Nautilus Minerals’ plans to mine the seafloor sink deeper

NAUTILUS HAS LEFT THE PAPUA NEW GUINEA GOVERNMENT FACING A DEBT EQUIVALENT TO ONE-THIRD OF THE COUNTRY’S ANNUAL HEALTH BUDGET FOR ITS 9 MILLION PEOPLE

Cecilia Jamasmie | Mining .com | August 13, 2019 

Struggling Nautilus Minerals, one of the world’s first companies to plan on mining the seafloor, will soon join a long list of companies that have failed at attempts to extract minerals in remote places, as its creditors have voted this week in favour of liquidating the company.

The Canadian firm, which tried for years to fully develop its Solwara 1 gold, copper and silver project off the coast of Papua Guinea, faced relentless community opposition, culminating in legal action and public appeals to the government.

Those issues, together with environmental concerns and the fact that the company lost its only production support vessel last year, eroded investors’ support, forcing Nautilus to delist from the Toronto Stock Stock Exchange in March.

Since then, the Vancouver-based firm’s assets, including equipment, intellectual property and mining leases, have been put up for sale through PricewaterhouseCoopers.

In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing a debt equivalent to one-third of the country’s annual health budget for its nine million people. 

“The company is essentially worthless. Its equipment is tailored to the mining of deep sea hydrothermal vents which the world now agrees are too ecologically valuable to mine,” Deep Sea Mining Campaign’s (DSMC) Andy Whitmore, said in a statement.

“Even other deep-sea mining companies such as DeepGreen suggest mining hydrothermal vents create an unacceptably high level of environmental impact,” Whitmore noted.

Unlike other seafloor mining companies, including Nautilus, DeepGreen doesn’t want to drill, blast or dig the bottom of the ocean. The explorer, also Canadian, plans instead to scoop up small metallic rocks located thousands of metres below the surface in the North Pacific Ocean.

The deep sea, more than half the world’s surface, contains more cobalt, nickel, copper, manganese and rare earth metals than all land reserves combined, according to the US Geological Survey.

Companies exploring or already developing projects to mine the seafloor argue the extraction of those deep-buried riches could help diversify the sources currently supplying metals needed for electronics and evolving green technologies, such as electric vehicles (EVs) and solar panels.

Not enough studies

Academics and scientists, including the DSMC  — a group of non-profit organizations and citizens from the Pacific Islands, Australia, Canada and the US — are concerned by the lack of research on the possible impacts of high seas mining. They fear the activity could devastate fragile ecosystems that are slow to recover in the highly pressurized darkness of the deep sea, as well as having effects on the wider ocean environment.

Last year, the European Parliament called for a ban on seabed mining until the environmental impacts and risks of disturbing unique deep-sea ecosystems are understood.

In the resolution, it also urged the European Commission to persuade member states to stop sponsoring and subsidizing licenses to explore and exploit the seabed in international waters, as well as within their own territories.

Shortly after, an international team of researchers published a set of criteria to help the International Seabed Authority (ISA), a UN body made up of 168 countries, protect biodiversity from deep-sea mining activities.

So far, it has granted 29 licences to governments and companies, authorizing them to explore in international waters.

Nautilus, however, has been the only company to go beyond the exploration stage for what was supposed to be the first polymetallic seabed mine.

More projects may be surfacing soon, as the ISA is expected to open up the high seas to mining.

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President Calls For A Fair Share Of Lihir Gold Mine Benefits

Post Courier | August 12, 2019

Newly elected president of Nimamar local level government (LLG) Stanley Tunut has called on the national government to allocate its share of service delivery funds owing over the years.

Mr Tunut, a National Alliance party member unseated deputy governor and incumbent president Ambrose Silul of the People’s Progress Party (PPP).

His election was witnessed by locals who gathered in numbers at the Tumbawinlam House last week Thursday.

He said Lihir island has been deprived of government services despite having the third largest gold mine in the world.

“Over the years, the people of Lihir have not felt the impact of the funds from the national government’s service improvement programs directed to the provincial, district and the local level government,” Mr Tunut said.

But he said that the royalties worth millions paid into the Nimamar local level government have made no impact in the livelihood of the people.

“The first thing I will do is to overhaul how the budget of the Nimamar local level government will revolve to the people of Lihir with the royalties that is directed into the administration.”

He said the budget of the LLG will be well structured to benefit the people rather than the administration consuming the entire internal revenue.

“I intend to make some changes in the administration the budget was delivered in past and make a fresh start,” he said.

“If you visit the entire island on the western and to the eastern tip, you will notice the run down state of infrastructures and road conditions. To get to the western tip of the island will only require four-wheel vehicles to manoeuvre through. School and health infrastructures are wearing to and drug supplies in the aid posts and clinics are inadequate,” Mr Tunut said.

He said only a fraction of the population that reside within the perimeters of the mine site receive benefits from the mining company Newcrest Mine Limited.

