Tag Archives: Frieda river mine

World’s largest sovereign wealth fund dumps PanAust shares

The Frieda river is now in the hands of the Chinese

The mighty Sepik river is under threat from mining

Norway’s Government Pension Fund has dumped its shares in Australian mining company PanAust, the company planning to build the controversial Frieda open pit copper mine.

The Fund is advised by a formal Ethics Committee and is sensitive to both environmental and human rights concerns. The Fund has recently divested from 11 international companies because of their involvement in rainforest destruction

In 2011 the Fund owned PanAust share worth US$38 million, by 2014 that holding had been reduced to just $3 million and the Fund’s 2015 report reveals it has dumped the miner completely from its portfolio.

PanAust acquired its interest in the controversial proposed Frieda river mine from Xstrata in 2013. The mine site 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 people who rely on the river.

Prominent Papua New Guineans are concerned about the proposed mine’s environmental and social impacts and claim PanAust is dumbing down the mine plan and safety standards to save money.


The Norwegian Fund has been dumping PanAust shares since 2012


Filed under Environmental impact, Human rights, Mine construction, Papua New Guinea

The Bastardization of the Frieda Project by Pan Aust Ltd

frieda exploration

US$50million  Settlement Over Due Since Nov-2015

Gabriel Ramoi LLB | PNG Blogs

On the 30th of August  2013 a deed of settlement was entered into between Pan Aust Ltd and Xstrata-Glencore Mining  for the sale of EL 56 covering the Nena -Frieda Deposit. On the signing of the Deed, US$25m exchanged hands between the two with US$50m now Due and outstanding since November 2015.

The payment of the additional US$50m rides on the back of Pan Aust obtaining approval from  the PNG Government to proceed with its Bastardized Version of the original Mine Development Concept first proposed by Xstrata Mining to the  PNG Government in 2012.

In 2012 Xstrata Mining Ltd proposed to develop the world class Frieda Mine with a Capital Expenditure Budget of US$5.4 Billion which consist of the plan to develop a fully integrated open cut copper  mine with a potential life  of 40 years with a 68 MW Hydro Power Plant costing US$800m . It also Proposed a Tailings Dam to mitigate against the contamination of the Fragile Sepik River Eco System and was considering the option of building a 300km Road link from the mine to the coast at Aitape jointly with the State for the export of Copper as opposed to the strongly contested option of barging copper down the Sepik River System.

Since taking over the Frieda Exploration License, Pan Aus Ltd has been selling a revised Bastardized version of this Mine Development Plan by sponsoring a campaign to take short cuts in the development of the Frieda Mine by reducing  Capital Expenditure from US$5. 4 Billion to US$1.2 Billion with a plan concentrated on taking the Gold first out of the Mine to finance the rest of the mine Development cost.

For Power Pan Aust Ltd Proposed a Diesel Generation set which will be barged up the Sepik River on a pontoon and anchored on the Frieda river to supply Power to the mine. Over the last year Pan Aust has also carried out a concerted campaign to get villages on the Banks of the Sepik River to accept their proposal to barge copper concentrate down the Sepik River System despite the total rejection of this plan by the entire Sepik Community. To date I have yet to read any environmental impact statement by Pan Aust on Frieda and in Particular its comments on Mine Tailings or its plans on the construction of a mines tailing Dam.

Building of Mines in PNG is more then just profits for shareholders. It is about opening up new opportunities and access to services by communities which but for the mine will remain unconnected to the rest of the country. It is about long term contribution in revenue streams to Provincial and Local Government Budgets. It is about building long term infrastructure that will survive long after the life of the mine. It is why the building of a road link from Frieda to Aitape must be the central piece of infrastructure that the Sepik Community and its leaders must insist from the mine developer. Frieda must add value to the two Sepik Provinces not take value and self respect out of us by buying out our leaders and compromising the integrity of the project.

My plea to Governor Amkat Mai and Governor Somare is to leave our Gold and copper in the Ground if the cost of taking it out would only cost hardship and misery to our People and the environment and by all indication Pan Aust ltd as the Potential Developer of the Frieda Mine is not the type of company and Developer with the resources to Develop a word class mine.


