Tag Archives: Arnold Amet

PNG experimental seabed mining project another ‘failed investment’, says ex-minister

The proposed production method for Solwara 1 Project. Image Nautilus

Pacific Media Centre | November 14, 2018

The controversial Nautilus Solwara 1 deep sea mining project has been accused of being another Papua New Guinean government “failed investment” on the verge of bankruptcy, claim campaigners citing a former attorney-general.

In a statement by the Deep Sea Mining Campaign, former PNG Attorney-General and Minister for Justice Sir Arnold Amet is quoted as saying:

“Nautilus is propped up by US$15 million in loans from its two major shareholders, it’s been forced to reduce its workforce and to terminate contracts for the construction of equipment.”

“Even the production support vessel crucial to Nautilus operations has had to be shelved due to failure to pay the shipyard constructing it,” he said.

“And Nautilus is now virtually worthless with its shares at a new record low of less than 10c  each.”

Deep Sea Mining Campaign said Nautilus was still desperately seeking funds for its flagship Solwara 1 deep sea mining project, while its commercial operation had been delayed ever since it first received its licence to mine the floor of the Bismarck Sea in 2011.

As a final attempt to save Solwara 1, Nautilus’s two largest shareholders, Russian mining company Metalloinvest and Omani conglomerate MB Holdings, formed a new company to secure funding for the Solwara 1 project, but this rescue attempt has gone in vain.

“Nautilus is due to repay the US$15 million loans to Metalloinvest and MB Holdings on January 8. How will it achieve this? There’s no likelihood of production starting until the end of 2019 or even later,” said Sir Arnold.

Economic burden

“I am really worried that the PNG government invested heavily to purchase 15 percent of a company that will be a burden to our economy. Our country’s over-extended finances may have to contend with a 15 percent stake in Nautilus’ bankruptcy,” he said.

Sir Arnold stated his position by urging the PNG government to terminate the contract with Nautilus so save the country’s money.

“Wiser investors such as Anglo American and Loews Corporation got rid of their shares early this year to reduce their exposure to risk. The PNG government should terminate its contract with Nautilus now before it sacrifices even more of our nation’s funds,” he said.

“In light of PNG hosting the APEC Summit at the end of this week it is important to highlight risky commercial ventures such as Nautilus Solwara 1 project that have used scarce public funds over environmental safeguards, regulatory frameworks and the livelihoods of our coastal peoples.”

Papua New Guinea is hosting the 2018 Asia Pacific Economic Cooperation (APEC) summi later this week, which is said to have been a huge financial load for the economically challenged country.

While the PNG government prepares for the summit, the country is going through many health crises including re-emerging of eradicated disease such as polio, violations of human rights against the people of Paga Hill, and extravagant spending for 40 Maserati luxury sedans, reports Pauline Mago-King of Asia Pacific Report.

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The writing is on the wall for Solwara 1

Former Attorney General of Papua New Guinea:

The writing is on the wall for Solwara 1 – PNG should withdraw its investment before it’s too late.

Deep Sea Mining Campaign | Scoop NZ | 17 January 2018

Amid financial strife and looming litigation, Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice advises the PNG Government to terminate its joint partnership agreement with Nautilus, recoup its 15% stake in the Solwara 1 deep sea mining project and decline to renew the licences for Solwara 1.

For Nautilus Minerals a miserable Christmas has just flowed into an unhappy new year. A series of gloomy end of year investor updates confirmed Nautilus is unable to raise the funds necessary to complete equipment for its Solwara 1 deep sea mining project.

Then came the final blow for 2017 – affected communities launched legal proceedings in a bid to obtain key documents that will reveal to them and all Papua New Guineans whether Solwara 1 was approved lawfully and what the true environmental, health and economic impacts of the project will be.

Shortly after, Company Chair Russell Debney resigned. This is in spite of his long association as a board member since the company listed on the stock exchange in 2006 and the chair of the company’s predecessors, Nautilus Minerals Niugini Limited and Nautilus Minerals Oceania Limited.

Due to the high-risk nature of the project, financiers have declined to bail the company out, suggesting the efforts of Nautilus’s two largest shareholders have been in vain. The best they have been able to come up with are bridging loans of USD 7 million to meet immediate needs whilst desperately hunting for another USD 350 million.

