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Tanzania cancels license of Barrick, Glencore nickel project

Another example of a Nation standing up and dictating terms to the international mining companies 

Fumbuka Ng’wanakilala | Reuters | 13 May 2018

Tanzania has revoked a retention license for an undeveloped nickel project jointly owned by Barrick Gold Corp and London-listed miner Glencore Plc as part of enforcement of a new mining regime.

The license for the Kabanga nickel project in northwestern Tanzania was among 11 retention licences canceled by the government under the Mining (Mineral Rights) Regulations of 2018, which were approved in January.

A retention license is granted to holders of a prospecting license after they identify a mineral deposit within the prospecting area which is potentially of commercial significance but cannot be immediately developed due to technical constraints, adverse market conditions or other economic factors.

“The Mining Commission would like to inform all owners of retention licences that the licences have been canceled,” commissions chairman Idris Kikula said in a statement.

Barrick Gold Corp and Glencore Plc which own the 50-50 joint venture project were not immediately available for comment. Their license was due to expire in May 2019.

Other retention licences canceled by the mining commission target other nickel, gold, silver, copper and rare earth exploration companies.

Tanzania, Africa’s fourth-largest gold producer, is seeking a bigger slice of the pie from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector.

Retention licences were previously granted for a period not exceeding five years, which was renewable.

Tanzanian President John Magufuli appointed the chairman and commissioners for the country’s new mining commission last month, paving the way for tighter regulation of the mining sector.

Magufuli sent shock-waves through the mining industry with a series of actions since his election in late 2015.

In July last year, he suspended the issuance of all new mining licences until the new mining commission was in place. 

The new mining rules state that “all retention licences issued prior to the date of publication of these regulations are hereby canceled and shall cease to have legal effect.”

“Consequent upon cancellation of retention license…rights over all areas which were subject of retention licences are hereby and without further assurance reverted to the government.”

Canada’s Barrick Gold Corp, the world’s biggest gold producer, is also the majority shareholder of London-listed Acacia Mining Plc, which is embroiled in a tax dispute with the Tanzanian government over mineral exports.

Barrick and Glencore have been looking for potential buyers for the Kabanga project since 2015 after lower global nickel prices derailed the project, according to mining sources in Tanzania.

The two miners have held the license for the project since 2009, which is estimated to have inferred resource of 36.3 million tonnes, grading 2.8 percent nickel.

Under legislation passed last Julyr, the mining commission has been given extensive powers to regulate and monitor the mining industry and mining operations in Tanzania.


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Three Chinese without work permits

Romulus Masiu | Post Courier

BOUGAINVILLE police have found three out of the total 17 Chinese in Panguna don’t have work permits.

Yesterday Arawa police went through their passports and found that there are 17 Chinese Nationals instead of the 16. While all their passports, work permits and visas are in place, only three of them — who turned out to be the interpreters — have no work permit. Instead, they came armed with business visas.

Arawa Police Station Commander Inspector Herman Birengka yesterday confirmed their passports, work permits and visas were thoroughly checked and screened and all were up to date. However, only the three interpreters are likely to be further questioned and charged by police.

Inspector Birengka and his team went to Panguna yesterday and observed that the 17 Chinese were camped in the mine pit workshop, which is not fit for humans.

The police also observed the Chinese and Americans up in the Panguna Mine area are invited by the local landowner groups.

Police obtained a copy of the Contract Agreement which was signed between a local landowner company called Taviranga-A Management Limited and a Chinese multi-million entity named Zhenyu Wang & Associates which is in China. The 4 page Contract Agreement titled ‘Scrap Steel Sales Contract’ was made and entered into as of December 10, 2011 by the two parties. In the Contract Agreement Taviranga-A is an organization for the development of the Panguna community and is responsible for the scrap steel on all of the communal areas in Panguna, including shopping and sports areas.

Furthermore, Taviranga-A has the authority from the Panguna Community to sell on behalf of all of the people in Panguna areas where there are multiple landowners and beneficiaries of the recovered value of the scrap sale. The local company has a distribution plan that includes and benefits all of the people of Panguna community. The term of the contract is for one year unless extended by either party.

ABG President Chief Dr John Momis who was not aware of the Chinese arrival commended Inspector Herman Birengka and his team for taking a tough stand dealing with any foreigners coming into the region. He said if the Chinese are found to be breaching Immigration or Labour law, they must be deported out of the region at once.

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Sunken treasure: The future for experimental seabed mining?

