St Barbara’s outdated colonial approach was their undoing

The observations of an investor in developing countries

Concerned Investor | Solomon Star

GRML was wrong all a long…

Photo: West Australian

The abandonment by Gold Ridge Mining Ltd (GRML) of their investment in Solomon Islands comes as no surprise to most critical observers.

St Barbara, the owners of GRML, came into the Solomons two years or so ago, with an ill-conceived concept of how to operate in a developing nation.

Long gone are the colonial days where governments and communities are not treated as equals. From the start, this misconception resulted in them mismanaging their shareholder’s money, the entire mining process and their stakeholders including local employees and those in the community.

The management style of St Barbara (SBM) and GRML show their lack of ability and understanding with regard to developing countries and they tried to manage as they would have in Australia. Report after report including those from Ernst Young and Price Waterhouse show the Australian mining model is the worst run and most expensive in the western world.

Based on this, the poor results from GRML should never have surprised anyone. The Australian mining model continually mismanages its value chain and as a consequence has never been able to manage it or devote sufficient time and effort into understanding its many parts and their interdependence on each other. As with any chain, it is only as strong as its weakest link and simply ignoring or undervaluing an underperforming link lets the whole chain down.

GRML was producing gold at nearly double their selling price! Admittedly SBM did remove the cause of one of their problems by replacing their MD, but the new one has little more experience in these matters and shows no aptitude for this task. The ‘expat management’ sent to Solomon Islands was considered to be abnormally incompetent by many observers. Was the new team picked solely to undertake the restoration work and finalise matters before the obvious planned withdrawal from Solomon Islands? The lack of conviction with which SBM and GRML undertook work pre and post flooding leads one to believe that a commercial decision was made that the insured value of the Gold Ridge Mine project was worth more than the value attributed to it by the Directors of SBM. GRML was in trouble long before the floods in April this year. The floods became a very convenient excuse for them to withdraw from a calamitous operation. Any well run operation would never have abandoned their operations as GRML had… there was an ulterior motive all along.

As an investor in the Solomon Islands as well as other developing countries, we consider the Solomon Islands to be a good safe investment with little or no more sovereign risk than countries such as Australia. The Solomon Islands government and the various ministries have shown a great deal of competence and ease in dealing with them. In fact after years of mismanagement, we only now consider that Australia is less of a sovereign risk and that is only due to the current party that is in power.

It is quite preposterous that the directors of SMB should authorise the release of a document insinuating that the situation in Solomon Islands is dangerous and they  had ‘safely’ removed all their expat employees (SBM recent report on their website). This press release has only been made to allow them to claim under their relevant insurances and save face with their shareholders, at the cost of Solomon Islands. Unfortunately SBM has followed the path of other publically listed companies where bad information is slowly given to market and its shareholders whilst good information is almost instantaneous. Nothing has been said about the dangerous conditions that GRML management left the pit prior to first withdrawal, their failure to secure the site, their failure to maintain their settling dams. All we hear in the press is GRML is working to resolve issues with the Government of SI and how unsafe it is. All problems are caused by others, never by the management of SBM or GRML. Admittedly the GR land owners chairman also pushed the company way too far.

When will these so called business leaders understand that they are responsible, put their hands up and let people who actually know what they are doing get in and fix the problem. The problem was not one of process and equipment but a pure managerial competence issue on the side of SBM. It will not be an easy fix as the amount of “silly” money that GRML threw around will need to be reviewed so that both the project and all its stakeholders have a long-term future there. Therefore it must be fair to all parties and the expectations of all concerned must be one of compromise so that all stakeholders benefit from the resources mined at the project.

Gold Ridge mine in Solomon Islands withdraws workers, Police deployed to site

Solomon Star | PACNEWS

Solomon Islands Gold Ridge Mining Limited (GRML) has confirmed it has withdrawn personnel from its Gold Ridge mine following a serious escalation in security and associated safety concerns.

GRML Director, Bob Vassie, said:

“Safety is the Company’s highest priority. We have taken the decision to withdraw our employees from site because we cannot assure their continued safety and security in the current circumstances.”

He said the decision to withdraw all staff from the Gold Ridge site followed a number of recent serious security incidents which have been growing in frequency and severity.

Police deployed 50 officers to the Gold Ridge mine site following the escalation of law and order problem in the area.

“These incidents have been reported to the Royal Solomon Islands Police Force (RSIPF),” he added.

“Subsequent to the withdrawal of GRML personnel from site on Wednesday, a number of people from local communities and illegal miners have entered the mine site and the RSIPF is now in attendance.

“The Company is liaising with local authorities.

“Once the RSIPF is able to confirm that strong and effective security has been re-established at Gold Ridge, a return to site will be considered so that immediate options for the mine can be assessed.”

Operations at Gold Ridge were suspended in April this year due to torrential rainfall and ensuing flooding.

The Company has been unable to resume production due to a number of factors beyond its control, including the loss of stable bridge access across the Tinahulu River on the public road to site, and the continued presence of large numbers of illegal miners camped in the open pit mining areas.

