Tag Archives: Frieda river mine

Academic Urges Govt To Revisit Tax Regime

Post Courier | May 28, 2019

The recent political tussle in PNG has emerged due to inconsistent resource development policies, mainly the disagreements on local fiscal contents associated with the extractive sector, explains an academic.

Senior Lecturer Dr Ken Ail Kaepai of PNG University of Technology said from Lae that PNG needs to critically revise the minerals taxation regimes to develop sound policies and innovative ways of capturing a significant share of the mineral wealth without placing tax burdens on the industry.

“The political tussle between the government and opposition is not new. During the mineral boom periods, Australia had its share of high political turnovers due to arguments over resource rent tax and royalty policies.”

“The idea of national ownership of resources has been People Progress Party’s (PPP) policy platform for maximizing the mineral wealth for PNG.

However, PPP has not pursued it for a policy shift. Currently, the political mindset thinks that equity participation is one way to accommodate national interests com- pared to allowing 100 per cent foreign ownership of PNG’s mineral resources,” he said.

He said that the lack of capital for exploration and project developments restrict the national ownership of mining, oil and gas. The State and landowners do not have the equity capital for procuring equity interests in resource projects.

Dr Kaepai explained that given the limitation, the State has agreed to acquire 22.25 per cent interests in the Papua LNG through a deferred payment of the equity capital, which includes the landowner’s 2 per cent interest.

“The State will bear landowner’s financial burden of their equity interest through KPHL. It means that the landowners will be free-riders at the expense of the State and the society at large.”

“Under this arrangement, the dividends will be delayed over more extended periods required for allowing the State to repay the equity capital sourced from external lending institutions or will enable the investor to recoup its equivalent equity capital cost internally using future positive cash flows from the project.”

Dr Keapai said that the deferred payment of the equity capital shifts the financial burden of providing the upfront capital cost of equity to the investor.

The State’s market capitalization of equity participation in minerals, petroleum and LNG is not clear, and landowner equity participation has been problematic,” he stressed.

Dr Kaepai said that the Panguna was the only mine that consistently paid equity dividends until its premature closure in 1988.

“Local equity participation in Porgera and Lihir gold mines have been problematic and unsustainable, while free-carried interest was offered to OK Tedi landowners under exceptional circumstances associated with the riverine tailings disposal system.”

Dr Kaepai said that a former mining minister, the DMPGM and the MRA misled the GoPNG to take the 30 per cent equity in the failed Nautilus Minerals’ under-sea mining development.

“It is a significant loss of public funds that could have been used to develop the deteriorating health and education infrastructures in rural PNG.”

“It appears that the GoPNG provides tax holidays as compensation for equity participation, and at the pretence of attracting foreign direct investment. “This strategy causes a fiscal dissipation where both tax concession and equity participation could lead to wasteful resource extraction.

“The State and landowners need to critically assess the financial viability of equity participation in Papua LNG, Wafi-Golpu and Frieda projects.

This includes the renegotiation of the Porgera gold mine on a case by case basis.


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UPNG students report on Frieda mine awareness

The mighty Sepik river is under threat from mining

The National aka The Loggers Times | April 8, 2019

EAST Sepik students attending the University of Papua New Guinea completed a Frieda mine awareness report last week.

The report is from an awareness campaign against the proposed Frieda mine that was carried out by the UPNG Avisat Students Association comprising of students from Ambunti, Gawi and Angoram in East Sepik.

Association president Dipson Ban said they carried out a two week awareness from Dec 9-21 last year from Iniok, Tunap Hunsten LLG to Avatip, Ambunti LLG of East Sepik.

Ban said they covered villages that were vulnerable to the proposed mine, educating people to understand and to make wise decision to save the Sepik River.

“The awareness campaign was intended for the benefit of everyone in the community and not only Sepik river people.

“Understanding ecosystem for the benefit of food security, sustainability of the culture which is our main identity and protecting our only life.”

The awareness was the initiative of UPNG Avisat Students Association and supported by sponsors including Mariwia Ltd, Hungo Ltd plus contribution from various Sepik communities.

“The final report will be presented to East Sepik government for policy purposes,” Ban said.

