Tag Archives: Chinese mining

Chinese looking to cut costs for Frieda river mine

What will be the costs for the environment and the mighty Sepik river as PanAust looks to “decrease capital expenditure”?

Frieda River upside options explored

PNG Industry News | 16 February 2018 

THE Frieda River copper-gold project in Papua New Guinea’s Sandaun Province represents PanAust’s long-term strategic growth opportunity.

This was said by PanAust managing director Fred Hess when he presented the company’s quarterly report for December 2017 this week.

[PanAust is wholly owned by Chinese State company, Guangdong Rising Assets Management Co. Ltd (GRAM)]

“In 2017, we made strides towards making the project a reality through identifying opportunities to increase the value of the project, decrease capital expenditure, and reduce its overall risk profile. 

“We will continue to evaluate these opportunities in 2018,” Hess said. 

The company says it continues to liaise with PNG authorities on Frieda River following lodgement of a special mining lease (SML) application and environmental impact statement (EIS) with the Mineral Resources Authority (MRA) of Papua New Guinea and Conservation and Environment Protection Authority (CEPA) of PNG, respectively in 2016.

“The overall approval and permitting process for the SML application and other permits and approvals is now being coordinated by a government appointed state negotiating team, chaired by the Department of Mineral Policy and Geohazards Management.

PanAust says it is investigating opportunities to increase the value of the project and access alternative development pathways to decrease capital expenditure and reduce the overall Project risk profile. Study work to investigate these opportunities continued throughout the quarter, and indicate several potential pathways for value enhancement. The outcomes of this work will inform a decision as to whether an update to the project’s SML application will be made.

Hess added: “Looking to the year ahead, PanAust will look to further strengthen the relationships that have become integral to the company’s success, and are synonymous with how it conducts itself where ever it operates.

“The common currency of PanAust’s success is the strength of its relationships; relationships with our employees, communities, host governments, suppliers, peers, and partners. These relationships depend on trust and consistent transparent communication. This is what pushes PanAust way ahead and will continue to do so throughout 2018,” Hess said.

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Ramu NiCo shuts down equipment for serious maintenance work

Poor workmanship and shoody construction has hampered the Ramu nickel mine

The National aka The Loggers Times | January 23, 2018

Maintenance work on high-pressure acid leaching (HPAL) of train one at Ramu Nico’s Basamuk Refinery is going on. Work started on Jan 11 and is scheduled to end on Friday.

Ramu Nico company said the maintenance shutdown was to thoroughly maintain the system, eliminate potential system deficits and test the integrity of the equipment within HPAL.

More than 500 workers, both Chinese and PNG national employees of Ramu NiCo and external vendors, are involved in shutdown maintenance activities.

Safety officers from Ramu NiCo’s health safety and environment department are monitoring the maintenance work.

The maintenance shutdown would enable stable and prolonged production output for next year.

This is now consistent for Ramu NiCo autoclaves, enabling proactive forecasting of production rates and effective planning of major equipment turnarounds.

Ramu NiCo Basamuk HPAL process has three trains which are a vital component of the nickel/cobalt project in Madang.
The three HPAL circuits are key components to the safe production at Basamuk.

Shutdown maintenance is carried out periodically with each high-pressure acid leaching circuit enjoying a 15-day annual overall, staggered throughout the year.

The planned overhaul focused on autoclave scale removal, including integrity checks of equipment and statutory requirements in relation to pressure vessels and valves.

The maintenance and repair of each auxiliary system is carried out according to planned schedules, including acid-producing plants and boilers.

The Basamuk high-pressure acid leaching processing department applies operational principles of compliance in safety and operation at high efficiency, including undertaking of stable and proper maintenance at Basamuk processing site.

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Fiji Miner Invests Over $40M To Dig Deeper: Dinny Laufenboeck, Corporate Services Manager

Chinese engineers at the control centre at the new power house at Vatukoula Gold Mines. Photo: Karalaini Tavi

Charles Chambers Lautoka | Fiji Sun | December 30 2017

Vatukoula Gold Mines Limited has invested over $40 million to allow workers to dig deeper and further away from the existing infrastructure.

“The richest parts which are closest to surface have been mined out in the last 18 years,” Dinny Laufenboeck, the company’s Corporate Services Manager and Special Advisor to the General Manager said.