The Force Majeure conditions announced in April remain in place.

Since returning to site in June, the Company has prepared the processing plant for care and maintenance, and commenced lowering the water levels in the tailings storage facility in accordance with the site stabilisation plan submitted to the Solomon Islands Government.

“GRML has continued to pay the entire Gold Ridge workforce since the suspension of operations in early April,” Vassie said.

GRML announced on 18 July that with no foreseeable prospect of mining operations re-commencing this calendar year it was necessary to reduce its workforce to levels more appropriate for the currently limited scale of activities and dewatering.

“The planned redundancies were communicated to employees yesterday, and reduce the local workforce from approximately 570 to approximately 160 people.

“The expatriate workforce has also been significantly reduced. All redundant employees will be paid their full entitlements.

“A strong and effective RSIPF presence on site is critical to ensure the safety of personnel and security of site assets and infrastructure.

“Options for the future of the mine continue to be actively considered and discussed with the Solomon Islands Government.”.

Boom and dust: Uncertain future for the mining town run by Rio Tinto

“Rio Tinto has come in, destroyed our land and given us money for it. I don’t want them coming in and digging everything up, destroying nature. They are affecting our water and killing all the fish. I think the country is more important than that.”

When bauxite mining began in Arnhem Land, an entire town was built for its workers. But now Rio Tinto has closed its refinery on the remote Gove peninsula and Nhulunbuy’s population will shortly halve. So what next for the town and its services – and the Yolngu people who have come to depend on them?

The refinery in Nhulunbuy, in north-east Arnhem Land. Photograph: Alcan/AAP

Oliver Milman | The Guardian

Dixon Peters, a 28-year-old Yolngu man from the remote community of Gapuwiyak, jabs his boot into Northern Territory red dirt at the mention of Rio Tinto.

Peters works odd jobs as part of an NT employment program. Some days he mows lawns, other days he’ll do a spot of welding. He wants to train as a mechanic, but there are no suitable programs in the area. What he doesn’t want to do, he says, is work in the local mine.

“Rio Tinto has come in, destroyed our land and given us money for it,” he says. “I don’t want them coming in and digging everything up, destroying nature. They are affecting our water and killing all the fish. I think the country is more important than that.”

Peters’ home of Gapuwiyak is one of the small missionary-founded communities here, small specks dotted on the gargantuan tapestry of incandescent rocks, rivers and forests that make up Arnhem Land, an area larger than Portugal but with a population a little over 16,000.

This is Yolngu land, they’ve been living on it for more than 40,000 years. But here on the Gove peninsula, this is also a land shaped by mining, most recently since behemoth Rio Tinto bought into the area in 2007.

The Yolngu fought to stop the establishment of the bauxite mine and the associated alumina refinery – set up in 1963 by Nabalco, which was later renamed Alcan Gove and bought by Rio Tinto. Famously, bark petitions from the Yolngu of Yirrkala were delivered to parliament, where they now hang.

The totemic case, the first documented recognition of Indigenous people in Australian law, was an opening salvo in the ultimately successful push for land rights. But the court ruled against the Yolngu on the matter of the mine, and in 1963 the mine came, and an entire town – Nhulunbuy – was built to service it.

Since then a 22,000-hectare principality has been carved out – an area larger than Washington DC – in Yolngu land. Rio Tinto effectively runs Nhulunbuy, which sits on the same excised area as the bauxite mine, a hulking structure that shuttles 8.2m tonnes of rust-red dirt a year to the refinery via a snaking 20km conveyor belt.

A conveyor belt stretches for more than 20km, ferrying mined bauxite between the Gove mine and the refinery. The bauxite will now be sent directly to Nhulunbuy’s port for transport. Photograph: Monica Tan for the Guardian

And now, despite their early opposition, many Yolngu have come to depend on Rio Tinto, or rather what flows from it.

This is why Rio Tinto’s decision to close its Gove refinery has sent shockwaves through the area.

While the refinery didn’t employ many Yolngu, it was the raison d’etre for vital services in the area, from the hospital to the electricity to the food that is shipped into the Rio Tinto-owned port.

The refinery closed in July; 1,100 workers were made redundant. People now worry about what Rio Tinto could still take away, because Nhulunbuy is a company town in almost everything but name. The power station, the port facilities, the warehouses, the fuel storage facilities and the airport all sit on Rio Tinto’s lease.

Vast chunks of infrastructure could potentially depart; there are concerns the supermarket and bank could follow suit, despite assurances to the contrary. People are worried the hospital could be in danger. The NT government says cryptically it will assess what the “impact of Rio’s decision is on the future health demands of Nhulunbuy and the east Arnhem region”.

“If they take things away from us, we’ll have no money,” says Peters. “I’m worried about everything going. I’m worried that they will take the principal away from our local school. He grew up here.”

