Tag Archives: Frieda river mine

Frieda mine new owners charged with corruption in China

Members of Guangdong's Commission for Discipline Inspection panel report 'on last year's anti-corruption crackdown of officials in the province. Photo: Guangdong Commission for Discipline Inspection

Members of Guangdong’s Commission for Discipline Inspection panel report ‘on last year’s anti-corruption crackdown of officials in the province.



Officials of GRAM  [Guangdong Rising Asset Management], the New Owners of Pan Aust  Ltd, Charged  Under Official Corruption in CHINA.

Over the week end while in Singapore I received new of grave concern regarding the arrest on corruption Charges against the Chairman and a number of leading  Directors of Guangdong Asset Management Ltd.

It was reported over the week end that on Saturday the 17th of this Month the Guandong Prosecutors office arrested Mr.Xie Liang who is the Party member and Deputy General Manager of GRAM for official corruption.

It was also reported that GRAM is one of 13 Companies in Guagnadong under investigation by the Office of Public Prosecutor for stock Market manupulation.  In September last year Mr.Zhong Jin Song the Former General Manager of GRAM was cited by the Party for serious disciplinary violation and in January this year , the ex  Chairman of GRAM Mr.Li Jin Ming was expelled from the Party due also to serious violation and Disciplinary  issues.

Now if this information is correct it should lead immediately to the Register of Mines moving quickly in protecting PNG National Interest in ensuring that any application before it by Pan Aust Ltd to extend its Exploration Licence over Frieda River and in particular any attempt by Pan Aust Ltd to extend EL 58 should  be rejected out right  and the matter immediately referred to Cabinet through the Ministerial Economic Ministers Committee for consideration on the way forward with respect to the development of the Frieda River Gold & Copper Mine.

frieda exploration

The Current State of Play

In  2013  Xstrata  Glencore Ltd entered into a deed of sale with Pan Aust Ltd to buy the Exploration licences over the Frieda River Deposits  valued at US$125 million. PanAust  Ltd deposited US25million in August 2014 nad took control of the  Frieda River project . According to the terms of the deed of sale  by November 2015 Pan Aust ltd  must pay another US$50 million to Xstrata Glencore. Readers of this blog will note that Pan Aust earlier this year went ahead and sold the Frieda asset together with the entire company for over US$380 million to GRAM of China.  GRAM of China is now for all intent and purpose the new owner of the Frieda Deposit.

Now with this grave news coming out of China regarding GRAM , t is in the best interest of the State to once and for all reign in control and sovereignty over the Frieda Deposit by putting  its foot down by rejecting any attempt to extend the exploration licence over the Frieda Deposit by GRAM or any other player and for the state to take over the licences and to develop this resources itself utilising a number of Models available to it including Contract Mining or production sharing regime as opposed to the rent based regime .

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China looks to mine Papua New Guinea assets


Oxford Business Group

Chinese miners are looking to increase their presence in Papua New Guinea’s minerals industry, with two recent acquisitions giving companies from the mainland a firm hold on assets in the extractive sector.

China already has a presence in the PNG economy, through investments in the mining, infrastructure and property sectors, attracted by the country’s relatively untapped mineral wealth. Recently, firms have been looking to raise their profile in the minerals sector, taking advantage of the depressed commodities market to buy into ventures where existing operators are in need of a cash injection, as well as secure supplies to meet domestic demand.

Buying up

In May, Australian miner PanAust accepted a revised takeover offer worth about A$1.2bn ($923m) from Guangdong Rising Assets Management Company (GRAM). The move will see the state-owned Chinese company gain control of a large-scale gold and copper development on PNG’s Frieda River, building on its 22.5% stake in the firm.

According to Greg Anderson, the executive director of the PNG Chamber of Mines, Chinese investors are better placed than most to fund developments, particularly large-scale mining projects such as Frieda River, because they have the capital. “It is a mega, world-class project and raising the funds for it, particularly in the current market, would be extremely difficult,” he told Australia’s ABC radio in June. “With the entry of the Chinese into the project, it’s far more likely that it will go ahead, certainly within the next five years or so.”

The Chinese drive gained further impetus when Zijin Mining Group acquired a 50% stake in Canadian-based miner Barrick Gold’s PNG Porgera gold operation for $298m in cash, at the end of May, as part of a broader strategic partnership. Barrick’s take from the mine was 493,000 ounces of gold last year, and it is expected to have an operational life of five years or more.

Barrick Gold is selling assets as it looks to reduce a $13bn debt pile, after investing heavily in assets when the market was high, only to see commodities prices dip.

Chairman John Thornton noted that Chinese firms would increasingly have a central role in the mining industry as the country’s appetite for minerals grows. “A 21st-century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China,” he said.

