Category Archives: Solomon Islands

Solomons’ gold mine to launch ‘world class’ redevelopment

Empty trucks at the Gold Ridge mine

Radio New Zealand | 23 October 2019 

A closed Solomon Islands’ gold mine is set to be officially relaunched this weekend.

The troubled Gold Ridge Mine, which has changed ownership multiple times over the years, has been closed since 2015.

It is now being redeveloped by the Chinese-owned Australian developer AXF Group in partnership with local landowners in Central Guadalcanal.

The full details of the reconstruction by the China Railway International Group is expected to be announced during a ground-breaking ceremony on Saturday, the Solomon Star reports.

Gold Ridge senior official, Allen Wang, said he believed China Railway had the mining experience, construction expertise and Pacific experience to make a great contribution to the development of a world class mine in Solomon Islands.

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Axiom sues Tovosia and Solomon Islands mining board 

Solomon Star | 3 October 2019

AXIOM Mining Limited (AML) says it has initiated legal proceedings at the High Court over the government’s handling of its export permit application.

General Manager Dr Phil Tagini said they’ve filed a claim for judicial review against the decision of the Minerals Board, as well as a misfeasance claim against the Minister of Mines Bradley Tovosia and Director of Mines Nicholas Biliki for failing to properly exercise their powers under Regulations 70 and 71 of the Mines and Minerals Regulations pertaining to the company’s export permit application. 

“Furthermore there are subsequent requests for materials by the Ministry of Mines which the law does not require for the consideration of an export permit,” Tagini explained.

He said the application has met the requirements of the Mines and Minerals (MM) regulations and thus the company should have been granted an export permit to ship out its nickel ore products to its United States-based buyer, Traxys.

However, Tagini said Minister Tovosia in a letter dated July 18 this year informed Axiom that the Minerals Board following its extra-ordinary meeting on July 5, had decided to reject the company’s export permit application on the basis that it did not possess a business licence from the Isabel Provincial Government (IPG). 

The Board had maintained that this is a requirement even though it is not required in the Act or Regulations. 

Tagini explained that Axiom’s non-possession of a business licence was not deliberate on its part but was rather due to failure of the Isabel Provincial Government to respond positively to its numerous applications and attempts to obtain a business licence.

He said Axiom has come to a stage where it could no longer tolerate the overreach of the Board and must bring the matter for an independent interpretation by the Courts.  

He added Axiom’s nickel mine project on San Jorge is projected to contribute up to 15 to 20 percent of Solomon Islands Gross Domestic Product (GDP) when in the full exportation phase. 

“We are surprised that with the current state of our economy that a company that has been granted a Mining Lease and has been mining for a year is being refused to export their ores for reasons that we believe are not according to law. 

“We have complied with all requirements under the law so it is very concerning to us that this situation is preventing more employment opportunities for Solomon Islanders and much needed tax revenues into our government coffers.   

“It is unfortunate that every citizen and the landowner and our loyal suppliers have to suffer for this poor governance. 

“Axiom is left with no other option but to have the matter rectified in the courts,” Tagini said.

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Solomon’s PM urged to impose duty on APID  

MV Solomon Trader oil spill on Rennell Island, Solomon Islands. Photo: The Australian High Commission Solomon Islands

MAKILI: TAX THE MINERS

Ian M. Kaukui | Solomon Star | 25 September 2019

PRIME Minister Manasseh Sogavare has been urged to revoke the 100% tax exemption duty granted to the bauxite miners on Rennell island, Renbel Province.

The bauxite mine is owned by Chinese logger APID Ltd, which had contracted Hong Kong-based company Bintan Mining, to carry out the operation.

Local activist Lawrence Makili said if the Government is looking for money to fill its coffers, Prime Minister Sogavare must remove the duty exemption the miner has been granted.

“There are lots of areas we can earn our own money as a country if we are led by responsible leaders,” Makili stated.

“These include using our own resources to stimulate economic developments and one of them is the imposing the right tax on foreign businesses operating here,” he added.

“Yet, we see a foreign investor coming in and get our resources freely out of the country.”

Makili said the resources belong to the country and it should be utilised for its economic benefits.

