Category Archives: Mine construction

PNG demands Wafi-Golpu gold stays in-country, urges Newcrest, Harmony talks

Jonathan Barrett | Reuters | September 13, 2019

  • Papua New Guinea to offer duties, taxes concessions in exchange
  • *PNG govt wants to extract more wealth from its resources

Papua New Guinea wants to keep 40% of gold produced from the proposed Wafi-Golpu project, the country’s commerce minister said, creating a potential hurdle to an agreement with co-owners Newcrest Mining and Harmony Gold.

The miners had been hoping to secure a mining lease over the major gold and copper deposit earlier this year, before a change in PNG’s leadership and a shift in minerals policy led to delays.

“We’d like to see Newcrest come to the negotiating table on this,” PNG’s Minister for Commerce and Industry Wera Mori told Reuters in a phone interview late on Thursday.

“They get 60% of the production, we get 40%. If they don’t like it we’ll mine it ourselves – we own the resources.”

Mori said that the government could offer concessions on duties and taxes as part of the negotiations and he said he was confident a deal would be struck.

Newcrest and Harmony each own 50% of Wafi-Golpu, while the PNG government has the right to purchase an equity interest.

The companies were not immediately available to comment. Attempts to reach PNG’s mining minister were unsuccessful.

Located near the port city of Lae, the project is forecast to hit an annual production peak in 2025 of 320,000 ounces of gold and 150,000 tonnes of copper, according to the project website.

The proposed policy changes are part of a push by the South Pacific archipelago to transform its mineral-rich economy amid a perceived lack of benefits flowing from resources projects back to communities.

PNG is also negotiating to take a bigger share of the Porgera gold mine as part of lease-renewal talks with joint venture partners Barrick Gold Corp and Zijin Mining Group.

It has also sought concessions from French giant Total SA over a $13 billion plan to expand gas exports.

The Wafi-Golpu gold would be processed in-country, creating a downstream industry for PNG, Mori said.

Mori told Reuters that PNG wanted to build up its gold bullion reserves, acting as a peg for its kina currency.

PNG’s central bank currently fixes its currency to a narrow U.S. dollar band, propping up the kina’s value while creating a shortage of dollars available in the Pacific nation.

“When the stock market crashes we lose value,” he said.

“But if the stock market crashes and we have gold, the gold price goes up.”

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Another call for PNG to cancel sea bed mining licences

Radio New Zealand | 6 September 2019

The former governor of Papua New Guinea’s Madang province, Sir Arnold Amet, has renewed his call for the government to cancel sea bed mining licenses.

This comes as Canadian miner Nautilus, in which the PNG government has a 15 percent stake, is fighting through the courts for its economic survival.

Sir Arnold said he feared that Nautilus, which had been close to beginning sea bed mining at its Solwara One site in the Bismarck Sea, could on sell its PNG licenses.

The James Marape government is backing the call made by Pacific Forum leaders for a 10 year moratorium on seabed mining, but Sir Arnold said it must go further.

“Our preference is, quite obviously, for cancellation of those licenses and a total ban until such time as science can truly satisfy us that that [seabed mining] is worthwhile and economically and environmentally sustainable project. At the moment there is no such evidence,” Sir Arnold said.

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Moratorium on deep sea mining in PNG welcomed

PACNEWS | 4 September 2019

Papua New Guinea Prime Minister, James Marape supported Fiji’s call at the Pacific Islands Forum for a 10-year moratorium on seabed mining.

The PM’s support for a moratorium was welcomed by the PNG Council of Churches at its meeting last week. However, the churches and civil society remind the Prime Minister that the environmental, social and economic risks of seabed mining necessitate a complete ban.

An open letter to PM Marape published in June from the PNG Council of Churches, Voice of Milne Bay, Alliance of Solwara Warriors, Bismarck Ramu Group, and the Center for Environmental Law and Community Rights seeks commitments to cancel all licences issued to Nautilus, to not issue any more sea bed mining exploration or mining licences, and to invest in truly sustainable local enterprises that will benefit local economies.

Jonathon Mesulam of the Alliance of Solwara Warriors said, “We thank our Prime Minister for heeding the calls of our communities by backing a 10-year moratorium on seabed mining. But we need to go further to protect our seas, our livelihoods and traditions by imposing a ban.”

Peter Bosip, Director, Center for Environmental Law and Community Rights claimed, “PNG’s recent history is littered with many examples of land-based mines with disastrous impacts. It is very difficult to monitor and regulate the impacts of land-based mining let alone mines deep under the sea. Globally, ocean ecosystems are already under stress due to pollution, plastics, overfishing, climate change and accelerating biodiversity loss.

