Category Archives: Mine construction

Nautilus Minerals working with ghosts

Nautilus Minerals has been going through a rough time recently, so rough the company is now claiming to be working in partnership with a ghost, a company that no longer exists.

Nautilus Minerals wants to be the first to mine the seabed, but has been on financial life support since last year, unable to raise the $300 million it needs to complete its preparations for mining. In the meantime it is being kept alive only by a series of short-term loans from its major shareholders.

To make matters worse, in November last year, the company supposed to be supplying the mining support vessel, the key piece of infrastructure for a seabed mining operation, cut off funding for the ship build.

With no money and no ship and forced to close its Papua New Guinea offices, perhaps it is no surprise senior staff have started bailing too. First, Chairman Russell Debney, on December 27  and then President, PNG Operations, Adam Wright.

But even given this alarming state of affairs, industry observers have been shocked to see Nautilus Minerals claiming, in its official Toronto Stock Exchange notices that it is still [12 February] working “closely with its partner Petromin”.

Clearly that statement can’t be true as Petromin is dead, it was extinguished by the Kumul Minerals Holdings Authorization Act of 2015. The Act replaced Petromin with Kumul Minerals Holdings Limited.

Kumul Mineral Holdings extract showing Petromin ceased to exist in December 2015

How could Nautilus Minerals not know that its partner in the Solwara 1 mine had been abolished by an Act of Parliament and replaced?

Whether a case of ignorance or sloppy management of its stock exchange statements, claiming to be working closely with a ghost is not a good look.

And there is more bad news for Nautilus. Unfortunately, the replacement of Petromin by Kumul Mineral Holdings just further undermines Nautilus’ lack of financial credibility, as Kumul Minerals Holdings is effectively bankrupt.

Kumul Minerals Holdings Annual Return for 2016, reveals a loss for the year of K354.7 million and total liabilities that exceed the total assets by K218.1 million.

Kumul Mineral Holding Ltd Annual Return 2016, page 11

This raises the question of whether Nautilus Minerals has informed its shareholders and the stock exchange of its partners financial strife and the ‘material uncertainty‘ it will be able to ‘realise its assets and settle its liabilities‘?

But then again, they are all probably reading this blog anyway!

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Chinese looking to cut costs for Frieda river mine

What will be the costs for the environment and the mighty Sepik river as PanAust looks to “decrease capital expenditure”?

Frieda River upside options explored

PNG Industry News | 16 February 2018 

THE Frieda River copper-gold project in Papua New Guinea’s Sandaun Province represents PanAust’s long-term strategic growth opportunity.

This was said by PanAust managing director Fred Hess when he presented the company’s quarterly report for December 2017 this week.

[PanAust is wholly owned by Chinese State company, Guangdong Rising Assets Management Co. Ltd (GRAM)]

“In 2017, we made strides towards making the project a reality through identifying opportunities to increase the value of the project, decrease capital expenditure, and reduce its overall risk profile. 

“We will continue to evaluate these opportunities in 2018,” Hess said. 

The company says it continues to liaise with PNG authorities on Frieda River following lodgement of a special mining lease (SML) application and environmental impact statement (EIS) with the Mineral Resources Authority (MRA) of Papua New Guinea and Conservation and Environment Protection Authority (CEPA) of PNG, respectively in 2016.

“The overall approval and permitting process for the SML application and other permits and approvals is now being coordinated by a government appointed state negotiating team, chaired by the Department of Mineral Policy and Geohazards Management.

PanAust says it is investigating opportunities to increase the value of the project and access alternative development pathways to decrease capital expenditure and reduce the overall Project risk profile. Study work to investigate these opportunities continued throughout the quarter, and indicate several potential pathways for value enhancement. The outcomes of this work will inform a decision as to whether an update to the project’s SML application will be made.

Hess added: “Looking to the year ahead, PanAust will look to further strengthen the relationships that have become integral to the company’s success, and are synonymous with how it conducts itself where ever it operates.

