Tag Archives: Guangdong Rising Assets Management

New governor signals approval for Frieda river mine

East Sepik’s new governor, Allan Bird, has signalled his approval for the planned Frieda river mine – all he wants is a government assurance ‘everything will be fine’ – SURELY HE IS NOT THAT STUPID?

Possible mining impact on Sepik river a concern

By Dorothy Mark | The National aka The Loggers Times | August 30, 2017

EAST Sepik Governor Allan Bird has warned that the start of the Frieda gold and copper mine on the border with West Sepik will depend on an assurance by the government that the river will not be polluted.

Bird said the people depended on the East Sepik River daily and did not want it polluted by the activities of the Frieda gold and copper mines.

He was responding to the concern raised by Madang provincial mines director John Bivi on the operation of the Wafi gold mine in Morobe, Marengo in Madang and Frieda in East Sepik.

Bivi requested Bird to highlight this problem in parliament if there is debate on the three mines to begin operating quickly.

Bird said he would not comment on Wafi and Marengo but he would see that the people of East Sepik get the maximum benefit from the Frieda mine.

“We don’t  want what happened at OK Tedi to happen to us. So we will be very careful with this one,” Bird said.

Ramu development foundation director Dr Boga Figa asked Bird to assist in any way possible to have a feasibility study carried out to construct a road from  Banu Bridge to Forogo which could link to East Sepik.

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Where to dump Frieda’s raw waste just a ‘technical issue’: Minister

Frieda River mine set to start operations 
[the Post Courier loves a misleading headline!]

Post Courier | March 09, 2017

The giant Frieda River mine in West Sepik is now 60 percent ready of becoming a reality with the National Government waiting to issue the mining license for the project to start after few technical issues are sorted out, says Aitape Lumi MP and Minister for Treasury Patrick Pruaitch.

“Frieda River is 60 per cent reality now, we are ready to issue the license. We just need to work through with the technical people to on how they will dump the raw waste.”

“The company has put an application to convert mine waste into power generation system , but the State does not have the capacity so it is doing its best to hire people to give the best advice on how we can look at that and we can give the okay for that 40 per cent to be completed, for 100 per cent to give the mining license for project to start,” Mr Pruaitch said.

Mr Pruaitch said this at the opening of the first ever Frieda Mine Landowners Forum underway in Port Moresby’s Crowne Plaza Hotel that started yesterday and will end today.

Mr Pruaitch urged the people to work together and put together their benefits package for the National Government to consider during the project negotiation.

” Let us not send mix signals, it will give opportunity for company to go divide a few LLGs and MP’s to start the mine with the least cost possible so we can bring in impacted development for that region,

“I believe that is a big project that will transform Sandaun Province and Sepik region including Madang. This project will spread benefits across the region.”

YUP, JUST LIKE OK TEDI HAS TRANSFORMED WESTERN PROVINCE; LIHIR HAS TRANSFORMED NEW IRELAND; PORGERA HAS TRANSFORMED ENGA; AND THE LNG HAS TRANSFORMED HELA PROVINCE

HOW ARE OUR POLITICIANS STILL ABLE TO SPOUT THIS NONSENSE AND NOT GET LOCKED UP IN LALOKI PSYCHIATRIC HOSPITAL?

OR MAYBE WE NEED TO CHANGE THE LAW TO MAKE PEDDLING FALSE CLAIMS AND PRAYING ON PEOPLES DESPERATION BECAUSE THEIR GOVT HAS FAILED THEM A CRIMINAL OFFENCE?

“I want initial support from landowners because if we don’t have a project, we will not talk about benefits. We have to have a project, we have to get a leg in and another one in than we can be able to negotiate for the benefits. If we are not supporting the project than we can be standing here as leaders driving a lost cost, we must have a project, we must have shareholding understanding with impacted landowners, we must have understanding with the Telefomin district, we must have that understanding with the Telefomin LLG and sandaun Provincial Government.”

“I want Frieda mine which is going to be the first mining for the next government to use LNG precedent to allocate these benefits.”

Landowners to discuss benefits amongst others

FRIEDA Mine landowners have come together to discuss issues including benefits for negotiations with the National Government and developer PanAust when Frieda Mine project comes into development.

Member for Telefomin Solan Mirisim who initiated the first ever landowner forum to discuss issues surrounding the Frieda River Project, the Political Leaders from the West Sepik Province. MRA and stake holders emphasised on how best they can work hand in hand and support the Company, landowners and the State to kick start the Project once the SM application is granted.

