Porgera landowners sue PNG Govt for billions

A protest against Barrick Gold. Photo: Facebook/ Kelly Taila

Radio New Zealand | 4 December 2018 

A landowners group in Papua New Guinea’s highlands region is suing the national government for $US13.28 billion over a breach of contract.

The Justice Foundation for Porgera and other landowners whose land is inside the boundaries of the Porgera gold mine are behind the suit.

They claim that Barrick Nuigini, a subsidiary of Canadian mining giant Barrick Gold, has destroyed their environment and livelihoods, and has not kept to the commitments made in the contract signed in 1989.

The Foundation’s Jonathan Paraia said the amount of money they are seeking is justified.

“That is based on the contract for Porgera Mine signed between the state and Porgera landowners, but the state has got its own agreement with the Candian mining company, Barrick. So we expect the government to call on the company to take responsibility for the claim because the company is the one that is causing the problems and destroying the people’s livelihoods,” Jonathan Paraia.

He said the initial stage of such a suit is arbitration but if that fails to reach a resolution the matter will be referred to court.

The Justice Foundation for Porgera has separately asked the courts to restrain the government from renewing the Porgera licence, which expires next May, until the issues surrounding the suit are sorted out.


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We Want Greater Share: O’Neill

Gorethy Kenneth | Post Courier | December 4, 2018

PAPUA New Guinea wants a greater share of benefits from major oil and gas companies operating in the country, Prime Minister Peter O’Neill said when officially opening the 15th PNG Mining and Petroleum Conference in Sydney yesterday.

Mr O’Neill told delegates and major oil and gas companies operating both in PNG and those who have interests in the resource sector that the country needs and wants a fairer share of the benefits flowing from the development of these resources.

He said that PNG wanted them to invest in its oil and mining sector and at the same time wanted returns that benefit the people and resources owners.

“I know you will continue to invest in the sector and the government is very much familiar with the ups and downs in the sector which we have all gone through,” Mr O’Neill said.

“The resource sector has the first opportunity to deal with many of our landowners issues and concerns, in many of our remote communities.

“They want to be included and must be part and parcel of the decisions we make in investing and developing their resources.

“The inclusiveness of these communities by making sure that they participate meaningfully in the development of the resource and participating in and — of course, making sure that their standard of living improves and grows is something that is important to the core agenda of our government.

“We want to invest in our people and we want to make sure that they participate. We want to make sure that the benefits that come with the development of the resources is fairly shared.

“We understand very well that investors want a decent return on their investments, but we also, in our country, want a fair share of the benefits coming out of those resources developments.

“It is important that industries continue to support that,” he said.

The conference ends tomorrow.

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PNG LNG expansion obliged to reserve gas for domestic market

The Hides gas field is set to supply more gas for PNG’s LNG expansion. Richard Dellman/AdvantagePNG

Angela Macdonald-Smith | Australian Financial Review | December 3, 2018

Papua New Guinea Prime Minister Peter O’Neill has revealed that 10 per cent of the gas in the next phase of LNG expansion in the nation will be reserved for domestic use, while the tax structure from the $US12 billion project will be engineered to ensure a flow of revenues for the government even when commodity prices sink to their lowest point in the cycle.

The news on some of the key terms around the LNG project puts some meat behind the memorandum of understanding between the government and the Total-led Papua LNG venture announced during the APEC summit in Port Moresby last month.

But as signalled by that announcement, the timetable for the project has slipped, with the partners now only set to start initial engineering and design work on the expansion in the June quarter of 2019 after the delayed “gas agreement” setting out fiscal terms and other conditions is finalised in March. 

Jean-Marc Moiray, the new managing director of the PNG operations of Total SA, which is leading the Papua LNG project, told a conference in Sydney the French energy giant hopes now to give a final go-ahead for the project “before the end of 2020”, and for production start-up by the end of 2024.

Oil Search MD Peter Botten had hoped that the “gas agreement” with the government would be announced during the APEC summit. But the complexity of the negotiations and stretched government resources are understood to have contributed to the delay. Louie Douvis

The schedule represents a delay from that previously outlined by project partner Oil Search, which was targeting a final investment decision in 2019 and start-up in 2023.

Oil Search managing director Peter Botten had voiced hopes that the “gas agreement” with the government would be announced during the high-profile APEC summit. But the complexity of the negotiations and stretched government resources are understood to have contributed to the delay.

Mr Botten told the PNG Mining & Petroleum Investment Conference in Sydney on Monday that he still expects Papua LNG to capture the market opportunity seen opening for global LNG demand in 2023-24 but underlined the importance of the timing staying on track.

“Everyone can see [the market window in 2023-24] and the competition is starting to ramp up,” confirmed Andrew Barry, managing director of ExxonMobil PNG, which is a major partner in the expansion.