“PNG has no need for seabed mining” stated Christina Tony of the Bismarck Ramu Group.  “We are blessed with abundant fisheries, productive agricultural lands and marine life. Seabed mining will benefit only a small number of people who are already wealthy and not bring prosperity to our communities.”

Nautilus is now approaching liquidation and PM Marape has described Solwara 1 as “a total failure”.  PNG’s investment in Nautilus has resulted in loss equivalent to one third of its last national health budget. The PNG Government through Eda Kopa (Solwara) Limited is attempting to recoup some of its financial loss through the Canadian courts. Smaller shareholders considering a class action are hoping to collaborate with Eda Kopa.

A new international report describes how Nautilus’ early investors pushed the PNG Government into purchasing a 15% share in its Solwara 1 project.  These investors increased the company’s share price with false promises of vast wealth and then walked away as multi-millionaires, leaving the company to flounder.

Sir Arnold Amet stated, “The approval of Solwara 1 occurred under my watch as an MP and Governor for Madang’. I regret that the O’Neill government didn’t adequately scrutinize that project and took up 15% equity in Nautilus PNG. It’s time to rectify that situation.

“Lets recognise this failed investment in the upcoming budget and ensure we don’t enter into seabed mining joint ventures in the future or issue any more seabed exploration or mining licences.  We now know how deep sea mining companies attempt to manipulate governments according to their own narrow profit motives without any conscience. We look to PM Marape to stand up for Papua New Guineans against the pressure exerted by these corporations,” he said .

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Wafi-Golpu To Be Delivered Under Marape-Led Govt

FORGET ‘TAKE BACK PNG’ – IT IS BUSINESS AS USUAL UNDER THE MARAPE GOVT

Gorethy Kenneth | Post Courier | September 4, 2019

Prime Minister James Marape announced that the government wants to get the Wafi-Golpu gold mine operational at the soonest.

And the government is already in serious discussions with the Morobe provincial government to resolve issues while it prepares to finalise discussions with developers, Harmony and Newcrest.

Mr Marape told a press conference in Port Moresby yesterday that they want this project to be their legacy as they look at other projects like the Porgera lease that has expired.

He said as the country is going through tough economic times, this project will help boost the country’s economy including others that they are now serious about addressing.

Mr Marape also revealed that the government has given the green light to Total to proceed with the implementation of the Papua gas project, claiming that additional gains have been negotiated for the country under the project agreement.

“As a government, we are finishing this one,” he said, adding: “It is signed by the (former) O’Neill government, (and) we allowing it to go.

“Our government will enter into discussion with Wafi -Golpu and we are bringing to conclusion our issues with the Morobe provincial government.

“Those issues will be brought to conclusion and as whole of government, we will sit in one and we will go into discussion with both Harmony and Newcrest so that is one other project that is looming on the horizon.”

Mr Marape also told the press that the government “is not considering” any more concessions to be given to resource project developers.

“…and as I stated, the existing laws we have in place will not consider anymore concession (to give), but where we will win, as provided for by law, we will win, and where they (developers) win they will win,” he said.

“We are also looking into the Porgera lease that has expired.

“So those announcements will come in due course, as the nation has some big projects on the horizon.

“Not all is looking gloom, although our economy is stressed a little at the moment and our treasurer is going through the numbers and hopefully tomorrow (today) or Thursday he will announce the numbers (as) he has seen (the) possibility of a supplementary budget that we have been talking about all along.

“And that will come in due course but let me inform the country that all is not bad as it seems…we are working on the three or four projects that we have on the horizon and that will bring some economic activity and life into economy and hopefully going 2020 and beyond, we will gain some traction in the economy, and we have started with Wafi-Golpu.”

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Canada rejects State claim against Nautilus Minerals

Eda Kopa Claim Disallowed By Monitor

Matthew Vari | Post Courier | September 2, 2019

Nautilus Minerals Solwara 1 joint venture partner Eda Kopa Limited has had its claim of US$50.8 (K172.8) million disallowed by the British Columbia Supreme Court appointed monitor PricewaterhouseCoopers (PwC) Canada.

This presents a setback for the state owned investment under Kumul Minerals Holdings Limited, as it seeks the unearned contribution claim during the Nautilus Plan of compromise and arrangement process catered for under the Canadian Companies’ Creditors Arrangement Act (CCAA).

According to documents from the monitor’s (PwC’s) status update as of August 28 last week, it referred to its Monitor’s Fourth Report, dated August 9, which called for a need for resolution with respect to Eda Kopa’s claims and CCAA proceedings.

