Tag Archives: Byron Chan

Government nets next to nothing from Tolukuma mine sale

The government sold the Tolukuma gold mine to a Singapore company, Asidokona, in 2015, for a reported price of K81.35 million. However, Mine Watch can reveal, the government has only ever received K700,000.

Despite Petromin’s claims Asidokona would invest heavily in the mine infrastructure, a new road and restart production, the whole deal looked dodgy from the very start.

Then Mining Minister, Byron Chan, described Asidokona as “reputable, committed” but  Asidokona is not a mining company, it is a front for Singaporean speculator, Philip Soh Sai Kiang     .

In 2016 Mine Watch revealed that Asidokona was trying to offload the mine for US$ 212 million to a Singapore nightclub company, LifeBrandz. That deal fell through.

All the while the government has been trying to convince landowners that mining will soon recommence and they will benefit handsomely from a new royalties deal as well as the 10% shareholding agreed as part of the 2015 sale.

This was tantamount to bare faced lying by the government, as officials must have known all along that Asidokona had no intention of restarting mining and, indeed, has only ever paid a tiny proportion of the sale price.

According to an audited financial report for Kumul Minerals Holdings Limited, the successor to Petromin, the sale of Tolukuma was completed on 30 November 2015, not for the reported price of K81.35 million, but K26 million.

Even worse, only K700,000 has ever been received and the balance of K25.3 million is still outstanding.

Apparently the buyer, Asidokona, was due to pay a further K16 million on before 31 December, 2016, but never paid. A further K2 million was to be settled by 31 December 2017 and K1.4 million by 31 December 2018.

According to the directors of Kumul Minerals “recovery of the outstanding sales proceeds is considered doubtful” and the debt has been written off.

To cap the sorry saga, Tolukuma Gold Mines has now been liquidated for non payment of its debts.

The Tolukuma landowners have every right to feel they have been betrayed and deceived by government authorities.



Filed under Financial returns, Papua New Guinea

Last Chan-Ce

The Political Career Of One Of The Youngest Members Of Parliament And Mining Minister Byron James Chan Is About To End Today

Gorethy Kenneth | Post Courier | July 13, 2017

The political career of one of the youngest members of parliament and mining minister Byron James Chan is about to end today.
National Alliance Party president Walter Schnaubelt is four ballot boxes away from being declared winner of the Namatani seat in New Ireland province. Schnaubelt has polled 15,843 votes after 19 of the 24 boxes had been counted, and needs more than 2000 votes for the 50+1 allowable votes in order to be declared.
Byron Chan’s father and New Ireland Governor, Sir Julius Chan, is also struggling in second place in the regional seat, and People’s Progress Party leader Ben Micah is in the same boat in the Kavieng open.
Counting is slow in New Ireland so Schnaubelt’s inevitable victory may not be declared until later today to end the brief political career of the mining minister.
Elsewhere, Prime Minister Peter O’Neill is a sitting Members who will be re-elected and an announcement is likely sometime today in his Ialibu- Pangia electorate.
O’Neill has polled 25,377 votes so far and will need a total of 33,400+1 allowable votes to be declared re-elected on the first count.
That’s excluding the informal votes/ballot papers. Counting was proceeding last night on 58 boxes out of 114 so Mr O’Neill needs about 8000 votes to be declared.
By week’s end there should be two more declarations – in the Highlands region and New Guinea Islands – as counting for 102 of the 111 seats start while nine seats are still counting. The last 18 polling stations are due to close today after throughout Papua New Guinea as the National Election winds down.
Two seats have been declared, retained by the ruling People’s National Congress Party members James Marape in Tari-Pori, Hela Province, and Justin Tkatchenko for Moresby South yesterday.
People’s National Congress Party has candidates in the top three throughout the country in progressive tallies. National Alliance Party and Pangu Party are also doing well, especially in the Momase region while independents have made an impact.
THE Party has started on a slow mode as counting continues in 17 provinces.