Filed under Financial returns, Mine construction, Papua New Guinea

Frieda River feasibility study delayed


The National aka The Loggers Times | 2.02.2016

HIGHLANDS Pacific Ltd says the completion date of the Frieda River project feasibility study has been extended to next month.
Highlands Pacific, which owns 20 per cent interest in the project, said this was to allow for additional operating parameters and design options to be investigated to maximise project returns, given the depressed commodity prices and challenging funding conditions.
It said in its 2015 December quarter report that the current work programme was scheduled for completion at the end of March. 
It will be followed by an independent peer review to be conducted in April, providing the opportunity for an application to be submitted for a special mining lease by June 30 this year.
The majority 80 per cent stake is held by Chinese company Guangdong Rising Assets Management following its acquisition of PanAust last year
GRAM has left the PanAust team in place completing the feasibility study.
The costs of the feasibility study and associated work are being funded by PanAust (GRAM).
Meanwhile Highlands Pacific managing director John Gooding said the company continued to advance its projects during the December quarter, with strong production results at the Ramu nickel project, encouraging exploration results at Star Mountains.


Filed under Exploration, Papua New Guinea

MRA annual report: PNG to continue its dependence on foreign mining

Porgera mine pit

Porgera mine pit

PNG Today

Despite the slump in the world mineral commodity prices and its negative impact on investment climate, a good number of existing mining and advanced exploration projects, progressed their work programs, while a number of project acquisitions were undertaken between investors last year.

The Managing Director of the Mineral Resources Authority (MRA) Philip Samar reported in the entity’s 2015 annual report to the government, that although times were tough on the investment and commodity market fronts, projects like Simberi saw a turn-around in its production levels reaching an output of 107, 553 ounces of gold and 21,387 ounces of silver last year. This will be an increase of over 100% from previous years. It is expected that the company will maintain its production at this level due to the recent upgrades to its processing plant.

Both the Kainantu mine and Tolukuma mine are moving towards reopening under new owners K92 Holdings Ltd and Aisdokona Mining Resources respectively. Both mines are scheduled to recommence commercial production within the next 2 years.

The only new mine to commence production last year was Crater Mountain with an anticipated initial low production of 10,000 ounces of which they reported production of 59 ounces of gold in the first 4 months.

Ramu continues to ramp-up production of nickel and cobalt having reached 90% capacity after its first export shipment in 2012.

Porgera and Lihir, despite the drought, safety and landowner setbacks throughout 2015, are both increasing production.

Barrick Gold concluded its strategic partnership with Chinese (Government owned) partner, Zijin Mining and has also commenced exporting pyrite.

Nautilus is progressing with development of its key infrastructure. It held several design workshops to support the design and build contract for the pivotal mining vessel during 2015. The company is expected to conduct its wet testing of the seafloor mining tools in the Oman during 2016 with integration of the sea floor equipment into the vessel during during 2017 in preparation for commercial mining in 2018.

PanAust has confirmed their takeover by their majority Chinese (Government owned) shareholder, which is considered positive for future funding. The company has confirmed its commitment to lodge a Special Mining Lease (SML) application for the Frieda River project in the first half of 2016.

Newcrest and Harmony have settled on a two stage approach to commence development of the Wafi/Golpu deposit and expectations are that an SML application may be lodged during Q3 2016.

In terms of exploration expenditure for the year, a total of K323,453,373 million was reported by compliant exploration tenement holders (as recorded in our Flexicadastre electronic tenement management system). Of this exploration expenditure K266 million was spent by the top 10 advanced explorers. The total expenditure is in comparison to K360 million reported as spent in 2014.

Other promising prospects are:

  1. Ok Tedi’s nearby Townsville prospect potentially adding to the throughput at Ok Tedi if developed.
  2. Highlands Pacific’s (with its new partner Anglo-American) Star Mountains prospect which is indicating encouraging exploration results.
  3. Harmony’s Kili Teke prospect, with indications of ongoing and future commitment to significant exploration spending.

Some defined resources are in retention phases notably substantial nickel discoveries in Oro Province and heavy mineral sands in Morobe Province, while coal and other sand based mineral opportunities are also appearing positive.

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Filed under Exploration, Financial returns, Papua New Guinea

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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Filed under Corruption, Exploration, Papua New Guinea

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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Filed under Environmental impact, Financial returns, Papua New Guinea