Mr Tunut said to look after the affairs of the people of Lihir, there has to be an audit made on the works of the previous administration in order to make a fresh start.

“The people of Lihir do not want any political affiliation but want services to be delivered.”

He said the Nimamar local level government under his leadership will support and work alongside Namatanai member Walter Schnaubelt to deliver projects for his local level government.

He urged all stakeholders, churches and the entire population including the landowners of Lihir Gold Mine to unite because the future of Lihir will depend entirely on them.

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Petroleum Dept lacks ‘expertise’

PNG Liquefied Natural Gas Plant near Port Moresby. Photo: Richard Dellman.

Luke Kama | The National aka The Loggers Times | August 9, 2019

THE Department of Petroleum and Energy (DPE) has a shortfall in technical expertise that needed to be addressed by the Government through recruiting competent and qualified personnel from the open market, an expert says.

Johannes Kaman, a national resource economist who has worked around the world on various oil and gas and mining projects, told The National yesterday that PNG was a country rich with oil, gas and minerals but needed the best technical advice to get the most out of those resources, and that advice had to come from the DPE.

“Oil and gas and the mineral sector is a very technical sector that needs the best people with the required skills, knowledge and expertise in those fields to carry out the task on behalf of the State and negotiate with developers,” he said.

Kaman said the failure in addressing the outstanding landowner issues and benefits sharing matrix concerning the PNG LNG and the failure in securing a better Papua LNG deal was a result of poor technical expertise in the department.

“The government needs to enquire about why the senior positions of the DPE which were advertised externally calling for applicants in the open market was withdrawn and the advertisements done again through an internal advertisement,” he said.

“The Government needs to find out why that was the case because people in all the senior positions in the DPE are acting on the positions.

“And some of them are not qualified and do not have the skills, knowledge and the technical expertise to be there.”

Kaman said PNG needed to get a better deal from its resources and there was really an urgent need to review the technical expertise at DPE.

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Landowners Want 100 Per Cent Ownership of Porgera Mine

Zombi Kep | Post Courier | August 5, 2019

Majority landowner representatives are calling on Prime Minister James Marape to extend his ‘Take Back PNG’ campaign by taking back the Porgera gold mine from operator Barrick Niugini Limited (BNL).

Acting through the Justice Foundation of Porgera, 18 out of 24 landowner agents who signed the MOA in 1969, are urging the PM to act on his word by taking back Porgera gold mine from Barrick.

In a recent press conference in Port Moresby, chairman of Justice Foundation for Porgera Mr Jonathan Paraia, claiming to speak for the 18 landowner agents, declared their intention to take 100 per cent ownership.

“Enga must own the land which was given to us by God and the 95 per cent that is leaving the country for Canada must stay back in the country,” said Mr Paraia.

“We own all the resources in the country, yet all the resources are leaving the country.”

He said if the profits were retained, a lot of people from Porgera, Enga and PNG as a whole will be employed and there will be surplus of money owing into the country.

“That’s why when the mining lease expires, we are putting our resolution up to government not to renew the agreement.”

He said according to the Mining Act, anything six foot underground belongs to the State and the State should have full ownership of the mine and its profits.

But he claims the ownership had somehow passed onto foreigners. “Over the last 30 years, 95 per cent is owned by Barrick and nothing is coming back to us, even the country is missing out on it,” said Paraia.

“But now as the mining lease is expiring, PNG must own this mine.”

He said that just like the government taking over OK Tedi, they want to take ownership of the Porgera mine to resettle the landowners affected, pay proper compensation, and deliver proper services.

“The government must allow us to take over the mine so that all the damages that were done to Porgera will be fixed by ourselves,” he said.

“The things that Barrick has failed to do today; we want to do ourselves.”

He stressed that the mine will continue to operate just as it is but the ownership needs to change. “All the workers will be intact and all contractors will remain but the ownership must change.”

Former Laigaip Porgera MP Nickson Mangape who is also one of the 18 landowner agents, brushed aside comments made on social media that they are incapable of owning the mine.

“You people kept asking who will take over Porgera gold mine and saying that it’s too complicated on Facebook,” explained Mr Mangape.

“You look at OK Tedi, the government of the day took over. This is the same thing that we want with Porgera.”

He said there is no difference.

“About 33 per cent went to landowners (Ok Tedi) and 67 per cent went to the government, the same will happen with Porgera.

Enough is enough,” he said.

Meantime the National Court in Waigani ruled last week Friday that BNL and Mineral Resources Enga (PJV) will continue mining after the August 16 expiry of the mine’s SML.

Following the ruling, BNL president and chief executive officer Mark Bristow said a total of K20 million in royalties for landowners are withheld as a result of ongoing legacy issues.

Mr Bristow also said the company has funded a lot of training initiatives and to date, the total value of K544 million including donations has provided schools, health services, water, power, bridges and roads in support with the local government to change the lives of the people for the better.

