Tag Archives: Frieda river mine

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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Foreigners barter for control of Frieda river mine while landowners have no say

Big profits to be made in this foreign auction of PNG resources – but none of that money will filter back to PNG…

Will the Chinese or the Australian's get to destroy the Frieda river?

Will the Chinese or the Australian’s get to destroy the Frieda river?

PanAust Rejects New A$1.1 Billion Guangdong Offer as Too Low

James Paton | Bloombeg

PanAust Ltd. rejected a new bid from China’s Guangdong Rising Assets Management Co. that valued the copper producer at A$1.1 billion ($840 million) as too low.

Guangdong Rising, PanAust’s largest shareholder, should pay more than A$1.71 a share if it wants to boost its ownership, the Brisbane-based company said Wednesday. PanAust rose as much as 0.9 percent to A$1.755 in Sydney trading.

“With PanAust’s share price now trading above the GRAM offer price, it suggests that the market also agrees with this view,” according to the statement. The PanAust board is open to talking with the state-owned Chinese investor to determine whether the two sides can agree on a price, the company said.

Guangdong’s cash offer, 40 percent higher than PanAust’s share price before the bid last month, is “unconditional and not subject to the board’s recommendation,” the Chinese company said in a separate statement.

The cash bid in March was unsolicited and made when both the producer’s shares and copper and gold prices were trading at or near five-year lows, PanAust said at the time.

PanAust, seeking to develop one of the world’s largest undeveloped copper and gold deposits at Frieda River in Papua New Guinea, last year rejected Guangdong Rising’s previous offer of A$2.30 a share.


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Chinese increase stake in Frieda river mine ahead of takeover bid

Chinese build PanAust stake

Barry FitzGerald | The Australian

Low expectations of a rival bid emerging have allowed Chinese state-owned Guangdong Rising Assets Management (GRAM) to ramp up its stake in its $1.1 billion takeover target PanAust at its bid price of $1.71 a share.

GRAM disclosed it had picked up 10.58 million PanAust shares at the bid price, increasing its stake in the Laotian copper/gold producer — and PNG copper/gold developer — from 22.49 to 24.12 per cent.

The stake is tipped to ward off would-be counter bidders although the prospect remains that PanAust could extract a higher offer in return for a board endorsement. That in itself was enough for investors yesterday to keep PanAust just above the bid price at $1.72 a share.

PanAust soared 40 per cent from its five-year lows of $1.22 on Monday when GRAM’s unsolicited bid was announced.

Chinese interest in yet another copper/gold producer had a rub-off effect on the valuations of PanAust peers in the market, with OZ Minerals and Sandfire rising 5 per cent and 4 per cent respectively.

The GRAM move follows the 2013 million acquisition by Chinese interests of the Northparkes copper/gold mine in NSW from Rio Tinto for $850m, and last year’s deal for the Chinese state-owned MMG to acquire the Las Bambas copper/gold project in Peru for $US5.8bn.

The unconditional cash bid from GRAM follows last year’s song and dance when PanAust revealed that GRAM had proposed a $2.20 a share takeover bid, then increased to $2.30 a share. But no bid was made at the time.

JP Morgan said yesterday that the latest offer was in line with its base case valuation of $1.70 a share but noted that did not ascribe any value (other than sunk costs) to PanAust’s acquisition last year of an 80 per cent stake in the undeveloped Frieda River copper/gold project in PNG. The broker said that on an unrisked basis, Frieda River was worth $1 a share to PanAust, although much de-risking of the project is required before a development could proceed.

It said an improved offer price would be required to get the approval of the PanAust board. But either way, the broker said the likelihood was that the takeover would eventually be completed.

Preliminary work by PanAust on Frieda River pointed to the potential for a $US1.7bn development capable of annual production of 125,000 tonnes of copper and 200,000 ounces of gold. The remaining 20 per cent is held by Highlands Pacific.

Highlands itself is on takeover alert after international commodities trader Trafigura marched to a 16.03 per cent stake in the company.

That pips PanAust’s 14 per cent stake which was part of last year’s action that saw PanAust acquire its Frieda River stake from Ivan Glasenberg’s Glencore.

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Chinese government bid to take control of Frieda river mine

With the Chinese government already responsible for pumping millions of tonnes of toxic tailings into the sea in Madang, what future for the Sepik river if the Chinese get their hands on the Frieda mine?

frieda river

PanAust feels heat of $1.1bn Guangdong bid

Barry FitzGerald | The Australian

Laotian copper/gold producer PanAust has again come under the takeover gaze of its biggest shareholder, China’s state-owned Guangdong Rising Assets Management (GRAM).

The cash offer of $1.71 a share is down heavily from last year’s indicative and non-binding offer of $2.30 a share (increased from an earlier offer of $2.20) that never eventuated. But this time at least, the offer is for real, with PanAust shares soaring 49.5c, or 40 per cent from five-year lows to $1.72.

The bid values PanAust at $1.1 billion, with GRAM already owning 22.5 per cent, most of which was acquired in September 2009 when PanAust was in need of a cornerstone investor in the wake of the global financial crisis.

The unconditional cash bid came as PanAust shares struggled in response to the crash in copper prices, and the looming need to finance the development of the 80 per cent-owned Frieda River gold/copper project in PNG.

Credit Suisse analyst Michael Slifirski said the offer was “highly opportunistic’’ given GRAM’s $2.30-a-share indicative offer 12 months ago. He said it took advantage of the equity market’s obsession with short-term earnings and cashflow, and disregard of long-term value.

