Tag Archives: Frieda river mine

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…

china

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.

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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.

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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…

FriedaRiverCamp

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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Govt pushes blindly ahead with new mine without understanding past failures

Frieda river to be the next area of PNG sacrificed to foreign greed by politicians and bureaucrats who serve their overseas Masters rather then the people of PNG…

frieda river

Officials visit mine site

The National aka The Loggers Times

THE Government has assured landowners and developers of the Frieda River copper-gold project in West Sepik that it is committed to the resource development.
This followed a meeting last Friday between Mineral Resources Authority, landowners and PanAust officials at the project site, during which MRA managing director Philip Samar said the Government was committed and was awaiting the delivery of the feasibility study by PanAust which is expected by the end of this year.
“The receipt of the feasibility study by the state from PanAust the project developer, would initiate
the next phase of the Frieda project to move it from exploration phase to a development phase,” Samar said.
“The MRA, on behalf of government, will then assist in facilitating the statutory approvals including the grant of the mining lease to enable mine development.”
Landowners expressed their confidence in the Government’s efforts to facilitate the development of the Frieda project into a mine.
Landowner leader Bob Onengim said it was a first time for MRA chief to visit the project site, which he said was a significant show of commitment by the Government.
“We see this visit as a historical and an important one by any government department head, and your visit and presence here on site today has boosted our hopes and dreams that a mine development here in Frieda is imminent after 47 years of exploration,” he said.
Onengim said his group had pledged their support to all stakeholders including PanAust and the government.
PanAust currently indicates that Frieda will commence commercial production around 2020 and delivering in excess of 100,000 tonnes of copper and approximately 200,000 ounces of gold per year over a 20 plus years of mine life.

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Proper waste disposal needed for Frieda mine

“An investor will want to take all that money back at all costs even including human costs and a polluted Sepik River.”

frieda river

The National aka The Loggers Times 

A PROPER waste disposal mechanism should be in place at the Frieda copper and gold project in West Sepik before mining starts, a lawyer says.

Alois Jerewai said with developments taking place at the site, there was no clear explanation as to whether there would be proper waste management policies in place to assure the safety of people in the area.

“The entire Sepik River with its tributaries and the river basin itself form the food bowl for some 300,000 people directly, and the slightest mine waste leakage into the river system will destroy that,” Jerewai said.

“The Government and the two (associated) provincial governments are compelled to protect their people by ensuring that no environment permit be granted to mine developers except on absolutely contamination-free Sepik River.

“Under no circumstance will any proposal involving any form of a tailings dam be tolerated.

“All mine waste are to be disposed of elsewhere, promptly by safe and leakage free system, possible a deep-sea disposal of the kind deployed at Basamuk for the Ramu nickel mine in Madang.

“The Sepik people want the Government, Mineral Resources Authority, the two Sepik provincial governments, investors and operators of the mine to take note.”

Jerewai said recent news of a takeover offer of Frieda by a Chinese interest raised questions regarding people’s livelihood.

“Our fear is that the buying and selling of this tenement preceded any actual mining operation,” Jerewai said.

“At some point this buying and selling of a non-operating mine will peak.

“An investor will want to take all that money back at all costs even including human costs and a polluted Sepik River.”

The Frieda copper-gold mine project is owned by Australian miner PanAust and Highlands Pacific Ltd.

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Foreign investors double their money on the back of PNG minerals – but nothing for landowners or government revenues

Why is PNG and its people always the last to benefit from its own resources?

Could it be because we are blindly following a model of development that is being imposed from outside by those who take all the profits?

ramu mine

The Ramu Nickel mine near Madang in Papua New Guinea in which Highlands Pacific has a minority position of 8.56 per cent

How a small cap miner doubled despite a weak copper price

Richard Hemming | Sydney Morning Herald

If small cap mining companies are looking for a template for success in an environment of weaker commodity prices they should look no further than Highlands Pacific, whose stock had doubled in the past month and is now up 50 per cent since the start of March.

The rise of the Papua New Guinea-based company’s fortunes is an education on how a management team led by John Gooding has managed to squeeze value out of a number of projects in which it holds minority interests.

Patersons’ mining analyst Matthew Trivett called the stock a spec buy at 5.7¢ back in February. Highlands is now trading at 9.5¢ and has a market cap of $87 million. Trivett thinks it will go further based on the company’s strong financial and strategic position.

“Highlands’ management has been skilful in keeping minority shareholding in key projects; dealing with Chinese partners; and generating deals that create immediate value for its shareholders,” he said.

“It’s not every company that can get $10 million upfront from Anglo American for one of its projects.”

Demand coming from a giant manufacturer also helps. The copper price has fallen about 10 per cent this year, but it appears that Chinese interests are determined to get their hands on copper concentrate, which is still essential for electronic componentry.

Highlands Pacific’s most notable minority holding is its 20 per cent stake in the PanAust-controlled Frieda River copper/gold project in PNG. This asset is the reason behind the $1.1 billion takeover offer last month from the Chinese investment company Guangdong Rising Assets Management (GRAM).

Not only does Highlands Pacific own 20 per cent of the Frieda project, it also has a minority position of 8.56 per cent in Ramu Nickel, also in PNG, which is owned and developed by Chinese interests, which have so far spent more than $2 billion. Plus, unlike most mining juniors, it secured $10 million from the mining giant Anglo American to farm into its Star Mountains copper/gold project (also, you guessed it, in PNG). Anglo will spend another $25 million to secure 51 per cent of the project.

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