women from the Frieda River area to prepare them for participation in the development forum and help organise their governance and representative structures. Selected Frieda River employees will become women’s empowerment and safety champions,” PanAust said.

The partners will also work to build literacy skills, and promote cooperative approaches to decision-making, workloads and budgeting, leadership and coalition building.

At the signing PanAust managing director Fred Hess emphasised the role mining could play in supporting women.

“Mining, perhaps more than any other industry, has the ability to empower women in remote communities. At PanAust, we consider it our responsibility to encourage that development. At our operations in Laos, we have provided pathways for women to acquire trades, become leaders in the company and start small businesses. Our partnership with the Australian government will help us emulate this success in Papua New Guinea,” Hess said.

Australian high commissioner Bruce Davis said Australia was taking part to strengthen women’s participation in resource development negotiations.

“We will help build literacy and financial skills, as well as support women to take on leadership and decision-making roles in the development negotiations, to ensure they directly benefit from mining activities in the region,” Davis said.

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