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Ambunti earthquake should be a wake up call to Frieda mine proponents

Damage from a February 2018 earthquake near Mendi. The earthquake killed more than 100 people. PHOTO: MELVIN LEVONGO/AFP/GETTY IMAGES

5.6-magnitude quake hits 9 km NE of Ambunti, Papua New Guinea — USGS

Xinhua | March 7, 2019

An earthquake measuring 5.6 on the Richter scale jolted 9 km northeast of Ambunti, Papua New Guinea at 1847 GMT on Wednesday, the U.S. Geological Survey said.

The epicenter, with a depth of 132.36 km, was initially determined to be at 4.1824 degrees south latitude and 142.9124 degrees east longitude.

The Frieda River mine will be 70kms south of the Sepik River on the border of the Sanduan and East Sepik Provinces and some 500kms upriver from the coast.

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Spare Sepik River from pollution

The mighty Sepik river is under threat from toxic mine tailings and increased river traffic

MM Ondassa | Post Courier | 7 March 2019

The September 2018 signing of Frieda River mine project accord by PanAust – the developer and the landowner groups as reported in the other paper was good news for the government.

The Governor of West Sepik, Tony Wouwou said in part “… the accord committed all parties to ensuring peaceful and constructive cooperation”… and “… everyone must work together to resolve differences amicably and without disruption to the project …”.

Let’s hope they all remain committed to the terms of this accord.

I have three points to raise here. First is the issue that continues to raise eyebrows. It is about the ownership of the underground resources. Who owns the oil, gas and minerals on customary land? Is it the landowners, the government, or the developer?

The truth is; landowners own the land but not the underground resources. Why this is so, is because there are man-made laws that deny them full rights to their resources, hence they don’t get a fair share of the proceeds.

When the job is done, the developer packs up and leaves behind land and environmental completly reshaped. A change of law will certainly make a world of difference in favour of the landowner communities.

My second point is on the Sepik River. Governor Wouwou made no mention of a tailings dam, or Sepik River to be the passageway for the shipment of mineral ores, but said that a tailings pipeline would be built across the border in East Sepik.

The people of Angoram and Ambunti-Drekikir, whose survival depends on the pollutant-free Sepik River are denied their rights to discuss risks that Frieda mine pauses to the Sepik River. The simple villagers have no idea whatsoever on the imminent risks they are about to face.

Despite the ignorance, there is a real possibility of serious environmental impacts that Frieda River mine activity can cause, as there is no guarantee that what happened to Fly River and now the Ramu River won’t happen to the Sepik River.

I raised this very concern last year, which was supported by the environmental scientist Alphonse Roy, who presented some related factual information based on his two “early warning study proposals” which he presented to the Angoram district administrator and others, now locked away or trashed.

May I appeal once again to the developer is to meet and listen to the Sepik River leaders and get first hand information on how this river has been their lifeline for many generations? They want to know how prepared PanAust is, in terms of the provision of alternative water services, fish stock preservation and health services in communities along the Sepik River to mitigate the impacts brought on by intentional and accidental mine rejects.

Thirdly, can the government quickly confirm if PanAust has been taken over by the then major shareholder, Guangdong Rising Assets Management – a Chinese state-owned company? If so, they must make Sepik River the safest?

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The human cost of globalization

Barzil’s latest mining tragedy should be a wake-up call for citizens at both ends of the supply chain. Photograph: Douglas Magno/AFP/Getty Images

Eric Silverman | Metro West | 17 February 2019

Last month, a massive dam holding back a lake of waste from an iron ore mine collapsed in rural Brazil. The exact toll from the tsunami of metallic sludge is still unknown. At least 130 are confirmed dead but, as one elderly woman said, “It’s easier to count the living.” Hundreds remain missing. Some bodies will likely never be exhumed from the muck. Surely you heard about the disaster, expressed momentary horror, then went about your daily life as if such matters did not concern you. They do.

Like it or not, your hand – all of our hands – helped breach that dam. Those who benefit most from the global economy have equally global moral responsibility.

If you’re reading this newspaper in Massachusetts, glance outside your window. See any mines? Count yourself lucky. The largest such chasm in Boston was the Big Hole formerly occupied by Filene’s Basement. Actually, we’re not lucky at all, just rich. Most of us in MetroWest don’t want mining. We prefer other, far safer jobs, never mind backyards unblighted by large-scale resource extraction. And we have the affluence and power to make corporate and government leaders take heed. Not so the poor souls recently entombed in the mud.

