Category Archives: Financial returns

New Ireland refuses to sign Simberi MOA approved by NEC

State Solicitor’s office accused of dishonesty 

Sharon Lowa | Post Courier | May 22, 2017

The New Ireland provincial government has refused to sign the Simberi Gold Mine memorandum of agreement recently approved by the National Executive Council (NEC) in April.

Deputy governor and chairman for natural resources in the provincial executive council Ambrose Silul said they are sick and tired of being misled by the state team negotiating the new MoA for both Simberi and Lihir Gold Mines.

Mr Silul insists that the state keep its word, and until it does, the New Ireland government will not sign any new MoA.

The New Ireland team had been renegotiating the Simberi MoA for over four years and a provisional MoA had been agreed in 2013, but that it was conditional on approval by the PEC.

“Our team wrote to the state team and Mineral Resources Authority (MRA) on October 6, 2013 that the draft MoA must include the provisions approved by the New Ireland PEC on May 21, 2013.

“That includes increasing the rate of royalties from two percent (FOB) annual revenues to 10 percent, as well as similar increases in the special support grant and tax credit scheme,” Mr Silul said.

Mr Silul further stated that the state solicitor’s office agreed that the changes the New Ireland government wanted made to the MoA would be included in the draft to go to the NEC.

He said that in a meeting in April 2015 in Kavieng, the state solicitor agreed they would include New Ireland’s provisions in both the Lihir and Simberi MoAs and allow the NEC to make a final decision.

“All we are asking is that NEC – and not the state bureaucrats – decide on the merits of our suggestions. Instead, we have a bunch of bureaucrats making decisions that should be made by NEC.”

“We will not accept this dishonesty on the part of the state team,” Mr Silul said.

Mr Silul is calling on the mining minister to conduct an immediate investigation into this affair.

The MRA mining coordinators and the state solicitor’s office deliberately and willfully misled the NEC by submitting an MoA that did not include the provisions they promised would be included.

1 Comment

Filed under Financial returns, Papua New Guinea

Call to implement advice in EITI report

The National aka The Loggers Times | May 22, 2017

GOVERNMENT agencies responsible for the mineral and petroleum sectors have been urged to implement a Cabinet decision to implement the recommendations in the first PNG Extractive Industries Transparency Initiative Report.
The call came from the EITI secretariat following Cabinet’s directive last week that the recommendations based on the 2013 fiscal year be implemented.
The agencies include the Department of Petroleum and Energy, Mineral Resource Development Company, the three Kumul enterprises, Auditor-General, State Solicitor, Mineral Resource Authority and the departments of Finance and Treasury.
Head of Secretariat Lucas Alkan said the onus was now on the State agencies to act.
“It is important that we take action on the report recommendations now to validate the EITI candidate status early next year.
“It is only through these efforts that we will be seen as making meaningful progress to meeting global best practice in managing our resource wealth.
“And PNG can be accredited as an EITI member country by EITI International.”
The Petroleum and Energy minister is required “to immediately implement a reliable electronic registry to supersede the current paper ledger system”.
The minister responsible for the Kumul Consolidated Holdings Limited is to ensure it participates in the EITI process and regularly reports to the EITI process the State’s share/ interest in the mining and petroleum sectors it manages under the General Business Trust.
Alkan said similar directions were given to Finance Minister and Treasurer to make sure information on fiscal and finance data were conveniently available to help in the EITI reporting process.

Leave a comment

Filed under Financial returns, Papua New Guinea

Taga: Volatile nature of mining impacts bauxite

The number of bauxite export cannot be estimated for 2017 because of volatile nature of the mining business, says director Mineral Development Dr Raijeli Taga. Picture: Luke Rawalai

Serafina Silaitoga | The Fiji Times | May 17, 2017

Director Mineral Development Dr Raijeli Taga said this resulted in one shipment being sent so far this year to China.

This, she said, was sent in March.

Despite this situation, Dr Taga said XINFA Aurum Exploration Fiji Ltd would continue with its mining operation to stockpile for later export when the commodity price improved.

“The number of bauxite export cannot be estimated for 2017 due to volatile nature of the mining business,” she said.

“Further exports will be purely a business decision of the tenement holder which will depend on the market price in terms of profitability and sustainability of their operations.

“If the export price is not feasible then the tenement holder would continue with the mining activity and export when the price is right.”

For last year, Dr Taga said the export declined because of low commodity price in China who was the primary buyers of Fijian bauxite.

“Since the bauxite from Fiji is not of premium grade, it has to compete with bauxite from countries such as Australia, Mongolia and Indonesia which are of superior grade,” she said.

“According to the quarter one update of 2017 from the Bauxite Index, the Chinese domestic alumina prices have fallen from recent highs in January, as supply was ramped up to take advantage of the higher prices.

“Subsequently, it assumed that the bauxite export would be very similar to 2016 unless the price improves.”

However, announcements, she said indicated that bauxite import would remain weak as China had suspended spot import for three months because of ample cheaper DOM (Days on Market) supply.

