Tag Archives: Chinese mining

Time PNG govt exercised better control over its own resources

A Britten Norman Islander, the first plane to land at Frieda River in 1970. Kiap John Pasquarelli had discovered gold and copper in 1963. Now, 55 years later, the mine is still undeveloped and the object of great controversy

Gabriel Ramoi | PNG Attitude | 12 June 2018

Resources firm Pan Aust (wholly owned by the Chinese state company, Guangdong Rising Assets Management, GRAM), has lost its way with the Frieda River copper-gold project in Papua New Guinea’s Sandaun Province.

It is now time for the PNG government to exercise leadership and rein in control over the Frieda asset if the PNG is to sustain its free education and health policies and lift the rest of the country out of poverty, disease and ignorance.

The view from Frieda is now very different compared with the corporate carnage of 2013 following Glencore’s hostile takeover of Xstrata Mining. In that epic battle for world copper supremacy, Mike Davis’s Xstrata lost to Ivan Glasenberg’s Glencore and with it went a chunk of PNG’s national asset, the K260 billion Frieda mine.

Glasenberg has gone on to become the king of copper and head of the number one mining house in the world.

But then, for a deposit of just K80 million, little known Australian miner Pan Aust Ltd moved in and acquired Frieda from Glencore while PNG government advisers and ministers slept on the job despite warnings from industry that the government should exercise control and reclaim ownership over its strategic asset.

Pan Aust went on to the sell out to GRAM in 2015 for a reported K1.2 billion although officially the deal was closed at K450 million.

GRAM is owned by the municipality of the city of Guangzhau in southern China, although the deal maker in this transaction was a leading Australian Chinese billionaire Dr Chau Chak Wing, the subject of a current controversy because of allegations that he is an agent of the Chinese Communist Party.

Additionally, the influential South China Morning Post reported in September last year that the chairman of GRAM, Li Jinming, as well as the CEO and chief financial officer had been arrested and are facing prosecution in China for failing to account for a number of acquisitions made by GRAM in Australia, including Pan Aust, leading to a loss by GRAM of more than K3.2 billion.

None of these corporate maneuverings went unnoticed by the government of China and eventually Glencore was forced to sell a number of its copper assets to China in order to keep selling its copper ore to the communist country.

I suspect the sale of the Frieda copper mine may have been part of an arrangement between Glencore and the government of China for a number of its assets to be sold to Chinese-controlled companies.

But the question that now needs to be asked in PNG following the arrest of the GRAM directors is what can the PNG government do with Frieda?

Last week, the PNG Mineral Resources Authority reported that Pan Aust had advised it of the withdrawal of an application for the mine development license over Frieda that was filed in 2016.

I suspect the real reason for this is that Pan Aust does not have the required capital to follow through with the development of Frieda Mine since the arrest of the GRAM executives in China and the freeze on GRAM’s activities pending finalisation of court proceedings in China.

Pan Aust and its junior partner Highlands Pacific are already in arbitration over the issue of the costs relating to each partners contribution to the feasibility study.

In the wake of this total mess, an opportunity exists for the PNG government to open dialogue directly with the government of China to revisit the Frieda project.

Already two leading Chinese state companies – China Energy Engineering Ltd and China Railway Yunnan Construction & Development Ltd – have expressed interest in developing the infrastructure associated with the mine.

The PNG government and the provincial governments of West and East Sepik – the ministers of the two provinces in particular – should take the lead in opening dialogue with China on the Frieda project.

How the Frieda project will be developed is part of the unfolding resource war being waged worldwide between private capital (represented by figures such as Glasenberg, Donald Trump and Malcolm Turnbull) and powerful state actors such as the gvernment of China and other savvy emerging states such as Russia and Indonesia.

The leading US-based mining journal Behre Dolbear reported last week that the Republic of Congo, Ghana, Tanzania, Zambia and Mauritania have recently enacted new legislation apportioning greater revenues from mining in favour of the state to the rejection of Barrick Gold in Tanzania and Glencore in Congo.

Over the last six months we have also seen the rise of resource nationalism in Indonesia with a direct challenge to BHP Billiton and Freeport Copper to divest up to 51% of their interest in the Grasberg mine to the Indonesian state.