Where the monitor disallowed the claim on the basis that Eda Kopa’s claim is an equity claim, and that the agreements between Eda Kopa and the Nautilus Group do not support any such claim.

The report also stated that on July 31, Eda Kopa sought to dispute the monitor’s disallowance by submitting a Notice of Dispute, however, according to the monitor the notice did not provide any new information to the Nautilus Group or the Monitor, and, accordingly, neither saw any basis for withdrawing or amending the disallowance of Eda Kopa’s claim.

According to the monitor on August 6, it and Nautilus received notice Eda Kopa retained Canadian counsel and led for an appeal that is set for September 10 this month to hear Eda Kopa’s appeal of the disallowance of its claim.

A resolution to the matter is expected to be reached on or shortly after September 10.

According to the monitor’s update if a resolution cannot be achieved in both Eda Kopa’s claim through the CCAA process or its general relationship with Nautilus going forward then the plan will not be implemented resulting in no distribution to affected creditors as anticipated and the Nautilus group restructuring will fail.

The CCAA plan was approved early in August at a meeting of affected creditors along with an acquisition plan by its main lender Deep Sea Mining Finance Limited would take over a number of the 44 entities registered under the Nautilus Group in nine jurisdictions around the world.

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Landowners in PNG threaten to shutdown LNG gas project

French oil and gas company Total gas station. REUTERS/Jean-Paul Pelissier

Radio New Zealand | 31 July 2019

Landowners in Papua New Guinea’s Gulf province say they’ve begun an action to shut down the Papua LNG gas project.

Baimuru landowners are unhappy with the developer, French company Total, over non-renewal of landowner company contracts at the project site and other issues.

Baimuru is the location of the fledgling project’s gas wellheads, which landowners say they will block access to as part of their protest.

The Landowners are demanding the Department of Petroleum and Energy intervene as soon as possible to intervene.

They seek a recognition of their rights to engage in and benefit from spin-off benefits and contracts from the $US13 billion project.

The Landowners were expected to hold a press conference in Port Moresby on Wednesday afternoon to announce the shutdown and their demands.

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Nautilus liquidation looming

Cedric Patjole | Loop PNG | July 31, 2019

Nautilus Minerals Inc will be liquidated if a plan of compromise and arrangement is approved and backed by a court order.

The company revealed this when announcing that they, along with its subsidiaries, have obtained an order of the Supreme Court of British Columbia in Canada to convene a meeting of creditors to vote on a plan of arrangement.

This includes an acquisition agreement and the filing of a plan of compromise and arrangement.

Nautilus Minerals announced yesterday that the granted court order was given under the Companies’ Creditors Arrangement Act authorizing:

(i) Nautilus to enter into an acquisition agreement with Deep Sea Mining Finance Ltd (DSMF) for the acquisition of certain subsidiaries and certain intercompany indebtedness; and

(ii) Certain subsidiaries or “Nautilus Restructuring Entities” of the Company will file a plan of compromise and arrangement among the subsidiaries and their unsecured creditors, and to convene a meeting with those creditors for the purpose of voting on the approval of the plan of compromise and arrangement.

A plan of compromise or arrangement sets out a company’s intentions to deal with its debts and restructure its business and operations.

The plan will be presented to Nautilus creditors on August 9, 2019, who will then vote on whether they accept the proposal or reject it.

Nautilus states that in the event that the plan of compromise and arrangement is approved by a majority of the Affected Creditors, its subsidiaries will bring an application to the Court for an order approving and sanctioning the plan of compromise and arrangement and various transactions related to the Plan and the Acquisition Agreement on August 13, 2019.

If the Sanction Order is granted as sought, and the conditions precedent to the Acquisition Agreement and the plan of compromise and arrangement are met, the Company will have effectively no assets, and, will be liquidated upon implementation of the plan of compromise and arrangement.

Eda Kopa (Solwara) Limited has led a claim of K163 million (US$51 million) against Nautilus Mineral Limited for failing to meets its funding obligations of the Solwara 1 Project.

Early this month, Chairman of Kumul Mineral Holdings Limited (KMHL), Peter Graham, said the Project has stalled with a substantial proportion of the development work still to be undertaken.

The claim has been filed under a Canadian court supervised creditors process initiated by the parent company of its joint-venturer in the Solwara 1 Project, Nautilus Minerals Niugini Limited (Nautilus PNG).

The Solwara 1 Deep-Sea Mining Project is a venture to mine polymetallic sulphide deposits located on the seabed in an area approximately 50km north of Rabaul and 30km west of New Ireland Province.

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