She said Beijing also announced plans for winter cuts

Leave a comment

Filed under Fiji, Financial returns

Solomons landowners discuss concerns on reopening gold mine

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen – ANU

Landowners on Guadalcanal in Solomon Islands have been consulted about the proposed reopening of the Gold Ridge gold mine.

The mine was closed in 2014 after massive floods and its ownership was then transferred from the Australian owner St Barbara to a local land-owning company Guadalcanal Community Investments Ltd.

Guadalcanal Community Investments Ltd is now working with Chinese-owned Australian property developer AXF Group which plans to have the mine operational by the end of 2018.

Bringing the gold mine back to life is also a major policy objective of the government which says it wants to do it right.

Members of landowning communities discussed a range of issues with government officials and company representatives relating to royalties, security, environmental impact, revenue sharing and the relocation of people.

They were assured by both the government and the company that their concerns would be taken onboard and addressed to ensure a smooth reopening.

Leave a comment

Filed under Financial returns, Mine construction, Solomon Islands

Bougainville Copper moving to reopen controversial Panguna mine with Government backing

Reopening the Panguna mine could give the Bougainville Government a much-desired source of revenue claims the ABG. (AAP Image: Ilya Gridneff, file)

Eric Tlozek | ABC News | 4 May 2017

The company which used to the run the controversial Panguna copper mine on the island of Bougainville is now trying to reopen it with the support of the island’s Government.

It has been almost three decades since Panguna was abandoned, after anger about the mine led to the outbreak of an armed insurgency known as the “Bougainville crisis”.

Now the Bougainville Government believes it needs the mine to reopen, so the region can have a source of revenue that could enable it to become independent from Papua New Guinea.

The bid by the Bougainville Copper Limited (BCL) to reopen its Panguna mine is stronger than one might expect, given the mine led to an armed insurgency and its abandonment left central Bougainville with many environmental problems.

But this time it will be quite different and the landowners will be brought along on the journey.

BCL secretary Mark Hitchcock said restarting the mine would allow the company to address some of the environmental and social problems it left behind.

“We did have to leave in a hurry and things were not closed down the way that a normal mine would close,” Mr Hitchcock said.

“When we go back, we’ll be conducting our baseline studies to see what the situation is and we will, as the mine progresses, progressively work on some of those environmental issues.

“But with the people, the mine will only work if we involve them all the way along.”

BCL was owned by Rio Tinto, but the mining giant gave its shareholding to the PNG Government and to the Autonomous Bougainville Government, the entity created as part of the Bougainville Peace Agreement to end the crisis.

The PNG Government said it would then give its shareholding to unspecified landowners in Bougainville, creating uncertainty about who the company must deal with and leaving the Bougainville Government without a controlling stake.

Mr Hitchcock said that has created another problem to be resolved.

“The ABG and the landowners are a little bit concerned about who the actual owners are, after Prime Minister O’Neill said that he was going to gift them to the people of Bougainville and the landowner,” he said.

“So that’s one of the issues we need to sort out. “

The controversial Panguna mine was one of the richest copper mines in the world. (ABC News, file photo)

The PNG and Bougainville Governments have just agreed to create a Joint Steering Committee to resolve this and other issues.

BCL executive chairman Rob Burns said that was a major step forward.

“So we’ve got commitment in that respect that all parties are going to work together and it’s terrific news for BCL,” Mr Burns said.

BCL was stripped of its mining tenements and left with just an exploration licence, but it still has all the resource data for the site.

Other companies have expressed an interest in mining Panguna, but the Bougainville Government is giving preference to BCL because it owns part of the company.

Raymond Masono, Bougainville’s Deputy President and Mining Minister, said “BCL is not longer the devil that we know”.

“We actually own this devil as a major shareholder in the company,” he said.

“Also, BCL under the Bougainville Mining Act has the first right of refusal to Panguna.”

BCL return expected to face opposition

The main reason the Autonomous Bougainville Government is supporting a resumption of mining is revenue.

There will be a referendum in 2019 on whether the region should become fully independent of Papua New Guinea, and the Bougainville Government believes a mine is the best way to guarantee income for a new country.

“We believe that Panguna can bankroll Bougainville’s autonomy and independence if the people so decide in the 2019 referendum,” Mr Masono said.

The Bougainville Government, headed by President John Momis, believes most landowners support reopening the mine.

The Bougainville Government says most landowners support the resumption of mining, but other residents may be less convinced.

A United Nations Development Program report in 2014 found there was no evidence of majority support for reopening the mine amongst the general population.

There are also some organised groups who oppose BCL’s return.

Mr Burns said the company was aware of “active detractors”.

“We believe that they’re a very minor group and the most vocal of that group have competing interests in our Panguna mineral rights and they aren’t truly representative of landowners,” he said.

The push to reopen Panguna is part of a broader move by the Bougainville Government to lift its moratorium on mining in general.

BCL’s attempt will surely be watched by companies and investors to see how well the damage of the Bougainville crisis has healed.

1 Comment

Filed under Environmental impact, Financial returns, Human rights, Papua New Guinea

Micah Vows To Take A Stab At Resource Laws

“Today poor people in Hela, poor people in Gulf, poor people in Central Province are seeing the flow of their oil and their gas to Japan and to China with no compensation and no proper development taking place.”

