Tag Archives: Chinese mining

Solomons landowners discuss concerns on reopening gold mine

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen – ANU

Landowners on Guadalcanal in Solomon Islands have been consulted about the proposed reopening of the Gold Ridge gold mine.

The mine was closed in 2014 after massive floods and its ownership was then transferred from the Australian owner St Barbara to a local land-owning company Guadalcanal Community Investments Ltd.

Guadalcanal Community Investments Ltd is now working with Chinese-owned Australian property developer AXF Group which plans to have the mine operational by the end of 2018.

Bringing the gold mine back to life is also a major policy objective of the government which says it wants to do it right.

Members of landowning communities discussed a range of issues with government officials and company representatives relating to royalties, security, environmental impact, revenue sharing and the relocation of people.

They were assured by both the government and the company that their concerns would be taken onboard and addressed to ensure a smooth reopening.

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Ramu mine faces huge deficit

Post Courier | April 04, 2017

THE Ramu nickel-cobalt project in Madang is facing a huge deficit balance accounting to more than K100 million despite achieving 100 per cent design capacity beginning this year.

The deficits are due to the declining commodity prices and serious April 2016 fatality at Basamuk refinery forcing the project to shut down indefinitely at the time incurring huge production losses.

Vice President of Ramu NiCo, Zhao Deqian announced this during the monthly KBK elders’ project update meeting in KBK on Saturday. Mr Zhao was accompanied by Executive Deputy General Manager KBK Mine Li Bentao and Deputy General Manager Commercial KBK Mine Liu Tianhua.

“We have achieved milestone production reaching 109 percent design capacity but at the time when nickel price is at US$13,000/ton low and production loss during Basamuk April 2016 incident costing hundreds of millions of Kina deficit.

“We are still recovering from production loss but capable to sustain ourselves given the current production stability,” Mr Zhao said.

He said the project operation cost can sustain itself from little money made including salary for employees and the deliverance of Project MOA commitments.

“We are now emphasising on safety issues and taking strict control on safety standards on site so we do not repeat the same Basamuk April 2016 incident. We cannot afford another production loss,” Mr Zhao said.

He said the company has identified some priority areas to cut down costs including the reduction of Chinese employees and increase of national employees through localisation programs.

“Our aim now is to make profit, deliver benefits to landowners and ensure high safety standards,” he said.

The Vice President acknowledges the landowners for their support and asked for their continuous support for the Project until it clears off the deficit balance.

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PNG group says mining ombudsman ‘last hope’

Porgera mine. Photo: wikicommons / Richard Farbellini

Radio New Zealand | 13 March, 2017

A human rights group in Papua New Guinea says it would be a great relief if Canada agrees to appoint an ombudsman to monitor PNG’s mining sector.

The Akali Tange Association has written to Canada’s Prime Minister, Justin Trudeau, as part of a wider global campaign calling for the appointment.

The group said Canadian-owned Barrick Gold had employed security guards at Porgera who had committed killings, assault, and rape.

Its executive officer, McDiyan Robert Yapari, said an ombudsman would finally provide some justice for victims as well as holding mining companies to account.

“Now we don’t have any choice but only our prayers – our only hope now lies with the Canadian Prime Minister, if he sets up this Canadian extractive human rights ombudsman – that would be a great relief for us,” said McDiyan Robert Yapari.

Mr Yapari said the situation at Porgera Mine was getting worse and an ombudsman was the community’s last hope.

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Where to dump Frieda’s raw waste just a ‘technical issue’: Minister

Frieda River mine set to start operations 
[the Post Courier loves a misleading headline!]

Post Courier | March 09, 2017

The giant Frieda River mine in West Sepik is now 60 percent ready of becoming a reality with the National Government waiting to issue the mining license for the project to start after few technical issues are sorted out, says Aitape Lumi MP and Minister for Treasury Patrick Pruaitch.

“Frieda River is 60 per cent reality now, we are ready to issue the license. We just need to work through with the technical people to on how they will dump the raw waste.”

“The company has put an application to convert mine waste into power generation system , but the State does not have the capacity so it is doing its best to hire people to give the best advice on how we can look at that and we can give the okay for that 40 per cent to be completed, for 100 per cent to give the mining license for project to start,” Mr Pruaitch said.

Mr Pruaitch said this at the opening of the first ever Frieda Mine Landowners Forum underway in Port Moresby’s Crowne Plaza Hotel that started yesterday and will end today.

Mr Pruaitch urged the people to work together and put together their benefits package for the National Government to consider during the project negotiation.

” Let us not send mix signals, it will give opportunity for company to go divide a few LLGs and MP’s to start the mine with the least cost possible so we can bring in impacted development for that region,

“I believe that is a big project that will transform Sandaun Province and Sepik region including Madang. This project will spread benefits across the region.”