It wasn’t meant to be like this. Just three years ago, Rio Tinto promised “long-term intergenerational benefits” from an agreement struck with Gumatj elder Galarrwuy Yunupingu and senior Rirratjingu figure Bakamumu Marika, representing the two key Yolngu clans.

It was the first agreement of its kind signed between traditional owners and a mining company – “Rio found its conscience”, as a negotiator for the clans recalls it.

For the previous 40 years, the federal government had compensated the Yolngu for having their land forcibly removed and then ripped apart by metallic teeth and arms. Payments amounted to $3m in 2010.

By contrast, the handsome new deal was to provide between $15m and $18m a year, depending on the price of bauxite, until 2053. The money was paid to funds run by the Gumatj and the Rirratjingu to fund medical, retail and residential developments, as well as forge employment opportunities.

But almost immediately the difficulties hit. The mining boom unhelpfully forced up the Australian dollar. The bauxite price then dipped and the NT government reneged on a deal to fund an epic 1,000km gas pipeline from Katherine to Gove to power the refinery, citing a $3bn risk to taxpayers.

Rio Tinto insists the agreement with the Yolngu remains in place after the refinery closure, although the confidentiality of the deal’s details mean it is unclear whether the payments will continue as before. All of this has left the communities here confused about what the future holds.

Then Indigenous affairs minister Jenny Macklin, Galarrwuy Yunupingu and prime minister Julia Gillard sit at the official signing of a historic 42-year mining agreement between traditional owners and Rio Tinto in 2011. Photograph: Peter Eve

Effects of the exodus

Nhulunbuy is a slightly surreal place, a piece of white real estate in black Australia. Neatly trimmed, verdant front lawns sit beside boat trailers in the driveways. Parents usher their floppy hat-wearing children in and out of a neat primary school, while a few Rio Tinto workers mill about their rather spartan company accommodation camp in the centre of town.

The town’s population of 4,000 will slump by as much as half when all the Rio Tinto workers and their families leave, with most set to depart by January.

Qantas, which is halting its Darwin-Gove-Cairns route, is busy selling company houses in Nhulunbuy. Photograph: Monica Tan for the Guardian

The effects of the exodus are already being felt. Qantas, which is to cease its regional flights to and from Nhulunbuy’s airport, has put up its company-owned houses for sale. A fabric shop open for the past decade will be shutting. “It seems like the right time to go,” the owner says.

A few houses lie empty. More will follow. Locals talk about a family spending $700,000 on a house that is suddenly worth $250,000.

Meanwhile Rio Tinto has committed 250 of its now-dormant properties to a project that aims to bring in new residents – namely, Yolngu people. If the town is to survive, it will be in an altered state, both economically and socially.

“Everything here is hooked up for Rio Tinto: the power, water, everything,” says a resident who has lived in the town for several decades. “They say the power station will stay but I saw them bring in diesel generators a couple of days ago. There’s a complete lack of information from the company.”

The resident fears the change to come.

“If the Yolngu people come in, it will change things a lot around here. It’s 99% white at the moment … we’ll see the crime rate go through the roof, it’ll be like Alice Springs or Tennant Creek here.”

Racial divisions, and tensions, are hard to ignore here. Practically no Indigenous people worked at the Gove refinery, yet the Yolngu people have been on the receiving end of the benefits – infrastructure, and payments to the two main clan groups – and the ignominies – the alcohol dependency, the suicide – that have come with the mine, both directly and indirectly.

The Yolngu didn’t want alcohol to be on sale in Nhulunbuy, but it is. Now parts of the beach at nearby Yirrkala, a Yolngu-dominated township where alcohol is banned, have a shimmering blanket of used Victoria Bitter cans.

Charting a future

Klaus Helms is a stout balanda, or non-Indigenous person, with a shock of white hair. Having worked alongside Yolngu people since his arrival on the Gove peninsula in 1969, Helms is now the chief executive of the Gumatj Corporation.

“If Nhulunbuy is to survive, they will need about a 30% increase in Yolngu people in the town,” he says. “Some people will be very uncomfortable with that change. But you know what, it’s called tough luck. It’s Indigenous land.”

The clan that put its trust in Helms call him “detun”, or buffalo, due to his frequent, gruff collisions with Rio Tinto and its predecessors in the area. His job is to help plot a future for the Gumatj.

“We need to hold on to as much infrastructure as possible and we need to think about what we need to do to survive,” he says. “I say the word survive, not thrive. If we’re not careful we’ll lose what’s left. It’s OK for Rio Tinto workers – they’ve got a big payout and they’ve left. We’re still here.”

While Helms wants to ensure essentials such as electricity remain, he sees an opportunity to diversify into new areas, albeit still primary industries – forestry on Rio Tinto’s rehabilitated mine area, development of pockets of gas and manganese. The Gumatj Corporation has an exploration licence for its own bauxite project, in a bid to wrest greater autonomy over the benefits of mining for local people.

A $2.5m mining training centre, funded by Rio Tinto, will take on about 30 Yolngu to improve their skills. About 20 are already involved in the existing bauxite mine.

