Category Archives: Mine construction

Nautilus Solwara 1 on the verge of bankruptcy as APEC Summit heads to Papua New Guinea

On 17-18 November, 21 heads of state will come to Port Moresby for the Asia-Pacific Economic Cooperation (APEC) summit. Set against a backdrop of debts and a declining economy the Nautilus Solwara 1 project speaks volume to another PNG Government failed investment that will be a further economic burden to the country.

Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice Papua New Guinea, “Nautilus is propped up by USD 15 million in loans from its two major shareholders, it’s been forced to reduce its workforce and to terminate contracts for the construction of equipment.”[1]

“Even the production support vessel crucial to Nautilus operations has had to be shelved due to failure to pay the shipyard constructing it.[1] And Nautilus is now virtually worthless with its shares at a new record low of less than 10 cents each.”[3]

Canadian company Nautilus is still desperately seeking funds for its flagship Solwara 1 deep sea mining project. Commercial operation has been delayed year after year since it received its licence to mine the floor of the Bismarck sea in 2011. In a last-ditch bid to finance Solwara 1, Nautilus’s two largest shareholders, Russian mining company Metalloinvest and Omani conglomerate MB Holdings, have formed a new company whose sole job is to secure funding for the Solwara 1 project [4]. However, their attempts have failed. 

Sir Amet continued, “Nautilus is due to repay the USD 15 million loans to Metalloinvest and MB Holdings on 8 January. How will it achieve this? There’s no likelihood of production starting until the end of 2019 or even later.”

“I’m really worried that the PNG Government invested heavily to purchase 15% of a company that will be a burden to our economy. Our country’s over-extended finances may have to contend with a 15% stake in Nautilus’ bankruptcy.”

Sir Amet emphasised, “Wiser investors such as Anglo American and Loews Corporation got rid of their shares early this year to reduce their exposure to risk[5]. The PNG Government should terminate its contract with Nautilus now before it sacrifices even more of our nation’s funds.”   

“In light of PNG hosting the APEC Summit at the end of this week it is important to highlight risky commercial ventures such as Nautilus Solwara 1 project that have used scarce public funds over environmental safeguards, regulatory frameworks and the livelihoods of our coastal peoples.”

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Notes

[1] Management Discussion and Analysis of Financial Condition and Results of Operations, Nautilus Minerals, 10 August 2018 http://www.nautilusminerals.com/irm/PDF/2056_0/MDAfortheperiodendedJune302018

[2] ‘Nautilus notified of rescission of shipbuilding contract’, media release, Nautilus Minerals, 4 July 2018, http://www.nautilusminerals.com/irm/PDF/2049_0/Nautilusnotifiedofrescissionofshipbuildingcontract; ‘Nautilus Minerals tanks on shipbuilding contract cancellation’, Mining.com, 4 July 2018 http://www.mining.com/nautilus-minerals-tanks-shipbuilding-contract-cancellation/

[3] https://ramumine.wordpress.com/2018/11/05/nautilus-minerals-sets-new-1-year-low/

[4] Nautilus signs funding mandate with major shareholders, Nautilus Minerals press release, October 11 2017, http://www.nautilusminerals.com/irm/PDF/1929_0/Nautilussignsfundingmandatewithmajorshareholders

[5] ‘Anglo American to exit stake in deep sea mining company’, Financial Times, 5 May 2018 https://www.ft.com/content/ad58aee6-4fad-11e8-a7a9-37318e776bab

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Wafi-Golpu project expected in June 2019

Cedric Patjole | Loop PNG | November 11, 2018

Newcrest Limited expect the awarding of the Special Mining Lease for the Wafi-Golpu Project in June next year.

Speaking at the Company’s Investor Conference, Executive General Manager, Craig Jetson, said the project has a wonderful ore body and is project of national significance to PNG.

The Investor Conference was held ion Sydney, Australia, on October 26th .

Jetson said following the submission of the Environmental Impact Statement (EIS) in June this year, the company are working with the PNG Government to finalize the necessary agreements to be required to enable them to approve the Special Mining Lease (SML).

“One thing for sure is that Wafi-Golpu is project of national significance to PNG, so there is a lot of excitement in PNG about this project, and they see it as a big part of the economic development of the nation,” said Jetson.