“The common currency of PanAust’s success is the strength of its relationships; relationships with our employees, communities, host governments, suppliers, peers, and partners. These relationships depend on trust and consistent transparent communication. This is what pushes PanAust way ahead and will continue to do so throughout 2018,” Hess said.

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Nautilus Minerals misleads the world over machine testing

This Auxiliary cutter has been tested in a large puddle NOT the extreme conditions it will face at 1500 metres

Nautilus Minerals has been proudly trumpeting to the world the successful completion of the ‘submerged trials’ of its giant mining machines. Nautilus though has been carefully to omit one crucial fact about these ‘successful trials’, they have been conducted in a large puddle NOT in the extreme conditions of pressure, cold and darkness the machines will experience at a depth of 1500m.

Nautilus still has no idea if the machines can work in those conditions, just as it has no idea what the environmental impacts of the proposed strip mining will be… 

Submerged Test of Seafloor Mining Tools Completed

Maritime Executive | 12 February 2018

Nautilus Minerals has successfully completed submerged trials of its seafloor production tools in Papua New Guinea.

The company plans to use the tools to cut and extract high grade copper and gold from the seafloor at the Solwara 1 Joint Venture’s project site in the Bismarck Sea. Solwara 1 is expected to be the world’s first commercial high-grade seafloor copper-gold mine project. The site has indicated resources of one million tons grading 7.2 percent copper, five grams (0.18 ounces) of gold per ton, 23 grams (0.81 ounces) of silver and 0.4 percent zinc. Inferred resources add 1.5 million tons of 8.1 percent copper, 6.4 grams of gold, 34 grams of silver and 0.9 percent zinc.

Each of the machines, a bulk cutter, an auxiliary cutter and a collection machine, weighs around 250 tons. All three will operate at depths of around 1,500 meters (4,900 feet) in temperatures of 2.6 degrees Celsius. The machines are designed to break rock with much greater force than land machines and must operate at low temperatures to avoid overheating.

The Collecting machine

The auxiliary cutter prepares the rugged seabed for the more powerful bulk cutter. These two tools gather the excavated material; the third, the collecting machine, will collect the cut material by drawing it in as seawater slurry with internal pumps and pushing it through a flexible pipe to the subsea pump and on to the support vessel above via the riser and lifting system.

The machines will be remotely controlled from a purpose-built vessel. The vessel is being built by China’s Fujian Mawei Shipbuilding and will measure 227 meters (750 feet) in length and 40 meters (130 feet) in width and will have accommodation for up to 180 people. It will generate approximately 31MW of power. 

Completing the trials in PNG allowed Nautilus to work closely with its partner Petromin, government officials and community leaders from coastal villages geographically closest to the Solwara 1 site the opportunity to witness the equipment in action.

The equipment is now being prepared for shipment to China where it will be integrated onto the support vessel [when and if it is ever completed].

Earlier this month, the Government of Papua New Guinea granted a two year exploration license to Nautilus. Work done in the area by the company has identified numerous exploration targets with similar geology to the deposits found at Solwara 1. 

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Moratorium on Panguna stays

Bougainville President John Momis

PNG Industry News |  12 February 2018

IT seems that nothing will happen at the Panguna copper-gold mine until after the referendum on independence is held for the island upon which it is situated in Papua New Guinea – Bougainville.

The doors to Bougainville Copper Mines (BCL) and RTG Mining – both anxious to redevelop the mine which has been closed since 1989 – have now been firmly shut by President John Momis.

Momis has told media that the mine would remain closed until after the vote, which is expected to take place on June 15, 2019.

This follows up on a statement issued by Vice President Raymond Masono, who is also Mines Minister, in which he said that the Autonomous Bougainville Government (ABG) had completed the legal process under the Bougainville Mining Act 2015 in relation to BCL’s application to renew its exploration licence over the Panguna mine area “and conclude that it is untenable under current circumstances for the Panguna project to proceed, resulting in a decision not to grant an extension to BCL’s exploration licence.

“Effectively BCL does not have any more tenement (sic) in Bougainville or any legal right over Panguna mineral resources and the legal ownership of the Panguna resources reverts back to the customary landowners of Panguna and the ABG.