Credit Suisse values PanAust at $2.11 a share that includes only 25 per cent of its assessed value of an assumed 55 per cent interest in Frieda River (the PNG government can take up to a 30 per cent interest in the project).

“The GRAM offer is too low in our view,’’ Mr Slifirski said.

BT Investment Management portfolio manager and analyst Brenton Saunders said that ignoring Frieda River (PanAust acquired its stake from Glencore last year), the bid was probably not that far from what the existing operations are worth.

“But we can’t ignore the fact that this company has very consciously chosen to go down a path to buy Frieda River, and to develop it — and that is a strategic game-changing decision for the company,’’ Mr Saunders said.

He added that it would be interesting to see how PanAust responds to the bid. “It is beyond me how the board could contemplate recommending this offer given that they were very quick and were very emphatic, in turning down the $2.20, and then a $2.30 offer, as being almost insulting in terms of what it implied in terms of valuation. For them to now come back and recommend anything less than the last one they knocked back seems implausible,’’ Mr Saunders said.

Fred Hess, PanAust’s managing director since November, was asked at a recent investor briefing if management and the board reflected on knocking back last year’s $2.30 indicative offer. “Well I am not. I am not. I am looking forward to the future and I look at the greater certainties we now have with 80 per cent ownership of Frieda River,’’ Dr Hess said.

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Enough is enough: PNG does not need mining: Stop the Frieda mine



Moses Koliwan

I have just finished reading the Sinivit Cyanide Spillage and the SOE declared by ENBPG. I note that Minister for Mining has also directed an independent MRDC investigation.

The number and volume of mining related accidents and the severe impacts of mining in PNG cannot be underplayed any longer.

We need not look far at at lasting and severity of the effects and impacts of mining in PNG to acknowledge the realisties. Look at Panguna, Ok Tedi, Lihir, RamuNico and now Sinivit.

When must we say enough is enough and ask ourselves one simple question and that is “Can PNG do without mining?”.

And for argument sake “Singapore never needed a Panguna, a Ok Tedi, a Porgera, a Lihir, a Sinivit nor the proposed Freida River MIne?

Haven’t we learnt enough yet from the Panguna experience and from the now the irreversible damage by Ok Tedi Mine on one of PNG’s two most prevalent and prominent river ecosystems and what impact this is now having on the people who live there? And, mind you this is no ‘fly by night’ impact. Only God knows how long this will last but certainly not in decades, centuries maybe.

We just should no longer lay back and become passive individuals and communities of savvy people and who are ignorant and complacent and allow continued mining experiments which destroy environments, livelihoods and upset natural balance and well being.

More importantly, our future generations have as much right and prerogative to enjoy this world in its pristine form and state like our ancestors did and we do to now. We can’t sit back and relax and say let the status quo be and let us keep learning from the bad mistakes we continue to make from mining activities. We cannot!

The many bad lessons learnt from mining activities in PNG are largely due to arrogance and bad tasting intent and vision in the name of development. The time for that has gone. PNG is educated and informed enough to protect its people and its environment for sustainable livelihood and harmony between nature and people – something we have done for centuries.

We cannot to remain ignorant and silent as individuals, communities, regions and a nation anymore. What is money compared to human well-being now and in the future? How will the change to made to the environment by mining support a sustainable future for me, my children and the generations to follow?

Shouldn’t we be investing heavily in green economy (agriculture)? At least the potential return is still high and the overall impact and risk to environment and people are manageable at local level as I see.

The recently announced Freida Copper Project does not and will not have a reference in my genius book of world records for best environmental safety and mining practices in the world. The company that has been granted the license to operate the mine only 9 years experience in Cambodia or some country of that sort.

Freida River is a open pit mine same as Ok Tedi. In fact is across the ranges from Freida. Its situated on the Freida River which feeds into the Sepik River. The same as the tributaries linked to Ok Tedi Mine which fed into the main Fly River. If the effects of Ok Tedi is something to go by, I feel so sorry for the wonderful people of the mighty Sepik River.

The impacts of the Ok Tedi Mine are also felt in the adjacent Gulf Province. Will Madang Province feel the environmental impacts of Freida Copper and Gold Mining Project? YES!!!!!!!!!!!

The environment and lives of my Sepik River people and those of adjacent Madang Province is too high on the agenda, to say the very least.

I am committed 100% to ensure that the Ok Tedi experience is not repeated in the Sepik to reduce is to a bowl of poison for the people and all the plants and animals and living creatures that call the Sepik River home.

The fight begins now and we will resist Freida Copper Project until the last coin is squeezed out of the jelly bag.

All responsible PNG leaders and elites will only see why this is so important, and why it is crucial to act out and voice this concern now on behalf of the present and the future generations of this very beautiful part of PNG – the Sepik.

I am now pleading for public support for the ‘Stop Freida’ campaign. The preparations for this are well underway and its launch will be in Angoram Station around mid June, 2015.

If you wish to support this course by way of comments, advice and discussions’ email me on moseskoliwan@gmail.com or call me on +67571580576.

I need support for environmental groups and other pressure groups, including scientists and social scientists, NGOs, individuals and people with interest on environmental protection and protection of vulnerable indigenous populations and groups.

The Sepik River people, their culture and their environment is at stake. Come stand with me with one voice and one action on Freida and stop it.


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