“What kind of deal can you do for a mine on your land if you don’t know anything about mining?” Helms says. “If you don’t know anything, you leave the deal to other people and that’s what we need to cut out – those middle people.”

Both the NT government and Rio Tinto have said they will not abandon the people left in Nhulunbuy. Rio Tinto says it will be increasing its bauxite mining, as well as ensuring vital services stay online and offering fresh investment into an economic development project to create new jobs.

In a speech at the annual Garma festival, Phil Edmands, managing director of Rio Tinto Australia, said the closure of the refinery was a “difficult but necessary” decision. “Rio Tinto remains committed to working in partnership with the traditional owners, businesses, governments and community organisations to help provide opportunities for Yolngu people in this region,” Edmands said.

Meanwhile, the NT government is continuing to talk up the prospects for north-east Arnhem Land, citing oil and gas exploration but also new opportunities, such as tourism.

“The local community has shown that it’s resilient and adaptable,” a government spokeswoman said. “People in the region have worked together to support one another and that is expected to continue.”

With about 90% of the NT covered by mining exploration licences, however, it is clear lessons need to be learned quickly if Indigenous people are to reap the long-term benefits they’ve been repeatedly promised.

Rio Tinto Australia’s managing director, Phil Edmands, and Gumatj Corporation deputy chairman Djawa Yunupingu at the announcement of a planned new mining training centre in Arnhem Land. Photograph: Yothu Yindi Foundation/AAP

Joe Morrison, the chief executive of the Northern Land Council, says:

“A lot of other Aboriginal people around the country will have to deal with what happens when a mining company leaves.”

“We’ve seen the boom and bust that mining brings. Some people have done well, some have been marginalised and some have really struggled. In many places, during the mining boom Aboriginal people were left rotting in the streets.

“You can’t see mining as a panacea for Aboriginal ills when you look at the high rates of suicide and self-harm, for example. There are big, big social problems. It also brings pressure for people to live in two worlds – their Aboriginal culture and also the aspirations of the balanda.”

Australia’s grand experiment of handing dominion of remote towns to mining companies has social, as well as economic, implications. Ambitious visions during the boom years can lead to confusion and, sometimes, despair when the slump arrives.

“The problem is that there is no plan to wind things down when the boom is over,” Morrison says. “I’ve got serious concern that there is no plan for Gove.

“The Aboriginal people haven’t gone anywhere for thousands of years. It’s the mining that came and went and the Aboriginal people are the ones left with the question of ‘what now?’ ”

There remains the possibility of a smart, diverse economy for Indigenous people, rather than simply tearing asunder the vast red dirt of the NT for minerals.

“There are things like tourism and cottage industries selling bush products such as soap,” Morrison suggests. “These kinds of things intersect with cultural knowledge and they involve women and children, which isn’t the case with mining. We need to think about our language and our customs as an advantage.”

Another legacy left by the refinery is an environmental one. Conservationists fret over whether contaminated wetlands can be returned to a semi-natural state, as well as the risk of a dangerous spill of the caustic soda used by the plant.

A Rio Tinto spokesman stresses that full-time staff will continue to monitor the ponds of toxic waste, with environmental management still a “key priority” for its operations.

But Dr Stuart Blanch , an NT environmental lawyer, says bauxite operations rarely leave behind a landscape that can be rehabilitated.

“The Gove refinery has ponds of toxic material and if that was released into the sea, from a flood or cyclone, that would be really bad news,” he says. “The real concern would be the marine environment, as the area is a relatively pristine one for sea turtles, dugongs and three species of endemic coastal dolphin.

“We want the refinery shut down and the toxins taken away, rather than it sitting there like an eyesore in the hope it may reopen.”

Peters, the young mower-cum-welder from Gapuwiyak, would indeed like to escape the tentacles of mining. But, for now, there is little opportunity to be fussy.

When I tell him of the new Rio Tinto/Gumatj mining training centre, he leans forward, his eyes wide. Instinctive hostility to digging up this storied, tropical terrain collides with expediency.

“What? They will train people there?” he asks. “Train Indigenous people, like me?”

Momis-Australian Economic Pact and Bougainville’s Future

The Momis-Australian economic pact developed since 2010 was sealed through the Mining Bill when it passed through Bougainville’s parliament. According to its salesman this economic strategy will bring independence, jobs, money, and happiness.

But there is not one example to back up their claims. On the other hand we know from Bougainville’s own history, and we know from the history of ex-colonial countries from around the world – still under the hoof of foreign powers – what will emerge.

So what will this economic strategy mean for Bougainville?