At the time of writing, BHP has agreed to sell its 40% stake to the state and current negotiations continue on the quantum of compensation for environmental pollution by Freeport.

While there is a much kneejerk reaction by our neighbours about Chinese checkbook diplomacy in the region, it must be remembered that China is Australia’s number one trading partner.

Despite just 70 years ago China being rolled over by Japan after a long period of being pushed around by colonial powers, it has emerged in recent times as a super power extending its hand of friendship to countries around the world as it builds a new world order with itself at the centre.

“Developing countries where 90% of the world lives are at a crossroad,” says the leading black African woman of our generation, Zambian economist, lawyer and banker Dambisa Moyo. “They are facing a choice between the United States model of democracy and private capitalism or the Chinese model of state capitalism and no democracy.”

This may be too unequivocal as many third world countries including PNG are now better poised to consider bartering our copper, gold and other mineral wealth for infrastructures such as roads, ports, railways, universities and hospitals rather than simply allowing private capital through direct foreign investment.

Our experience over 40 years has been dismal as highlighted by reports such as that by Jubilee Australia. As PNG struggles to build its next generation of mines, the young lawyers and technocrats advising our leaders must take it upon themselves not to repeat the mistakes of the past but to look at recent deals between China and a number of counties in Africa and negotiate a new mining development contract for PNG that we all can be proud of.

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MCC Involves Fishermen In Marine Survey

Post Courier | June 8, 2018

RAMU NiCo Management (MCC) Limited undertook a marine environmental monitoring survey along the coastline of Rai Coast district in Madang province recently.

And MCC used local fishermen to provide the reef fish for Ramu NiCo’s corporate health, safety and environment team and an independent consultant Ninkama Yoba and Associates to dissect for tissue samples for laboratory analysis overseas.

The local fishermen from the far-flung coastline of Rai Coast were very happy to be paid a sum of K300 for their catches which were stored in eski coolers provided by the Ramu NiCo team.

Group leader of the Saidor fishermen, David Lopez, thanked the Ramu NiCo HSE corporate team for their trust in allowing them to fish to supply catches for the survey.

“We usually catch fish to enjoy with our families during meals, but to catch fish to supply for the survey is good and also it provided us some money to help us in our remote place,” Lopez said.

From the catches, the fish muscles and liver plus mollusks and crustaceans were frozen, packed with ice and sent to the Australian Laboratory Services (ALS) in Sydney for analysis.

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Frieda Mine Lease On Hold

Frieda River mine camp

Frankiy Kapin | Post Courier | May 31, 2018

Frieda mine project developer PanAust Limited has indicated further alterations to its initial proposal for mine development thus holding back the Special Mine Lease (SML) application.

Mines regulator, Mineral Resources Authority (MRA) revealed this week that the assessment of the application had to be put on hold as the applicant has indicated there may be significant changes to the initial proposal for development and feasibility study.

According to MRA, PanAust is considering a range of potential material changes.

These include the relocation of the integrated storage facility to Frieda River from the Nina River, and increasing the hydro potential to over 300 Megawatts.

The project is also considering development of a public road corridor between Vanimo and Hotmin instead of using the Sepik River.

“This is to significantly reduce its activities within the river system.

“The proposed airport may be upgraded to a regional status and there may be consequential changes to tenements. Some relocation of landowners may also be required,” said the MRA.

MRA confirmed that PanAust’s application for a SML for the Frieda project is on hold pending the company’s lodgment to the government indicating amendments to the development proposal.

According to MRA, the tenement holder initially lodged the SML last year in June 2016 but has indicated to the State negotiating team that it may submit an amended proposal for development and feasibility study by October this year.

“Mining Act and Environment Act approvals will be delayed as a result against the original timetable.

“To date, PanAust has yet to submit its amended proposal two,” MRA issued.

MRA further stated that PanAust will also be required to lodge any amended environment impact assessment report to the Conservation Environment Protection Authority (CEPA) if the original proposals alter.

East Sepik Governor Allan Bird said as the host province, the provincial government will have a say once all mine development documents are assessed by MRA and submitted to the provincial heads.

The Frieda River project is copper dominated with gold and silver as bi-products and presently the project’s mine life is 17 years with a potential to extend.

Current indications from initial submissions are that the porphyry copper gold deposits contain an estimated total combined mineral resource of over 2.7 billion tones at an average grade of 0.42 per cent copper and 0.23 grams per tonne gold.