YUP, JUST LIKE OK TEDI HAS TRANSFORMED WESTERN PROVINCE; LIHIR HAS TRANSFORMED NEW IRELAND; PORGERA HAS TRANSFORMED ENGA; AND THE LNG HAS TRANSFORMED HELA PROVINCE

HOW ARE OUR POLITICIANS STILL ABLE TO SPOUT THIS NONSENSE AND NOT GET LOCKED UP IN LALOKI PSYCHIATRIC HOSPITAL?

OR MAYBE WE NEED TO CHANGE THE LAW TO MAKE PEDDLING FALSE CLAIMS AND PRAYING ON PEOPLES DESPERATION BECAUSE THEIR GOVT HAS FAILED THEM A CRIMINAL OFFENCE?

“I want initial support from landowners because if we don’t have a project, we will not talk about benefits. We have to have a project, we have to get a leg in and another one in than we can be able to negotiate for the benefits. If we are not supporting the project than we can be standing here as leaders driving a lost cost, we must have a project, we must have shareholding understanding with impacted landowners, we must have understanding with the Telefomin district, we must have that understanding with the Telefomin LLG and sandaun Provincial Government.”

“I want Frieda mine which is going to be the first mining for the next government to use LNG precedent to allocate these benefits.”

Landowners to discuss benefits amongst others

FRIEDA Mine landowners have come together to discuss issues including benefits for negotiations with the National Government and developer PanAust when Frieda Mine project comes into development.

Member for Telefomin Solan Mirisim who initiated the first ever landowner forum to discuss issues surrounding the Frieda River Project, the Political Leaders from the West Sepik Province. MRA and stake holders emphasised on how best they can work hand in hand and support the Company, landowners and the State to kick start the Project once the SM application is granted.

“I stand up here representing the views, the cries and the excitement of over 50,000 people from Telefomin District, including people from ward 21, particularly the seven impact Villages within the vicinity of Special Mine Lease area.”

Mr Mirisim said Telefomin is the host District of the Frieda River Project and is one of the most remotest districts in the country that has no road link, only mode of transport is by Air and the four LLG are all accessible by third level airline and it is very expensive District to deliver goods and services to our people on time.

“Frieda River Project is the only Project in this country that has taken over 40 years of exploration after exploration, I must take this time to thank many exploration companies who have worked on the Frieda River Project for many years to this time, it is long time awaiting for our People in Frieda River and Telefomin District.”

“I would like to thank the Highlands Pacific and the PanAust for taking the project closer to fruition. One final step to finish and we will have a world class Mine that will be mined and developed in our District which will no doubt create prime opportunity to impact and transform the lives of our people through employment, training, economic empowerment, contracts and all kinds.

“We want to see a Pathway that will improve our way of life, a pathway that will change the areas of Infrastructure, a pathway that will see a society transformed with Improved Social and Health Indicators.

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Solomon Islands govt signs agreement to restore mining lease

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo:  Dr Matthew Allen – ANU

Radio NZ | 9 March 2017

The Solomon Islands government has withdrawn last year’s cancellation of the mining licence for Gold Ridge Mining Ltd.

This effectively restarts efforts by landowners and the new majority shareholder, Chinese-owned Australian property developer AXF Group, to re-open the Guadalcanal mine.

In a statement the chairman of the cabinet sub-committee on Gold Ridge said the minister cancelled the mining lease because he felt the previous owner St Barbara’s sudden departure breach of the Mines and Minerals Act, and the Mining Agreement.

The miner’s departure from Gold Ridge followed complications around flash floods in April 2014, which compromised the mine’s tailings dam and impeded access to the mine.

St Barbara however, has repeatedly denied abandoning the mine.

It stands by its transfer of ownership, via the sale at a nominal amount, to local landowning company Gold Ridge Community Investments Ltd.

The Australian miner also denied claims by GCIL following the sale that it had saddled the local landowner company with all the environmental liability of the closed mine.

Following the signing of the agreement with government to restore the mining licence, GCIL’s chairperson, Walton Naezon, said landowners would be working closely with their chosen investor and the government to restore the mine to profitability.

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Greedy foreigners continue to fight over who profits from the destruction of the Sepik

The Chinese and Australians are fighting over who will control the destruction of the Frieda river and the region’s rainforests, swamps and staple sago trees

PanAust speaks out on HPL

Post Courier | March 08, 2017

MINER PanAust Limited has broken its silence on the rift that has developed with its joint venture partner-Highlands Pacific Limited (HPL).

Responding in a market report managing director Dr Fred Hess clarified the proposal was to reinvigorate its (HPL) board and that it had omitted material information to the proposal.

“PanAust also wishes to note that in its view each nominee would meet the test of independence as set out in the Australian Stock Exchange (ASX) Corporate Governance Principles and Recommendations.” he said.

“PanAust also wishes to clarify that the proposal to reinvigorate the Highlands board is unrelated to the ongoing dispute in relation to the Frieda River project and the proposed independent directors have no involvement in the Frieda River joint venture.