“So we have to go deeper and further away from the existing infrastructure.”

“That is a huge cost and while doing all this we have to keep the mine dry by pumping water out, have it ventilated and provide lighting.”

The areas that have been producing the best ore and veins have diminished.

Over the past 75 years, the mine has produced over seven million ounces of gold.

“I keep stressing this is an old gold mine and everybody knows that,” Ms Laufenboeck said.

Gold was reportedly discovered in Vatukoula in 1932 or 85 years ago from November 2017.

A man by the name of Bill Borthwick discovered gold with work actually being done to build the gold mines starting from 1935 to 1936.

Now, Zhongrun International Mining, a Chinese company with controlling shareholders, took over in 2014 and prioritised cutting expenditure and improving efficiency as the major work to be done.

Perhaps one of their major costs is the continuing pumping of water out of the mines because before they can start mining they have to pump the water out.

Dinny Laufenboeck said: “they recognised the cost involved and had to decide to either walk away from it or bite the bullet and develop more to reduce costs.”

Here’s What They Have Done:

The new $30 million power house has already been built and is being tested.

A new ventilation and hoisting shaft, which is to cost around $10 million is being done at an area called Dolphin at the old Wren Shaft. The idea is to sink a new shaft which would improve working conditions with better ventilation and open up new areas in Philip’s Shaft.

The upgrading of the Vatukoula Treatment Plant and Trailings Retreatment.

The company has also installed four state of the art air quality monitoring stations valued at approximately $120,000 around Vatukoula to monitor all emissions.  They are regarded as the most advanced available in Fiji.

The investment in new pumps for the de-watering of underground operations.

A joint venture with a Canadian based exploration company.

The training of local miners in steep structure mining by Chinese experts.

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Pundari discusses impact of Frieda mine

Sssh – don’t mention the Chinese!

Funny how the media can report so many ‘facts’ about the proposed Frieda river mine, including, supposedly its ownership, but leave out the fact that it is the Chinese State owned Guangdong Rising Assets Management Co. Ltd (GRAM) that owns PanAust, the company developing the mine…

The National aka The Loggers Times | December 21, 2017

THE Conservation and Environment Protection Authority (CEPA) has received a notification of intention by PanAust to develop the Frieda gold mine as required under the Environment Act 2000.

As part of the process to obtain an Environment Permit to develop the mine, the company has met the initial requirements of the legal process by submitting to the Director for Environment an Environment Inception Report.

Information CEPA has to date on the proposed gold mine is contained in the Environment inception Report.

Based on the EIR the following information is known by CEPA:

Copper mineralisation was first identified at Freida River in 1966/67, with the first exploration permit (termed a Prospecting Authority) held by Mount Isa Mines Ltd.
Since that time, the area has had a long history of exploration activities undertaken by numerous companies, with exploration permits held from 1967 to the present day.
The project is located within the Sepik River catchment and would comprise development of the Horse-Ivaal-Trukai, Ekwai and Koki (HITEK) copper-gold deposit in Telefomin district, West Sepik.
The project lies some 200km south of the northern coastline of mainland PNG and 75km east of the border with the West Papuan province of Indonesia.
The project would be developed by FRL, a company owned by copper and gold producer PanAust Limited on behalf of the joint venture between FRL and Highlands Frieda Limited (HFL), a wholly-owned subsidiary of Highlands Pacific Limited (HPL).
These deposits contain significant gold and copper with an estimated mine life of 17 years.
The main activities associated with the development of the project would include:

  • A sire access road from the Sepik River to the mine site;
  • mining will be done via an open pit mine;
  • placing waste rock and tailings into an integrated storage facility;
  • processing ore in a conventional concentrator at a site adjacent to the open pit;
  • copper-gold concentrate transportation by pipeline to a Sepik River port then barging along the Sepik River and northern coast of PNG to the proposed concentrate export facility located at Cape Moem near Wewak;
  • power generation during operations using an intermediate fuel oil (IFO) power station then augmented by a hydroelectric power station;
  • an airport constructed at Kaugumi Creek to transport personnel to and from the site;
  • the viability of the Project reflects a combination of economic, engineering environmental and social consideration that have been assessed and presented in FRL’s proposal for development; and,
  • The proponent for the project is FRL as manager of the Freida River Joint Venture and on behalf of joint venture participants FRL and HFL.
  • The participants and their equity in the project are: PanAust Ltd (80 per cent), Highlands Freida Limited (20 per cent).

