Category Archives: Papua New Guinea

Hearing on BCL licence case next month

Sally Pokiton | Loop PNG | April 23, 2018

decision for the non-renewal of exploration licence to Bougainville Copper Limited will be reviewed by the National Court in May.

The decision made on 16 January 2018 by the Autonomous Bougainville Government has been stayed by the court since April 10, pending the substantive hearing.

It was stayed after leave was granted by Justice Leka Nablu of the Waigani National Court.

Parties in the case, including another interested party, appeared before the National Court today (April 23).

The case will return to court on May 10.

BCL applied for the renewal of its exploration licence on 6 May 2016 from the Department of Mineral and Energy Resources of the Autonomous Bougainville Government.

On 16 January 2018, BCL was informed that the exploration licence will not be renewed. BCL believes there were flaws in the process and wants the decision to undergo judicial review.

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Judgement on Mt Kare Project EL soon

Cedric Patjole | Loop PNG | April 21, 2018

judgement on the Judicial Review into a Government decision to refuse Summit Development Limited’s (SDL) application to renew Exploration Licence (EL) over the Mt Kare Project will be delivered on 27 April 2018.

The Judicial Review was instituted by Indochine Mining Limited in December 2015 following a Ministerial decision not to renew SDL’s EL 1093.

The Judicial Review was heard on 5th September 2017 by Justice Leka Nablu, who has reserved her decision till the date mentioned.

Indochine acquired the Mt Kare Gold Project in Enga Province in 2011.

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Deep-sea mining possibly as damaging as land mining, lawyers say

Deep-sea mining off Papua New Guinea’s coast. Legal and environmental groups warn of danger to the environment and Indigenous groups who live nearby

Environmental and legal groups warn of potential huge effects on Indigenous people and the environment

Ben Doherty | The Guardian | 18 April 2018 

The “new global gold rush” over deep-sea mining holds the same potential pitfalls as previous resource scrambles, with environmental and social impacts ignored and the rights of Indigenous people marginalised, a paper in the Harvard Environmental Law Review has warned.

A framework for deep-sea mining – where polymetallic nodules or hydrothermal vents are mined by machine – was first articulated in the 1960s, on an idea that the seabed floor beyond national jurisdiction was a “common heritage of mankind”.

But exploration has gathered momentum in the past three years, with licences granted off Papua New Guinea’s coastlines, and successful mining off Japan late last year. The International Seabed Authority, which is drawing up a draft mining code, has issued 29 exploration contracts for undersea mining in international waters beyond any national jurisdiction.

Proponents argue deep-sea mining could yield far superior ore to land mining – in silver, gold, copper, manganese, cobalt and zinc – with little, if any, waste product. Different methods exist, but most involve using some form of converted machinery previously used in terrestrial mining to excavate materials from the sea floor, at depths of up to 6,000 metres, then drawing a seawater slurry to ships on the surface. The slurry is then “de-watered” and transferred to another vessel for shipping. Extracted seawater is pumped back down and discharged close to the sea floor.

But environmental and legal groups have urged caution, arguing there are potentially massive – and unknown – ramifications for the environment and for nearby communities, and that the global regulatory framework is not yet drafted, and currently deficient.

“Despite arising in the last half century, the ‘new global gold rush’ of deep-sea mining shares many features with past resource scrambles – including a general disregard for environmental and social impacts, and the marginalisation of Indigenous peoples and their rights,” the paper, written by Julie Hunter and Julian Aguon, from Blue Ocean Law, and Pradeep Singh, from the Center for Marine Environmental Sciences, Bremen, argues.

The authors say that knowledge of the deep seabed remains extremely limited.

“The surface of the moon, Mars and even Venus have all been mapped and studied in much greater detail, leading marine scientists to commonly remark that, with respect to the deep sea, ‘We don’t yet know what we need to know.’ ”

Scientific research – including a recent paper in Marine Policy journal – has suggested the deep seabed, and hydrothermal vents in particular, have crucial impacts upon biodiversity and global climate regulations.

Hydrothermal vents act as a sink, sequestering carbon and methane. The mineral-rich vents and their surrounds are also home to animals and organisms including crustaceans, tubeworms, clams, slugs, anemones and fish.

“It is becoming increasingly clear that deep-sea mining poses a grave threat to these vital seabed functions,” the paper says. “Extraction methods would involve the operation of large, remote vehicles on the seafloor to chemically leach or physically cut crust from substrate and/or use highly pressurised water to strip the crust.

