Tag Archives: Australia

Frieda river mining companies involved in internal war

The Chinese are fighting to get three Highlands Pacific directors off the PanAust board

The Chinese are fighting to get three Highlands Pacific directors, including Chairman Ken MacDonald off the PanAust board

Australian mining company Highlands Pacific is involved in a war with Chinese state-owned Guangdong Rising Assets Management (GRAM), over the future of the Frieda River mine. Highlands Pacific owns 20% of the proposed Frieda River mine through the joint venture company, PanAust. The Chinese own 80%.

Highlands Pacific has accused the Chinese of failing to complete the Frieda River mine feasibility study to the required standard. GRAM has responded by trying to throw three Highlands Pacific executives off the PanAust board… none of which bodes well for the future of the mine or the people of the Sepik…

HPL members asked to resign

Post Courier | February 17, 2017

REQUESTS by PanAust to Highlands Pacific Limited(HPL) for the resignation of three of its board directors have not gone down well. PanAust made the demand, in a notice it issued to HPL also seeking a special meeting be convened. PanAust, is a subsidiary of Chinese state-owned-enterprise, Guangdong Rising Assets Management Co Ltd (GRAM). PanAust holds 13.9 percent of HPL, and is a joint venture partner in the proposed Frieda River project.

The appointees PanAust is seeking to remove are Highlands Pacific’s Ken MacDonald (chairman), Ron Douglas (director), Mike Carroll and Dan Wood (independent director) and they be replaced with three nominees from GRAM. However, HPL on Tuesday had urged its shareholders, no action, stating it to be the strong view of the company that the replacement of four of the existing five non-executive board members with the PanAust nominees would not be in the interests of the other shareholders, who number over 7,500.

HPL said the PanAust proposal effectively would amount to a takeover of HPL without offering to acquire any shares, let alone with an appropriate premium.

“It is clear that a PanAust-dominated board would be at risk of operating in the interests of GRAM, rather than in the interests of all of our shareholders,” Mr MacDonald said.

“It is important for shareholders to be aware that HPL is currently in dispute with PanAust regarding the funding and methods of progressing the Frieda River project.

“HPL remains of the view that the PanAust approach to the project is suboptimal, and we have been urging it to adopt a different course of development that would generate better returns and reduced risks for our 7,500 shareholders.

“It also is our view that PanAust has failed to complete the Frieda River feasibility study to the standard required under the joint venture agreement,” Mr MacDonald said.

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St Barbara and PNG Industry News airbrush history

St Barbara may be repaying its debts to the bank, but what about its debts to the people of the Solomon Islands, who have been abandoned by St Barbara and left with an environmental disaster on their doorstep – a decision condemned as ‘immoral’ by the Solomon Islands Environment Ministry – Australian real estate investor circles Solomons ‘disaster’ gold mine

St Barbara repays last of debt

Simberi Gold Mine

Simberi Gold Mine

DIVIDENDS and acquisitions are well and truly likely for St Barbara after the gold miner repaid the last of its $US20 million debt.

PNG Industry News | 15 February 2017

The company will repurchase the final $20 million in aggregate principal of its US senior secured notes next months at a 3.3% premium to par value.

The repurchase will reduce future interest expense by around $A2.4 million per annum.

The repurchase, to amount to $US21 million, will be repaid from cash reserves.

St Barbara, which operates the Simberi gold mine in Papua New Guinea’s New Ireland Province, expects cash after the repurchase to be around $A70 million.

In the past 18 months, St Barbara has repaid $436 million in debt and will have only equipment leases of less than $1 million outstanding after the final note repurchase.

St Barbara managing director and CEO Bob Vassie said the repayment of the debt would inform the board’s consideration of future dividends in conjunction with growth options.

The company plans to internally fund the $85-95 million Gwalia extension project.

“We can afford our future at Gwalia,” Vassie told the Sydney Mining Club earlier this month.

While he described Gwalia as the “gift that goes on giving”, he noted that the company was very reliant on the Leonora operation.

Vassie said the company was keen to add another 250,000 ounce per annum, long-life mine, and would now be able to take advantage of value-accretive opportunities as they arose.