“PNG has got to get at the front of the line,” Mr Barry said, to capture both the market opportunity and to avoid cost escalation arising from increased demand on contractors.

As agreed in February, the expansion will involve three 2.7 million tonnes-a-year LNG trains that together will roughly double existing capacity in PNG from the Exxon-led PNG LNG venture. Two trains will process gas from the Total-led Papua LNG venture that owns the Elk and Antelope fields, with the third to be supplied by fields in the Highlands region within the PNG LNG project plus the P’nyang field further to the west.

Alongside the obligation to supply the domestic market, the LNG expansion project will have to allow third-party access to its pipelines to avoid stranded gas fields held by other companies, said PNG minister for petroleum Fabian Pok. National content obligations will also be imposed to ensure business opportunities for local companies.

Dr Pok said the PNG government had learned lessons from mistakes made with the initial PNG LNG project and would ensure conditions around the expansion would guarantee revenues for the government even during a price slump and would support local development, including using gas for power generation and to develop local industries

Still, industry sources say that the actual volume of gas kept for use within PNG will be much less than 10 per cent given the small local market and the time it will take to grow. The deal with the government is understood to allow gas unable to find a commercial market within PNG to still be exported as LNG.

Several projects using gas for electricity generation are in the works, including a 58-megawatt plant near Port Moresby by NiuPower, owned by Oil Search and Kumul Petroleum, due to start up in March.

ExxonMobil PNG also signed a deal at the conference with PNG Power to study the viability of a 5 MW power plant in Hela Province in the Highlands.

Only 12-13 per cent of PNG’s population has access to electricity despite the successful LNG export industry.

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Govt will support coal power plant, says Basil

Peter Esila | The National aka The Loggers Times | November 29, 2018

THE Government will support any type of energy-producing sources developed in the country, including coal, says Minister for Energy Sam Basil.
Basil, one of the major proponents of the coal project in Lae together with Lae MP John Rosso, said this on FM 100 talkback radio yesterday in reference to that project.
Bulolo MP Basil and Ross have already encountered fierce resistance to the project in light of environmental implications.
This includes biomass energy project landowners in the Markham Valley of Morobe.
“We will continue to support all the different power-producing companies using different methods that are coming into PNG to operate, coal being one of them,” Basil said.
“The important thing that we must also look at is that when we start putting new power plants in districts and provinces, I’d like to look more into the landowners, the local level government, districts, towns and the provinces.
“What kind of benefits will we have in return for those people who may have their land and resources available for those projects to take stage?
“We should now be looking at more benefits rolling back into the host districts and provinces, and landowners.”
Basil is aware of resistance to him and Rosso.
“I would like to test new ideas, new ways of doing things because PNG has been neglected for awhile,” he said.
“Our neighbours Indonesia and Australia are heavily dependent – more than 50 per cent – on coal.
“We should be asking ourselves: How can we progress PNG forward? I think that one of the answers is having access to energy.
“We have a lot of raw resources to burn, to produce products for us, decapitating international prices by having access to our own energy here like gas, coal and others.
“It is one of the things that we should be promoting,”
Of solar energy, Basil said: “We are looking for solar places.
“For example, we are asking the DDA (district development authority) of Markham and other districts that have ample land, good sunlight, to make land available.
“Register with the Energy Department so that when people come and look around for putting up solar plants, we have got land there.
“We can also identify potential sites for geothermal.”
Basil said that the National Energy Bill, which would allow for energy investments, was in its final stages.

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Wafi-Golpu Could Be First To Incorporate EITI Provisions

Matthew Vari | Post Courier | November 30, 2018

The Wafi-Golpu Mine is set to be the very first gold project to incorporate the Extractive Industries Transparency Initiative provisions included in the agreements for the Wafi-Golpu Joint Venture projects set for the Morobe province.
PNG EITI National Secretariat head Lukas Alkan said this early this month when commenting on the push by government and the PNG EITI secretariat to ensure the initiative is rooted in current and future project prospects to ensure effective transparency on revenues in the extractive sector.
“Some of these projects are new projects where the forums are being conducted like Wafi-Golpu and the Freida River.
“The transparency mechanism has been, we are trying to build into those agreements. We started off with Wafi-Golpu project.
“The MoA negotiation that is ongoing there is a provisions there for EITI for reporting purposes in terms of disclosing project agreements,” Mr Alkan said.
He said the secretariat was also looking at the reviews being conducted with Pogera and the other mines.
“We also look at ensuring that transparency mechanisms are built into those revised agreements.
“This is the first time that we are trying to tie in the EITI mechanism into a project that is yet to start.
He said, on the same token, project agreements that have already been signed, the secretariat continues to have difficulties getting disclosure.
“The need for work on certain legislations and the requirements that prevent bodies such as EITI from having access will need to be done in order to have access,” Mr Alkan said.
A learning curve the secretariat will ensure the country maintain transparency with the country’s new major projects earmarked within the next decade.
“This time around we have been proactive to ensure that when the new project is coming on-stream we are making sure that EITI mechanisms are built into those MoAs or agreements so that triggers the disclosure of the agreements when they are signed,” he said.