From this assessment, the project has a total mineable ore reserve of 608 million tonnes at 0.49 per cent copper and 0.27 grams per tonne gold.

The Frieda River project operator is Frieda River Limited (FRL), a subsidiary of PanAust.

Frieda River Project is located in the provinces of West and East Sepik and jointly owned by PanAust (80 per cent) and Highlands Pacific (20 per cent).

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Highlands Pacific to increase its stake in Ramu mine

Poor workmanship and construction has hampered the Ramu nickel mine

Highlands’ ownership of Ramu will increase to 11.3 percent from 8.56 percent”

Cobalt 27 agrees to streaming finance deal with Australian miner

Nicole Mordant | Reuters | 23 May 2018

Canada’s Cobalt 27 Capital Corp said on Tuesday it has agreed to the world’s first cobalt-nickel streaming finance deal on a producing mine with an Australian miner as the industry looks to bolster supplies of the key battery metal.

Streaming is a type of alternative finance that allows an investor to make an upfront payment in exchange for future production at a discounted price. The transaction is the world’s first cobalt-nickel streaming deal on a producing mine, Cobalt 27 said in a statement.

The transaction comes as Brazilian miner Vale SA was seeking to sell cobalt from its Voisey’s Bay mine in eastern Canada in a streaming deal worth around $500 million, Reuters reported in January.

Prices of cobalt, a critical component in rechargeable lithium-ion batteries for electric vehicles, have soared fourfold over the past two years to close to $100,000 a tonne on concerns of a shortfall as demand is forecast to spike.

Cobalt 27 said it had reached a C$145 million ($113.33 million) deal with Highlands Pacific Ltd to buy cobalt and nickel from a Papua New Guinea mine that the Australian miner has a stake in.

Cobalt 27, a small buyer of physical cobalt, is also in advanced talks with other owners of the Ramu mine on Papua New Guinea’s north coast for a further $87 million stream, it said. Both transactions can be funded from cash or a new debt facility.

Under the transaction with Highlands, Cobalt 27 will purchase 55 percent of Highlands’ share of cobalt production and 27.5 percent of its share of nickel output from the mine.

That will result in Cobalt 27 receiving an estimated 450,000 pounds of cobalt and 2.25 million pounds of nickel in concentrate a year from Ramu.

As a result of the deal, Highlands’ ownership of Ramu will increase to 11.3 percent from 8.56 percent. The mine is majority-owned and operated by Metallurgical Corporation of China Ltd. Other shareholders include the Papua New Guinea government, landowners and other Chinese investors.

Cobalt 27 has also agreed to buy a 13 percent stake in Highlands, a Papua New Guinea-focused mining explorer, developer and producer.

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Ramu NiCo landowners assured royalty payment ‘soon’

The National aka The Loggers Times | May 4, 2018

The Government has assured landowners of the Ramu NiCo project in Madang that they will receive their outstanding royalties soon.

Mining Minister Johnson Tuke reassured the four landowner association chairmen of the Ramu NiCo project, and Madang acting provincial administrator John Bivi, that as soon as procedural matters were executed by relevant authorities, the amount owed to them would be paid.

Tuke, while sympathising with the landowners, said this matter had been dragged on for too long as a result of officers not doing their jobs as expected.

He added that as soon as the appointment of the acting managing-director of Mineral Resources Authority was approved by Cabinet, royalty payment matters would be the first thing he would address.

Ramu Nico Management said it had the money to pay landowners.

Chairmen present during the meeting included Toby Bare (Kurumbukari Landowners’ Association), Sama Mellombo (Basamuk Landowners’ Association), Peter Tai (Maigari Landowners’ Association) and Jeffrey Kinang (Coastal Pipeline Landowners’ Association).

Meanwhile, the landowner chairmen were concerned that opportunists from the recent crime upheavals in Madang would use the current situation with the mine landowner against the State to instigate trouble and damage mine properties and assets in the province. Tuke, however, assured them that as minister responsible for mining he would not allow that to happen.

He told the leaders that he would be visiting landowners and the people of Madang next Friday with the new acting managing director of MRA to attend to their needs.