• More large-scale open cut mines.
• More foreign corporations – Rio Tinto yes, but almost certainly Chinese mining companies, looking to feed their heavy industries. And once they invest, we better like the deal, otherwise its more death from above.
• Hundreds and thousands of tonnes of toxic tailings.
• The sale of forestry and marine stocks to South-East Asian companies.
• Pollution, deforestation, depleted marine stock, clogged rivers, damaged marine environment, depleted wild life, polluted air, crop disease.
• Inflow of tens of thousands of migrants, some will be domestic migrants, many will be international.
•  Introduction of special economic zones with low corporate tax , no labour laws, or environmental protections.
• The emergence of large urban centres, surrounded by large migrant-squatter settlements and worker camps.
• Bougainvilleans sweating in the manual and semi-skilled jobs, with token faces on management boards.
•  Chronic land shortages.
•  Growing inequality between individuals, and regions.
•  Class conflict between a wealthy local elite, feeding at the table of the mining, logging and fishing company, and the silent majority enduring pollution, land shortages, increased crime, and racism (in their own land).
• More corruption, as resource revenues are squandered on houses in Australia, and the high life, for those politicians willing to sell off the people’s property.
• More crime, alcoholism, and drugs.
• More violence, growing racial tensions.
• The loss of cultural heritage, and the weakening of customary authority.

But those selling the dream – or nightmare – will have their gold, copper, timber and fish, by the time the whole thing goes down the drain…

Bougainville mining legislation mastermind, Anthony Regan, alleges mine-opposition a foreign plot

As the Mining Bill is debated before Bougainville’s parliament, which will deliver up Panguna to Rio Tinto, and potentially turn the rest of Bougainville into an industrial wasteland, the Bill’s mastermind and principal author, AusAID pundit and chief Rio Tinto apologist Anthony Regan, has declared all opposition to mining an ‘outsider’ plot – quite the irony given Regan, and his Australian troupe, i.e. outsiders, currently stand accused of hoisting a neo-colonial piece of legislation on Bougainville, i.e a plot.

Talking to Radio New Zealand, Regan claims only large-scale mining can support autonomy or independence on Bougainville. And the only viable large-scale mine in the medium term, he claims, is Panguna –

If it [Panguna] doesn’t reopen, then the options for Bougainville become more difficult because although there are other highly prospective areas, the average time for proving a prospective area that hasn’t been explored, proving and then getting established is fifteen to thirty years. Whereas the Panguna mine could reopen within six or seven years.

When asked by Radio New Zealand if he sees agriculture as a sustainable alternative, Regan (now a self-appointed economics expert!!), in a slap in the face to many hard-working and long suffering Bougainvillean agriculturalists, alleges calls for sustainable agriculture is a foreign-plot steered by the ‘activist community’,

So agriculture, contrary to what a lot of outside observers think, is a difficult one and brings with it many problems of its own in terms of land pressures.  Bougainville’s population has almost tripled in the last twenty years and land pressures are already very great. Land being locked up in cocoa plantations of one kind or another, both small-scale and large, puts incredible pressure on land availability for gardens … Outside commentators, especially from the activist community, who say there are obvious other ways of getting a sustainable economy in  Bougainville have yet to establish the viability of any alternative model unfortunately.

By ‘outside’ activists, does Regan mean MP for Central Bougainville, Jimmy Miringtoro (see here on Mine Watch), James Rutana (see here on YouTube) or the many other Bougainvillean commentators (see here on Mine Watch).

Get out more Mr Regan, the ‘kanakas’ can think for themselves without outsiders pulling their strings! Although we understand why you might think otherwise …

The lawyer-come-agronomist Regan concludes his insulting interview with a plug for the company he has helped deliver Panguna too through the new mining bill –

The majority of people in the public forums that the Bougainville government has held have wanted the mine to reopen and have wanted Rio Tinto, BCL, as the devil they know that accepts that it did some things wrong and wants to do something about it, they say they want the devil they know rather than a new devil that won’t take any responsibility perhaps.

There you have it. Those calling for sustainable development through agriculture are foreign activists, while according to Regan the grass roots only have eyes for Rio Tinto.

And why would we doubt the words of a man who has publicly defended Rio Tinto against accusations of war crimes, is on the payroll of a company which calls Rio Tinto one of its major clients, and who has been paid a ‘mere’ K680,000+ drafting the mine bill.

Momis to use K2 million in aid to boost support for mine reopening

Bougainville President John Momis is stepping up his campaign to reopen the Panguna mine by spending K2 million in aid money to get his propaganda into rural communities [see story below].

Already under fire from politicians, community leaders, women’s groups and landowners for his support for the return of Rio Tinto to the island, Momis’s latest move could further fuel community anger. Local people have already said Momis should be doing more to support local agriculture and other locally owned business enterprises while the health and education systems are crying out for further investment.

The K2 million in aid money will come from Australia and New Zealand. The money is on top of the millions Australia is already investing to ensure key advisory positions in the Bougianville government are filled with its own people.

Part of the money will be used to fund seven new communications posts in the ABG – which are already being advertised.

Momis has also been stepping up his campaign of attacks on his critics, attacks which will now be broadcast deeper, further and more frequently into rural communities thanks to the aid spending.