Most Americans look to nature for rest and relaxation. We sojourn in the forest, like Thoreau, to “learn what it had to teach.” Others sell their woods and hills to survive. It is far better to be on the buying end of consumerism than the giving end of iron ore and other raw materials. Just ask the people of Vila Ferteco, the community downstream from the shattered dam.

Or ask anybody at the fringes of the world system. I know some of them well, having lived and studied as an anthropologist in a community along the Sepik River in Papua New Guinea. They have little political voice, less money, and no position of privilege that would cause corporate directors or public officials to take notice. That’s why their society is at risk from one of the largest gold and copper deposits in the Asia-Pacific region, the Frieda River mine, now under development by an Australian company, PanAust, which is a subsidiary of a Chinese government entity. Many people along the Sepik River are speaking out against this mine. Few seem to care or listen, especially shareholders and consumers on the other side of the world who will someday reap the lion’s share of the mine’s benefits.

There are few opportunities for a paycheck in the developing world, never mind a job that would pass muster by the workplace safety regulations that protect your own labor. More than 750 million people, mostly in the Global South, have less than a $1.90 a day in their pockets. What they have, however, are the natural resources – minerals, timber, oil, and gas – that are fed to factories in Nigeria, India, and Guangzhou, then shipped as the myriad products that arrive by Amazon on our doorsteps. It’s not so far from Bangladesh or Brumadinho to the local mall.

Nobody gives up their land because they find pleasure in open-pit mining. They do so because they have as much choice in the matter as they do clout in the boardroom or parliament. Corporations know this well, and so do as they please in distant places beneath the palm trees, at least those that remain standing after clearcutting for palm oil plantations. The end result is what just happened in Brazil.

The Global South is the resource Wal-Mart for the industrialized world, only with worse wages and no health care benefits.

The poisonous sludge that murdered a town last week came from a mine owned by a Brazilian company, Vale SA. The same firm, together with the Anglo-Australian giant BHP Billiton, owned another Brazilian mine where a collapsed dam killed more than a dozen in 2015. BHP Billiton once operated the Ok Tedi Mine in Papua New Guinea that discharged 90 million tons of waste into the local river system – about 500 square miles – for more than a decade. Half the river, reported The Australian Conservation Foundation, was “almost biologically dead.” The cultural survival of its indigenous communities remains at risk. Across the border in the Indonesian province of Papua, the U.S.-based company Freeport-McMoRan runs the world’s most profitable gold mine. Some of those profits, reported by The New York Times, went into the pockets of military and police officials to ‘secure’ the site.

Needless to say, major Western banks and investment firms, such as Vanguard, Blackrock, State Street, Fidelity, Citicorp, Bank of America, and John Hancock, pour assets into these mines, maybe even some of your own retirement funds, just as the mines pour their toxic waste down nearby hills and waterways.

There is no shortage of blame. Corrupt politicians. Greedy Wall Street financiers. Multinational corporations and the glossy PR firms they hire to promote ‘global citizenship.’ But most of the blame rests with you and I – everyday people content with our own lives and things, and thus unwilling to consider the human cost of globalization and to demand a more ethical capitalism. It’s time we did. Before another town in a far-flung place most of us can’t find on a map is buried beneath indifference.

Eric Silverman, a former Research Professor of Anthropology, lives in Framingham. He is now affiliated with the Women’s Studies Research Center at Brandies University.

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Post Courier calls for new approach to landowner consultation

Wafi-Golpu And Frieda River Proposed Mines Are Nothing New To PNG

Post Courier Editorial | February 4, 2019

Papua New Guinea of all places in the world should know better than most other advancing, under developed and developing worlds what the price of new world class mines operations entail.

The industry itself is so sophisticated and complex that for an infant resource based country like PNG, the understanding and economics of the business has yet to be fully understood and appreciated. That is not to say PNG has not had its say and experienced what it means because the country’s history itself has demonstrated to the world what can and cannot go wrong in such developments.

It is a painful memory to give Bougainville as an example because that was the first ever manifestation of a culmination of events that took place because of the absence of modern day dialogue between developers and the local people of PNG.

Bougainville is too painful an experience to always delve on due to the that it was the first time ever that a civil war was fought on PNG soil. PNG’s experience are the two World Wars where it was not spared the agony of witnessing human beings being slaughtered and killed at random at the behest of two or more foreign powers attempting to take control of the world.