Ramu NiCo Mining Ltd community affairs manager Albert Tobe said the company was ready to pay royalties to the landowners as soon as the State gave them clearance.

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Landowners have no rights over old Basamuk camp says MRA

Landowners claim Highlands Pacific promised them a school and sports ground on land where MCC is now building an accommodation block and refuelling station… 

Post Courier | April 6, 2018

Mineral Resources Authority managing director, Philip Samar clarified that Ramu NiCo Management (MCC) Limited still holds the lease for mining purpose to portion four which was the old camp at Basamuk in Rai Coast distict, Madang Province.
Mr Samar was responding to a petition by a group who claimed to be Lands Title Commission (LTC) declared landowners of Basamuk who petitioned the State and the developer over business opportunities, compensation, environment damages and other issues.
The vice president of Ramu NiCo (MCC), Wang Baowen also attended the meeting.
In one of their petitions, the group claimed that a portion of land which was previously used as the accommodation camp during the construction phase is currently being developed without their consent.
This was after Ramu NiCo had moved its workers accommodation to a new location adjacent to Yaganon river.
However, MCC community affairs general manager, Martin Paining clarified to the people that, that particular portion concerned is still within lease for mining purpose (LMP), and there was no specific agreement signed previously that after the construction, the land would return to the traditional landowners.
One of the landowners argued that initially the then previous developer, Highlands Pacific Limited (HPL) had planned to build a school and a sporting field on that portion of land.
However, locals have witnessed new accommodation quarters being built and also a fuel refueling station being erected within that portion of land.
Mr Samar in supporting Mr Paining pointed out that Ramu NiCo had the license to operate and so long as they have the lease they can do anything on the land.
He said under the LMP which had been transferred from HPL to MCC, the current developer the license is still valid and the developer can do any development of that portion of land.
“There was no agreement which states that after the construction phase, the land goes back to the traditional landowners.”

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A Norwegian, a Papua New Guinean and an American walk into a Bar

Basamuk refinery, Papua New Guinea

Ellen Moore | EARTHblog | March 7, 2018

Do you like riddles? Then try this one on for size: what does your wallet have in common with Papua New Guinea?

Give up? OK, I’ll give you a hint: it’s got something to do with that little plastic rectangle with all the numbers on it.

That’s right, your debit card. You see, the world’s largest banks and investment firms are using the money they control — YOUR money — to finance mining projects that dump hazardous waste straight into oceans, rivers, and lakes. Papua New Guinea is ground zero for this problem.

Despite fierce local opposition and a legal battle that suspended operations for 19 months, the Ramu nickel and cobalt mine in Papua New Guinea is currently dumping around 14,000 tonnes of toxic mine waste into Basamuk Bay every day. Activities from the open-pit mine have polluted the water and destroyed fishing grounds. The indigenous Kurumbukari people were forcibly displaced from their ancestral homeland to make way for the mine, separating them from to their livelihoods, traditional way of life, and spiritual practice. The PNG National Fisheries Authority criticized the project, calling it “unsustainable socially, economically and environmentally.”

It’s Dirty. It’s Unnecessary. And it’s Wrong.

Ramu isn’t the only mine in PNG polluting critical water sources, and PNG isn’t the only country with this problem. Mining companies dump 220 million tonnes of hazardous waste directly into the world’s waters every year: more waste than the United States puts into its landfills.

That’s why today we are excited to announce the Ditch Ocean Dumping campaign. Earthworks, along with our coalition partners, are stepping up to stop this harmful practice — but we can’t do it without your help.

The banks couldn’t finance these projects without our money. Don’t let your money go to Waste! By propping up irresponsible mining companies, financial institutions like Citigroup, Credit Suisse, Bank of America, and JP Morgan are putting the health of our oceans and planet at risk.

Take Action now! Tell Citi it’s time to #DitchTheDumpers.

Help us stop this outdated practice from making a comeback: in addition to Papua New Guinea, new projects that would dump mine waste into the ocean are a being developed in Norway, and the industry has its sights set on Chile.

Everyone has their own connection to water. It’s personal. For many indigenous communities, water is the heart of their cultural heritage and spiritual practice. Healthy oceans and clean rivers and lakes are also critical to reducing the impacts of climate change. So go ahead: find your personal water connection. Then jump in and help us Ditch Ocean Dumping!

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