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Govt commits 2% royalty from Tolukuma sales

Byran Chan

Loop PNG | June 9, 2017

The National Government has committed to pay landowners from the Tolukuma Project site a 2 per cent royalty.

This will come from the sale of gold from the gold mine.

This is the first of five major commitments outlined in the revised Tolukuma Gold Mine memorandum of agreement (MOA) signed yesterday in Port Moresby.

The commitments were announced by Mining Minister, Byron Chan, who urged the landowenrs to look after their money.

“Please ensure that royalty funds allocated to the Yulai Future Generation Trust are governed and operated under a Trust Deed and not to repeat the mistakes of existing operating mines where the stakeholders have wasted such funds on dubious investment proposals only to see no returns,” he said.

According to the agreement the state will pay project landowners royalty calculated at 2 per cent of free on board (FOB) of the sale of gold.

Landowners have agreed to split the royalty where Mining Lease Landowners recieve 80 per cent while the balance is split equally between Woitape LLG and Central Province Government.

Mining Lease Landowners have agreed to share 2 per cent of their royalty with the Women and Youth.

Other commitments in the MOA include:

  • The Special Support Grant (SSG) and Tax Credit Scheme (TCS);
  • The establishment of the Infrastructure Development Committee and Office;
  • Funding the annual operation cost of the Provincial Liason Officer to be based at Tolukuma; and
  • The establishment of a new Landowner Company with a clear clan-based shareholding structure and company requirements.

Meanwhile Yulai Landowner Association Chairman, George Gusi, refused to sign the MOA yesterday stating outstanding issues were yet to be discussed and that no proper consultation was done with the MRA.

MRA Managing Director, Phillip Samar, said the refusal of Gusi to sign does not affect the commericial agreement on the Tolukuma Mine.

Samar said they will continue to speak with Gusi to address any of the outstanding issues.

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Tolukuma LO refuses to sign deal

Picture: Signatories to the revised Tolukuma MOA having  a toast while Yulai Landowner Association Chairman, George Gusi, shows disinterest.

LOOP PNG | June 9, 2017

The Tolukuma (Yulai) Landowner Group representing landowners of the Tolukuma Gold Mine refused to sign the revised Memorandum of Agreement (MOA) in Port Moresby today.

Chairman George Gusi snubbed the long overdue revised MOA, claiming there are still outstanding issues to be settled.

Facilitated by the Mineral Resources Authority (MRA), the signing ceremony was attended by Mining Minister Byron Chan, Central Province Governor, Kila Haoda, Executive Director of Asidokona, Vincent Siou, Woitape LLG President Joe Geru, and MRA Managing Director, Phillip Samar.

Speaking at the ceremony, Gusi asked for an extension to iron out outstanding issues which they want to see contained in the current MOA as he claims there was a lack of consultation by the MRA.

He said some of the outstanding issues include:

  • Establishment of the Infrastructure Development Committee;
  • Environmental damage report on the waterway and tailings dam, which is a national issue on the reputation of the mine;
  • No proper mine development plan showing the lifespan and economic value of the mine; and
  • No proper landowner business plan under the spin off benefits and life after mine programs.

Gusi also asked why there was a rush to sign the MOA on the eve of the elections, questioning the legal basis justifying Minister Chan and Governor Haoda to proceed as signatories.

“We are confused as to why we are rushing to sign. I strongly recommend that we defer the MOA signing till after the return of writs. It’s only five weeks away,” he said.

“So after the elections, we have a legitimate Government and authority to execute our MOA.

“Ladies and gentlemen, both national and provincial governments have totally failed to implement many undertakings in the previous MOA.”

Despite his refusal, the signing ceremony went ahead with all parties content with the MOA. Gusi maintained his stance and did not sign.

Following the singing, Minister Chan said the previous MOA did not contain any Government commitment, however, the revised agreement contained guarantees which the government was willing to deliver.

They include, among others, the Tolukuma Highway upgrade project.

Chan said he would not have proceeded with any signing if he knew there were still outstanding issues.