Pan Aust Limited is a copper and gold producer in Southeast Asia and has a portfolio of organic growth projects in Laos and Chile.

Processing method
The mine processing method will involve conventional crushing grinding and flotation circuit.
Mine tailings and waste rock will be contained within an engineered Integrated Storage Facility (ISF).
The mine will also have quarries to provide materials for the construction of dams, roads, water diversion bunds, infrastructure pads and the construction of the ISF embankment.

Power supply
During the construction phase, power generation will be provided by diesel generators.
Following construction phase and during operations, a portion of the power will be supported by hydroelectric power.

Raw water requirement & supply
The Nena River will supply all raw water requirements for the mine.

Main access road
A main access road will connect the Sepik River port, Kaugumi Creek airport, Freida River airstrip, IFO power station, ISF, process plant, mine infrastructure area and accommodation camps.

River ports
Construction: Freida River port and Sepik River port will accommodate transport of construction materials to the mine site.
The Wario River port, adjacent to Nekiel, will provide access for construction of the main access roads.
Operations: The Sepik River port will be used for import of equipment and consumables and export of concentrate. A tugboat refuelling facility will be located at Pagwi and a mooring point will be located upstream of Yambon Gate.

Logistics
Mine equipment and consumable will be received at the Port of Wewak where it will be transferred to barges, transported to the Sepik River and then trucked to site. Concentrate will be transported in barges along the Sepik River and the Bismark coast to a new concentrate export facility at Cape Moem.
Accommodation construction: Main (mine camp) – accommodation for 1500 personnel and various other accommodation facilities at different locations.
Construction: Peak construction workforce of 3720 personnel.
Operations: About 2000 personnel with a further 1000 ISF contractors in Years 1 to 9 ongoing construction campaigns for the ISF.

Main airport
Existing Freida River airstrip to start followed by a new airport to be constructed at Kaugumi Creek.

Tailings management
Integrated Storage Facility (ISF) will be constructed in the lower Nena River catchment about 4.5km upstream of its confluence with the Ok Binai.
Along with the large open-pit void, it will be the most prominent feature of the mine.
The primary design objective of the ISF is to safely store tailings and waste produced by the mining and milling operation.
This design has been subject to international expert peer review by Pan Aust’s ITGRP, which has been established to access the adequacy of the design of the ISF and the underlying studies informing this design, and to provide recommendations on additional studies or evaluations to address areas of uncertainty.

Environment regulatory process
The environment regulatory requirements for satisfying the environment impact assessment process as contained in the Environment Act 2000 is as follows:

  • Submission of EIR;
  • approval of EIR;
  • conduct of environment impact assessment;
  • submission of EIS;
  • stakeholder consultation on EIS;
  • preparation of submission to Environment Council;
  • Environment Council recommendation to Minister;
  • minister’s approval-in-principle; and,
  • Director of Environment issues Environment Permit.

The above process can take up nine months to complete and is also dependent on adequacy to technical information submitted.
CEPA will also conduct its independent peer review on critical aspects of the project submissions will then be presented to the Environment Council for deliberation and recommendation to the minister to issue an AIP.

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Mining Minister Tuke meets Einstein’s definition of insanity

Panguna, Porgera, Ok Tedi, Tolukuma all tell the same story – large-scale mining is a disaster for local communities and the environment.

And neither Frieda or Wafi-Golpu have yet come up with a credible plan for managing their toxic tailings – but heck, lets go ahead anyway… 