MOMIS OUTLINES MEDIA AND COMMUNICATION INITIATIVES FOR BOUGAINVILLE
JENNIFER NKUI | NEW DAWN

ABG President John Momis today told parliament that everyone is aware that despite the best attempt of some and the government’s achievements, messages are not getting to the people.
He said as a result, people lose faith in the leaders to deliver the benefits of autonomy and they lose faith in the government as a whole.

Mr. Momis said a recent survey conducted by the information and communications division of people in South Bougainville confirmed this state of affairs.

He said because of this state of affairs, Australia and New Zealand through the governance and implementation fund are supporting the ABG with over K2 million of assistance in the area of media and communication.

He explained that the K2 million will be used by the government to introduce and launch new activities which will help bring message to the people.

Mr. Momis said the activities will include the launching of a mobile community radio station, the launching of a monthly newspaper and the launching of ABG’s official website.

He has asked for contributions from his members on ways to improve communications and get accurate messages to the people.

Gloves come off as Bougainville’s leaders start to air their dirty laundry

Me’ekamui’s Miriori challenged to be honest about mining

New Dawn

John Momis (Henry Empeño)

President of Bougainville, Chief John L. Momis, today challenged “Me’ekamui Government’s” Philip Miriori to be honest about Bougainville mining issues. He was responding to a statement saying discussions about mining can happen only after the referendum on independence, and calling for Australian advisers to “go home”.

President Momis said:

“It’s amusing to see Mr. Miriori say mining can happen only after the referendum. For it’s widely known in Bougainville just how deeply involved Miriori is already involved in mining. It was he who worked closely with the Americans involved in Tall J Foundation Ltd. That company tried to do industrial mining of gold on the tailings on the Jaba River. But the people chased them away. Then a Chinese investor in Tall J. Tried to get his lost money back by bringing in Chinese to gather and sell scrap metal from Panguna. Then there is the Australian, Ian Renzie Duncan, at different times involved with Australian mining companies Zeus Resources and Trnaspacific Ventures. It was he who wrote Mr. Miriori’s speech delivered when Prime Minister O’Neill visited Panguna. It’s widely talked about in central Bougainville that Miriori is investing with Mr. Duncan, and that Duncan is taking alluvial gold supplied by Miriori.

“These are just a few of the mining interests that Mr. Miriori is involved in. It’s these and other mining interests that have take him off so regularly to meetings in Cairns, Brisbane, Perth, Singapore, and other business tourist destinations. Everyone around Panguna knows one thing for sure: no other Me’ekamui President has done more foreign travel than Miriori!

“But with all his deep involvement in mining already, how can he talk about decisions on mining waiting until after the referendum? I challenge him to be honest about his long history of mining interests.

“I also challenge him to be equally honest about foreign advisers. He says Australian funded advisers are not welcome. But these advisers have all been requested by the ABG to help us fill in gaps and weaknesses in the Administration. Although Australian funded, many are not Australian. They include Bougainvilleans. Until recently our legislative drafting adviser was from Vanuatu. Our Policy Adviser was from Bermuda – all paid for By Australia.

“For the ABG, the two most important things about our advisers are these. First, we only have them when we have a gap we cannot fill with a Bougainvillean. Second, they must follow the directions of the Bougainville Government. I am absolutely confident that they do  that. They do not control the ABG. They are not here to make money for foreign companies.

“I challenge Mr. Miriori to tell us about his foreign advisers, and what they are doing to make money for foreign interests. They included two Americans with the Tall J Foundation, Stewart Sytner and Thomas Megas. There are documents freely available on the Internet that show they claim that Mr. Miriori sold them mining rights in areas to the north of the Panguna Special Mining Lease. I challenge him to tell us is what Sytner and Megas claim is true.

What about the other investors in Tall J? What advice did they give to Miriori? What about the Tall J investor who brought in the Chinese scrap metal dealers? What advice did he give? What about the advice that Mr. Ian Renzie Duncan gives?

“Mr. Miriori is not being honest about the future of mining. His hands are not clean in relation to mining.

“Mr. Miriori is not being honest about foreign advisers. Again his hands are not clean.

“I challenge him to be honest on these matters. I challenge him to enter these debates only when he has clean hands.

Thiess Indian coal plans ended by landowner opposition

Landowners demonstrate their strength as they defend their land and defeat an Australian mining giant in India – despite seemingly overwhelming odds and police intimidation..

Bob Burton | RE New Economy

Prolonged opposition to the proposed huge Pakri Barwadih coal mine in India, which could displace hundreds of villagers, has resulted in a subsidiary of the Australian construction company Thiess being stripped of a $5.5 billion mining contract.

The mine, together with two others slated to be built in the Karanpura Valley in Jharkhand by other companies, are hugely controversial as seventeen villages are slated for demolition with approximately 8000 villagers facing displacement if the three projects proceed. Opposition to the mines has come with a heavy price tag, with mine opponents subject to arrest by police and violent harassment by gun-toting vigilantes.