He said despite the call being made previously, the Government continues to allow the miner to enjoy the exemption, much to the loss of this country.

In his speech at the recent Australia-Solomon Islands Business Forum, Sogavare said the government through the Ministry of Finance and Treasury is now working on a tax policy review.

“The Government is opened to inputs and dialogue in this area and will bring to Parliament the Tax Administration Bill, Customs and Exercise Bill and Value Added Tax Bill,” he said.

He said this is not going to happen in this year’s meeting but in 2020 Parliament meeting.

Sogavare said he is also conscious of how tax regime is affecting the private sector especially after Solomon Islands Tobacco Company (SITCO) and Solomon Breweries Ltd (Solbrew) paid him a courtesy visit. 

“We had a very informative and fruitful discussion and it was really interesting to hear their views with regards to excise taxes, and how they can assist in working together with the Government to ensure a win-win situation for all. 

“After this discussion, I realised that our tax regime in this instance has resulted in the government losing out millions of dollars. I have since instructed my staff to work closely with other relevant ministries to address look at other options,” he added.

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Debt-trap diplomacy: China secures Gold Ridge Mine in Solomon Islands

Previous facilities constructed at Gold Ridge Mine (Photo from Concrete Evidence)

China Railways loans Honiara US$825 million to construct and lease gold mine facilities through 2034

Duncan DeAeth | Taiwan News | 20 September 2019

Following the break of diplomatic ties between the Solomon Islands and Taiwan on Sept. 16, it has come to light that China Railway Group Ltd. has signed a US$825 million dollar deal with Honiara to build and lease a railway system and mining service station.

The deal was signed on Sept. 12, and the contract is set to last until March 2034, according to reports. In line with China’s usual strategy of dollar diplomacy, the money for the contract will come in the form of loans and will contribute significantly to the Solomon Islands’ national debt over the next 15 years.

The deal was inked with China Railway International Group, a wholly owned subsidiary of China Railway Group. According to CNA, China Railway International announced the deal on its website’s notice board on the date it was signed, with parent company China Railway Group announcing it on the Sept. 16., the day the Solomon Islands and Taiwan officially broke ties.

The proposed infrastructure project will be constructed in the interior of Guadalcanal Island to serve the Gold Ridge Mine, which at the height of its production in 2012 accounted for 20 percent of the country’s entire gross domestic product. The mine has only been in operation since 1998, but over the past two decades, mining has been regularly stalled by social unrest, environmental disasters, and financial scandals involving former owners.

The mine, which is currently the property of a local landowning company, Gold Ridge Community Investment Limited, was considered a “disaster area” by Honiara after a damn collapsed in 2015. The contract and lease agreement between Honiara and Beijing reportedly only cost China Railways .78 percent of its total 2018 revenue.

According to CNA, the contract signed by Honiara and China Railways involves two major phases. The first phase includes an exterior mountain-stripping project followed by the installation of interior mining equipment and facilities. The second phase includes the construction of roads, bridges, and a nearby reservoir along with dock facilities and a hydropower station.

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No Export Permit Yet For SI Miner 

Solomon Star | 11 July 2019

TWO leading landowners of Axiom Mining Limited’s mining lease site on San Jorge in Isabel Province, Sam Pitu and Janet Voda, have questioned why the government keeps refusing to grant an export permit to the Australian mining company to ship out its nickel ore products to its United States-based buyer Traxys.

In a joint statement, Pitu and Voda said the repeated refusal by the Minerals Board has become more and more intolerable to landowners as it denies them their rights to enjoy benefits from the exportation of nickel ore extracted from their land,” Pitu said on Wednesday.

“The continued delays and denial of an export permit for Axiom by the Minerals Board also denies us of our rights to benefit from revenues that would have come from the exportation of nickel ore from our land,” he added

“The action by the Board is indeed mind-boggling because Axiom has fully complied with the relevant mining laws and regulations of the country in its operation on San Jorge and with good mining practices and yet its export permit application continues to be rejected whilst giving some unscrupulous Chinese companies the go-ahead to mine in the country and export their products.