Sir Amet stated:

“Investors, financial institutions and even the former chair of Nautilus can see the writing on the wall for Solwara 1. By the company’s own admission the project is an experiment with unknown environmental and social consequences and uncertain profits. The past few months have really shown the extent to which financiers and our own communities in PNG reject this project.”

“This high-risk project is a foolhardy investment when our country has so many pressing needs. In order to acquire our 15% equity, the National Government obtained a loan in 2014 from the Bank of the South Pacific of almost PNG K400 million. It’s also likely that the Government has provided Nautilus with generous incentives, which would further limit the potential to raise revenue from this project.”

“This is irresponsible in the context of our country’s ever-increasing debt bill”, continued Sir Amet. There is little likelihood of a positive return from this project to the balance sheet of the economy. The recent bridging loans for the project are a drop in the ocean – only 1/50th of the total funds required. With an interest rate of at least 8% and a lucrative 5% cash commission going to a previous director of Nautilus, this loan represents yet another expensive debt burden for PNG – especially as the loan is secured against PNG’s equity.”

“These bridging loans are from existing Board directors through a new private investment company incorporated in the British Virgin Islands. Such financial structures are commonly known as ways for minimising tax. And because the loan is from a related party, there was no need to even consult the PNG Government as the minority equity holder. If we stay in this deal, it will be the people of PNG who will have to pay.”

“The best course of action now is for the PNG Government to terminate its joint venture agreement with Nautilus before our investment ends up sinking to the bottom of the ocean along with the company. In addition, Nautilus’s licences are renewed every 2 years. The environmental uncertainties surrounding this project call for the Government to decline renewal. Indeed, given the poor financial record of the company, the government should consider suing Nautilus for the recovery of the full K400 million investment as its 15% equity stake is now virtually worthless.”

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Karkar Islanders against seabed mining: Leader

Brian Kramer at the event at UPNG

Jemimah Sukbat  | Loop PNG | December 2, 2017

Karkar Island has joined New Guinea Islanders in the fight against seabed mining.

This was the message from senior statesman Sir Arnold Amet.

His message was relayed by Member for Madang Brian Kramer at the School of Natural and Physical Sciences forum at UPNG’s main lecture theatre recently.

Kramer, who was just there as an observer, relayed Sir Arnold’s written speech as he was unable to attend the forum.

Sir Arnold says the Karkar Island, where he comes from, is located in the western part of the Bismarck Sea. Therefore, he and the islanders are pledging their support in the stand against the development of seabed mining.

He said the project will be the world’s first deep sea mine operation and a high level of uncertainty surrounds it.

Furthermore, the mine is situated on traditional fishing grounds thus it threatens the villagers’ main source of income, food and the tourism industry.

The mine is 25km from Kono and Messi villages of west coast New Ireland. It is also 40km from the Duke of York Island of East New Britain.

In 2012, PNG decided to issue the world’s first commercial mining licence to Canadian mining company, Nautilus Minerals Inc, to mine the Solwara 1 project in the Bismarck Sea.

The project is expected to be a reality in 2019.

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NAUTILUS IS A RISKY DEAL – SIR ARNOLD AMET

FORMER ATTORNEY GENERAL OF PAPUA NEW GUINEA WARNS POTENTIAL INVESTORS – NAUTILUS IS A RISKY DEAL!

PNG Blogs | October 19, 2017 

PAPUA NEW GUINEA | SIR ARNOLD AMET, FORMER ATTORNEY GENERAL AND MINISTER FOR JUSTICE OF PNG HAS JOINED THE GROWING OPPOSITION AGAINST NAUTILUS MINERALS SOLWARA 1 DEEP SEA MINING PROJECT IN THE BISMARCK SEA.

 “It is understandable that Nautilus shareholders want to protect their own financial interests but new investors should beware – the Solwara 1 project is very high risk” said Sir Amet.

“The muddy puddle at the so-called test site at Motukea Island is not fit for purpose. It will not provide any evidence that these machines won’t malfunction at the intended operating depth of 1.6 km. The hulks are already deteriorating in our tropical conditions.”

Canadian company Nautilus is still desperately seeking funds for its flagship Solwara 1 deep sea mining project. Commercial operation has been delayed year after year since it received its licence to mine the floor of the Bismarck sea in 2011.