“Right at the outset when we started working through the process of the permitting with the Government we established an agreed timeline that we’d work on towards getting those permits completed and that timeline see’s us having the permits before June next year.”

He said they were fortunate to work with such a wonderful ore body and its perfectly suited to the technology they have been developing over the last 10 years.

“The beauty of Wafi -Golpu is that we can take all those learning’s from Cadia and apply them to a brand new ore body and really take the next generation of our cave-in technology forward.

“So it’s a pretty exciting time for us, we are in the process of obtaining our permits from the Papua New Guinea government, once we get those permits the project is ready to go. So the project has been extensively studied over a long period of time, and it is project ready.”

The Wafi -Golpu Project is a joint venture between subsidiaries of Newcrest Mining Limited and Harmony Gold Mining Company Limited.

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Saonu Raises Concerns On Wafi-Golpu Mining Lease

Post Courier | November 9, 2018

Morobe Governor Ginson Saonu has raised concerns on the pending signing of a special mining lease between the developer of the Wafi-Golpu mine in Morobe Province and the government during the APEC summit next week.

He cited sources from social media who had released a report saying there was already a memorandum of agreement in place, established by the Mining Act.

The issue was interrupted by a court case and the signing of the special mining lease is expected to take place in 2019.

Mr Saonu directed his concerns to the Prime Minister Peter O’Neill during question time in Parliament.

“Would you please confirm or deny, whether the government has agreed to sign a heads of agreement at the APEC Summit? Why was the Morobe provincial government and stakeholders not consulted?’’ Mr Saonu asked.

‘‘If the proposed signing of the heads of agreement is true, will you inform all the stakeholders landowners, state entities and the people of Morobe on what the agreement is all about?’’

He went on to ask the prime minister if it was still necessary to continue and complete the due process and what would be the legal consequences of abandoning the process.

In response Mr O’Neill said: “Mr Speaker our government has appointed a state negotiating team. Technical people from the Mining Department, Treasury, State Solicitors office and other government agencies are dealing directly with Wafi Golpu developers, particularly Newcrest and Harmony.

“They continue to discuss the way forward in continuing to develop this mine The negotiations are still in its early stages and there have been no briefings to cabinet or to the prime minister.

“I don’t see any mine development agreement being signed around APEC and certainly any agreement that needs to be signed will be in full consultation with Morobe provincial government and the people of Wau Bulolo particularly the landowners.”

Mr O’Neill said any understanding reached with the developer was about the program going forward.

‘‘There would not be any legally binding agreement but for the benefits of investors and potential financiers of the project, the government and its developers wants to give a clear position about its intentions to develop the mine,” he said.

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Communities reject planned Frieda river mine

Ambunti on the the Sepik River

“most of the river communities in Ambunti, Wosera-Gawi and Angoram have responded negatively”

By Clifford Faiparik | The National aka The Loggers Times | 22 October 2018

East Sepik Governor Allan Bird, pictured, says many communities along the Sepik River have expressed concerns about environmental impacts that will be brought about by the Frieda River mine.

Bird said this yesterday in response to reports of a team from the Mineral Resources Authority (MRA) carrying out awareness on the mine along the Sepik River.

“Most of the river communities in Ambunti, Wosera-Gawi and Angoram have responded negatively to a team of officers from Mineral Resources Authority who were there to do awareness on the mine,” Bird said.

“Villagers tend to become suspicious of government officers conducting awareness on a project that will affect their environment.

“They are also suspicious that they will not get economic benefits from such impact projects, although the government officers had portrayed a promising economic and social benefits package to them in the awareness.

“MRA officers had been conducting awareness for two weeks amongst villagers along the river about the economic and social benefits from the Frieda mine.”

The mine is at Telefomin in West Sepik.

Meanwhile, the MRA officers said they had encountered some “misunderstandings” while conducting awareness.

“We were advised not to conduct awareness in those villages,” one of the officers said.

“This misunderstanding was created by a non-government organisation that was there earlier on conducting awareness on the mine.”

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Wafi-Golpu Project To Lift Economic Growth, Says O’Neill

ECONOMIC GROWTH DOES NOT MEAN BETTER LIVES FOR ORDINARY PEOPLE

Benny Geteng | Post Courier | October 16, 2018

The Wafi-Golpu project in Morobe province and Papua LNG in Gulf province will help PNG experience a 3 per cent economic growth when productions begin, said Prime Minister Peter O’Neill.