“In particular, the announcement failed to disclose that PanAust views each nominee as independent from PanAust, and that there is no arrangement or understanding that the proposed independent directors will act at the direction of, or report to PanAust.”

Dr Hess said the reasons for PanAust seeking to change the composition of the Highlands board include to implement a new strategy and direction for Highlands.

Dr Hess said this is with a view to increasing shareholder value in circumstances where the HPL share price has decreased significantly over the last five years.

“PanAust notes that voting patterns at the last annual general meeting reflect substantial shareholder discontent with the current board following the US$68 million loss in 2015 which included the payment of short term incentives to senior management.

“Sentiment is unlikely to have improved following the 2016 half year loss of US$23.5 million which has been exacerbated by the board’s delayed and ineffective response to implement austerity measures and also in the absence of any disclosure in respect of strategy to create shareholder value.

“Clearly, change is overdue with barely US$10.5 million cash left in the bank at year end after spending US$3 million on staff costs for the year,” Dr Hess said.

He said PanAust disagreed with the comments that had been made by Highlands that, should the proposal be implemented, it would result in a “PanAust-dominated board” which “would be at risk of operating in the interests of GRAM, rather than in the interests of all its collective shareholders.”

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction.

“PanAust notes that it is still waiting on a response from Highlands on the date of the shareholders meeting to consider Highlands board composition,” he said.

He urged investors to consider the resolutions being proposed by PanAust carefully, together with the information and reasons put forward by PanAust.

Further, that they vote in favour of the resolutions at the special meeting, which will be held in May, 2017.

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China ‘angling for control’ of massive Mt Frieda copper deposit in PNG

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea. 

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea.

Brian Robins | Sydney Morning Herald | 2 March 2017

Frieda River is one of the largest undeveloped copper deposits in the world. Now, the smaller shareholder in the project, in the remote highlands of Papua New Guinea, has cried “foul’ warning that a proposed board spill will give the Chinese government control.

Less than two years after paying $1.2 billion to snap up PanAust, an Australian miner with interests in projects in Laos and Papua New Guinea, Guangdong Rising, a Chinese investment company owned by the Guangdong provincial government of southern China, is angling to gain control over the Mount Frieda gold and copper deposit.

The Frieda River deposit has been under study for development for more than 30 years. Now controlled 80 per cent by PanAust and 20 per cent by Highlands Pacific, it has had a series of owners, from Japanese to American groups, with Swiss trader Glencore the majority owner before it sold to PanAust. All of the owners to date have struggled with the cost of developing the resource.

Located in the remote north-west of PNG, Frieda River is 175 kilometres north-west of the Porgera gold mine and 75km north-east of the Ok Tedi mine.

Development costs have been put at as high as $US6 billion, which is a stumbling block, since few private companies could finance a project of that size, and most banks would baulk at the large sums involved and the associated development risk. One reason for the high cost is the need for a hydro-electric dam to generate the power needed by the project.

The most recent project study put forward by PanAust last year was based on a plant capable of handling 40 million tonnes of ore annually, producing 175,000 tonnes of copper and 250,000 ounces of gold, with an initial mine life of 17 years. This would cost an estimated $US3.6 billion to develop, excluding some key costs such as the power station and other items of equipment.

Highlands Pacific rejected the study, and obtained a review of the proposal arguing it was deficient, a view which was supported by an independent assessor which found that less expensive, lower risk options should be put forward for consideration.

PanAust had in September 2014, well before the Chinese government took control of the company, put forward a $US1.7 billion estimate to develop Frieda River. The second, more expensive development concept reflects the larger annual production capacity of the project, additional spending on waste and tailings management and increased construction costs.

In February, just over a month after the peer review of the feasibility study was released, PanAust moved to take control of the Highland Pacific board, seeking to replace its four independent directors with its own nominees.

Guangdong Rising has a 14 per cent shareholding in Highlands Pacific, with Trafigura, the privately controlled commodity trader, owning 16 per cent and an arm of the PNG government another 11 per cent.

Guangdong Rising’s “proposed board spill would constitute a change of control of the company, without any payment or premium for control”, Highland Pacific’s outgoing chairman Ken MacDonald and Ron Douglas, the chairman elect, said in a letter to shareholders.

“Our shareholders deserve better. If GRAM wants control, it should make a takeover offer and pay a full price.”

For its part, the Chinese company has stated the proposed board spill is simply an attempt to “reinvigorate” Highland Pacific’s board.

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction,” it said in a statement, denying the proposed board spill is about gaining full control over the Mt Frieda project.

It also argues that the nominees it has put forward to stand for the Highlands Pacific board are viewed as being independent of itself, and they will not act under its direction. 

Along with the Frieda River stake, HIghland Pacific has a small share in the large Ramu nickel project, controlled by China Metallurgical Co, along with some advanced exploration projects.

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