“Just look at the case of the controversial Bintan mining company which continues to mine bauxite from Renell despite its perceived non-compliance with the country’s mining laws and regulations. 

“In February this year, the company caused an environmental disaster because of its reckless decision to allow its cargo carrier to load bauxite in cyclonic weather.

“And last week, just six months on from the oil spill, the company ran into another disaster when its bauxite carrier barge capsized during a loading operation releasing 5,000 tonnes of ore into the waters of Kangava Bay.”

Pitu added: “Bintan’s continued operation in Rennell despite the two environmental disasters it caused through reckless decisions brings into question why the government continues to entertain such companies in the country and denies genuine investors of the legislative support they need to carry on with their operations.”

Adding on to Pitu’s sentiments, Voda said the government needs to exercise fairness in its dealing with foreign investors and to deal with them within the bounds of Solomon Islands laws.

She said the bribery claims made against Bintan in the media should be matters of serious concern to Solomon Islanders because it somehow implies that the company could be bribing government officials to go ahead with its operation despite its non-compliance with the country’s mining and environmental laws and good mining practices.

Bintan yesterday issued a statement denying the bribery claim.

Voda said the government’s delay in granting an export permit to Axiom when it has granted the company with a mining lease is totally nonsensical because a mining company cannot extract minerals without having to export them.

She said the landowners need money to improve their welfare, Isabel Provincial Government needs money to provide services to the people of the province and Solomon Islands needs money to improve its economic base and yet the national government has deliberately ignored the millions of dollars stockpiled on San Jorge in the form of nickel ore awaiting a government permit to be exported.

Comments are being sought from the mining board.

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Solomon Islands: bay hit by oil spill suffers second mining contamination crisis

A major bauxite spill has turned water red at Rennell Island in the Solomon Islands. Photograph: Supplied

An estimated 5,000 tonnes of bauxite has spilled into Kangava Bay, where a tanker ran aground in February

Lisa Martin | The Guardian | 5 July 2019

A second major spill has hit the pristine Solomon Islands bay where a bulk carrier ran aground on a coral reef and leaked oil earlier this year.

On Monday, an estimated 5,000 tonnes of bauxite, the ore used in aluminium smelting, slipped into the water at Kangava Bay, Rennell Island, while it was being loaded on to a barge.

“The water is red. It’s like a scene from the Exodus,” a source on the island told the Guardian.

It is the second major environmental disaster for the area this year.

MV Solomon Trader ran aground on a reef in February, spilling about 80 tonnes of heavy fuel oil. The vessel was there to load bauxite from the island’s mining operations, which lies on the doorstep of a world heritage site in the island’s east.

The Guardian understands the Solomon Islands government is expected to sign off on the four-month oil spill clean up on 17 July, following the completion of the environmental assessment.

While local villagers have been told not to eat fish, it is understood many still are, in the absence of other food sources on the remote island. Test results are yet to come back to determine whether fish stocks have been contaminated with hydrocarbons.

“The impact of the oil is not nearly as bad as you would expect. The oil isn’t likely to cause any long-term damage,” a seperate person on the ground told the Guardian.

“The bauxite is the overwhelming issue by a long shot and that is causing substantial long term changes to the marine ecosystem.”

Ongoing mismanagement of bauxite loading has resulted in the whole bottom of the bay, down to several hundred metres, being covered in the mineral, the source said.

“It’s just totally out of control,” he said.

University of Technology Sydney water and ecology expert Martina Doblin warned the bauxite powder was likely to smother and bury what is on the ocean floor and will be spread around in tidal currents.

“It could limit the amount of light, so the water is cloudy and that means less light penetration for coral and sea grasses … it would have a harmful effect,” Doblin said.

OceansWatch Solomon Islands spokesman Lawrence Nodua said the contamination would cause problems for fish breeding.

“Normally fish come to where the coral are, so if the coral dies, they won’t be there, and [will lose the reef protection],” he said.

He claimed there were reports that children swimming in the bay were experiencing skin irritation from the poor water quality.

A Bintan Mining Solomon Islands company spokesman told the Guardian on Thursday that loading operations were suspended following the incident on Monday. The company would not comment further.

Sources on the ground said the company had moved loading operations to other parts of the island.