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Filed under Environmental impact, Financial returns, Papua New Guinea, Solomon Islands

PNG Power Limited adamant that No Power Purchase Agreement was signed with coal miner, Mayur Resources

png-power-limited

“PPL is approaching the proposal with caution amidst environmental concerns because such an agreement for coal-fired power stations would put Papua New Guinea in violation of international agreements including the Kyoto Protocol and the recent Paris COP 21 Agreement”.

EMTV News | 24 November 2016

PNG Power Ltd has confirmed that it has not signed any Power Purchase Agreement with Mayur Resources to build coal-fired power plants in Lae, Morobe Province.

The state enterprise added that it had only received an unsolicited proposal from the Australian company to build a coal-fired power plant.

PPL Chief Executive Officer, Chris Bais said that The National Newspaper had misreported on Wednesday November 23 that a Power Purchase Agreement had been signed between PPL and Mayur.

“The proposal is currently under an assessment stage as our technical teams need to ascertain its technical and financial viability. It has not gone to power purchase agreement discussion stage yet.

“PPL is approaching the proposal with caution amidst environmental concerns because such an agreement for coal-fired power stations would put Papua New Guinea in violation of international agreements including the Kyoto Protocol and the recent Paris COP 21 Agreement”.

Mr Bais goes on to say that PPL is conscious of the fact that there are agreements in place with regards to renewable energy and carbon emissions which the PNG Government is party to.

“We are also discussing with relevant government stakeholders about this matter and will make a decision going forward,” assured Bais.

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St Barbara retains PNG assets, forms exploration JV with Newcrest

simberi

Simberi island

Esmarie Swanepoel | Mining Weekly | 14 November 2016

Gold miner St Barbara Gold has decided to retain its Simberi operations, in Papua New Guinea, following a strategic review.

The company in February this year launched the review to evaluate “various options” for the assets, including continued ownership, exploration and development, possible joint ventures and divestment of some or all of its assets in the country.

St Barbara said on Monday that while a number of potential buyers had expressed interest in the Papua New Guinea assets, their level of interest did not meet the company’s assessment of the value of the assets.

Instead, the company has inked an option and farm-in agreement with gold miner Newcrest’s Papua New Guinea exploration arm, for copper/gold porphyry exploration on the tenements on nearby Tatau and Big Tabar Island, subject to the completion of conditions precedent.

The agreement gives Newcrest the option to earn a 75% joint venture interest on tenement holdings, and will require Newcrest to pay an initial $3-million in exploration fees over a two-year option period, conducting 4 000 m of diamond drilling.

The company can then earn a majority share in the projectareas by spending a further $25-million in exploration and drilling 32 000 m of diamond drilling, over two stages ranging up to six years.

Under the agreement, St Barbara will manage the explorationduring the initial earn-in period, and will retain the right over all oxide and sulphide material which is, or has the potential to be mill feed for existing oxide or the contemplated sulphide plant at Simberi.

In addition, St Barbara will spend between A$6-million and A$7-million in 2017 on its own exploration across the Tabar Island group, including Simberi.

MD and CEO Bob Vassie told shareholders on Monday that the strategic review had been rigorous, and that the company had tested each strategic option for the future of the Papua New Guinea assets.

“What we own in the Papua New Guinea would be difficult to replace in the current market. St Barbara’s diligent work over the last few years has successfully turned around the Simberi operation, which is now consistently generating good cash flows.

“The prospectivity of the region, and the potential for exploration discovery on the Tabar Island group is demonstrated by the significant option and farm-in agreements with Newcrest.”

Vassie said that the gold miner’s focus was on continuing exploration work to extend the oxide mine life at Simberi, improve the sulphide opportunity, maximise the value from exploration interest, and work with Newcrest to achieve success from the joint exploration

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Renewables better alternative than coal for PNG

coal

Dateline Pacific | Radio New Zealand | 14 November 2016

A group campaigning against investment in coal in Papua New Guinea says renewable energy sources are a better alternative.

There are signs of a move towards coal-powered energy in PNG with the Mineral Resources department this year directing ten million kina towards exploring the sector.

However, plans for a coal-fired power plant in Lae are yet to meet approval from the Morobe provincial administration or PNG Power.