“I stand up here representing the views, the cries and the excitement of over 50,000 people from Telefomin District, including people from ward 21, particularly the seven impact Villages within the vicinity of Special Mine Lease area.”

Mr Mirisim said Telefomin is the host District of the Frieda River Project and is one of the most remotest districts in the country that has no road link, only mode of transport is by Air and the four LLG are all accessible by third level airline and it is very expensive District to deliver goods and services to our people on time.

“Frieda River Project is the only Project in this country that has taken over 40 years of exploration after exploration, I must take this time to thank many exploration companies who have worked on the Frieda River Project for many years to this time, it is long time awaiting for our People in Frieda River and Telefomin District.”

“I would like to thank the Highlands Pacific and the PanAust for taking the project closer to fruition. One final step to finish and we will have a world class Mine that will be mined and developed in our District which will no doubt create prime opportunity to impact and transform the lives of our people through employment, training, economic empowerment, contracts and all kinds.

“We want to see a Pathway that will improve our way of life, a pathway that will change the areas of Infrastructure, a pathway that will see a society transformed with Improved Social and Health Indicators.

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Greedy foreigners continue to fight over who profits from the destruction of the Sepik

The Chinese and Australians are fighting over who will control the destruction of the Frieda river and the region’s rainforests, swamps and staple sago trees

PanAust speaks out on HPL

Post Courier | March 08, 2017

MINER PanAust Limited has broken its silence on the rift that has developed with its joint venture partner-Highlands Pacific Limited (HPL).

Responding in a market report managing director Dr Fred Hess clarified the proposal was to reinvigorate its (HPL) board and that it had omitted material information to the proposal.

“PanAust also wishes to note that in its view each nominee would meet the test of independence as set out in the Australian Stock Exchange (ASX) Corporate Governance Principles and Recommendations.” he said.

“PanAust also wishes to clarify that the proposal to reinvigorate the Highlands board is unrelated to the ongoing dispute in relation to the Frieda River project and the proposed independent directors have no involvement in the Frieda River joint venture.

“In particular, the announcement failed to disclose that PanAust views each nominee as independent from PanAust, and that there is no arrangement or understanding that the proposed independent directors will act at the direction of, or report to PanAust.”

Dr Hess said the reasons for PanAust seeking to change the composition of the Highlands board include to implement a new strategy and direction for Highlands.

Dr Hess said this is with a view to increasing shareholder value in circumstances where the HPL share price has decreased significantly over the last five years.

“PanAust notes that voting patterns at the last annual general meeting reflect substantial shareholder discontent with the current board following the US$68 million loss in 2015 which included the payment of short term incentives to senior management.

“Sentiment is unlikely to have improved following the 2016 half year loss of US$23.5 million which has been exacerbated by the board’s delayed and ineffective response to implement austerity measures and also in the absence of any disclosure in respect of strategy to create shareholder value.

“Clearly, change is overdue with barely US$10.5 million cash left in the bank at year end after spending US$3 million on staff costs for the year,” Dr Hess said.

He said PanAust disagreed with the comments that had been made by Highlands that, should the proposal be implemented, it would result in a “PanAust-dominated board” which “would be at risk of operating in the interests of GRAM, rather than in the interests of all its collective shareholders.”

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction.

“PanAust notes that it is still waiting on a response from Highlands on the date of the shareholders meeting to consider Highlands board composition,” he said.

He urged investors to consider the resolutions being proposed by PanAust carefully, together with the information and reasons put forward by PanAust.

Further, that they vote in favour of the resolutions at the special meeting, which will be held in May, 2017.

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China ‘angling for control’ of massive Mt Frieda copper deposit in PNG

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea. 

Exploration drilling at the Mt Frieda deposit, in Papua New Guinea.

Brian Robins | Sydney Morning Herald | 2 March 2017

Frieda River is one of the largest undeveloped copper deposits in the world. Now, the smaller shareholder in the project, in the remote highlands of Papua New Guinea, has cried “foul’ warning that a proposed board spill will give the Chinese government control.

Less than two years after paying $1.2 billion to snap up PanAust, an Australian miner with interests in projects in Laos and Papua New Guinea, Guangdong Rising, a Chinese investment company owned by the Guangdong provincial government of southern China, is angling to gain control over the Mount Frieda gold and copper deposit.

The Frieda River deposit has been under study for development for more than 30 years. Now controlled 80 per cent by PanAust and 20 per cent by Highlands Pacific, it has had a series of owners, from Japanese to American groups, with Swiss trader Glencore the majority owner before it sold to PanAust. All of the owners to date have struggled with the cost of developing the resource.