During the height of the oil spill disaster, Bintan Mining Solomon Islands faced criticism for continuing with its bauxite loading operations.

While currents pushed slick away from the world heritage site, the Guardian has been told small amounts have washed up in the area.

“Nothing significant, literally the size of a 50c piece here or there,” another source said.

Since 2013 the site has been on a Unesco danger list because of logging and overfishing.

The bulk carrier’s insurer, KP&I, said negotiations over clean-up operation costs would kick off soon but warned compensation claims would take time.

Although matters of liability are yet to be determined, the insurer and ship owner have previously “expressed deep remorse” and characterised the situation as “totally unacceptable”.

Comment has been sought from the Solomon Islands Maritime Authority, National Disaster Management Office and mining ministry.

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Environmental Toll of Solomon Islands’ Oil Spill Still Being Calculated

An Australian Embassy official surveys oil spill damage to the shoreline of Rennell Island.

Catherine Wilson | Mongabay / Solomon Times | 3 July 2019

An international effort to halt a massive oil spill from a wrecked ship in a far-flung province of the Solomon Islands has finally succeeded. But the scale of damage to the marine and coastal environment near Rennell Island, where the incident occurred within a few kilometers of a UNESCO World Heritage Site, is still being calculated.

On Feb. 5, the Hong Kong-based MV Solomon Trader ran aground in bad weather, spilling heavy fuel across coastal waters, beaches and a sensitive coral reef system. Local experts decried the spill as potentially the country’s worst human-made environmental disaster.

“The full extent of the impact of the oil spill on the ocean and environment is yet to be determined. The investigation is ongoing and may take some time,” Joe Horokou, director of environment and conservation at the Solomon Islands environment ministry, told Mongabay.

However, the Australian Department of Foreign Affairs and Trade, which sent a team of marine and environmental experts to support the Solomon Islands’ disaster response, offered a bit more detail.

“More than 80 tonnes [88 tons] of heavy fuel oil has dispersed across the island’s sea and shoreline, contaminating the ecologically delicate area,” the agency stated in a March 25 press release.

A remote and sensitive area

The Solomon Islands is part of the marine biodiversity-rich Coral Triangle and has one of the world’s most important coral reef systems, home to 485 coral species and 1,019 fish species.

The MV Solomon Trader was loading bauxite in Kangava Bay from a mine located on western Rennell Island for export to China when violent weather generated by Cyclone Oma drove it onto a nearby reef. The vessel’s grounding caused extensive damage to its hull and fuel tanks, which were carrying some 700 metric tons (772 tons) of oil.

Rennell Island, one of the country’s outlying islands in its southern Rennell and Bellona Province, is geographically remote with little infrastructure and few services. The shipowner, Hong Kong-based King Trader Ltd., failed to respond quickly to the spill, and fuel continued to leak from the wreck for more than a month. King Trader claims that weather conditions remained too dangerous for salvage operations to start. On Feb. 16, the Solomon Islands requested help from the Australian government. By early March, the oil slick extended more than 6 kilometers (3.7 miles) along the island’s shoreline, according to news reports.

A two-week pollution control operation by a Solomon Islands and Australian team began March 7. Eleven days later, the Solomon Islands National Disaster Management Office (NDMO) reported that salvage experts had stabilized the beleaguered ship and stopped the fuel leak. As of last week, booms were limiting the spread of oil into the deeper ocean, and a cleanup of the beaches and coastline was underway in partnership with local communities.

But the toll of the incident on the marine environment and human health is only just beginning to be tallied. Scientists report that oil spills can kill fish and invertebrates directly, while toxic compounds can curtail coral growth and reproduction and diminish coral and fish biodiversity.

There is no doubting the environmental sensitivity of the site of the shipping disaster. The southern third of Rennell Island, not far from Kangava Bay, comprising 370 square kilometers (143 square miles) of forest and a marine area extending 5.5 kilometers (3.4 miles) out to sea, was declared a UNESCO World Heritage Site in 1998.