Jeremy Chunn

Sunken-Treasure 1

Sunken-Treasure 2

Sunken-Treasure 3

Sunken-Treasure 4

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Newspapers guilty of publishing foreign mining company propaganda as ‘news’ stories

The Post Courier and The National both continue to copy out corporate media releases and publish them as ‘news’ stories.  Check out all the identical sentences and phrases (highlighted in red) in the two articles below that have clearly been copied from an MCC media release despite NO acknowledgement of the source or attempt to balance the story…

Visit to mine site impresses partners

The National

BUSINESS partners with the Ramu NiCo project visited the Basamuk refinery yesterday and came out impressed with the project’s ongoing production of nickel and cobalt in the country.

Mineral Resources Development Company clients and administration general manager Imbi Tagune said:  “Despite all the technical problems and challenges, MRDC is relieved that the management is able to overcome issues and deliver the project in its full production capacity soon.”

“We want to understand the project and ensure it is economically viable sooner,” he said.

MRDC is a partner in the Ramu NiCo project and manages the 2.5% equity set aside for the project landowners.

“As a joint venture partner, we fully understand the difficult situation Ramu NiCo faces at the moment in finding short- and long-term solutions for the long-term benefits for all stakeholders, importantly the landowners,” he said.

Tagune assured the Ramu NiCo management that the visit was for Mineral Resources Madang and the landowner executives to understand and assist the project as business partners.

Ramu NiCo’s chief operating officer Gao Yongxue: “We are currently operating around 30% of our designed capacity and we are working hard to address the technical challenges and implement process optimisations to improve the capacity.”

He added the company would continue to commit resources to achieve results, train and equip its workforce.

MRM impressed with project

Post Courier

THE BOARD of Directors of the Mineral Resources Madang (MRM), a subsidiary of the Mineral Resources Development Corporation (MRDC) in the multi-billion Kina Ramu NiCo Project is impressed with the ongoing production of the only nickel and cobalt project in the country.

Imbi Tagune, clients and administration general manager of MRDC representing the Board of Directors (BOD) said despite all the technical problems and challenges faced, it is relieving to see that optimisation issues are identified and are being addressed and the management is optimistic to overcome them and deliver the project in its full production capacity soon.

MRDC represents the project landowners in the country and also a partner in the Ramu NiCo Project and manages the 2.5 percent equity set aside for the project landowners.

“We want to understand the project and ensure it is economically viable sooner.” 

“As a joint venture partner, we fully understand the difficult situation Ramu NiCo faces at the moment in finding both short and long term solutions for the long term benefits for all stakeholders, importantly the landowners,” Mr Tagune said.

Mr Tagune said this during a brief visit by the MRM BOD comprising the Chairman of MRM and KBK landowners’ association chairman, Mathew Denguo with directors of MRM including Lima Mullung, Chairman of Basamuk Landowners Association, Peter Tai, chairman of Maigari Landowners Association and Steven Saud, Chairman of Coastal Pipeline landowners association.
Carter Oiee, Coordinator of Ramu project from MRA, Joe Tayman, Technical Manager from MRDC, Kini Renagi from MRDC, former ambassador to China and current First Secretary to the Ministry of Mining Max Ray also accompanied the directors on Wednesday April 10 on a day familiarization trip to Basamuk Refinery.

Mr Tagune assured Ramu NiCo Management that the visit was part of MRM comprising of landowner association chairmen to understand the Project as business partners to assist and support the Project and not as landowners.

Ramu NiCo’s Chief Operating Officer Mr Gao Yongxue, his assistant Mr Wang Baowen, Deputy General Manager of Basamuk Refinery Mr Wang Jun, Basamuk Safety Manager Mr Douglas Turner, Assurance Manager of Basamuk Refinery Mr Graham Gerrard and Training Manager Mr Jeffers Heptol were present to welcome the delegation.

Mr Gao welcomed the delegation and briefly introduced the Project update. 
“We are currently operating around 30 percent of our designed capacity and we are working hard to address the technical challenges and implement process optimizations to improve the capacity,” Mr Gao said.

But he assured the directors that the company is committed to the project and will continuously commit resources to achieve the optimisations and at the same time train and equip its work force to ensure the project reaches its full designed capacity in the near future.

Following the safety presentation by Mr Heptol, the delegation was taken on a guided tour of the refinery where they visited the important components including the central control room, high pressure acid leaching trains (HPAL), new acid plant, production and packaging plant and others.

Mr Wang Baowen, assistant to the Chief Operating Officer later exchanged ideas and answered queries from the delegation on areas including production, product export, community development activities and others.

Later in Madang, the Board Members met with the Director and Executive Vice President of Ramu NiCo, Mr Gu Yuxiang and were presented the project’s financial model covering expected revenue, expenditure, levy and royalty components and other financial models.