Back in November 2010 a subsidiary of Thiess, a wholly-owned subsidiary of the giant Australian contracting company Leighton, was awarded the contract with an Indian joint venture partner to build and operate the mine which had been allocated to by the government-owned power utility, the National Thermal Power Corporation (NTPC).

When the deal was publicly announced in December 2010 Leighton was ecstatic over what was expected to be a 22-year contract to mine over 300 million tonnes of thermal coal. A particular cause for celebration by Thiess was that it had won the contract “against stiff competition” from two other Indian companies.

While the proposed 15 million tonnes a year Pakri Barwadih coal mine is a big project, the main game for Thiess was in building a strong working relationship with NTPC. With over 43,000 megawatts of installed coal plant capacity and growing fast, NTPC is the largest power generator in India. (For the sake of comparison, the capacity of NTPC’s power plant network is over three-quarters the size of the whole Australian grid).

NTPC had high hopes for the project too as, frustrated by lack of reliable supplies on the domestic coal market and daunted by the high cost of imported coal it had decided to take on coal mining to supply some of its own plants. The Pakri Barwadih coal mine was to be NTPC’s first and crucial in reinforcing its mining credentials when bidding for other coal blocks.

With NTPC planning to build a further five mines to feed its ever-expanding fleet of coal plants, Thiess saw the Pakri Barwadih mine as providing “a platform on which to build a contract mining business in India.”

Party time over

However, the celebrations proved short-lived.  The joint venture for the Pakri Barwadih project, Thiess Minecs, is 90% owned by Thiess and 10% owned by the Indian company, Minecs Finvest Private Limited. Minecs Finvest, the Economic Times reported in 2012, is controlled by Vinod Bagrodia, the brother of former coal minister Santosh Bagrodia.  The former minister has been under investigation over several coal deals unrelated to Thiess as a part of the suite of investigations as part of the sweeping ‘Coalgate’ probe of potential corruption in the allocation of lucrative coal deposits.

For its part Thiess denied any impropriety in the Pakri Barwadih deal and stated that Santosh Bagrodia was not the minister when the contract was awarded.  However, Santosh Bagrodia was Minister during the bidding period for the contract in 2008-2009, though he denies having had any contact with his brother or other family members. Even so, according to the NTPC the Central Bureau of Investigation, the Indian agency charged with handling major criminal investigations, was probing the matter.

With first coal scheduled to be mined by late 2011, community opposition to the Pakri Barwadih and two other coal projects slated for the Karanpura Valley became intense. Farmers stood to lose valuable well-watered land and the initial compensation offer was paltry. Faced with opposition, NTPC later increased the compensation for landowners. Despite this, opposition from villagers persisted.

Dev Prasad, a farmer facing displacement by the Pakri Barwadih mine, told the Sydney Morning Herald late last year that he would not move.

“If it was only me, I could take the money and live for the few years at the end of my life. But I have to hand this land on to my children and grandchildren. If I lose this land they will have nothing. Our lives are in this land. Without it, who are we? It is not just a house to live in, it is our way of life, our history. I am a farmer. My father passed this land to me, and I must pass it to my son. I cannot fail where my ancestors succeeded,” he said.

When the protests grew, a police crackdown followed. Protesting villagers were threatened and arrested. When construction of an NTPC office block commenced near a village unrelated to the Thiess Minecs mine, police shot and killed a protesting villager and injured two others. On another occasion, vigilantes toting AK-47’s violently broke up a community meeting and have threatened villagers on other occasions. Thiess Minecs deny any involvement with the armed vigilantes insisting that “all land access issues are the responsibility of the mine owner.”

By 2012, Thiess was in constant dispute with the NTPC over the schedule for the mine. NTPC complained that Thiess Minecs had failed to meet construction deadlines. By mid-July 2012 issued Thiess Minecs with a ‘show cause’ notice setting out the failure to meet the agreed construction schedule. NTPC claims that it even lobbied the federal Minister for Resources and Energy over its problems with Thiess. (NTPC does not state who was minister at the time).

While the relationship between NTPC and Thiess Minecs had all but broken down, community opposition remained. By mid-2013 a source told The Hindu that NTPC was thinking of withdrawing from the project “due to obstacles and demoralisation of the staff.” By early 2014 community opposition continued to block mining prompting NTPC Chairman & Managing Director Arup Roy Choudhury to complain about “illegal mining” and rather ominously urge police to “restore law and order”.

Divorce proceedings filed

Last Thursday NTPC informed Thiess Minecs that it was terminating the contract for the Pakri Barwadih mine. In its statement to the Australian Stock Exchange on Monday Thiess referred to the NTPC contract as only running for five years and worth just $267 million. The company claimed that even if the agreement was terminated, a move it vowed it would resist, it would have no “material impact on” Leighton’s financial results. How a deal which had been touted in 2010 as being worth $5.5 billion deal over 22 years had become just a five year long project worth a twentieth of the original estimate went unexplained.