However, he said the revision of the MOA was an ongoing thing and any outstanding issue would be catered for down the track.

“Whatever we sign today, it’s continuous, it’s a Government commitment to the people of Central Province, Goilala District and to your people. It is our commitment,” he said.

“This Government has committed all of these projects to you as of today.”

Meanwhile, Bonnie Gelu, from the State Solicitors office, who was present informed landowners and guests that Minister Chan and Governor Haoda, as signatories to the MOA, are acting within the legal parameters as they are still recognized as elected leaders until the return of writs.

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Chinese Ramu mine owes landowners K10 million

Ramu landowners will get royalties, assures Chan

Chinese mining company MCC is yet to pay any royalties despite 5-years of operations

Ramu LOs will get royalties, assures Chan

Cedric Patjole | Loop PNG | January 28, 2017

Chan made the assurance in Parliament on Friday when asked by Usino-Bundi MP, Anton Yagama.

Yagama said since the project began, tons in mineral exports have left their shores at Basamuk, however, to this date there has been no royalty.

He also queried when the outstanding K10 million would be paid to the landowners.

Chan said the Mineral Resources Authority (MRA) and project developers, Metallurgical Company of China (MCC), had recently agreed to pay landowners royalties.


Filed under Financial returns, Human rights, Papua New Guinea

Sticking points in Mining Act yet to be resolved, says Mining Minister Byron Chan

Byron Chan, Minister for Mining  Source: Business Advantage International

Byron Chan, Minister for Mining  Source: Business Advantage International

David James | Business Advantage | 9 January 2017

The Minister for Mining, Byron Chan, says that the long-awaited amendments to Papua New Guinea’s Mining Act are ‘complete’. But, he tells Business Advantage PNG, there are still some contentious issues.

Byron Chan says there has already been considerable work on the revisions to the 1992 Mining Act. 

‘Everything is complete, it’s done. My department over the last nine years of consultation has come out with something pretty good and pretty modern.

‘Those amendments are there ready for any government to enforce, or to take up. I suppose you have to have the will to do it.

‘There are some issues there that are maybe a bit controversial. It is to do with equity, and the compulsory acquisition increase (in) governments’ equity over the next 25 years of the mine life,’ he told Business Advantage PNG recently.

‘Those major issues are concerns at this time which we could not really attend to right now, so the PM has deferred the matter to later.’

(At the December 2016 PNG Mining and Petroleum Investment Conference, Prime Minister Peter O’Neill postponed changes until after the July 2017 national elections.)


Chan says ‘it has been quite a struggle to maintain the status quo’ during his tenure as Mining Minister. He expresses his appreciation to landowners ‘and other associations’ for their understanding.

‘This government, over the last several years, has dealt with landowner problems and associations and mining problems through the memorandum of agreements (MOAs). That was a way forward for us. Our people were pretty content for us to address these issues through the MOA discussions.

‘It is something that maybe previous governments did not attend to, which led to a lot of shut-downs. This government, under my ministry, has been very lucky that people have been very constructive in their approach towards getting what they want.’


Chan believes that, despite a period of low commodity and minerals prices, investor interest remains strong. ‘It is time for some good news, now and into the medium term and maybe into the long term future.’

Speaking at the PNG Mining conference in December 2016, Chan said mining production in PNG improved in 2016, pointing to an increased number of mining leases and a resurgence in the number of exploration tenements.

‘It is reason to be optimistic about the mineral sector. Over the last 9 months of 2016, we have had a total of 560 applications for tenements.

‘Out of these tenements 338 are active, 61 are in the renewal process, and 161 are new (operations). So there hasn’t been a significant downturn in exploration.’

Chan says the special mining lease applications for the Frieda River and Wafi Golpu mines also indicate there is a resurgence in interest in mining in PNG.

‘We anticipate that the required statutory technical assessments required under the Mining Act will be completed by the second quarter of 2017.’


Chan says several key mines have enjoyed increased production and revenue in 2016.  