Govt adamant to get two new mines operating: Tuke

The National aka The Loggers Times | November 22, 2017

THE Government is adamant to get two new mines operating in this term of Parliament, Mining Minister Johnson Tuke, pictured, says.
Tuke, who is also the Kainantu MP said in Lae after returning from a familiarisation visit to the Hidden Valley mine and Wafi-Golpu exploration site in Bulolo, Morobe.
Tuke earlier visited the Porgera gold mine, K92 mine, Frieda River exploration site and the Ramu nickel mine.
He said under the O’Neill-Abel government’s 100-day plan, ministers holding economic portfolios were tasked to ensure their respective departments aligned their operations towards producing revenue for the Government and bail the country out from economic down turn.
“This government is doing the ground work to have at least two mines operating,” Tuke said.
“This government is fully committed.
“In this term of Parliament we will initiate something.
“The developers and landowners are also serious in having the mines off the ground.”
Tuke said the companies doing exploration at the Frieda and Wafi-Golpu sites have already submitted their proposals to dig for minerals. It was for the relevant government agencies to study their proposals and advise the National Executive Council to grant the miners special mining leases.
“Frieda has conducted exploration for the last 40 years or more,” he said.
“Last week, I was at Frieda and talked to the people there. Their response was positive.
“My visit there was to identify issues with the people and the company, so that I can better advice the Government so that it can make well informed decisions.
“That is the case with Wafi too.”

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Mining Minister pre-empts Frieda river mine approval process

The Frieda river mine has yet to go through a proper approval process, the companies involved have yet to agree how they will manage the toxic and dangerous mine tailings or how they will produce enough electricity, but the Mining Minister doesn’t care. He has given government agencies a two-year deadline to get the mine approved and construction started…

Frieda Gold Set For 2019

Post Courier | November 14, 2017

Construction phase for the Frieda mine gold project in West Sepik Province will begin in 2019.
Mining Minister Johnson Tuke Tuke said this during his ministerial visit to the mine last week. The production will start around 2030 or 2040 which the developer PanAust committed to deliver in line with the Government’s 100 days plan.
Mr Tuke said the government has been given two years to go through government agencies like, Conservation & Environment Protection Authority, Mineral Resources Authority, provincial governments and the extractive industry to get the project started.
“There is no issue but I would like both governors to continue with the positive attitude they’ve embraced and get their provincial MPs on board, because inclusive management and political will is crucial to get Frieda off the ground,” he said.
The East Sepik and Sandaun governors have agreed to work together to get this project off the ground.
“All of us have to work together and I’ve assured the people and the developer, give us two years to get all the paperwork done and then we can start on the project,” Mr Tuke said.

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Frieda river mining company in corruption investigation in China

Guangdong Rising Assets Management is under investigation for a series of bad investments including the purchase of PanAust and the Frieda river mining rights. Four people are already being prosecuted for corruption and now the former Chairman is in the spotlight over losses of more than $1 billion

Chinese probe big mine loss

Rowan Callick | The Australian | October 16, 2017

The former chairman of a Chinese state-owned enterprise has been handed over to prosecutors for investigation after the company’s investments in several Australian mining ventures lost more than $1 billion.

Li Jinming, who chaired Guangdong Rising Assets Management, which is owned by Guangdong province, was earlier expelled from the Communist Party following an investigation that began in 2014 over losses that the disciplinary inspection team described as “dreadful”.

The company was established 17 years ago with $2bn capital, the South China Morning Post reported, and it began investing in Australia after the Global Financial Crisis pushed down asset and commodity prices.

It acquired, through different subsidiaries, lead-zinc producer Perilya for $45.5 million, coal producer Caledon Resources for $500m, copper and gold company PanAust — with a massive prospect awaiting commitment in Papua New Guinea at Frieda River — for $180m, and rare earths producer Northern Minerals for $60m,

It also paid $15m for a large stake in gold and base metal explorer Hawthorn Resources.

Leading Chinese financial website Caixin reported that most of these deals had since made losses, with calls on further capital from GRAM.

Li Zezhong, who worked for GRAM for 11 years, ultimately as president, was then appointed mayor of Zhuhai, a thrusting city of 1.5 million on the western side of the Pearl River Delta, just north of Macau.

It was his successor at GRAM who urged a deepening of the investigation into the company’s management.

Last month it was announced that Li Zezhong was being investigated for “serious violations of party discipline,” believed to relate to his time at GRAM.

Four colleagues from his time at the company are already being prosecuted for corruption.

Caixin has reported that investigators are also seeking to interview Liu Facai, now living in Australia. He chaired the committee responsible for all state assets in Guangdong province when he led a team to Australia 11 years ago to explore investments in mineral projects.

Caixin said that he and his son, who was already living in Australia, introduced GRAM to firms in which the company went on to invest.

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Filed under Australia, Corruption, Financial returns, Papua New Guinea