Tag Archives: Australia

MP upset at Australian advisors in Bougainville

A lake in the pit of the long defunct Panguna mine in Bougainville. Photo: www.travelinspired.co.nz

Radio New Zealand | 23 August 2018

An MP in the autonomous Bougainville parliament says Australian aid to the region is being used to jockey for position ahead of the vote on possible independence.

Bougainville is due to vote next year on whether to remain part of Papua New Guinea or choose independence.

Donor nations have started increasing their support but MP Joseph Watawi is taking issue with Australia sending in teams of advisers, without consultation.

He says the advisers are there to gain political power and influence for Australia when what Bougainville needs are nurses, doctors and engineers.

Mr Watawi told Don Wiseman he thinks the Australian assistance is focused on the possible re-emergence of the former Australian owned mining company, Bougainville Copper Ltd – the company which sparked the Bougainville crisis.


JOSEPH WATAWI: So rather than Australia trying to get back here under the cover of BCL, to re-open the mine, I think it is a fair thing for them to seriously look at how they can provide some form of redress to the people of Bougainville through supporting the current, ongoing reconciliation process in Bougainville. That’s what I see it is currently lacking.  

DON WISEMAN: You have been critical of Australia sending in advisers but the truth is isn’t it, that the ABG – the Bougainville government – still needs advice. It hasn’t got a lot of the capacity it needs if it is going to get itself organised for this vote.  

JW: So called advisors, which have flooded the Bougainville administration, I think some of these are absolutely unnecessary. Only on areas which we think we need critical advice then we should be able employ people that we identify and people that might come from Australia, but there are other places. In PNG we also have a lot of retired public servants who may be able to engage in terms of  providing capacity in whatever administrative area that we think we need and require that kind of advice. I don’t see a wholesale advisory capacity that should come from retired Australia. It is like Australian aid is being given to Bougainville and we take it on the right hand and they take it back on the left hand. So it really doesn’t make any sense.

DW: When you say unnecessary advisors, what are you thinking of?

JW: Well in areas where we think it is necessary that we should have some advisers, then we should engage people in those areas that must be identified in terms of strategic advice in what ever areas. For example in terms of growing the economy, I think it is an area we think we can probably need some expertise in giving us some rough forecast on what they think the economy will be like in the next ten years down the road. So these are some of the areas I think we could be able to take on advice, but anything else, in terms of weapons disposal – what do they know about weapons disposal when we own the weapons here, and we think we had ways and means to deal with people who are holding onto weapons.

DW: The New Zealand government has also stepped up its involvement and I see from a press release you have put out that you are quite happy with what New Zealand is doing. So what is the difference between what New Zealand is doing and what Australia is doing?

JW: New Zealand I think, because they are also based with the culture of the Maori people and I think they know how to deal with the indigenous people and the manner in which they offer their support and assistance, particularly on the policing service, I see the role New Zealand plays also involves some kind of customary, cultural relationship that sort of enhances the manner and the attitude they are offering the kind of advice and support, in terms of capacity for Bougainville, and that’s the difference I see. 

DW: There are discussions around restarting mining on Bougainville, and BCL is one of those, but it is not of course an Australian company anymore is it? You have tied this Australian involvement into a possible return of BCL but BCL is now owned by Bougainville and the PNG governments, isn’t it?

JW: The sale by Rio Tinto to the PNG government and the ABG was a rush job, and I think it was just a way out, of Rio Tinto not willing to address the legacy issues in terms of the environmental damages and all of these other things that they had created while operating the Panguna mine. And not only that but even they wanted to basically pass on some of these liabilities to the ABG. I think Rio Tinto on that note basically, just acting, like, you know, we don’t want to know what happened to you guys. We picked up the wealth and whatnot from your ground, and therefore we do not to come and recognise the difficulties you are suffering, the pain the people have gone through. From my observation and analysis this is very unfair.    


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Former Mine Staff Make Call-Out

Mount Kare mine workers have been abandoned

Post Courier | June 25 2018

Former employees of Summit Development Limited (SDL) are calling on the company to settle their outstanding payments.

Kenneth Cornelius, a former employee representing those affected, said they were laid off in 2014 when the company’s license was cancelled and were eventually terminated without proper settlement. The prolonged delay in settling the outstanding debts due to license refusal and lengthy court processes had extremely affected their families and beneficiaries.

“We, the representatives of former national hire employees, contractors and consultants of Summit Development, a subsidiary of Indochine Mining Limited (IDC) in Australia, have been very silent and patient for more than three years when Summit Development Ltd pursued its license renewal and their judicial review court case in relation to the cancellation of their exploration license 1093,” Mr Cornelius said.

