Category Archives: Mine construction

PNG PM O’Neill calls on the Island Nations around the World to Work Together to Protect Marine Resources

Has O’Neill forgotten his government is forging ahead with experimental seabed mining? 

Open cut strip mining of the sea floor doesn’t sound like a good way of ‘preventing marine resources being destroyed’!

PNG Today | March 17, 2017

The Prime Minister of Papua New Guinea,  Peter O’Neill has called on Island Nations around the world to  come together for global action to protect their communities from marine damage.

Prime Minister O’Neill made the comments in Suva, Fiji, where he attended the Pacific Regional Preparatory High-Level Meeting for the United Nations Conference on Oceans on March 16-17.

PM O’Neill said island nations have valid marine resources concerns that must be taken up by the global community.

“Island Nations might be small in terms of geography, but we are many in number, and together we can bring about global change on issues harming our communities,” the Prime Minister said.

“We are not only the Pacific Island nations, but island nations and communities from oceans and seas right around the world.

“Pollution, illegal fishing and climate change destroys ecosystems in island nation maritime areas.

“We did not cause these problems, but these problems cause damage to our communities today and into the future.

“This meeting in Suva is all about building consensus and establishing a way forward to bring the global community with us to prevent our marine resources being destroyed.”

Following earlier meetings with United Nations representatives and partner Pacific Island nations, Leaders attended the High-Level meeting today to finalise the actions to move forward ahead of the UN Conference of Oceans in June.

“All countries, including our own, have a role to play in managing our own waterways, as well as the pollutants that flow to the world’s oceans.

“Papua New Guinea’s Vision 2050 is a National Development Roadmap further underscores environmental protection as an important pillar.

“Selected areas are being considered as Marine Protected Areas so that nature can replenish marine resources.

“Papua New Guinea already has in place the Strategy for Responsible Sustainable Development, STARs, which addresses the integration of the global 2030 Agenda.

“This includes the United Nations Sustainable Development Goal 14 incorporated into the national planning process.

“SDG 14 is intended to conserve and manage the sustainability of the world’s oceans, seas and marine resources so as to ensure sustainable development.

“This is in its early phase and will ensure marine life sustainability and bio-diversity for decades to come.

“But ultimately, there is only so much individual countries can do. We have to come together as a global community to have workable solutions for our future generations.

“For Pacific nations, we have to ensure that we lay the groundwork now to ensure real and tangible outcomes from the UN Conference of Oceans later this year.”

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President Momis announces support for the new Bougainville Copper Limited (BCL)

Bougainville News | 16 March 2017

President of the Autonomous Bougainville Government Chief Dr John Momis has announced his support of the new Bougainville Copper Limited (BCL) .

The new BCL is step away from the post-colonial and pre-crisis arrangement that had Bougainville at a disadvantage; it is partly owned by the Autonomous Bougainville Government, the National Government, Panguna Landowners and people of Bougainville to develop the defunct Panguna Mine with the landowners for the benefit of Bougainville.

President Momis said the ABG as regulator will work together and support BCL explore alternative Panguna development options that will accommodate the interest of project stakeholders to fast track the development of the Panguna resources.

“Since BCL was invited to formally re-engage in discussions in Bougainville in 2012, the landowners have consistently stated their preference to work with BCL as the developer,” Momis said.

This was recently reaffirmed by the nine (9) Landowner Associations in Buka on 23 February 2017 after the BCL team led by Chairman Rob Burns made presentations to the ABG leaders and the nince landowner association executives and representatives on the new BCL’s development proposal for Panguna.

During that visit the Chairman present to the ABG leaders and the landowners a staed development proposal outlining how different the new Panguna approach will be under the new BCL hich now owned by the ABG, the Panguna landowners, people of Bougainville and the National Government.

Due to the recent majority of shares transferred by the Rio Tinto to ABG and the National Government, the ABG and the landowners now view BCL as not the devil we know but the devil we won.

The ABG and the landowners will now have to take advantage of this scenario and work out a positive strategy for an outcome that will be equitably beneficial for all stakeholders especially the landowners.