Local opposition

Chinese miners have not always enjoyed a warm welcome in PNG. There have, for example, been clashes between locals and employees of the Metallurgical Corporation of China, which operates the Ramu nickel cobalt project via its subsidiary Ramu NiCo. At least four people were killed in 2009, when riots were sparked by fights between local and Chinese workers during the construction of the project, located near Madang on the north coast. Last August, production was halted for three days after five Chinese workers were injured in an attack by locals.

The $2.1bn Ramu mine was the first large-scale foray by China into the PNG minerals extraction sector. In 2014, the mine produced 21,000 tonnes of nickel, according to the Chinese firm’s junior partner Highlands Pacific, which is forecast to increase to 31,000 tonnes a year when the facility reaches full capacity over its 40-year lifespan.

Though global demand for many minerals remains sluggish, some analysts are forecasting a rebound for the mining industry in 2016. In particular, metals such as copper, gold and nickel – all of which are found in PNG – are expected to post solid price increases, in part on the back of higher demand from China.


Filed under Financial returns, Papua New Guinea

Chinese companies make push for sensitive mining projects in Papua New Guinea

PHOTO: Barrick Gold, the world's biggest gold miner, has sold 50 per cent of its Porgera gold mine. (Barrick Porgera)

Barrick Gold, the world’s biggest gold miner, has sold 50 per cent of its Porgera gold mine

ABC News

A Chinese state-owned investment firm has lodged a compulsory acquisition notice for Australian-based mining company PanAust, which has assets in Papua New Guinea and Laos.

The notice, lodged with the Australian Stock Exchange, is the final step in a $1.4 billion takeover bid for PanAust by Guandong Rising Asset Management (GRAM).

PanAust said GRAM would keep its Australian-based management and would take control of the Freida River project once the takeover process was complete, expected to be within six weeks.

The copper project sits in the headwaters of the Sepik River, which winds its way through 1,000 kilometres of jungle valleys and wetlands.

The Sepik River, one of the largest pristine river systems in the Asia-Pacific region, is home to hundreds of thousands of Papua New Guineans.

PNG’s Chamber of Mines executive director Greg Anderson said the takeover followed a worldwide trend of Chinese companies being the only ones with the financial muscle to push through with the acquisition.

“It is world-class project and raising the funds for it, particularly in the current market, would be extremely difficult,” Mr Anderson said.

“They will have that capital so with the entry of the Chinese into the project it is far more likely that it will go ahead, certainly in the next five years or so.”

Dr Gavin Mudd, a lecturer in environmental engineering at Monash University and a director of the independent mining watch-dog the Minerals Policy Institute, said mining companies in Papua New Guinea did not have a good environmental record.

“Any impacts on the Sepik wouldn’t just impact people at the mine site up in the mountains, it would pretty much follow all the way right down to the coast,” he said.

“We need to be concerned about the volumes of water on-site, we need to be worried about the quality of that water, the chemistry of it, how much heavy metals are present and so on, risks such as acid mine drainage, how tailings are managed.”

‘GRAM understands sensitivities in region’

PanAust director Paul Scarr said environmentalists had nothing to fear from the takeover.

“GRAM has been a cornerstone shareholder of PanAust since 2009,” Mr Scarr said.

“During that period PanAust has received international recognition for its sustainability performance and that includes with respect to matters such as environmental management, local communities development, education and training.

“We certainly understand, and GRAM certainly understands, the sensitivities involved in this region, and they completely support PanAust’s goals in this respect to have no negative impact on the Sepik River.

“It is one of the great river systems of the world and we fully understand that.”

On the other side of PNG’s rugged mountain spine, Barrick Gold has just sold 50 per cent of its Porgera mine to leading Chinese company the Zerjin Mining Group.

It is hoped that partnership will help avoid some of the teething troubles suffered by China’s first PNG project, the Ramu nickel mine.

“I think the intention is that they will get to know PNG and get to know the project with the possibility that they might eventually take it over completely,” Mr Anderson said.

“But it is a very good way to go through the PNG learning curve, to be partnered with a very experienced player like Barrick, so I think it is a good way to come into the country.”

Barrick has settled a class action brought by a group of women raped by security guards and police at Porgera, but the company still faces problems with human rights and illegal mining.

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Chinese GRAM gets funding for PanAust’s Frieda River copper mine study

See, its not Papua New Guinea’s Frieda river mine: First it was Xstrata’s and then PanAust’s and now another bit of PNG is owned by the Chinese…

But when did the landowners ever give their consent to the loss of their land and their rights?

