Tag Archives: fly-in-fly-out

Fly-In-Fly-Out Causing Economic Loss

Post Courier | July 15, 2018

The PNG Resource Owners Federation has countered assertions made by the Chamber of Mines and Petroleum that the fly-in-fly-out employee commuter-based system employed by mining and petroleum projects in PNG is economically “balanced”, compared to the alternative of living on site.

According to the Chamber of Mines and Petroleum, FIFO provides the best balance of shared benefits to communities throughout PNG, not confined to host rural communities.

However, the PNG Resource Owners Federation maintains that it denies host rural communities of much need social and economic benefits.

Citing a 1997 study conducted by National Research Institute (NRI) on the economic impact of the FIFO of expatriate staff of one mining project in PNG, Federation president Jonathan Paraia said using the national income accounting equation, it is estimated that on average, the annual loss of national income is between K5.2 million and K13 million.

And considering the multiplier effect, the annual loss must be approximately K11 million and K29 million.

Mr Paraia said continuation of the FIFO system for a decade will cost the economy, including the multiplier effect, between K110 million and K300 million.

Mr Paraia said the economic benefits that could have been derived from a live-on-site arrangement would be employment in the informal sector, disposable income from FIFO employees, GST and other rates, taxes and fees, banking and financial services and trading, commerce and general business activity at all levels.

“The report further found that it was economically viable to build a township to accommodate the FIFO workers from this particular mine instead of the FIFO system.

“In that time, using the report’s formula, the country must have now lost between K253 million and K690 million over the period of the life of this particular project.

“The number would clearly run into many billions if all projects that practice the FIFO in the country are taken into account,” Mr Paraia said.

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LO Associations Request No ‘Fly-In, Fly-Out’

Mining Minister Johnson Tuke is bulldozing ahead with Wafi-Golpu but will landowners demands be honoured?

Post Courier | 13 July 2018

The Peter O’Neill government is committed to getting off the ground the Wafi-Golpu gold mine project before the year ends, as well is the aspirations of key stakeholders to be met as a precedent to the mine reaching initial production stage.

The two-day Wafi-Golpu development forum ending yesterday in Lae was told.

The main point arising from discussions and presentations between key stakeholders from the government, the landowners and the developer centered on the processes and development stages to the project, as well primarily the benefits and participation of concerned authorities and recognised landowners.

One of the key factors presented to be considered in the Memorandum of Agreement that is deemed to provide a win-win situation to key stakeholder is to put a stop to “Fly In, Fly Out” arrangements.

The three existing government recognised landowner groups of the mine site including the Babuaf, Yanta and Hengambu Land Owner Associations (LOA) share similar notion when it comes to fly in fly out.

President of Babuaf LOA Thomas Nen said it is paramount in this development forum that their stance as a key stakeholder to the project be put forward reminding all parties to the table that Babuaf requested specifically for a mining township that covers no fly-in, fly-outs.

Mr Nen said included are a hydro scheme, hospital and technical training college in the requested mining township.

He said the MOA must consider endorsing the development vision and aspirations of the communities and that both Hengambu and Babuaf have completed and produced their community development plans stemming from the community development forum in which their community’s aspirations and dreams are spelt out.

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Fly in, fly out practice supported

The National aka The Loggers Times | July 11, 2018

THE fly-in-fly-out (Fifo) arrangement for mining and petroleum projects allows economic benefits to be spread across the country, according to the PNG Chamber of Mines and Petroleum.

This was one of several reasons given in a statement to The National from the chamber in response to concerns raised by the PNG Resource Owners’ Federation last week.

The federation’s concerns were based on how project areas were losing out on economic benefits due to this and called on the government to put a stop to it.

“Papua New Guineans make up around 95 per cent of the workforce in mature mining and petroleum operations in PNG,” the chamber said.

“They are employed from the preferred area local communities and the host province, as well as from other parts of PNG.

“This Fifo employment model for the resource industry provides the best balance of shared benefits to communities right across PNG.

“Many of the employees from other parts of the country prefer to live in their own homes, than to take their families to mostly remote and isolated areas where the operations are located.

“Fifo allows these employees to return regularly to their families, which spreads the economic benefits to these parts of the country instead of being concentrated in one area.”

The chamber said Fifo delivered skills-transfer opportunities, drove domestic industry through air links and helped provide a boost to local suppliers, contractors and goods-and-services trade throughout the country.

“Additionally, Fifo helps ensure the resource project does not become a social or environmental burden on the host population,” it said.