“Without even settling our outstanding debts, our employment contracts with SDL were unmercifully terminated on March 2016. Upon issuing our termination notices, we were only assured by the company management that our outstanding debts and bills will be settled in full once the exploration license EL 1093 is renewed.

“As members of the Mt Kare Project technical team, we have successfully delivered very important achievements for the project, especially the land investigation study, land investigation report, customary land surveys, pre-feasibility studies and land mediation,” Mr Cornelius said.

He said the exploration license renewal was not a condition of their employment contracts with SDL and should not be given as an excuse for not settling them. Around 120 employees, consultants and services providers are affected.

“The National Court Judge Leka Nablu had handed down her final judgment ruling in favour of the former mining minister and State on April 27, 2018, which is not to renew SDL license. Thus we strongly demand that Indochine mining company management voluntarily settle us before they can pursue their judicial review appeal at the Supreme Court,” he said.

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Mines Need To Be Closely Scrutinised says Australian Govt

Matthew Vari | Post Courier | June 6, 2018

Despite much of the discussion coming out from a concerned mining industry over the review of the Mining Act 1992, there is need for Papua New Guinea to use its resources to its best advantage.

Considering the large portfolio of Australian mining companies investing in the PNG mining sector, Australian assistant Minister for Trade, Investment and Tourism Mark Coulton was asked if the Australian industry had approached his ministry with their concerns to be raised to the PNG government.

While Mr Coulton said there was no such request, nor was he fully aware of the particular concerns of the review, he reiterated from a government standpoint that scrutiny in the mining industry was in the best interest of the country whose resources were being developed.

“I don’t think scrutiny with mining hurts, mines can bring great benefit but they certainly need to be closely watched because there is potential to damage of the environment,” Mr Coulton said.

He said as a partner, Australia could help with formulating agreements with resource owners to ensure effective benefits take place.

“There is always a balance and modern technology means there is much a lesser issue than it used to be.”

“I think some of the future developments where Australia can help with maybe local people in helping with the sort of agreements that might bring benefits.”

“The feeling that being a part owner of a mine would be a benefit to local communities but maybe it’s more beneficial to communities if they had an offtake agreement where a percentage of the royalties went to the local people rather than the ownership of the company.”

“I am a believer and we should use our natural resources sustainably, but correct me, if PNG has these wonderful resources they need to use them to the best of their advantage,” Mr Coulton said.

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PNG miners to present in Sydney

Drilling at Edie Creek

RAPID-FIRE presentations by four companies with interests in Papua New Guinea will be delivered in Australia on Thursday at the inaugural ResourceStocks Sydney conference.

PNG Industry News | 14 May 2018

Kingston Resources is first up at 11.45am, followed by Geopacific Resources, Kalia and Niuminco Group. Each company has a 15-minute slot at the event, which is to be held at the SMC Conference and Function Centre over two days, May 16 and 17.

• Kingston Resources has the advanced exploration Misima gold project which has 2.8 million ounce resource which Kingston aims increase. Misima Island is 625km east of Port Moresby in the Solomon Sea and was operated as an open pit gold mine from 1989 to 2004, producing 3.7Moz gold at an average cost of $218/oz. Kingston owns 49% of Misima and is earning in to 70% and the joint venture partner PPC, is owned by JX Nippon Metals and Mining (66%), and Mitsui Mining and Smelting (34%).

• Geopacific Resources has the advanced exploration Woodlark Island gold project in Milne Bay Province. Geopacific recently released a prefeasibility study on the project which indicated that Woodlark has the potential to be a robust, low-cost, low-stripping ratio open pit operation that can deliver an average of 100,000 ounces of gold per annum over 10 years. Highlights of the study include: an initial head grade of 1.63 grams per tonne gold; an all-in sustaining cost of $A990 per ounce for the first five years and $A1110/oz over the life of mine; capital cost of $A180 million; and a reserve of 34.7 million tonnes at 0.99gpt gold containing more than 1.1 million ounces.

• Kalia describes itself as an exploration company targeting energy metals across a range of mineralisation styles – and one of the company’s areas of interest is Bougainville Island. Kalia says that from the preliminary work completed, including the re-processing of the data collected in 1986 by Fathom Geophysics and the analysis of raw data from other studies, sufficient sites have been identified to begin exploration. 