Mr O’Neill said the two projects, when they start producing will boost the economy of the country at a sustainable rate.

“PNG will experience a medium growth of 3 percent. 3 percent is a sustainable growth for a country.

“The Wafi – Golpu mine will be the basis to deliver infrastructure to the province,” he said.

Mr O’Neill said with the Papua LNG Project there is good progress to deliver the project and the negotiation team is at fiscal terms of project signing and closing to pass concessions.

He said the economy is looking bright at a good economic projection of 2- 3 per cent growth.

He also said there will be no fly in fly out for employees of Wafi -Golpu.

Mr O’Neill made this statement last week during the swearing in of the Lae City Authority interim board following a recent strong stance by Morobean parliamentarians who have made it clear they do not want the practice of fly in fly out in the Wafi – Goplu project.

Mr O’Neill said the country will not repeat the same mistakes of the billion dollar LNG Project deal in Hela Province to the new projects and the leaders have now learnt from their mistakes.

“We built an international airport in Hela and that airport is only used once every month,” he said.

He said these are some instances of missed opportunities that the Government will try to avoid in the upcoming mining projects of the country.

The Prime Minister said the new Wafi – Golpu mine is a bankable project for the country to embrace.

The construction phase of the Wafi – Golpu is valued at K5 billion and is set to be one of the biggest revenue earners for Morobe province when gold production starts.

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Nautilus are you nuts!

 
Sccop NZ |12 October 2018

The United States Geological Survey reported that a magnitude 7.0 earthquake struck close to the proposed Solwara 1 deep sea mine in Papua New Guinea yesterday at 7am local time. This follows a magnitude 6.6 quake nearby in March.

Second large earthquake near proposed Solwara 1 site

Dr. Helen Rosenbaum, of the Deep Sea Mining Campaign said:

“Thankfully there have been no reports of damage or injury. However, this is the second large earthquake this year right near the Solwara 1 deep sea mine proposed by Canadian company Nautilus. It’s also in the vicinity of several other exploration tenements in the Bismarck Sea between East New Britain and New Ireland Provinces that Nautilus aspires to turn into seafloor mines.”

Dr. Rosenbaum continued:

“Can you imagine the damage and pollution that would occur if Solwara 1 and these other proposed deep sea mines become a reality? Nautilus plans to have a 1.6 km long pipe moving ore slurry from the sea floor to the surface. An Independent oceanographic assessment indicates that currents in Bismarck Sea would carry pollution from the Solwara 1 shorewards towards New Ireland province, the Duke of York Islands and possibly to the coast of East New Britain.

“Where are our emergency response plans?”‘ asks Jonathan Mesulam from the Alliance of Solwara Warriors and a local community leader whose village is located in New Ireland province, only 25km from the proposed Solwara 1 project.

“There is already great uncertainty about the environmental damage that will occur from the normal operation of Solwara But such serious earthquakes will cause a catastrophe! Nautilus’s equipment has never been tested under these extreme conditions. We have no capacity at either the provincial or national level to deal with such an event.”

Jonathan Mesulam continued:

“Papua New Guinea sits right on the Pacific Ring of Fire. What was our Government thinking by approving Solwara 1. And not only did they approve the project but they have also invested heavily to purchase a 15% stake in this experimental venture. The company’s only credible shareholder Anglo American divested itself of this dodgy project in May and Nautilus’s share price has now hit an all-time low. Why is our National Government still backing this loser?”

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Nickel mining set to start on Solomons’ San Jorge island

Axiom drilling activity on Isabel Nickel Project.

Radio New Zealand | 6 October 2018 

Nickel mining is finally set to commence on San Jorge Island in Solomon Islands’ Isabel Province.

An Australian company, Axiom, this week announced that mining will begin in December.

It said the mine’s first nickel ore shipment was expected to be made in the first quarter of next year.

Axiom, which was granted a lease by the Solomons government last month, said it was close to finalising finance for its project.

According to the company, it is in “advanced stages of negotiations with a number of parties” who are potential partners in the mine.

On the back of Wednesday’s announcement, shares in Axiom Mining rose sharply on the Australian stock exchange.

Isabel is considered to possess one of the largest clusters of nickel laterite deposits in the Pacific.

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