Mr Tagune thanked Ramu NiCo’s management for allowing them to visit the Refinery and the presentation on the Project update and financial model.


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Yandera to cost US$1.42 billion

Gynnie Kero | The National

MARENGO Mining Ltd yesterday announced that it will cost US$1.42 billion (K3 billion) to develop the world-class Yandera copper-molybdenum-gold project in Madang.

The money will come from major Chinese engineering, construction and mining company China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd (NFC).

[Read about NFC’s dodgy mining record in Africa here]

The pricing will be used for a fixed lump sum, turnkey, engineering, procurement and construction (EPC) contract for the development of Yandera.

Marengo Mining Ltd received a pricing of US$1.42 billion for engineering, procurement and construction (EPC).

“The EPC pricing provides a strong foundation for the completion and delivery of the Yandera feasibility study, which is scheduled for completion in March 2013,” Marengo said.

“Even with the potential increased throughput, the development capital expenditure (Capex) numbers has remained just below the company’s prior guidance.

“Other infrastructure, including mining fleet, pre- strip and power transmission line, subject to the completion of the pending feasibility study, is currently estimated in the range of US$300 million to   US$400 million for a total project  Capex in the range of US$1.7 billion to US$1.85 billion.

“These Capex estimates do not include owner’s costs, working capital, capitalised operating costs and third-party power supply, which will be included in the development costs.”

NFC president Wang Hongqian said Marengo’s Yandera project was a high priority for NFC.

“We remain fully supportive of Marengo as it advances the development of the project,” Wang said.

Marengo’s president and chief executive offi­cer Les Emery  said:

“For a company at Marengo’s stage to have received a fixed price EPC quote from such a respected, major Chinese engineering, construction and mining company is a huge achievement and a recognition of the value inherent in the Yandera project.

[Err, Les, what about all those dead miners at NFC mines in Africa?]

“With the EPC pricing provided by NFC, Marengo will include this in the feasibility study expected to be completed in March 2013.

“Negotiations between Marengo and NFC on the EPC contract have now commenced.”

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Garnaut quits mining board after PNG travel ban

Rowan Callick | The Australian

ECONOMIST Ross Garnaut has quit as chairman of Papua New Guinea’s biggest-earning company, Ok Tedi Mining, as a result of PNG Prime Minister Peter O’Neill’s declaration in parliament two months ago that he was barred from entering the country.

Professor Garnaut, who has been involved with PNG for 47 years, said in his resignation letter:

“It is undesirable for development in PNG that the government’s use of its immigration powers should be seen as having been effective in forcing changes in the board of a major private company.

“For this reason, there was value in allowing some time for the Prime Minister to lift the ban should he be of a mind to do so.”

But now, he said, “it is not possible for me to fulfill my responsibilities as chairman of this large, complex mining company for an indefinite period while the government is preventing me from travelling to PNG” – which he had been doing seven or eight times a year.

Mr O’Neill said in November:

“I want to put it on record that (Professor Garnaut) will be no longer welcome in this country until BHP surrenders control of PNG Sustainable Development Program to the government and people of PNG.”

Professor Garnaut had then just stepped down as chairman of PNGSDP, the trust to which BHP-Billiton assigned control of Ok Tedi – which has an annual output of about $4.5 billion – when it ceased to operate the massive copper and gold mine a decade ago, following environmental controversies.

The trust, which has built $1.36bn in assets for those in the area since the mine’s eventual closure, and disburses more than $100m annually for development projects, owns 63.6 per cent of Ok Tedi Mining Ltd.

The rest is jointly owned by the governments of PNG and of the Western Province that contains the mine.

Recently, BHP pulled back from appointing PNGSDP directors – who are now chosen by the board itself, which includes PNG government nominees. But BHP must agree to changes in the core terms of reference under which the trust operates.

Professor Garnaut said the Ok Tedi board must address three pressing issues: proposals to extend the life of the mine; a performance review of senior managers; and potential co-operation with mining giant Xstrata and Brisbane-based Highlands Pacific to develop nearby ore bodies.

Former prime minister Mekere Morauta took over the chairmanship of OTML at the weekend, after succeeding Professor Garnaut at the helm of PNGSDP in November.

“I believe Papua New Guineans will look back on (his) contributions with a sense of gratitude,” Mr Morauta said. “I can think of no other person, Papua New Guinean and expatriate, who has contributed more to the making of good policies, outcomes and organisations in modern Papua New Guinea.”

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Ok Tedi Mining Ltd to be PNG’s mining comapny


As it nears the end of its operations, Ok Tedi Mining Limited is to become Papua New Guinea’s own Mining Company.

This provision is part of a detailed mine closure plan as Eunice Taumomoa reports:

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