The ABG and the landowners have also committed to addressing the immediate challenges to progressing the Panguna project and looks forward to working in partnership with BCL through the project development cycle.

During discussions held this week between the BCL and the ABG, the two parties reaffirmed their commitment in which a way forward can be agreed for the immediate addressing of stage 0- Removing impediments under the BCL proposed staged development proposal presented during 23 – 24 February visit.

In those discussions it was also mentioned for BCL’s consideration to find ways and opportunities in its exploration to project development financing phase to support the ABG’s immediate development agendas as a way of building a long term unwavering development in Panguna.

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Solomon Islands govt signs agreement to restore mining lease

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

Radio NZ | 9 March 2017

The Solomon Islands government has withdrawn last year’s cancellation of the mining licence for Gold Ridge Mining Ltd.

This effectively restarts efforts by landowners and the new majority shareholder, Chinese-owned Australian property developer AXF Group, to re-open the Guadalcanal mine.

In a statement the chairman of the cabinet sub-committee on Gold Ridge said the minister cancelled the mining lease because he felt the previous owner St Barbara’s sudden departure breach of the Mines and Minerals Act, and the Mining Agreement.

The miner’s departure from Gold Ridge followed complications around flash floods in April 2014, which compromised the mine’s tailings dam and impeded access to the mine.

St Barbara however, has repeatedly denied abandoning the mine.

It stands by its transfer of ownership, via the sale at a nominal amount, to local landowning company Gold Ridge Community Investments Ltd.

The Australian miner also denied claims by GCIL following the sale that it had saddled the local landowner company with all the environmental liability of the closed mine.

Following the signing of the agreement with government to restore the mining licence, GCIL’s chairperson, Walton Naezon, said landowners would be working closely with their chosen investor and the government to restore the mine to profitability.

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Bougainville Copper eyes a return to Panguna

panguna

Radio New Zealand | 6 March 2017

Bougainville Copper Ltd is laying out its plans for a possible return to the Panguna mine in central Bougainville.

The Panguna mine and BCL were at the heart of the divisions in the Papua New Guinea region that led to the ten year civil war and prompted a shut down of the mine and a pull out by the then Rio Tinto controlled company.

Rio Tinto is no longer involved, having walked away last year, giving its 53 percent shareholding to the Autonomous Bougainville Government and the PNG Government.

Late last month BCL presented a time line for its possible restart of mining to shareholders and the Australian Stock Exchange.

Chief executive Mark Hitchcock spoke to Don Wiseman about this and they hope to achieve their goals.

MARK HITCHCOCK: It has always been Bougainville Copper’s aim to return to mining on Bougainville and with the change in shareholding in June last year, this gave Bougainville Copper, as an independently run and managed PNG company, the chance to actually forge some of its plans to return to mining. So the plan for Stage Zero, which is what we are call it for December [2017] is to arrange some of the precedents that need to be done for us to get back on the ground in Bougainville and Panguna.

DON WISEMAN: A key part of that is this issue of these shares that were split between the ABG and PNG Governments. The ABG wants those shares. What’s going to happen to them?

MH: There is still a little bit of uncertainty around the 17.4 percent that Prime Minister O’Neill indicated would be given to the landowners of Bougainville. It’s part of our Stage Zero to get some understanding on how those shares will be handled by the PNG Government.

DW: There are several other issues of course. There is still some trust and acrimony as far as BCL goes – I know you are under different ownership now but you have to overcome that barrier, so how do you do that?

MH: Well Bougainville Copper does have a fairly good name and people do remember the Bougainville Copper days and some of the good things that were generated when Bougainville Copper was running the mine at Panguna. Like education was world class, medicine was world class, and lifestyle was very good and a lot of people still remember that, so you can discount some of the good will that was generated then. So we, being a reputable and honest company, returning, we have held the ground, we have held the position and we have always wanted to return and we would like to return on terms that everyone is happy with.

DW: There is this question of compensation that has been floating around for many, many years. Demands from Bougainvilleans for compensation for the social and environmental that have been blamed on Panguna.

MH: We see that as part of the negotiations moving forward and that any compensation that is considered would be dealt with during the lifecycle of the new mine and done on a community based, sort of project.