In a last ditch bid to finance Solwara 1, Nautilus’s two largest shareholders have now formed a new company whose sole job is to secure funding for the Solwara 1 project [1].

 “Nautilus is not a professional outfit” stated Sir Amet.

“I am concerned that the Papua New Guinean Government has bought a 15% share in a dodgy project, any operating disasters by Nautilus Minerals will quickly translate into an environmental catastrophe for the Bismarck Sea and its communities. The associated financial liabilities will be huge.”

In recent statements the machine operators for the Solwara 1 project voiced their fears about the safety of operating the equipment 1.6 km under the surface and only 25 km off the coast of New Ireland Province [2].

In their Annual information forms lodged with Canadian Securities, Nautilus describes Solwara 1 as an experiment – both the environmental impacts and profits are complete unknown [3]. Nautilus has declined to conduct a preliminary economic assessment, pre-feasibility study or feasibility study – as per conventional industry practice.

 “With this high level of environmental and financial risk, The PNG Government should never have issued Nautilus with its licence. It was issued even though PNG has no legal framework to regulate such a mine and we have no capacity to monitor its impacts. The legal context for the licensing Solwara 1 is highly questionable” continued Sir Amet.

Coastal communities in Papua New Guinea are holding the PNG Government to account. Formal letters have been submitted to the Ministry of Mining and Ministry of Environment and Conservation requesting that key documents relating to the licensing of the Solwara 1 project be made public. They have given the PNG Government until October 18 to respond or face the prospect of legal proceedings [4].

For further information:

Sir Arnold Karibone Amet – ametarnol[at]gmail.com, + 675 72539353.

Peter Bosip, Centre for Environmental Law and Community Rights (CELCoR) – pbosip[at]gmail.com, +675 3234509

Jonathan Mesulam, West Coast Central People of New Ireland – mesulamjonathan[at]gmail.com, +675 70038933

Lucielle Paru, Central Province Pressure Group, NCD and Central Province – lucielle[at]mediterraneanpng.com, +675 70858690

Notes

[1] Nautilus signs funding mandate with major shareholders, Nautilus Minerals press release, October 11 2017, http://www.nautilusminerals.com/irm/PDF/1929_0/Nautilussignsfundingmandatewithmajorshareholders

[2] PNGeans to pioneer new mining technology, Post Courier, 28 September 2017, http://postcourier.com.pg/pngeans-pioneer-new-mining-technology/

[3] See sections on Risk factors in Annual information forms for financial years 2015 and 2016. For example:

“Our operations are speculative due to the high-risk nature of business related to the exploration and acquisition of rights to potential mineable deposits of metals. These risk factors could materially affect the Company’s future results and could cause actual events to differ materially from those described in forward-looking statements relating to our Company.” (FY 2016, p 52)

“… Performance, availability, reliability, maintenance, wear and life of equipment are unknown. There can be no guarantee that sub-sea engineering and recovery systems can be developed or if developed, will be employable in a commercially-viable manner.” (FY 2015, p54)

“… while Company studies have indicated a low likelihood of risk to the aquatic environment from mining activities, the actual impact of any SMS [seafloor massive sulphide] mining operations on the environment has yet to be determined.” (FY 2015, p61)

“Nautilus has not completed and does not intend to complete a preliminary economic assessment, pre-feasibility study or feasibility study before completing the construction and first deployment of the Seafloor Production System at the Solwara 1 Project.”

“No independent Qualified Person has confirmed the amount of these costs or recommended that these costs be incurred. There is significant risk with this approach and no assurance can be given that the Seafloor Production System, if fully funded and completed for deployment at the Solwara 1 Project, will successfully demonstrate that seafloor resource development is commercially viable.” 

(FY 15, p52)

[4] Constitutional Right to Key Documents on Experimental Seabed Mining, Centre for Environmental Law and Community Rights (CELCoR) and Alliance of Solwara Warriors media release, 3 October 2017, http://www.deepseaminingoutofourdepth.org/constitutional-right-to-key-documents-on-experimental-seabed-mining/

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World-first PNG seabed mining project “forges ahead”

Nautilus Minerals' Adam Wright speaks at the PNG petroleum and mining conference in Sydney. (ABC News: Sajithra Nithi)

Nautilus Minerals’ Adam Wright speaks at the PNG petroleum and mining conference in Sydney. (ABC News: Sajithra Nithi)

Sajithra Nithi | ABC News | 10 December 2016

The world’s first project to mine the seabed for minerals is expected to begin operations in Papua New Guinea in early 2019.