‘Lihir, our largest producer, is projected to be up a whopping 38 per cent on revenues, against 2015. (In 2016) Porgera is up 17 per cent; Ok Tedi 36 per cent; Hidden Valley 33 per cent; Simberi 20 per cent.

‘Unless there are price falls in our key minerals of gold, silver, nickel and copper, this level of production and revenue is expected to continue to rise over the next 10 years.’

Chan notes a mostly upward, albeit uneven, growth trend in mining. He says in 2013 the mineral sector contributed K8.1 billion and in 2014 K8.5 billion. In 2015, revenue fell to K7.2 billion, but in 2016, despite the downturn in commodity prices, it is expected to rise to K9.1 billion.


Chan says there has also been strong growth in the alluvial mining sector.

‘The last few years we have seen an increase in applications for alluvial mining leases and efforts are being made to properly regulate this sector.

‘It is estimated that total income from alluvials from 2016 will exceed K330 million.’

Production from alluvial mining has been uneven. Chan says in 2008 the export value of alluvial gold exports was K180 million. By 2014 it was up to K373 million but it fell to K356 million in 2015 and it is expected to be lower again in 2016 at K311 million. The average over the eight year period has been K300 million.

‘It will continue to contribute significantly to the country’s economy. All PNG needs to do is create a business and social environment conducive for investment.’

New studies

Chan adds that PNG’s ‘own scientists’ are currently conducting exploration studies on coal, geothermal and strategic minerals, such as rare earth elements.

‘These resources will open new opportunities in the energy sectors. Policy documents are also being drafted by relevant government organisations to provide the guidelines for exploiting these resources.’

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Chan calls for changes to PNG Mining Act before polls

Governor of PNG's New Ireland Province, Julius Chan. Photo: RNZI/ Peter Kinjap

Governor of PNG’s New Ireland Province, Julius Chan. Photo: RNZI/ Peter Kinjap

The Governor of Papua New Guinea’s New Ireland province has come out in support of calls for changes to the Mining Act before next year’s elections.

Sir Julius Chan, who is a former PNG prime minister, said he backs statements by Hidden Valley’s Nakuwi Landowner’s Association that citizens should have more ownership of mineral extraction operations.

The association is frustrated at long delays to a revised agreement regarding the Newcrest’s Hidden Valley mine in Morobe province that would guarantee landowners and local communities more benefits.

In recent years elements of the government have indicated the Mining Act could be modified to give landowners more control of the wealth from mining.

However, speaking at this month’s PNG Mining and Petroleum Investment Conference in Sydney, the prime minister Peter O’Neill ruled out any changes to the Act before the 2017 elections.

The Mining minister Byron Chan echoed this.

But Mr Chan’s father, Sir Julius, said PNG people have suffered for too long under a Mining Act that literally steals the wealth from their land.

He said that the level of royalties which mining companies pay in PNG compared to overseas “completely screws the landowners and provinces”.

“Our people are getting almost nothing from the huge amount of wealth coming from their ground,” he complained. “It all goes to the company and the National Government, and none of it comes back to the people.”

Sir Julius criticised the O’Neill government for reneging on various promises made to him in return for his party’s support for the formation of the coalition in 2012.

This included commitments on renegotiating the Memorandum of Agreement for the Lihir Gold Mine in New Ireland.

“Government has dragged its feet for literally four years, ever since 2012 when the MoA came up for the regular five-year review,” he explained.

“National Government should be protecting the rights and the interests of the landowners and people, but instead it just delays and acts as the stooge for the Mining companies. This has to stop “

The New Ireland governor said his administration fully supported the Nakuwi Landowners in their intent to shut down the Hidden Valley Mine unless government signs a new MoA.

Sir Julius said it is time for Mining Provinces and landowners to come together to insist on a fair deal from the great wealth that is coming out of their land.

“I think we need to sit down together and come to agreement on how we want the entire mining regime, the entire mining system, to work.”


Filed under Financial returns, Papua New Guinea