DW:  To go back to the question of a time line you have laid out a programme through to the end of 2020, by which stage you will be where?

MH: At 2020, if we can get a lot of things that we need done in 2017 we will have progressed doing all our studies and we will be at a stage where we have done a feasibility and we are ready to go and finance and start building the mine in 2020. So then it would be middle 2020s, a good five years to get the mine up and running after 2020.

DW: Yes although on your timeline which you have presented to the Stock Exchange in Australia you are going to need a fair amount of money, several hundred million dollars, before then, aren’t you, in terms of this preliminary work, so where is that going to come from?

MH: Part of the plan of having a staged process is to actually build the wealth of the company – it’s currently trading at 20 cents, or just below 20 cents Australian, and we believe there is a lot more wealth behind the company than that, and just building these stages and getting a lot more information we will build the value of the mine.   

DW: As far as the landowners and the ABG – why should they go down this road. What’s in it for them – re-opening Panguna and all those scars again?

MH: The autonomous Bougainville region has a referendum in 2019 where it will its future. Its future is dependent on there being an economy that can sustain themselves as a region and the Bougainville people see that they need a major project to actually fund their future.

DW: You have been involved with the company for a long time, you must have a sense of what most Bougainvilleans are thinking and there’s certainly been vocal opposition. Do you think that’s changing?

MH: Yes there has always been fairly widespread support for Bougainville Copper. There are detractors and there will always be detractors in all spheres of the world but I believe that the underlying people of Bougainville are supportive, because they do remember what they used to have when the mine was fully operational.

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Local investor aims to be ‘first mining company’

akim-ku

Post Courier | March 02,2017

LOCAL investor company Akim- Ku Limited aims to be the first to be recognised as a mining company.

Owner Joe Tomperop told the media yesterday that the benefits of owning a mine would mean a lot for this country because it will help bring a lot of benefits for both the state and the resource project areas.

Mr Tomperop outlined this challenge when explaining why he has invested with the Lepyok-Saii landowners Association Inc of Enga province. He said it was a difficult task to invest in resources that were initially non-material, but as proven with the development of existing mining companies, small companies can reap the benefits.

He said home-grown mining companies offered spinoff benefits to local communities which paved the way for more developments giving them equal access to services which they have lacked.

“I chose this project because there are 7, 000-9,000 people living in a basin of with no form of income can ease this problem.

“SMEs invest on something they see but I am investing on something I can’t see because I believe we can do the job rather than depending on expatriates to do the job for us,” he said.

He said government assistance was welcomed in seeing a mining company, including a refinery that can enable the country to have an export license guaranteeing retention of the country’s revenue.

“I see a sleeping giant in the Kweokam gold project that can match existing alluvial mines and that is because PNG is sitting on an island of gold,” he said.

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BCL has no funds to re-open Panguna

Heavy trucks sit rusting on the edges of Panguna copper mine

Heavy trucks sit rusting on the edges of Panguna copper mine

BCL is talking big about its plans to reopen the Panguna mine – but it doesn’t even have the K100 million for a feasibility study, let alone the billions needed to re-start the mine…

BCL funding arrangement for proposal

Gorethy Kenneth | Post Courier | March 03,2017

THE full cost of re-opening the Panguna Mine will run into billions but it will be better understood when the scoping study which is underway is complete.

Bougainville Copper Limited (BCL) said that they need to raise significant funding of US$100 million to carry out the feasibility study, K12.5 million to remove the impediments to development and K25 million to demonstrate project viability to secure feasibility study funding.

BCL tells Post-Courier the proposal presented by the company chairman Robert Burns in Buka last week to the cabinet ministers of the Autonomous Bougainville Government (ABG) and the nine landowner groups outlined a staged approach to developing a new Panguna.

Stages zero to two of the development plan includes the removal of impediments to mine development, opening an office in Buka, which is now being planned and on the ground studies to demonstrate the social, environmental, technical and financial viability of the project.

BCL Chief Financial Officer and Company Secretary Mark Hitchcock said a full feasibility study is planned to be finalised in 2020 with the decision to proceed to construction and operations being dependent on obtaining the necessary approvals, permitting and financing.