“The significant cost of building townships to sustain and support families onsite can be an immense strain on a community, and is not sustainable in the long term after the project closure.

“The Chamber of Mines and Petroleum said host communities of resource developments already enjoy considerable socio-economic opportunities not available to other communities in the country.”

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OK Tedi Mine to lay off 200 employees

PNG OK TEDI MINE

One PNG | 12.02.2016

THE Ok Tedi mine will lay off 200 employees when it resumes operation next month, according to managing director and chief executive officer Peter Graham.

He told Radio Australia’s Pacific Beat programme yesterday that commodity prices continued to drop which had forced the company to reduce the number of its employees.

“During the temporary suspension of operations (since August 22), we’ve had about 250 to about 300 of our employees on site at any one time and kept rotating them to complete this maintenance work during this period,” he said.

“So we’ve had a continuing turnover of people that try and share the available amount of work among the workforce.

“When the people (employees) do come back, there will be a reduction in the number of employees and that has already been processed.

“We’ve come down to about 200 employees.

“And we all will move to a fly-in fly-out operation predominantly versus a mix of fly-in fly-out/residential previously.”

He said as of yesterday, “we start to see the first group of people returning and we will make a comprehensive induction to make sure everyone remembers everything they need to know about this skills-training and safety-orientation over the next course of three or four weeks”.

He said the reduction in the number of employees would have happened anyway.

“With copper prices where they are, we simply had to address our unit costs like every other producer,” around the world.”

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Australian miners and activists target BHP

BHP-Billiton-Logo

PNG  Loop

BHP Billiton confronted its own disgruntled employees along with environmental protesters at its annual shareholder meeting.

The use of compulsory fly-in fly-out (FIFO) workers at two new coal mines in central Queensland prompted workers from around the country to accuse BHP of destroying families.

The increasing casualisation of the workforce, through the use of contractors on weaker pay and conditions, was also a key focus for miners from Western Australia, NSW and Queensland.

People living in towns near the Caval Ridge and Daunia mines were discriminated against and refused a job, 20-year BHP coal miner and local resident Kev Adams told the meeting.

“I know you have a big job Andrew, but you are damaging our mine and damaging our community,” he told chief executive Andrew Mackenzie.

Locals are left with no certainty about their future, he said.

“You can imagine what that does to children with their parents living in a constant state of anxiety week to week, it’s an absolute fact I see every day in a town called Moranbah that used to be thriving and is turning into a dustbowl.”

The use of FIFO workers was squarely aimed at controlling the workforce, claimed Construction, Forestry, Mining and Energy Union general vice president Wayne McAndrew outside the meeting.

BHP chairman Jac Nasser said he understood the concerns, but Australia had to be globally competitive.

Shareholders were also critical of the company for continually mining uranium in the wake of Japan’s Fukushima disaster, and for producing thermal coal due to its carbon emissions.

BHP executives were repeatedly attacked for the company’s environmental record and contribution to climate change.

“We call on BHP to lead the transition away from dirty energy to clean energy … as the world’s biggest mining company you leave a footprint on people and places and have to be aware and accountable for those impacts,” Australian Conservation Foundation campaigner Dave Sweeney said.

Mr Nasser said BHP accepted the science on climate change and had donated funds to the cause, but would not abruptly abandon coal mining, and said uranium mining could help to reduce emissions.

BHP mines uranium at South Australia’s Olympic Dam, where testing of new heap leaching technology – a cheaper way of processing valuable minerals – was showing promise, Mr Mackenzie said.

However it plans another three years of tests before any decision on expansion, and Mr Mackenzie said any expansion would come with steady growth.

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Crater Mountain Gold Mining Project Landowners do not want Fly-in Fly-out operation

PNG Facts

Landowners of the Crater Mountain Gold Mining Project, are refusing a Fly-In Fly-Out operation for workers there.

Nevera Resources Association Chairman, Mathew Kaulovo, says locals have seen very little development in the area since independence and want the mine developer, Anomaly Limited and its owner Crater Gold Mining Limited, to set up an on-site camp for employees.

Kaulovo says, landowners are willing to work with the company, but it must first adhere to this condition, because they refuse to end up with nothing after the mine life, similar to other projects in P-N-G.

He’s urging the National Government to ensure this clause is inserted into all mining agreements, for developers to follow, when applying for licences in the country

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Foreign mining industry cries foul over PNG asserting its independence

Is this the sort of ‘development’ we want in PNG?