Then, six years ago, the site, which provides habitat for 10 endemic plant species, 43 species of breeding land and water birds, and 730 species of insects, was red-flagged on the World Heritage in Danger List. UNESCO identified a number of threats to its status from logging activities on the western half of the island and invasive species introduced by logging and container ships, as well as climate change and the overexploitation of marine resources.

“The World Heritage Site is not affected by the spillage as the oil was mainly found in particular locations within the bay,” Horokou told Mongabay.

Nevertheless, the Solomon Islands government has asked the United Nations to provide more independent environmental testing.

Local food and water

In the meantime, the spill has affected local communities’ food and water security.

“From now, people will rely on rainwater for drinking and daily household use as their source of water is being contaminated,” Lawrence Nodua, a Solomon Islander volunteer with the U.K.-registered marine conservation NGO OceansWatch, told Mongabay. “Some families in Lavangu [village] in Kangava Bay are now running out of water.”

With almost no rainfall during the past month, people living in coastal villages near the spill are facing water shortages that could lead to a potential increase in cases of diarrhea, according to the NDMO. Authorities have also warned them to stop eating locally caught fish and shellfish, critical components of their food supply.

Solomon Islands authorities say that the shipowner and its insurer are responsible for addressing the environmental damage, although the environment ministry has stated that further actions to hold specific entities accountable, and potentially seek compensation, will not occur until government investigations into the incident and the scale of damage are completed.

Nevertheless, early this month, King Trader, while claiming that matters of liability are yet to be determined, apologized in a public statement, saying that “the insurer and owner of the grounded MV Solomon Trader have offered a sincere apology to the people of the Solomon Islands following the bauxite carrier’s grounding.”

“My government is prepared to go as far as putting the companies on a blacklist internationally if they do not take on their responsibilities,” Solomon Islands former Prime Minister Rick Houenipwela declared at a press conference March 7.

“The ecological footprint of the whole bay is already devastated with much of it unlikely to recover,” he added. “The impact on the marine life and the coral is already massive with much of it irreversible.”

A weak state

The Solomon Islands is still recovering and rebuilding following a devastating five-year civil conflict that started in the late 1990s. The country’s limited capacity and resources hamper its ability to respond fully to disasters, and it doesn’t have sufficient legal protection and legislative powers to follow through in holding international entities accountable for loss and damage.

The country is a vast archipelago of more than 900 islands spread over 854,000 square kilometers (330,000 square miles) with high exposure to earthquakes, cyclones and tsunamis. Government functions, such as coordinating a national response to disasters or overseeing the shipping industry and high-risk extractive activities like logging and mining, are hampered by limited transportation, unreliable communications and the absence of roads and infrastructure in many parts of the country.

Inadequate laws also leave the country vulnerable. However, the country took a step in passing the Solomon Islands Maritime Authority Bill in August last year. The new legislation paves the way for setting up a regulatory organization mandated to develop nationwide shipping services and ensure compliance with international maritime laws. Currently, the Solomon Islands is not a signatory of key agreements, such as the International Convention for the Prevention of Pollution from Ships.

The Indonesian mining company contracted to extract bauxite on Rennell Island that chartered the Solomon Trader, Bintan Mining Solomon Islands Ltd., has made no public statements in the wake of the spill. But mining ventures have a troubled history in Rennell and Bellona Province. Allegations of impropriety and irregularities in the awarding of a mining license to another Indonesian company active on the island, PT Mega Bintang Borneo Ltd., led to its license being revoked in 2014.

Extractive industries, and logging in particular, have been the focus of accusations of high-level corruption and environmental destruction in the Solomon Islands in recent decades. Political patronage of foreign companies, extensive kickbacks and the loss of revenue to hefty tax exemptions are well documented.

But unlike its experience in logging, the country has few operating mines and limited experience in managing them. In 2012, the Solomon Islands became a candidate for implementing the rigorous Extractive Industries Transparency Initiative Standard, but withdrew in June last year. The initiative reports that the country needs to significantly boost its legal and regulatory framework and ability to control mining production, exports and revenues to restart the process.

Meanwhile, local communities on Rennell Island remain in limbo. Unable to fish with their beaches polluted, they’re waiting to find out how serious the devastation is and what hope remains for environmental recovery.

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