Chris Lahberger from the Nogat Coal PNG group talked to Johnny Blades about his group’s concerns.

CHRIS LAHBERGER: Firstly, there’s the issue of climate change where the new just keeps getting worse, and Papua New Guinea itself has some of the first refugees in the world from climate change with the Carteret Islanders in Bougainville having to be relocated. So there’s that and also the prospect of building a coal-fired power plant right in downtown Lae. The Lae wharf area is literally seven hundred metres from the Lae CBD. This doesn’t happen anywhere else in the world where you build a coal (plant) right in the middle of an urban area. So we think there’s definitely some health issues there. We’ve seen some good support from the people at the PNG Cancer Foundation. They acknowledge there’s a big risk there if they built coal powered fumes in the middle of Lae.

JOHNNY BLADES: There’s a company or two who have got quite significant interests in looking into this in the Papua basin, in the Gulf and elsewhere right?

CL: Yeah that’s right. There’s really no need for PNG to invest in coal. There are huge resources for renewable energy here. We’re situated in location on the equator where we get very strong trade winds for nine, ten months of the year that would be awesome for wind power. And obviously, we’re close to the equator so there’s massive resources for solar (power); and we have very high mountains and big rivers, so we have hydro resources, some of which have already been tapped but really, we’ve only just scratched the surface of hydro. We could just about provide enough hydro to power the entire country and much of the Australian east coast seaboard as well if we had the right infrastructure in place. So if I hear we need coal for energy, I don’t think that’s right. The only real reason why you’d invest in coal right now would be to make some economic headway out of it, try to turn it into an export market and make some sales in the global coal market. But as we’ve seen on the global coal market, the price is pretty low. A lot of countries now are transitioning away from coal and they’re looking into renewables. So I can see the risk in the future that to invest in coal now you wouldn’t necessarily get the returns that you’d think you’d get.

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Fishing companies and NGOs call for moratorium on bulk sediment seabed mining in South Africa

phospahate-mining-south-africa

Kim Cloete | Mining Weekly | 13 October 2016

The Responsible Fisheries Alliance (RFA), which comprises five major fishing companies and two nongovernmental organisations, is calling for a moratorium on all new and existing prospecting and mining applications related to bulk sediment seabed mining.

This follows the release of a new report commissioned by the Centre for Environmental Rights (CER), which found that prospecting rights granted to three phosphate mining companies over the past five years are in an area that overlaps with a significant part of South Africa’s largest fisheries.

Therefore, RFA members The World Wide Fund for Nature –South Africa and BirdLife South Africa, together with Irvin & Johnson, the Oceana Group, Sea Harvest, Viking Fishing and Pioneer Fishing, have made the call to halt the mining of phosphate minerals, which are dredged from the ocean floor and used for fertiliser.

The RFA believes that, in the absence of sufficient research on the potential impacts of bulk sediment seabed mining, there is no option but a moratorium. It also highlights that a lack of information on the environmental impact of bulk seabed mineral extraction has prompted authorities to enforce moratoria on the practice in Namibia, Australia and New Zealand.

The RFA has, therefore, urged government to follow international best practice and to adopt a precautionary approach in South Africa, adding that seabed mining should not be allowed until the government has done an in-depth study and analysis of the overlap between fishery grounds and prospecting application areas. Environmental assessments also need to be undertaken.

Bulk sediment seabed mining involves dredging and removing sediment on the sea floor, which could permanently destroy marine habitats and the breeding, spawning and feeding areas of fish stocks.

Research undertaken by the University of Cape Town’s (UCT‘s) Environmental Policy Research Unit, under the aegis of the CER, has found that the prospecting areas and proposed drill sites coincide with 77% of the offshore hake trawl footprint and one of the primary fishing grounds of the small pelagic fishery.

South Africa’s fishing industry has a wholesale value of between R6-billion and R8-billion. In 2015, exports of fish products generated R5.3-billion in revenue for the country.

The commercial fishing industry creates about 27 000 direct and 100 000 indirect jobs in South Africa. In contrast, the CER says bulk marine sediment mining would create only 40 to 50 jobs per mining vessel, of which many are temporary. 