“In making that decision to not grant an extension of terms to BCL’s tenement, the ABG has also made a decision to impose a mining reservation (moratorium) over the Panguna mine area for an indefinite period,” Masono said.

Masono added that the public was invited to comment on the Panguna moratorium and this should be submitted to the Department of Mineral and Energy Resources by close of business on March 26, 2018.

“It is in Bougainville’s best interest that the Panguna resources owners be left alone and be dealt with by the ABG alone regarding any future plans for the Panguna project moving forward when the circumstances are conducive and the moratorium is lifted.

“For BCL or RTG or any other investor to directly deal with the landowners regarding the development of the Panguna project will only result in more division and problems among the people and may affect ABG’s drive for peace and unity leading towards the referendum.

“The ABG will not accept nor be influenced by any speculations regarding its decision on the moratorium and redevelopment  of the Panguna project,” Masono concluded.

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Landowners and companies in new battle for Panguna mine, which triggered Bougainville Crisis

PHOTO: Panguna landowners are arguing about which company should restart mining. (ABC News: Bethanie Harriman)

 Eric Tlozek | ABC News | 10 February 2018

The race to reopen one of the world’s biggest copper mines, Panguna, is dividing landowners and the wider community in Bougainville.

Key points:

  • Local leader Philip Miriori says activity at the Panguna mine would bring “prosperity” and “better infrastructure” to the community
  • Bougainville’s President says the Government is keen to restart the mine to boost its case for independence
  • Not all landowners around the mine are happy with the stalemate, or with RTG’s push to leapfrog former operator BCL

Panguna was abandoned in 1989, after landowner dissatisfaction with the mine led to the Bougainville Crisis, an armed uprising against the Papua New Guinea Government in which 20,000 people died.

Now mining companies are trying to come back, right as Bougainville prepares to vote on whether it should become an independent nation.

Philip Miriori is a local leader who wants mining to resume.

“The Panguna mine must reopen,” he said.

“That is going to bring prosperity. We need to see our kids go to school. We need better hospitals, better infrastructure.”

Mr Miriori leads a group called the Me’ekamui and has been battling through the courts and mediation to become chairman of the landowner association of the mine pit, the SMLOLA (Special Mining Lease Osikaiyang Landowners Association).

“I think unity for the resource owners is important, before anything else,” he said.

“Without the unity, I don’t think we can achieve anything.”

Mr Miriori’s Me’ekamui group has entered into a joint venture with Perth company RTG Mining, which is making a bold bid to reopen Panguna.

PHOTO: Philip Miriori’s Me’ekamui group has entered into a joint venture with RTG mining. (ABC News: Eric Tlozek)

“What I was interested in with RTG is a social licence [to mine],” Mr Miriori said.

“I don’t want to get anything for myself, I want to see my people benefit.”

But Mr Miriori and other supporters are being paid by RTG, an arrangement the Bougainville Government has criticised.

Mr Miriori said the payments were legitimate salaries, not inducements for people’s support.

“That is always a normal part of anything, nothing is free,” he said.

“The world has changed. People are educated. So there’s no bribery there.”

RTG’s bid and Philip Miriori’s push for leadership of the landowner association has disrupted a sustained effort by the mine’s former operator, Bougainville Copper Limited, or BCL, to return to Panguna.

BCL is part-owned by the Bougainville Government and had an exploration licence and first right of refusal over the site.

But the Bougainville Government has now rejected BCL’s application to extend that licence, and put an indefinite moratorium on any mining at Panguna.

PHOTO: The Panguna mine is one of the world’s biggest copper mines. (AAP Image: Ilya Gridneff)

Bougainville’s President, John Momis, said the issue of mining had become too sensitive.

“A lot of people are against mining, any mining at all, and mostly against BCL, because of its past,” he said.

Landowners at loggerheads as referendum looms

Mr Momis said the Government does not want conflict at the mine to distract from a scheduled referendum next year on whether Bougainville should secede from Papua New Guinea.