The day after NTPC gave Thiess Minecs notice that its contract would be terminated in 45 days, the Chief Executive of Thiess Minecs, Dr Raman Srikanth, was arrested by Hyderabad Police on what has been reported as charges of cheating and criminal breach of trust.  Local police also report that Thiess Minecs and Bruce Munro, chairman of Thiess Pty Ltd are also named in the complaint by Roshni Developers, an Indian company which failed to get a sub-contract working on the mine.

The Pakri Barwadih mine debacle is an all too familiar tale of the dynamics of coal projects: developers in a panicked rush to get coal to market, controversy and scandal over how decisions were made and contracts awarded, demands by coal proponents that farmers and residents get out of the way and governments willing to use repressive measures to force a project through when they don’t. Even developers dreams of easy money from coal projects have withered.

The high costs of coal don’t stop at the mine gate either. World Health Organization data released last week revealed that of the top ten cities for air pollution, India took second, third and fourth positions. Further expansion of coal fired plants with minimal pollution controls would make India air quality even worse.

Even if Thiess’s legal defence against NTPC fails, the company has its eye on even bigger fish, this time in Australia. In June last year Thiess struck an agreement to work with GVK Hancock Coal to help develop the $10 billion Alpha Coal Project in Queensland’s Galilee Basin.  The company hopes that the proposed 32 million tonnes a year mega-mine will be able to export its coal to India.

While GVK Hancock Coal is awaiting a final decision from the Queensland government, exhibits many of the characteristics that dog coal projects around the world. Farmers worried about the impact of the mine on groundwater were so persuasive that, in an unprecedented recommendation, the Land Court stated that either GVK Hancock’s Alpha Coal Mine not be approved at all, or if it was, that it be subject to conditions intended to limit potential damage to water resources.

Even if the Queensland government approves the Alpha mine, there are serious doubts that GVK Hancock will be able to persuade a coalition of banks to pour billions into a project which at best can only deliver expensive coal to an already oversupplied market.

As the global appetite for coal slows – undermining the market for Galilee Basin coal – and falling prices drive companies to insist contractors slash costs, Thiess may well be set for further disappointment because it picked coal as a financial winner when it has turned out to be a big-time loser.

Allow gold mine operators to return to Honiara – government report

ABC Radio Australia

Trucks lined up at the Gold Ridge mine in Central Guadalcanal in the Solomon Islands

A Solomon Islands government report has recommended allowing the Australian operators of the Gold Ridge mine to return to the country.

The mine on Central Guadacanal has been closed since the flood disaster last month.

Walton Naezon, the Deputy Premier of Guadacanal Province and a Gold Ridge landowner had threathened to sue the government over delays in deciding the mine’s future.

Solomons Prime Minister Gordon Darcy Lilo has accussed the mine’s operator, St.Barbara Mining of walking out and banned company executives from re-entering the country until an independent review was concluded.

‘Immediate action’ needed at Solomon Islands gold mine: UN

Australian Network News

PHOTO: St Barbara’s Gold Ridge mine, on Guadalcanal, about 40 kilometres from the Solomon Islands’ capital, Honiara. (Concrete Evidence)

Solomon Islands risks an environmental disaster unless immediate action is taken to prevent leaks at the country’s only gold mine, the United Nations warns.

The Gold Ridge mine, operated by Australian company St Barbara, was found to have an extremely high level of contaminated water in its tailing dam following last month’s flash floods.

The UN has recommended local authorities start the process of ‘dewatering’ to prevent any breach that may affect around 8,000 people living downstream.

It says preparations will need to start immediately for the process to be completed before the wet season begins in November.

“To be on the safe side and to avoid a potential disaster down the line, the water levels should be dropped,” Sune Gudnitz, head of the UN Office for the Coordination of Humanitarian Affairs, told Pacific Beat.

“It will take time to lower the water level in a responsible way to dilute the water that comes out of the dam to have a minimal environmental impact.”

Mr Gudnitz said water in the dam was polluted and believed to contain both cyanide and arsenic.

The UN Disaster Assessment and Coordination (UNDAC) team was deployed on April 23 in response to a request by the Solomon Islands Government.

‘Living in fear’

The Prime Minister of Solomon Islands, Gordon Darcy Lilo, accused St Barbara of abandoning the mine when it evacuated all staff on April 7.

Mr Lilo’s government has since barred several expatriate St Barbara workers from returning until an independent review of the situation is complete.

Local landowners have been critical of the government’s response.

“It’s not the right course of action. We need St Barbara right back in Solomon Islands on the ground to do the dewatering,” said Dick Douglas, chairman of the Gold Ridge Landowners Council.

“They have the technical knowhow and they know the system.”

Sam Maneka, chairman of the Metapona Downstream Association, agrees.

“The Prime Minister is wrong in his decision to disallow St Barbara to come over to Solomon Islands and stabilise the situation.”

Mr Maneka says his people are “living in fear”.

“I wonder when there’s rainfall up there, if the people should be evacuated,” he said.