He said the company has also made a commitment following its recent meeting with Prime Minister James Marape that it would invest in the Paiam hospital to get it operational again.

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Please review appointment of new KPHL chairman

Ivan Gordons | YuTok, Post Courier | August 5, 2019

Just recently I wrote a letter that was published in the local daily questioning the appointment of Andrew Baing as the chairman of KPHL on whether he was the same person who was found guilty by the leadership tribunal years back on misappropriation grounds and dismissed from holding public office.

I simply stated that this was not right for someone with such a record to be appointed to such an office that was dealing with public monies especially of such magnitude.

A reply was published also from a person saying that he was grateful for the last Prime Minister for the appointment and that he was going to prove the country proud or something along those lines.

Not much was said after that.

Fast forward to this present day and we all can see for ourselves. It is ridiculous how KPHL has addressed this saga to date.

Yes they can rant on about this law and that, this Act and that but with all that aside they are dealing with public funds.

Just provide the information to the PAC and explain yourselves to the people of this country where their money from the 500 shipment of gas has gone. There are many stories out in the public domain on the abuse and misuse of these funds benefiting the well off while the people are struggling.

I have faith and trust in our new PM honourable James Marape that he will not let his people down.

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Leader Speaks His Mind On Porgera Mine

Communities living around Papua New Guinea’s Porgera gold mine lack enough access to clean water to meet their basic needs. Photo: Columbia University

Post Courier | August 5, 2019

The landowners of Porgera mine have given up their mountains and land to mine developers. This is with the thought that they will be partakers and beneficiaries. But after 30 years they still haven’t benefited from it.

These are the words of Nixon Mangape who is a signatory of the 24 landowner agents that signed the MOA in 1989.

“We have given our mountains to the developer to mine gold which we thought that the government will benfifit from the taxes collected from the developer, as well as the national and provincial government but us the landowners will receive the maximum benefit,” he said.

“That was our initial thought when we signed the agreement in good faith but in so many years the developer haven’t given us any contract.”

Mr Mangape said that he represented Tiene Wape clan.

“Out of the 23 landowners that were party to the signing of the MOA in 1989, I am the 24th person who signed the agreement,” he said.

“I have not benefited from the mine and even my clan have not benefitted.

“That applies to all 24. We were not given contracts.”

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Govt Not Receiving Fair Share: Study

Sources of revenue from extractive sector to government. Source: EITI

Post Courier | August 5, 2019

A recent study based on the PNG Extractive Industry Transparency Initiative (PNGEITI) Reports have found that the PNG Government is not receiving its share of resource benefits and recommended government broaden its economic base in order to increase its bargaining power in current and future extractive projects.

The research study titled: Does the PNG government get its fair share from the resource sector? -was presented at a public seminar at the Institute of National Affairs in July to an audience representing Government, Industry and Civil Society stakeholders.

It focused on the Government’s ability to increase its bargaining power in its current and future planned resource projects.

The study was undertaken by Economists, Associate Prof Martin Davies at the university of Washington and Lee and Dr Marcel Schroder economics lecturer at Lebanese American University.

Both researchers are also guest lecturers at the University of Papua New Guinea and the Institute of National Affairs.

The researchers constructed a new database based on the PNG EITI annual reports that documents fiscal resource revenues for a large set of resource rich countries from 2006 to 2017.

“Using this dataset, we analysed the PNG governments’ take from the resource sector and study its determinants through a simple game-theoretic model as well as regression analysis.

This allowed us to make comparisons between Papua New Guinea and other resource rich developing countries,” said Prof Davies.

“Salary and wage tax is largest payment received. Papua New Guinea is the only country in our database of 50 countries where this is the case. Corporate income tax and royalties seem unusually low,” said Dr Marcel Schroder.

The study provided potential Fiscal Regime recommendations.

“PNG is a developing country which means funds for crucial spending such as infrastructure, health and education are needed today rather than tomorrow. Therefore, avoid deals with MNCs that lead to extreme back-load of fiscal take,”

They also recommended avoiding giving too many incentives (loss carry forward arrangements, tax concessions, treating royalties as advance income tax, etc.) and recommended that the State reconsider zero rating GST.

“Many resource rich countries derive significant revenue through GST.

It is also relatively easy to administer. Consider relying more on royalties on sales.

“They have many advantages with Revenue flows today vs tomorrow, they are more stable than income tax and other payments and they are relatively easy to administer,” said Prof Davies.

The study encouraged the audience to understand reasons behind low income tax payments. Is it only due to fall in commodity prices.

“There seems no mechanism for government to benefit from exceptionally high commodity prices (e.g. additional royalty, excess profit tax). Therefore, in future, if deal offered by MNC isn’t attractive, valid to leave resources in the ground for later,” said Dr Marcel Schroder.

The researchers further provided economy-wide policy recommendations.

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