He said the ABG is now fully committed to the opening of a new Panguna mine and it will support Bougainville Copper Ltd (BCL), of which it is a major shareholder.

Hitchcock also reiterated Mr Burn’s statement in Buka last week that the nine Landowner Associations have agreed to work with the ABG and BCL to progress the staged development process.

“We need to raise significant funds at two different stages of the project – the Feasibility studies, $100 million, construction – multi billions (but pending completion of feasibility study), Feasibility Funding (high risk stage), Equity raising will be unlikely at current share price and we may need to introduce a strategic partner,” BCL management said yesterday.

“For construction funding, the large projects have limited funding options, and must have high financial returns, low sovereign risk, including social risk and be internationally competitive,” they said.

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China ‘angling for control’ of massive Mt Frieda copper deposit in PNG

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea. 

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea.

Brian Robins | Sydney Morning Herald | 2 March 2017

Frieda River is one of the largest undeveloped copper deposits in the world. Now, the smaller shareholder in the project, in the remote highlands of Papua New Guinea, has cried “foul’ warning that a proposed board spill will give the Chinese government control.

Less than two years after paying $1.2 billion to snap up PanAust, an Australian miner with interests in projects in Laos and Papua New Guinea, Guangdong Rising, a Chinese investment company owned by the Guangdong provincial government of southern China, is angling to gain control over the Mount Frieda gold and copper deposit.

The Frieda River deposit has been under study for development for more than 30 years. Now controlled 80 per cent by PanAust and 20 per cent by Highlands Pacific, it has had a series of owners, from Japanese to American groups, with Swiss trader Glencore the majority owner before it sold to PanAust. All of the owners to date have struggled with the cost of developing the resource.

Located in the remote north-west of PNG, Frieda River is 175 kilometres north-west of the Porgera gold mine and 75km north-east of the Ok Tedi mine.

Development costs have been put at as high as $US6 billion, which is a stumbling block, since few private companies could finance a project of that size, and most banks would baulk at the large sums involved and the associated development risk. One reason for the high cost is the need for a hydro-electric dam to generate the power needed by the project.

The most recent project study put forward by PanAust last year was based on a plant capable of handling 40 million tonnes of ore annually, producing 175,000 tonnes of copper and 250,000 ounces of gold, with an initial mine life of 17 years. This would cost an estimated $US3.6 billion to develop, excluding some key costs such as the power station and other items of equipment.

Highlands Pacific rejected the study, and obtained a review of the proposal arguing it was deficient, a view which was supported by an independent assessor which found that less expensive, lower risk options should be put forward for consideration.

PanAust had in September 2014, well before the Chinese government took control of the company, put forward a $US1.7 billion estimate to develop Frieda River. The second, more expensive development concept reflects the larger annual production capacity of the project, additional spending on waste and tailings management and increased construction costs.

In February, just over a month after the peer review of the feasibility study was released, PanAust moved to take control of the Highland Pacific board, seeking to replace its four independent directors with its own nominees.

Guangdong Rising has a 14 per cent shareholding in Highlands Pacific, with Trafigura, the privately controlled commodity trader, owning 16 per cent and an arm of the PNG government another 11 per cent.

Guangdong Rising’s “proposed board spill would constitute a change of control of the company, without any payment or premium for control”, Highland Pacific’s outgoing chairman Ken MacDonald and Ron Douglas, the chairman elect, said in a letter to shareholders.

“Our shareholders deserve better. If GRAM wants control, it should make a takeover offer and pay a full price.”

For its part, the Chinese company has stated the proposed board spill is simply an attempt to “reinvigorate” Highland Pacific’s board.

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction,” it said in a statement, denying the proposed board spill is about gaining full control over the Mt Frieda project.

It also argues that the nominees it has put forward to stand for the Highlands Pacific board are viewed as being independent of itself, and they will not act under its direction. 

Along with the Frieda River stake, HIghland Pacific has a small share in the large Ramu nickel project, controlled by China Metallurgical Co, along with some advanced exploration projects.

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