And when we will stop letting the industrialized world get ever richer by taking our resources while we just get worse and worse off as we deal with all the environmental and social costs…


Peter Ker | The Age

PanAust suitor Guangdong Rising Asset Management has secured funding to complete a feasibility study into the Frieda River project in Papua New Guinea. 

The Chinese company behind the $1.4 billion takeover of PanAust Limited is set to move quickly on the copper miner’s prize asset, with a preliminary funding deal for the Frieda River project set to be announced as early as Monday.

Guangdong Rising Asset Management’s (GRAM) ownership of PanAust rose to 87.38 per cent by Friday afternoon. The Chinese group will unveil a memorandum of understanding with the Bank of China on Monday as it seeks to convince remaining shareholders to accept the offer.

Under the non-binding agreement that will be announced in Sydney, Bank of China is expected to provide funding to complete the $50 million feasibility study for the $US2 billion Frieda River project, located in the highlands of Papua New Guinea. The bank is also expected to be involved in funding the eventual construction of Frieda River, as well as other PanAust assets around the world.

Officials to attend signing

The agreement is expected to be inked in front of a Chinese delegation to Sydney led by the governor of Guangdong province. GRAM chairman Wei Zhu is expected to attend the event along with officials from PanAust and Bank of China.

GRAM’s offer to pay $1.85 for each PanAust share is scheduled to close on Wednesday. The group requires a further 2.62 per cent of PanAust shares to accept the offer to move to 90 per cent ownership and compulsory acquisition of remaining shares.

GRAM’s move on PanAust is another demonstration of China’s strong interest in copper deposits, following MMG’s purchase of the Las Bambas copper asset in Peru last year and China Molybdenum’s purchase of the Northparkes copper and gold mine in NSW in 2013.

A copper shortage is expected to emerge by the early months of 2017 and is expected to push copper prices higher. The red metal was fetching $US2.79 per pound on Sunday.


Filed under Exploration, Financial returns, Human rights, Mine construction, Papua New Guinea

Chinese the only bidders for Barrick’s troubled Porgera mine

Chinese State owned mining company Zijin is the only company bidding to buy Barrick Gold’s Porgera mine according to reports from Bloomberg [see below].

porgera_burns-266x300If the sale goes through Porgera would be the third mine in PNG in Chinese hands. The Chinese already operate the Ramu nickel mine and have recently purchased the rights to build the Frieda river mine

Zijin Mining is based out of Fujian Province. It is the largest gold producer in China and second largest copper producer. It also produces zinc, tungsten and iron ore.

Barrick is looking to off load its troubled Porgera mine but most potential bidders will be wary of the mines troubled environmental and human rights record.

Final bidders emerge for Barrick’s Australian gold mine
David Stringer and Brett Foley | Bloomberg
Gold Fields Ltd. is among final bidders competing to acquire a $400 million US Australian mine from Barrick Gold Corp., people with knowledge of the matter said.
The Johannesburg-based producer and China’s Zijin Mining Group Co. submitted final offers for the Cowal gold mine in New South Wales state, according to the people, who asked not to be identified as the details are private. They are competing with local suitors Evolution Mining Ltd. and Independence Group NL, which also submitted binding bids, they said.
Barrick, the world’s biggest gold miner, said last month it has fielded interest for mines it’s seeking to divest in Australia, Papua New Guinea and Chile. The Toronto-based company plans to reduce net debt by at least $3 billion US this year, partly by selling the assets and cutting staff at its head office.
Zijin Mining has also expressed interest in Barrick’s Porgera mine in Papua New Guinea, the people said. Representatives for Gold Fields, Independence Group and Evolution declined to comment, while spokesmen for Barrick and Zijin didn’t immediately respond to calls and e-mails seeking comment.
Cheaper Production
The Cowal mine, which produced 268,000 ounces of gold last year, may be worth at least $400 million, Morgans Ltd. wrote in an April 22 note to clients. Barrick, which is working with Credit Suisse Group AG on the potential sales, could raise as much as $1.1 billion from divesting Cowal and Porgera, TD Securities Inc. said in February.
Gold Fields, which purchased three Australian mines from Barrick in 2013, is hunting for mines with production costs equal to or lower than its existing assets, Chief Executive Officer Nick Holland said in a Feb. 12 interview. Its production at all major operating regions including Peru, Australia and South Africa fell in the three months to March 31, the company said May 7.
The South African producer had all-in sustaining costs of about $1,143 an ounce in the three months to March. That compares to equivalent costs of $740 to $775 an ounce at Cowal, according to Barrick.