• Niuminco Group has the brownfields Edie Creek gold project in Morobe Province 120km south of Lae. The mining leases cover nearly four square kilometres and lie in a valley between high slopes. Since becoming involved in the Edie Creek project, Niuminco has upgraded existing buildings and power supplies and constructed service roads in the lease area. Edie Creek ore is currently being processed at an average 15.0 tonnes per day – an increase from the previous 12 month averages of 6.4tpd. With new infrastructure purchased, it is anticipated Edie Creek will scale up to run at more than 40tpd – a three-times increase over recent production rates (13 to 15tpd).

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PNG gas project may spark ‘new civil war’

Armed clansmen in the town of Komo in Papua New Guinea’s Hela Province. Photo – Michael Main.

Australian Associated Press | 10 May 2018

A new report on a partly Australian-funded Papua New Guinea gas project warns landowner discontent could “spiral out of control”.

A partly Australian-funded liquefied natural gas project in Papua New Guinea’s southern highlands has the hallmarks of another Bougainville civil war, a new report warns.

The ExxonMobil-led project, which attracted a half billion dollar Australian government loan in 2009, supplies eight million tonnes of gas a year to Japan, South Korea and China.

Despite gas flowing since 2014, landowners in Hela province are yet to receive royalty payments, resulting in escalating tensions, tribal violence, incidents of hostage-taking, blockades and sabotage.

A new report from Australian think tank Jubilee Australia warns there are risks landowner discontent could “spiral out of control” and might force the PNG government into a military crackdown.

“The build-up of arms has accelerated to a pointed where it is often speculated that the landowners are in possession of more firepower than the entire PNG defence force,” the report says.

Between 1987-1997, 20,000 people died in a civil war between PNG and its Bougainville province. Panguna, one of the world’s largest copper and gold mines, sparked the conflict.

“The PNG state lost its war with Bougainville against a population that began the war armed only with bows and arrows,” the report says.

“In Hela, the population is far more numerous and heavily armed with weaponry that is increasing in sophistication and firepower by the day.”

The report is scathing of undelivered infrastructure projects resource companies promised landowners including roads, airports, hospitals, housing and sewerage projects.

Report author Michael Main, who spent seven months on the ground in Hela province, said the vast majority had not been built. A few were incomplete or not maintained properly or were white elephants.

He pointed to the Komo hospital, which has no equipment, staff, fuel for its generator, or beds.

“Tari airport does not even have a security fence, and on one occasion the author was required to chase away a cow that had wandered on to the airstrip, away from the Air Niugini plane that was coming in to land,” the report said.

The gas project was partially funded by Australia after the export credit agency Efic made its largest-ever loan of $500 million to ExxonMobil, OilSearch, Santos and the PNG government in 2009.

The report is critical of the due diligence undertaken by consultants paid for by ExxonMobil.

It calls for a full Senate inquiry.

Last month, Jubilee Australia released another report which concluded the touted economic boom from the project had not eventuated and the PNG people would have been better off if it hadn’t gone ahead.

PNG Prime Minister Peter O’Neill dismissed the report as fake news, despite admitting he hadn’t read it, while some of his ministers acknowledged the government had some lessons to learn.

Comment has been sought from ExxonMobil and the PNG government.

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Australian-backed gas project fails to deliver PNG economic boom – report

A boy walks on the ExxonMobil pipe in Papua New Guinea. Jubilee Australia says projects like these need greater accountability in their economic modelling. Photograph: Ian Shearn

Study shows PNG would have been better off if massive ExxonMobil-led project had never happened

Christopher Knaus and Helen Davidson | The Guardian | 29 April 2018 

The massive ExxonMobil-led liquid natural gas project in Papua New Guinea, backed by a $500m Australian government loan, has failed to deliver on a promised economic boom for the country a new report has found.

The PNG people would have been better off if the project had never happened, according to the analysis, commissioned by research group Jubilee Australia.

The US$19bn project has been supplying LNG to Japan, South Korea, and China since 2014, using gas production and processing facilities connected by 700km of onshore and offshore pipeline across PNG.

The project, owned by an Exxon-led joint venture, was strongly backed by the Australian government through the largest loan ever provided by the nation’s export credit agency.

The $500m loan from Australia’s Export Finance and Insurance Corporation (Efic) was made with two chief aims: to help Australian exporters win contracts in the project’s construction phase; and to potentially add “considerably to PNG’s economic growth”.

But the Jubilee report found that while the project had been a “remarkable technical success”, with export gains exceeding expectations, the promised economic windfall has failed to materialise for PNG people.