He said the Government may have been overly keen to restart the mine, because it wanted the revenue to boost its case for independence.

“Panguna is a very, very difficult issue for all the things that happened in the past,” Mr Momis said.

“So maybe we were pushing things too hard because of our desire to meet our fiscal self-reliance target.”

Not all the landowners around the mine are happy with the stalemate, or with RTG’s push to leapfrog BCL.

Jeffrey Clason’s mother is one of the mine landowners, and he said many people want BCL to resume mining.

“I think the majority of the landowners are still with BCL and I think as the Mining Act says, they’re the last people to say yes or no, it’s their land,” he said.

“So, for the landowners, BCL is still welcome.”

PHOTO: Bougainvillean Bernadine Kama says she does not want mining to restart at Panguna at all. (ABC News: Eric Tlozek)

Some Bougainvilleans, like Bernadine Kama — who comes from a village near the mine, don’t want mining to restart at Panguna at all.

“We’ve already seen the damage and destruction done to our land,” she said.

The Bougainville Government said it will come up with a new strategy for Panguna, and will continue consultation with landowners about whether it should be mined, and who should mine it.

But in the meantime, Bougainville Copper Limited is pursuing court action against the Government, which is not only a major shareholder, but also the mining regulator.

So the battle for Panguna is getting more complicated, right as the region prepares for a contentious referendum on its political future.

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Delay in Woodlark mine causing anxiety: MP

Cedric Patjole | Loop PNG | February 9, 2018

The delay in the Woodlark Island Gold Project is causing a lot of anxiety and undesired expectation from landowners.

Samarai-Murua MP, Isi Leonard, said this in Parliament when asking Mining Minister Johnson Tuke on the status of the Woodlark Island Gold Project.

Leonard said the project has been on development status for well over a decade following numerous delays and a changing of ownership twice.

“The people of Woodlark and Samarai-Murua regard the project as a major catalyst for development. But the delay in its development is causing much anxiety and undesired expectation,” he said.

The member asked Minister Tuke the status of the project, whether the low commodity process hindered project development financing and if the government could step in.

Leonard asked about a previous agreement for a joint venture partnership to develop gold projects on Woodlark and Misima islands.

He also said if the current explorer is moving ahead, can a previous project agreement signed be approved by the Government.

“Geo-pacific Resources is moving the project forward, can the MOA agreed to by stakeholders in December 2015 be approved by the NEC. This will give more confidence to the landowners and the developers of the project,” he said.

Meanwhile, Minister Tuke asked the MP to send his office his series of questions which he will respond in detail as he did not have the information with him.

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Tuke Firm On Seafloor Mining Decision

Minister Johnson Tuke is demanding Nautilus provide a firm timeline for mining to start

Matthew Vari| Post Courier | February 6, 2018

Minister for Mining Johnson Tuke is firmly committed to the National Government’s decision to go ahead with the Solwara One project.

Mr Tuke maintained the government has done its due diligence to the latter and Nautilus Minerals has complied per government regulations.

He said this in response to what he termed were external groups that continue to undermine the decision made by the country.

“I stand firm that this is the government’s decision and no other parties can undermine the government.”

“Papua New Guinea is a sovereign nation and as such we go by our own polices and manage our own affairs in so far as this ministry is concerned.”

Minister Tuke made the comments during an update presentation made by Nautilus CEO Mike Johnston on Monday evening in Port Moresby. The presentation has is part of Minster Tuke’s recent planned visits to existing Mine projects in the country.

Minister Tuke said the government has been determined to ensure new prospects get off the ground, thus he has met with developers for other proposed mine projects in the country.

“I have been adamant about this not only you (Nautilus), but few other mining prospectus we have got Wafi (Golpu) and Frieda river to deal with, I am concerned with the timeline. You have give some us certainty,” Minister Tuke told Mr Johnston.

“For the last few years or so we haven’t experienced any new mine. This government is concerned that we should at least come up with a new mine that is the reason why I have demanded to know the timeline.”

He, however, maintained that all requirements for the first of its kind seafloor operation to stick to the policies and environmental provisions.

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