“All of these methods would produce large sediment plumes and involve the discharge of waste and tailings back into the ocean, significantly disturbing seafloor environments.”

The Harvard Environmental Law Review article says the exploratory phase of deep-sea mining has already adversely affected Indigenous people in the Pacific. In Tonga, large mining prospecting vessels have disturbed traditional fishing grounds, and in PNG villagers bordering the exploration site in the Bismarck sea have reported high incidence of dead fish washed ashore.

The paper argues for governments globally to reform the international seabed regime to reflect modern developments in law and science, and to protect potentially vulnerable communities.

“They should recognise the risks of operating in an unknown environment, fully embrace the precautionary approach, and protect and conserve the ocean for the benefit of current and future generations,” it says.

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‘PNG is on the cusp of a super cycle in mining investment’

Illustrator: Holly Wales

Dr Kishti Sen* | ANZ | 20 April 2018

Papua New Guinea’s real gross domestic product averaged around 2 per cent per annum in 2016 and 2017.

This is a significant step down from the previous two years when growth averaged over 10 per cent thanks mostly to the sizeable liquefied natural gas (LNG) exports. These benefits have now largely faded.

Recently released ANZ research expects growth to remain subdued in 2018 and 2019 as the benefits of the LNG expansion diminishes and as non-mining sectors struggle owing to an overvalued currency and foreign exchange shortages. 

Infrastructure investment associated with the upcoming APEC meeting and higher agriculture output should be the main drivers of activity in the short term.

The national budget is in deficit with debt already at 32 per cent of gross domestic product (just 3 per cent below the self-imposed limit of 35 per cent) and the government is limited in its ability to support the economy.

However, PNG’s longer-term prospects are more encouraging as it would appear to be on the cusp of a ‘super cycle’ in resources investment, particularly in gas, gold and copper projects.

The challenge for the government and business is to manage the next upturn so that a boom-bust cycle is minimised.

Meanwhile, the Kina remains an overvalued currency and better macro balance could be achieved if faster depreciation occurred.

The currency’s fair value on our estimate is around $US0.23-0.25.

At this level, the Kina would likely remove uncertainty in the foreign exchange market, add liquidity and help clear the backlog of import orders, maximise import substitution and assist Kina-exposed industries including agriculture and mining.

*Dr Kishti Sen is an international economist at ANZ

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Samar Exits MRA

Post Courier | April 17, 2018

Mineral Resources Authority’s (MRA) managing director (MD) Philip Samar’s term in office has expired since April 9.
Mr Samar served as the managing director for four years since his permanent appointment as MD from 2014-2017.
He was appointed acting MD for the MRA in 2012, a post he held until 2014 when he was made permanent.
The outgoing managing director also took the opportunity to thank the Prime Minister Peter O’Neill and the government for the opportunity given to lead the MRA in the last six years since 2012.
Mr Samar thanked the Prime Minister for his confidence in appointing him to be head of the statutory authority responsible for regulating the exploration and mining sector in PNG. The last six years have been the highlight of his career over the last 21 years as a public servant.
“I am privileged to serve the government, the people of Papua New Guinea especially the mining project stakeholders and the exploration and mining industry.
“I am satisfied I have done my part in nation building through managing the MRA and servicing the mining industry. Since the MRA’s establishment in 2007, the statutory authority has performed well in regulating and promoting Papua New Guinea’s mineral sector,” he said.
Mr Samar said for the last 10 years, the mining industry has been the single largest contributor of revenue to the national purse contributing over 60 percent of revenue annually.
“This makes the sector important and the government must continue to support the sector by creating a conducive environment where the industry is allowed to operate sustainably, safely, profitably and responsibly,” Mr Samar said.
He said the government must realise the expected benefits to be derived from these projects such as employment, taxes, duties, royalties, dividends, compensation, training and business spinoffs.
As outgoing MD, Mr Samar said there was still room for more improvements and urged the government to consider to:
– Support the MRAs ongoing regulatory roles by strengthening its governance, independence and resourcing.
– Revise the proposed amendments to the Mining Act to capture additional practical administrative improvements.
– Review and revise the Mining Safety Act 1977.
– Strengthen the regulation of the small scale mining alluvial gold sector.
– Improve training, create awareness and provide capital and appropriate technology to the alluvial miners around the country.
– Change the current benefits sharing arrangements via MOAs to a more project delivery model.
– Review and revise the government’s equity participation in major mining projects.
– Better organise itself to optimise its participation in the Wafi and Frieda copper projects.