The report author, Paul Flanagan, a former senior Australian treasury official, found that overall, the PNG economy had grown by 10% – far less than the near-doubling of GDP predicted in Exxon-commissioned modelling produced in 2008 by the strategy consultants, Acil Tasman (now Acil Allen).

That same modelling, which has been removed from the ExxonMobil website, predicted the project would help drive significant growth in other areas of the economy, but the reality has been quite different. The report found:

  • instead of household income increasing by a predicted 85%, it fell by 6%.
  • instead of employment increasing by 42%, it fell by 27%
  • instead of government expenditure to support education, health, law and order, and infrastructure increasing by an estimated 85%, it fell by 32%
  • instead of imports increasing by a predicted 58%, they fell 73%

“On every other measure of economic welfare (household incomes, employment, government expenditure, imports and every non-resource sector of the economy), the PNG economy currently would have been better off without the PNG LNG project, often drastically so,” wrote Flanagan.

Separately the project has consistently sparked security concerns, with the Highlands region’s notorious tribal violence as well as local landowner anger directed at the project over alleged non-payment of royalties.

The Jubilee report made several recommendations to the Australian government, including the development of a code of conduct for economic modelling.

Dr Luke Fletcher, executive director of Jubilee said there was little to no transparency about what assumptions were made by economic modellers hired by resource firms proposing large-scale projects. Fletcher said the problem wasn’t just restricted to PNG but occurred across Australia.

“It’s about transparency about how these models are conducted, but also accountability when the models turn out to be bogus or problematic,” he said.

ExxonMobil did not respond to questions about the Jubilee report.

Efic was asked detailed questions about the economic outcomes of the project. A spokesman said Efic “takes steps to ensure that all transactions that it enters into comply with relevant laws and regulations, and Efic transaction documentation contains provisions to this effect”.

Guardian Australia made attempts to obtain due diligence reports on how it assessed and approved the loan, however Efic refused to provide the reports on the basis of a special exemption contained in freedom of information laws.

The funding of the PNG LNG project was “the biggest decision Efic ever made,” said Fletcher.

“The argument we’re making is that this is a decision which had a huge impact on the economy of a country of six million people,” he said.

“These decisions have huge consequences, not just for particular communities but in this case for an entire nation. There needs to be more of a public discussion about what taxpayer money is going towards.”

Fletcher noted the broad exemptions Efic had from freedom of information laws.

“Given what we’ve seen in PNG … there’s just no way for there to be accountability unless we’re able to understand its decision making. Unless it’s releasing its decision-making and benchmarking its due diligence, there is no way we can hold them to account.”

Fletcher said the report estimated the PNG government should have collected around 1.4bn kina (AU$567.8m) in revenue but was instead collecting about 500,000 kina (AU$203,000).

While this shortfall was likely “a combination of generous fiscal terms and aggressive taxation tactics by the companies”, Fletcher said, there were also concerns about the government management of what was collected.

“The resource curse is a well established phenomenon where you get a huge resource boost to a relatively undeveloped economy and despite what you’d expect the economy doesn’t do well,” he said.

A 2017 analysis by the Lowy Institute found that from 2003 to 2011 PNG experienced “comparatively healthy macroeconomic conditions”, including a “major boost” to the domestic economy from the LNG project’s construction phase.

“However, from 2012, fiscal policy settings began to deteriorate and the budget deficit increased markedly,” the Lowy report said, adding that while the end of the commodity price boom was a factor, so too were expansionary fiscal policies adopted by the PNG government.

Fletcher said profligate spending during the construction phase, weak central institutions like the sovereign wealth fund and central bank, and poor management of the exchange rate which hit non-resource sectors hard, were all potential contributors to the dramatic economic decline.

“This is exactly what happens when a country goes down this path – it puts all its focus and belief that resources are going to solve everything,” said Fletcher.

“This is not just a PNG problem, Australia in many ways could be seen to be cheerleading, not just with Efic but in encouraging PNG down this path, with an unique belief that big resource projects can solve anything.”

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Tensions in Temotu as expiry of Aus miner’s licenses loom

NASA picture of Nende, known also as Santa Cruz, in Solomon Islands’ Temotu province. Photo: NASA

Radio New Zealand | 15 March 2018 

Tensions are rising in Temotu as an Australian miner’s licences to prospect and operate in the Solomon Islands’ province approach their expiry date.

Pacific Bauxite secured a prospecting license in 2016 with the support of some local landowners and obtained a provincial business license, after a change in the local government, to begin working on Nende Island.

But it has met with stiff opposition from other landowning groups who accuse the company of operating illegally and are trying to take it to court.

Koroi Hawkins has more – audio link 

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