PNG was just caught up in the international quagmire of geo-political and militarily ambitious strategic to be the best in the world.

The point here then is that PNG is not short of world or international experience and exposure that it has learnt or not from. In this case Wafi and Golpu plus Freida River proposed gold and copper mines are the perfect opportunity to showcase what PNG can do when it comes to benefit streams which is what all landowners are screaming murder about at the moment. So with the unique experience that many of PNG’s outstation and communication officers process, perhaps the two new mining projects should set the new standards and technical understanding of what new resources development projects should be realigned in relation to connections with local people.

This is as opposed to the standard policies and principles contained within all mining and other resource projects agreements and understandings.

This means where there is no clear clarification of how best landowners should be involved in progressive developments be they technical or project economics, they should be debriefed like all other stakeholders.

It is about time where local landowners considered illiterate and uneducated are left out from the technical briefings provided and with the wishful thinking that community liaison officers can best do the job on behalf of developers and investors to explain basic project economics to curtail resentment. Landowners should be engaged from day one until project agreements are signed so as to avoid the prevailing misconceptions about who benefits most from the millions invested in projects.

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Who benefits from the exploitation of our natural resources?

Lester Seri

Last week the Sepik River People published a Public Announcement Advertisement, making clear their stand, “Ban Frieda River Mine”.  This is a repeat of their previous announcements to ban the mine.

Interesting to note that the Governor of the East Sepik Province rightly seem to be responsible and cautious by allowing for proper consultation and hearing everyone out in order to take a collective decision, but there are other MPs that seem to want the process fast tracked and give the green light for the mine development to take place quickly.

One wonders why the rush considering the enormity of the mining tasks involved of the planned project, the rugged geographical setting, and the likely social and environmental implications that might  arise out of it affecting the multitude of the people in the area, as we have seen in the other mines such as, Ok Tedi, Pogera, and Bougainville to name a few?

It seems like we have never learnt any lessons from these other mine projects to do a better job in order to minimize social and environmental impacts while improving on just and equitable sharing and distribution of the benefits from the proceeds of the mineral exports?

For whatever number of years that Ok Tedi and Pogera Mines have been in operation and the billions of revenue these mines have generated, it is beyond belief that little if any has change in the lives of the landowners and the surrounding communities, I mean basic necessities such as improved income,  electricity, water supply, hausik and medicines, schools, and better constructed road network, and business opportunities for the people in the region. How does one explain this real hard reality situation that we are experiencing in Papua New Guinea, after 42 years of political independence and billions of dollars of revenue generated?

The same could be said about our people on Bougainville Island, after how many years of the Panguna Mine and the many many millions of Kina that it generated, and after the mine closed due to civil war, what is there to show for, in terms of “development”, in real terms? The same could be said of the Misima mine and the people too?

I guess the question that needs answering is, who has and is actually benefiting out of the exploitation of our precious natural resources? More precisely, how are our own people, especially in the rural areas of these multi-billion dollar project areas, really benefiting? The fact that as citizens, we barely scrape through every year despite billions of Kina annual budget being handed down, and effectively there is nothing to show for, is quite troubling to live with.

May be, as a People and a Nation, we should acknowledge the stand taken and the call made by the Sepik River People, this time, and take a step back and critically look at our natural resources extraction policies, laws and strategies again by identifying those serious issues and problems that we have had and faced in the last 42 years, and answer the question, why have we not done well and made any real progress in our development endeavour, in order to do what might be the right thing or way to do to realize that collective desired progressive difference? This challenge should not be that difficult to do as there have been and continue to be scores of scholarly papers / books that have been written about PNG experience over the years relating to our developmental challenges that should guide us to do the right thing, for once!

One problem for sure, in my humble view, is that, in the course of the 42 years of our independence, we have had all the time and opportunity to take a bold stance and make major policy shift to make a big  and better difference but we just did not have that, bold, strong, honest and responsible leadership to do it, and our situation and sufferings today is a testament, that we had quality leadership failure. We need good, strong, bold, determined and responsible leadership with moral authority committed to doing the right thing by their people for now and into the future. 

It is my greatest hope that the Governor of East Sepik and the Leaders responsible for this major mine development will take heed of the our peoples’ call and do what is proper and right by all and guide the nation along a more prosperous developmental path into the future, a better one than what we have been through thus far?

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