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Ok Tedi Mine Landowners Get Share Certificates

Post Courier | April 17, 2018

The people of Western Province finally own 33 percent of the giant Ok Tedi Copper Mine following the handover of equity share certificates by Ok Tedi Mining Limited Board Chairman Sir Moi Avei to Governor Taboi Awi Yoto yesterday in Kiunga.

“OTML is now a third owned by the people of Western Province,” Sir Moi told a large gathering of locals and invited guests in front of the grand Cassowary hotel.

“We have heard so much about this 33 percent. Is it every going to happen? The board in its wisdom made a decision that the only way to move this share transfer is loan MRDC K30million to pay for the stamp duty. Governor the stamp duty has been paid. OTML is now one third owned by the people of Western Province,” Sir Moi Avei told the excited crowds.

He also said this ensures that politics cannot interfere now because they own more than thirty percent of the mine.
Western Governor Taboi Yoto said in the past we were told that we own 63 percent but we do not have direct control of the funds.

“We have direct control of the 33 percent and that’s the difference,” Mr Taboi Yoto said.

According to the Governor out of the 33 percent, 12 percent is owned by CMCA communities through their board, the mine villages own 8.4 percent and the Fly River Provincial Government owns 12.6 percent.

“For the government with the four MPs, the PEC members and the LLG presidents, we will decide how we will use the money for development purposes.

“I thank the government of Prime Minister Peter O’Neill for this.”

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Harvard Environmental Law Review Calls For Precautionary Approach to Seabed Mining

Harvard Environmental Law Review Calls For Precautionary New Legal Standards

Post Courier | April 17, 2018

Today, the Harvard Environmental Law Review published an article entitled, “Broadening Common Heritage: Addressing Gaps in the Deep Sea Mining Regulatory Regime.” The article provides a new perspective on the incipient global industry of seabed mining, heralded as the next extractive frontier despite growing concerns and opposition from civil society, scientific experts, and indigenous groups worldwide.

“Deep sea mining has been framed by proponents as a lucrative mineral windfall with minimal impacts,” says author Julie Hunter, attorney and Clinic Fellow at the University of British Columbia. “This narrative entirely disregards recent scientific information linking the deep seabed with major climate regulation and biodiversity functions. Destroying these ecosystems before more can be learned about them not only risks major health and fisheries impacts – it could completely upend global climate change efforts.”

The article provides a brief overview of the so-called ‘gold-rush’ for seabed minerals, in which countries and companies have scrambled to buy up licenses for seabed exploration covering millions of square kilometers of ocean, before environmental and regulatory standards have even been drafted. With Japan becoming the first country to successfully mine its deep seabed in 2017, and Canadian company Nautilus Minerals scheduled to begin the world’s first commercial operation in Papua New Guinea’s waters in 2019, deep sea mining is rapidly becoming a reality.

However, the risks of operating in an unknown environment less documented than Mars are starting to become apparent. In 2016, a consortium of scientists and oceanographers released a study detailing the critical carbon sequestration functions of deep sea hydrothermal vents and methane seeps. Combined with other studies establishing irreversible impacts from seabed mining, these findings trigger a body of protective environmental and human rights law, including the precautionary principle and the need to obtain free, prior, and informed consent from indigenous and other affected peoples.

“Pacific Islanders have already suffered negative consequences as a result of mere exploratory mining in the region,” says author Julian Aguon, attorney and founder of Blue Ocean Law—a law firm that works throughout the Pacific region to defend and advance the rights of colonized and indigenous peoples. “Our work has documented impacts to fisheries and traditional customs in coastal communities in Papua New Guinea, Tonga and elsewhere, and the disconcerting absence of true and meaningful consultation with affected groups.”

Other acknowledged impacts of deep sea mining include contamination of the water column and fisheries by tailings and heavy metals, species extinction, coral reef acidification, carbon emissions from onshore mineral processing, and increased risk of oil spills and surface accidents, among others.

Given the unique biodiversity, genetic, and biomedical properties of deep sea ecosystems, not to mention their potentially critical role in climate regulation, the so-called “common heritage” of the seabed extends far beyond the value of its minerals. “It would be tragically ironic if, in our rush to obtain minerals for use in green tech and renewable energies, we end up bulldozing the most important climate regulator of our planet,” says Hunter. “That possibility alone merits a cautious approach.”

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