“There’s even a local Brisbane school where kids send up all their used coloured pencils to those in PNG who have nothing.”

HIGHLANDS PACIFIC CEO JOHN GOODING

Dancing around the issue

Anthony Barich | PNG Industry News*

ABOLISHING fly-in, fly-out employment would have detrimental effects for Papua New Guinea’s mining industry, an Australian junior has warned.

While applauding the PNG government’s determination to consult industry ahead of changes to the constitution regarding resources ownership, Highlands Pacific CEO John Gooding warned of potential ramifications of changing fly-in, fly-out rules.

As PNG mining minister Byron Chan had vowed to halt FIFO operations – mostly from Cairns but also from other Australian destinations – for mines in PNG, the PNG Resource Owners Federation said in February that the FIFO scheme had been draining PNG of its economic, social and infrastructure benefits.

“There’s a bit of a push for less FIFO and many thought that refers to ex-pats, but if you look at PNG, a lot of people fly into the project then fly back to their provinces when they’re not working. So the FIFO concept is something that, if it didn’t happen in PNG anymore, would completely change the whole complexion of the place,” Gooding said.

Highlands Pacific is involved with the Frieda Copper, Ramu Nickel and Star Mountain operations in PNG, with additional exploration.

However, PNG’s parliament approved dual citizenship in February, which will enable those born in Australia living in PNG, or vice versa, to travel and do business far more easily between the two countries.

The PNG government earlier this year published in the National Gazette the constitutional amendments related to the ownership and exploitation of PNG’s hydrocarbons and minerals.

These changes are part of the O’Neill government’s Kumul consolidation agenda, which it announced last year. In relation to resource ownership, the government will elevate to constitutional status the state’s ownership claims.

Two sections (212B and 212C) will be added to the constitution. The first of the new sections states that: “All hydrocarbons and minerals in their natural state are and always have been the property of Papua New Guinea.”

The second section referred to as “the consolidation and commercialisation of PNG’s business” sets the constitutional basis for the organic law creating the Kumul Holdings structure.

The state’s ownership says that by elevating to constitutional status, it is hoped claims of resource ownership by local landowners will be put to rest.

While Gooding welcomed the consultation process for the Mining Act changes, he warned of potential difficulties implementing it due to the diversity of languages and remoteness of many communities.

He said mining companies, already active in consulting with communities from the start, even before they even start an operation, had been helpful in gaining locals’ trust to alleviate some of these issues.

“There are some parties that are saying that if this is their land, they own everything to the centre of the earth, including the mineral wealth, and the government is saying – and rightly so – that natural mineral wealth is there for the whole of PNG, not just the people that camp on top of it,” Gooding said.

“You need to understand, PNG has 800 different language groups, and as many different tribes or communities that are very isolated, so it’s all about land ownership. So some people have trouble with that concept that the resources are there for the national good.

“Where we are operating is a pretty isolated area, so we’ve provided water reticulation for the village and built a new health centre and provided education for the kids.

“There’s even a local Brisbane school where kids send up all their used coloured pencils to those in PNG who have nothing.

“We provide medical services and emergency evacuation services when required.

“It really is about being a good neighbour. You need to do it from when you first get there, or even before you even get there until the last day that you’re there, it’s a responsibility we have to help these people as much as we can – and they help us too.

“You try to provide training, education and skills that people can take into the future, which is really important.”

Frontier Resources managing director Peter McNeil also sees a potential issue if any changes are made to equity arrangements.

“I’ve had a lot of time in-country, it’s a good destination – so long as the PNG government doesn’t try to change the amount of equity they can gain for sunk costs in the end, which is 30%,” McNeil, who has been working in PNG since 1985, said.

“If they try to change, that equity level will kill juniors, because the 20% level that’s the difference between the 30% and the 50% – that’s the bit that I work for. Any big company is going to want to at least be on equal terms with the government in a major project.”

McNeil also supports the government’s efforts to sort out land ownership issues.

“If this change assists in dealings with landowners, which it must, then it’s enshrined in the constitution. I imagine they’ll still allow the alluvial resources (non-mechanised) to be owned by landowners, because they’re panning on their own properties,” McNeil added.

McNeil first went to PNG as a student in 1981 when his father, an exploration geologist, was general manager PNG for Esso Minerals, establishing the Misima gold project.

“They spent tens of millions in five years doing a lot of grassroots exploration,” McNeil said. “The next challenge there will be when you start chasing the second-order anomalies in the exploration space in PNG.”

* Published in the August/September 2014 PNG Report magazine

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