Similarly, a proposed marine phosphate mining project in Namibia – Sandpiper – which aimed to dredge 5.5-million tons of sediment a year, would have only provided about 135 permanent jobs.

While prospecting licence holders argue that there is an impending shortage of phosphate for agricultural processes, the RFA says an additional study by UCT indicates that there is no shortage in South Africa.

“There is good reason to believe that the phosphate mined [will be] a huge cost to South African oceans [and] will simply be exported for profit,” said coalition spokesperson Saul Roux.

“The health of our country, people and environment and, therefore, our economy, depends on the health of the ocean. The potential risks of bulk marine sediment mining to our marine ecosystems and renewable industries, such as fishing, are simply too great. The proposal to dredge our seabed should not be allowed to proceed unchecked,” said Roux.

The group made its call during National Marine Week, which ran from October 10 to 14. 

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Only 5% of oil and gas companies operating in Australia pay resource tax

lng-australia

LNG projects are at the heart of a “fossil-fuelled rort”

Heath Aston | Sydney Morning Herald | 11 October 2016

Just five per cent of oil and gas projects operating in Australia are paying anything towards the Federal Government’s royalty-like scheme designed to share the wealth generated by the nation’s resources with the public that owns them.

As pressure builds for a parliamentary inquiry into the petroleum resource rent tax, Fairfax Media can reveal that just eight out of 149 resource projects currently generating revenue contributed a cent in PRRT in 2014-15.

The Australian Tax Office is concerned that the petroleum resource rent tax will not deliver anything over time. 

The as-yet-unpublished figures from the Australian Tax Office will add to concerns by some academics and tax transparency campaigners that Australians are being short-changed by the boom in liquified natural gas exports.

On Monday, the Greens backed a parliamentary inquiry into what Senator Larissa Waters called a “fossil-fuelled rort” while Treasurer Scott Morrison hinted at some concern within government.

“The Treasurer will continue to take advice on sensitive tax matters such as this,” said a spokesman.

ATO data shows the oil and gas industry, which is now dominated by multinational-operated LNG projects off the Western Australian coast and Queensland’s coal seam gas sector, had revenues of $25 billion last year.

But the design of the PRRT, which is a rent based on super-profits rather than a flat royalty, allows companies to write off exploration and other capital costs against revenue before being forced to pay any PRRT.

The ATO figures shows the total “carry-forward expenditure” of the industry has risen to $187 billion. Effectively, that means the sector can pocket sales of $187 billion before being forced to pay any PRRT.

Resource tax experts like Diane Kraal, a senior lecturer at Monash University, say the picture is worse because generous “uplift rates” like the 18 per cent rate applied to exploration costs mean carry-forward expenditure grows by that percentage every year that they are not used against revenue.

According to the ATO, total carry-forward expenditure grew sharply from $128 billion in 2012-13.

Ms Kraal has warned that the PRRT will not deliver any significant revenue “in her lifetime” if its design is not overhauled.

On Monday, Fairfax Media revealed that Qatar, which will lose its crown as the world’s biggest LNG exporter to Australia in 2020, will receive $26.6 billion from its LNG sector in that year.

Treasury forecasts Australia to receive less than $1 billion in PRRT in 2020.

Oil and gas peak body, the Australian Petroleum Production & Exploration Association, defended the industry on Tuesday, saying “PRRT was never intended to be paid by all projects at all times”.

“It is a super-profits tax so it only applies when projects achieve super-profits,” said APPEA chief executive Dr Malcolm Roberts.

“The PRRT is just one of many taxes paid by the industry. The combination of company tax, state and federal royalties and the PRRT adds up to more than 50 cents in every dollar of profit.

“Taking all these taxes into account, the oil and gas industry pays the highest effective tax rate of any industry in Australia.”

In October last year, Chevron, the US-owned company that owns Gorgon, the world’s largest LNG plant, which is located in Commonwealth waters off WA, was hit with a $300 million bill by the Federal Court for tax avoidance.

When it sought approval for Gorgon and sister project Wheatstone, Chevron promised it would contribute “$338 billion to Federal Government revenue” by 2040.

Asked whether this was guaranteed, Mr Roberts said: “The revenue to government from any project will depend on market conditions over the life of the project – when commodity prices rebound, government revenues will benefit.”

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