Matthew Vari | Post Courier | May 2, 2017

A very serious leader of the People’s Progress Party (PPP) has vowed to take a stab at the resource laws of the country and the huge public service machinery if his party forms the government.

The current member for Kavieng and PPP leader, Ben Micah, has made the ambitious plans known in the presence of party candidates and supporters assembled at Jackson Airport domestic terminal, yesterday.

He said resource owners will have full ownership of their resources as it has always been for thousands of years and also that the public service will get the biggest trim in its history and the formation of a key ministry to focus solely on village development.

“Today poor people in Hela, poor people in Gulf, poor people in Central Province are seeing the flow of their oil and their gas to Japan and to China with no compensation and no proper development taking place.”

“This is the message that I want to give to the people of Papua New Guinea; the Mining Act 1992 will be repealed and new law of ownership will take place, the oil and gas act of 1998 will also be repealed and this time the new laws will be brought into place that will give the ownership rights to customary landowners,” Micah said.

He said within weeks of forming government, his party will create a ministry of village development and will cut out 11 ministries in the current public service.

“Eleven departments and agencies are going to be removed; we are going to make Waigani small so that we are going to create the ministry of village development,” he said.

“This ministry will focus on 90 per cent of the people of Papua New Guinea living in rural areas and living in the settlements. There will be no more settlements.”

1 Comment

Filed under Financial returns, Human rights, Papua New Guinea

Locals threaten armed campaign against PNG seabed mine

Credit: Alliance of Solwara Warriors

Radio New Zealand | 1 May 2017

Locals are prepared to take up arms if a seabed mining project in Papua New Guinea goes ahead, according to a anti-deep sea mining campaigner.

A campaigner against deep sea mining says locals have threatened to take up arms if a seabed mining project in Papua New Guinea goes ahead.

Canadian company Nautilus Minerals was given an Environmental Permit by the PNG government in 2009, to develop the the Solwara 1 Project, but work is still to begin.

Helen Rosenbaum from the Deep Sea Mining Campaign said locals in New Ireland province and the Duke of York Islands were feeling so desperate that they would consider taking up arms against the project.

“They know they can get access to explosives, it’s incredibly easy to get access to arms in a country like Papua New Guinea through the police, through the army,” she said.

Ms Rosenbaum said the mining project would be the first of its kind and would set a dangerous precedent in the Pacific.

HELEN ROSEBAUM: Well there’s quite different layers of risk. There’s of course environmental which is well documented by our own reports which are direct risks to the hydro-thermal vents that are being mined and the unique eco systems that are there. There’s also the risks that will result from the mining process and the plumes that are generated that are likely to contain metals and other toxics and the risk of those things getting into the food chain – the marine food web effecting marine species and of course effecting the communities that rely on those marine species for their substance and their quite thriving local economy. There’s also economic financial risk to the company which we’ve been outlining to Anglo American and other investors, their economic returns for Soera 1 are totally unknown and Nautilus are clear about this in documentation that this is a huge experiment from all perspectives. They’re clear they don’t know what the environmental impacts are going to be.

Last year I visited the Duke of York islands, New Ireland province and communities and provincial government in East New Britain as well. People are very concerned about the impacts. They’re already facing impacts from climate change, they’re already losing land on their islands due to sea level rise. They’re facing increasing frequency of storm event so their already feeling quite threatened, so this is the last straw for them. On top of  all of that they were saying now we have to deal with this, they were already facing a very uncertain future and because of losing land to sea level rises they’re feeling like their future is going to depend more on the marine environment for their nutrition and their livelihoods and they’re wondering how they’re going to exist and how are their children going to exist.

TG: What ways have they told you they might respond?

HR: Well, they are working with local groups over there to support them, to use political power means. It is PNG elections time in June and July this year. We’re looking at how they can hold candidates accountable for their policy platforms and ask them that hard questions about their positions on Sowara 1 project, but a lot of people are feeling quite desperate and because of  the high level of corruption and not feeling that in PNG that a candidate says something that  that sounds good to them on Nautilus they won’t change their minds later on. And one can see this happening all the time with Sir Julius Chan who is the governor of New Ireland province and he just flip-flops. Sowera 1 is in the water of New Ireland and last year he was voicing serious concerns about the Sowera 1 project and wondering whether it should go ahead, but this week a press release came out saying he has resigned to the Sowera 1 and he’s going to make the most of it. Goodness knows what’s going on behind the scenes in terms of money changing hands. Local people are feeling so desperate they are saying that they would even take up arms against the project. Many of them work at mining companies, or have worked at mining companies in the past. They have access to explosives and they know it’s incredibly easy and it’s only a matter of money to get arms in a country like PNG through the police of through the army. And they have the experience of Bougainville, many of them worked at the Bougainville mine prior to the civil war in Bougainville what was caused by impacts of the civil war – for them making this threat is no idle threat . Many people in the Duke of York Islands and the New Ireland province have married into Bougainville. They understand want it means to have conflict, and they not saying this loosely.

Leave a comment

Filed under Corruption, Environmental impact, Financial returns, Human rights, Papua New Guinea