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Governor Orders Probe Into Ramu Nickel Mine

Gorethy Kenneth | Post Courier | November 28, 2018

MADANG Governor Peter Yama has commissioned a team of environmental experts to immediately conduct an environment damage assessment on the Ramu nickel mine.

Mr Yama announced this yesterday after raising serious concerns on how the Conservation and Environment Protection Authority (CEPA) has handled the environmental damages surrounding the Ramu Nickel Project in Madang.

“It would be irresponsible for me as governor for Madang not to outline to my people the provincial government’s stand on the current and future operations of the US$2.1 billion Ramu Nickel project,” he said.

At the end of 2012, the company completed full construction and started full operations, and was now operating at its peak.

Mr Yama had noted the landowners of Ramu Nickel project’s concern over:

  • The environmental impact, Ramu Nickel project is having on their lives; and
  • The lack of infrastructure, and social inclusion in the sustainability of their lives.

“These issues are serious and the state of the environment is currently unknown, I am aware that Conservation and Environment Protection Authority has not been monitoring the discharge of deep-sea tailings for a couple of years, posing a major threat to our marine environment.

“As such I have immediately commissioned a team of environmental experts including marine biologists to conduct an environmental damage assessment to better place me to seek redress.”

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PNG mine workers “benefit from FIFO lifestyle” claims industry

PNG Resources | November 26, 2018

A questionnaire by the PNG Chamber of Mines and Petroleum has unearthed a range of benefits that the Fly-in/Fly-Out (FIFO) operating model delivers to PNG workers, their families and the broader community.

Distributed to mining projects with PNG employees engaged under FIFO arrangements, the questionnaire revealed inspiring stories and long-term benefits for employees from across PNG.

Thousands of workers within Papua New Guinea’s mining industry are employed on a FIFO basis, complementing the staff drawn from local communities and host provinces.

Respondents cited a number of benefits of the employment arrangement including:

  • Quality time to spend with their partners, children and extended families
  • Time to take part in community obligations, volunteer at their children’s schools and participate in church and community activities
  • Time to focus on achieving personal goals, including home improvements and starting part-time businesses
  • Opportunities to travel
  • Sufficient time to switch off completely and relax away from the pressures of work

Dr Albert Mellam, executive director of the PNG Chamber of Mines and Petroleum, said the responses also highlighted the financial benefits that FIFO delivers, enabling workers to secure better opportunities for their families, including education and health.

FIFO workers will typically work on a roster such as 15 days at work, then 13 days off; or 21 days on site, followed by 14 days off.  Many PNG mine workers have been participating in a FIFO arrangement for 10 years or more, and express great satisfaction with the FIFO system.

“Our research shows that FIFO workers are in many instances able to achieve life goals in their home communities which would not have been possible in a traditional working arrangement,” said Dr Mellam.

“Importantly, the FIFO employment model provides the best balance of shared benefits to communities right across PNG.

“It enables employees and their families to remain within their own community, rather than permanently relocating to remote areas where the majority of the mines operate. By returning on a regular basis to their families, the economic benefits of mining are spread instead of being concentrated in a single area.”

Senior engineer Joseph Palei of Porgera Joint Venture says as a FIFO worker he is able to spend more time with his family in Lae and use his days off to relax away from the worksite.

“When I return to the gold mine after 14 days, I am more focused and can perform my job to a higher level of safety and diligence,” said Mr Palei.

“Being a FIFO worker has also allowed me to build a home during field breaks and provide better opportunities for my family, including health and education.”

Highly-regarded independent mining expert Richard Jackson recently presented at a Chamber workshop, in which he explained that building a project township for a mine does not necessarily deliver a better outcome for the local community.

“Even from a landowners’ viewpoint, building a project town has some disadvantages. Many of the economic benefits derived from such a township will not accrue to local people unless a great deal of effort is put into planning for them.

“Most resource projects are located in what were previously remote areas whose relative lack of access to the outside world placed very severe restrictions on their potential for trade and economic development. In many cases, despite the construction of roads, airports and other physical forms of communications and despite the arrival of telecommunications, once the project ceases to operate, the basic fact of geography re-asserts itself. They remain remote and at a disadvantage for economic development.

“Building a mining township will provide access to modern services, but only during the life of the mine.”

Mr Jackson said there were several other ways of providing sustainable benefits for local landowners including skills training throughout the life of the project.

“This form of FIFO has a major benefit,” Mr Jackson added. “It means that mine workers spend their earnings in existing towns and villages across PNG and thus spread mining benefits in ways that no government regulations or policies can do.”

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