Tag Archives: Australia

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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Adani’s Australian Coal Mine in Trouble as Chinese Banks Refuse Loans

Image Courtesy: Tracey Nearmy/AAP

The proposed $22 billion project will have destructive impact on environment, including the Great Barrier Reef.

Newsclick | 6 December 2017

With three Chinese banks announcing that they will not be financing Adani group’s controversial Carmichael mine in Queensland, Australia, the mining giant’s ambitious project – worth $21.7 billion – appears to be doomed. Earlier this year, Australian banks had backed out of financing the project. Adani Mining is facing a financial crunch as 24 banks around the world have earlier refused to finance its mining ventures in Australia.

Adani’s extravagant expansion into Australian mining seems to be dogged by accusations of crony capitalism and destruction of environment, very similar to the ones in India for his Mundra SEZ project and mining activities. The opposition in Australia however has taken on a much more widespread scale.

Recently, Australian journalists who visited Mundra in Gujarat to study Adani Group’s activities were harassed by local police, presumably at the behest of powers that be.

The Carmichael mine has drawn the ire of Australians ever since Adani bought it in 2010. A recent survey showed that 62% people in Queensland opposed the Adani mine. There have been a series of protests in Brisbane, Sydney, Melbourne, Townsville, Cairns, Mackay and at Adani’s work sites near Belyando in Central Queensland. Such was the pressure built by public opinion that Queensland premier Annastacia Palaszczuk reversed the government’s previous position and pledged to veto a loan to Adani if re-elected. In March this year, 13 NGOs came together to form the Stop Adani Alliance which organized a National Day of Action on October 7. During November 20 and 24, a Stop Adani Shakeup week was observed to pressurize federal MPs into opposing the mine. All over Queensland, and even elsewhere, anti-Adani T-shirts, badges, caps and other protest markers can be seen on people.

Adani group has reportedly faced a series of regulatory actions in India for its riding roughshod over environmental and other laws. It has also been alleged that its explosive growth is largely due to Gautam Adani’s closeness to Prime Minister Modi since the latter’s stint as Gujarat Chief Minister. Recently, Australian Broadcasting Corporation’s investigation on its well known Four Corners programme, unearthed various dealings of Adani Mining through secret tax haven accounts in Cayman Islands and the British Virgin Islands.

The Galilee basin, where the giant mine, projected to be one of the world’s largest, is located contains an estimated 7.8 billion tonnes of coal. Adani group has claimed that the mine will have peak production of 60 million tonnes of coal per year by 2022. The company has acquired Abbot Point coal terminal near Mackay for $1.98 billion from the Queensland government and plans to build a 388 kilometer rail link from the mine to the port. The company is awaiting a concessional A$900 million loan from the government’s Northern Australia Infrastructure Facility (NAIF) for the rail link.

The most significant reason why most Australians are opposed to the mine is its environmental impact. The mine is estimated to generate 4.7 billion tonnes of greenhouse gases. It will also use 26 million litres of water every day severely depleting the groundwater in this drought prone region. The Great Barrier Reef, already under threat from warming of the oceans and their acidification, will also be affected by the mining activity. The project involves dredging of 1.1 million cubic meters of seabed from near the Reef.Experts have vigorously argued that this will have an adverse impact on the delicate ecosystem that sustains the Reef.

Adani Australia have argued that an estimated 10,000 jobs will be created in Queensland, which is currently suffering from severe unemployment. This claim has been supported even by Australian Prime Minister Malcolm Turnbull. However, Jerome Fahrer, an economist who appeared on behalf of Adani Mining before the Queensland land court, testified in 2015 that the project would create precisely 1,464 jobs.

The land where the mine is planned to be built belongs to the Wangan and Jagalingou traditional or indigenous people, and is part of 30,000 sq.kms land area for which they have filed a ‘native title claim’ in 2004. The W&J peoples have launched a long and complicated legal battle to oppose the Carmichael mine, and hearing is scheduled for March 2018.

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Australian govt using ‘aid’ money to promote their mining industry

Bruce Davis, left, and Fred Hess signing a memorandum of understanding at Frieda River last week. Looking on are East Sepik Province Governor Allan Bird, Ambunti-Drekkir MP Johnson Wapunai, Vice Mines Minister Bari Palme, women’s mentor, Fredah Wantum along with women from Paupe village and PanAust employees

Approval processes for any Frieda river mine have not yet been completed – but the Australian government is already spending ‘aid’ money to help ensure the mine does go ahead.

PANAUST, the beneficiary of this ‘aid’ subsidy, is, of course, an Australian company…

Long-term plan for women at Frieda River

PANAUST and the Australian government are working together to empower women through the Frieda River copper-gold project under a new initiative called the Papua New Guinean Women in Mining Project.

In terms of an agreement signed at Frieda River last week, the partners say a three-year work program will strengthen the participation of women in the development forum process and ensure women receive lasting benefits over the life of the mine and beyond.

“The project will provide a mentor to work with women from the Frieda River area to prepare them for participation in the development forum and help organise their governance and representative structures. Selected Frieda River employees will become women’s empowerment and safety champions,” PanAust said.

The partners will also work to build literacy skills, and promote cooperative approaches to decision-making, workloads and budgeting, leadership and coalition building.

At the signing PanAust managing director Fred Hess emphasised the role mining could play in supporting women.

“Mining, perhaps more than any other industry, has the ability to empower women in remote communities. At PanAust, we consider it our responsibility to encourage that development. At our operations in Laos, we have provided pathways for women to acquire trades, become leaders in the company and start small businesses. Our partnership with the Australian government will help us emulate this success in Papua New Guinea,” Hess said.

Australian high commissioner Bruce Davis said Australia was taking part to strengthen women’s participation in resource development negotiations.

“We will help build literacy and financial skills, as well as support women to take on leadership and decision-making roles in the development negotiations, to ensure they directly benefit from mining activities in the region,” Davis said.

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