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Chinese take over Frieda River mine

The Frieda river is now in the hands of the Chinese

The Frieda river is now in the hands of the Chinese

PanAust Agrees to A$1.2 Billion Bid From Guangdong Rising Assets Management

Move will see ownership of several copper and gold deposits in Asia move into Chinese hands

Rhiannon Hoyle And David Winning | Wall Street Journal

PanAust Ltd. agreed to a takeover by Guangdong Rising Assets Management that values the Australia-listed miner at around 1.20 billion Australian dollars (US$950 million), ending a rare hostile move by a Chinese company to acquire overseas resources assets.

The deal, if approved by PanAust’s shareholders and regulators, will see ownership of several copper and gold deposits in countries from Laos to Papua New Guinea move into Chinese hands.

On Friday, independent directors of PanAust Ltd. said they would recommend investors back a revised offer from GRAM worth A$1.85 a share. The higher bid represents an 8% increase on GRAM’s previous A$1.71-a-share bid, which had been rejected by PanAust as too low.

GRAM, which owns around a quarter of PanAust and has been a shareholder since 2009, had freed its original bid from conditions entirely in an effort to win support of other investors. However, a lack of acceptances prompted GRAM to re-engage PanAust directors in an effort to win their support for a deal.

It comes less than a year after PanAust acquired a majority stake in the Frieda River copper-gold deposit in Papua New Guinea, which it bought from Glencore PLC and aims to develop at a cost of more than US$1.5 billion. Frieda River is one of Asia’s biggest undeveloped copper deposits.

A successful takeover would also increase China’s influence in Laos. PanAust is already one of the biggest miners in the Southeast Asian nation of Laos, and runs the Phu Kham copper-gold mine and Ban Houayxai gold-silver mine. In recent years, it has accounted for roughly 7% of the country’s gross domestic product and nearly a third of its exports.

China Minmetals Corp. took control of Laos’ other big copper mine, Sepon, when it acquired a suite of assets from OZ Minerals Ltd. in 2009.

GRAM is aiming to acquire the Southeast Asian copper deposits at a time when many analysts are forecasting rising demand and prices of the industrial metal, fueled by China’s own expanding middle class. China is the world’s biggest buyer of commodities such as copper, which is used in everything from cookware to air-conditioners and electrical wiring.

GRAM, advised by J.B. North and Co., has repeatedly tried to acquire the company. In May last year, the Chinese company made an initial bid worth A$2.30 a share but couldn’t convince PanAust’s directors to support a deal.

GRAM returned earlier this year with the A$1.71-a-share offer. In rejecting that bid, PanAust said it was timed to coincide with its share price, and spot prices for copper and gold, trading near multiyear lows.

An independent assessment commissioned by Brisbane-based PanAust later put a fair price on its stock at between A$1.84 and A$2.04 a share. PanAust was advised by Rothschild in its discussions with GRAM.

PanAust has been grappling with weaker commodity markets that have squeezed earnings, prompted write downs and job cuts, and forced the miner to scrap its dividend. While PanAust executives said other companies had expressed interest in its assets, analysts said it would be difficult for any competing bid to succeed given GRAM’s existing large stake in the miner.


Filed under Financial returns, Papua New Guinea

PanAust gives the usual empty promises over the environment

We have heard these empty promises so many times before – from the likes of BHP (Ok Tedi), Rio Tinto (Panguna) and Barrick Gold (Porgera) – but still the government and bureaucrats are happy to believe the miners as if the previous disasters never happened…


Frieda river mine camp

Focus on environment issues

The National aka The Loggers Times

PANAUST will bring the best environmental management standards, including management of tailings and mine waste to the Frieda River Project, a company spokesperson says.
The A$25 million (K53m) project is located on the border of East and West Sepik.
The Australian miner gave the assurance following concern by prominent lawyer Alois Jerewai over the implementation of a proper waste disposal mechanism at the Frieda copper-gold mine in West Sepik.
Jerewai had said with current developments taking place at the project site, there was no clear explanation as to whether there were proper waste management policies in place to assure the people in the area of their livelihood.
A company official said PanAust has had considerable experience with tailings management at its operations in Laos (Asia) where the challenges were very similar to Frieda River in relation to topography, high rainfall (tropical conditions) and the presence of downstream communities.
“The Government of Papua New Guinea has in place an approvals regime that requires these issues to be properly managed,” the official said.
“PanAust is undertaking extensive community consultation prior to any development and this will include communities along the Sepik River.
“PanAust is proposing that waste and tailings will be placed within an engineered integrated storage facility. The company is not contemplating either riverine or deep-sea disposal of mine waste rock and tailings.
“PanAust was committed to developing a world class operation of which the people of PNG would be proud, and would provide economic benefits while minimising environmental impacts.”
The Frieda River project is in the feasibility stage which is expected to be completed by the end of this year

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