Nautilus Minerals is the Canadian company in charge of the Solwara 1 project, which will see copper and gold deposits mined from the seafloor at a depth of 1,600 metres, 30 kilometres off PNG’s New Ireland Province in the Bismarck Sea.

A few months ago, Nautilus reported funding issues for Solwara 1.

Adam Wright, vice-president of PNG operations for Nautilus, said the global oil and iron ore price had an impact on some shareholders, who have now put in a bridging finance facility for the project.

Speaking at a conference about mining in PNG, he said a big incentive for mining the seabed is the higher concentration — or grade — of the metal deposits.

“The grades of the Solwara 1 deposits [are] 7.2 per cent copper. If you look at the average grades of copper in terrestrial copper mines, it’s now less than 0.7 per cent copper,” Mr Wright said.

“Yes, you can still find copper on land, but as grades fall you’re going to have to clear more land … relocate more communities, you’re going to have to store more tailings, you have to dispose of more waste … accessing an ever-decreasing resource with ever-increasing costs.”

Solwara 1 is being developed in a joint venture with state entity Kumul Minerals Holdings.

The plan to mine the seafloor has raised concerns about the possible effects on the environment.

In July, PNG’s former attorney-general Sir Arnold Amet joined the campaign against Solwara 1, calling it a “Papua New Guinea-pig” experiment.

He said the licence was issued even though PNG has no national policy on deep sea mining nor an appropriate legal framework to regulate such operations.

However, Mr Wright from Nautilus said the company submitted an environmental impact study to PNG’s Conservation and Environment Protection Authority (CEPA), which was then independently verified.

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Lutherans Walk 9 days Across Highlands Region Campaigning Against Experimental Seabed Mining

lutherans-esm-awareness

Rachel Shisei | EMTV News | 23 November 2016

It took 9 days and an estimated total of 261 kilometres, for a group of Lutherans, to walk four Highlands provinces.

Their outreach awareness focused on the issues affecting ‘God’s creations’, or the natural resources in the country. The campaign specifically aimed at the Experimental Seabed Mining project, the only kind in the world licensed by the government, to operate in the country.

“We are not in favor of this ‘experimental’ seabed mining project to happen in the country, so we’re including and doing awareness in our outreach. If we don’t do it, who else will?” said Pastor Matei Ibak, the Lutheran Youth Bible Study Master.

Ibak said, despite speaking about the ‘sea’ to people of the Highlands provinces; most people were in tears when the youth group from Karkar Island performed dramas and songs, expressing the importance of the sea to their livelihood, and country as a whole. This, he said, is a sign that people agree, that things are going the wrong way and may become worse, if nothing is done in time.

Former Chief Justice, a Karkar Islander and a Lutheran churchgoer himself, Sir Arnold Amet weighed in on the issue saying that in terms of awareness, the government has a lot more work to do to help the people understand the environmental; biological; and oceanographic impacts that the mining activity can have on the sea once disturbed.

“The potential impact upon the sea life is still uncertain so I am expressing the view against the project from continuing until those issues are fully explained to the people.

Sir Amet said, it is very vital that for such projects, the whole government, regardless of the various departments and levels of government, should unite and respond in accordance.

“There’s a lack of united response that results in many issues remaining outstanding until disasters strike,” said Sir Amet.

Pastor Ibak pointed out, that their awareness is not based only on the Lutheran faith, but promoting Christianity as a whole in the country; that in the beginning God created the earth, and gave man his first duty to look after the land and everything on it.

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Sir Arnold Amet urges govt to call off Papua New Guinea-pig mining experiment

ASW-vs-Nautilus

ABC News

Former PNG Attorney General and Minister for Justice, Sir Arnold Amet, has joined the campaign against Solwara 1, the deep sea mining project in the Bismarck Sea off New Ireland province which is due to start operations in 2018.

He has accused the Mining Minister, Byron Chan, of granting the Canadian company Nautilus Minerals a world first licence to conduct what he calls a Papua New Guinea-pig experiment.

Sir Arnold says the licence was issued even though PNG has no national policy on deep sea mining nor an appropriate legal framework to regulate such operations, and against that background the project should not proceed.

Listen to the full interview

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