Located in the remote north-west of PNG, Frieda River is 175 kilometres north-west of the Porgera gold mine and 75km north-east of the Ok Tedi mine.

Development costs have been put at as high as $US6 billion, which is a stumbling block, since few private companies could finance a project of that size, and most banks would baulk at the large sums involved and the associated development risk. One reason for the high cost is the need for a hydro-electric dam to generate the power needed by the project.

The most recent project study put forward by PanAust last year was based on a plant capable of handling 40 million tonnes of ore annually, producing 175,000 tonnes of copper and 250,000 ounces of gold, with an initial mine life of 17 years. This would cost an estimated $US3.6 billion to develop, excluding some key costs such as the power station and other items of equipment.

Highlands Pacific rejected the study, and obtained a review of the proposal arguing it was deficient, a view which was supported by an independent assessor which found that less expensive, lower risk options should be put forward for consideration.

PanAust had in September 2014, well before the Chinese government took control of the company, put forward a $US1.7 billion estimate to develop Frieda River. The second, more expensive development concept reflects the larger annual production capacity of the project, additional spending on waste and tailings management and increased construction costs.

In February, just over a month after the peer review of the feasibility study was released, PanAust moved to take control of the Highland Pacific board, seeking to replace its four independent directors with its own nominees.

Guangdong Rising has a 14 per cent shareholding in Highlands Pacific, with Trafigura, the privately controlled commodity trader, owning 16 per cent and an arm of the PNG government another 11 per cent.

Guangdong Rising’s “proposed board spill would constitute a change of control of the company, without any payment or premium for control”, Highland Pacific’s outgoing chairman Ken MacDonald and Ron Douglas, the chairman elect, said in a letter to shareholders.

“Our shareholders deserve better. If GRAM wants control, it should make a takeover offer and pay a full price.”

For its part, the Chinese company has stated the proposed board spill is simply an attempt to “reinvigorate” Highland Pacific’s board.

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction,” it said in a statement, denying the proposed board spill is about gaining full control over the Mt Frieda project.

It also argues that the nominees it has put forward to stand for the Highlands Pacific board are viewed as being independent of itself, and they will not act under its direction. 

Along with the Frieda River stake, HIghland Pacific has a small share in the large Ramu nickel project, controlled by China Metallurgical Co, along with some advanced exploration projects.

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Tussle over HPL’s future control and the Frieda river mine

hpl

See also: Frieda river mining companies involved in internal war

Post Courier | February 27, 2017

A RIFT has developed between Highlands Pacific Limited (HPL) and its shareholder, Chinese group Guangdong Rising Assets Management Co Ltd (GRAM), over the future control of the Papua New Guinea company.

HPL says it is a battle with potentially major ramifications for its multi-billion kina PNG projects, including Frieda River, Ramu Nickel and Star Mountains.

Last week, GRAM subsidiary PanAust, which owns a 14 percent stake in HPL, had demanded a meeting of HPL’s shareholders to remove four of the company’s five non-executive independent directors and replace them with three GRAM nominees.

HPL argued the highly aggressive move would deliver GRAM control of the firm which was valued at about A$60 million (K146 million), without GRAM having paid anything to the other shareholders of the company that collectively hold 86 percent.

The move also would deliver GRAM essentially full, unassailable control of the giant US$6 billion (K19bn) Frieda River project in West Sepik Province. HPL and GRAM are joint venture partners in the project, with GRAM holding an 80 percent interest and HPL 20 percent.

HPL also holds an 8.56 percent interest in the Ramu Nickel project, as well as a major shareholding in the ‘exciting’ Star Mountains exploration project.

HPL directors had opposed GRAM demands, stating that handing control of the Company to GRAM/PanAust would not be in the interests of its shareholders.

Chairman Ken MacDonald said the GRAM/PanAust proposal effectively amounted to a takeover of Highlands without offering to pay shareholders.

HPL managing director Craig Lennon said the future of Highlands was vitally important for the development of its projects, and could have serious economic implications for PNG.

“We want to see these projects, especially the Frieda River project, develop in a timely fashion, creating potentially enormous economic benefits for PNG by creating jobs, generating revenues for government and earning foreign exchange income,” he said.

“With Highlands remaining as an independent company, we have the best chance of achieving that outcome.”

The special meeting to consider the matter would be held in Port Moresby, and shareholders would vote on the proposals to remove four of the five non-executive independent directors including the chairman.

The two directors who GRAM is not trying to remove for now are the managing director Craig Lennon and Bart Philemon, the highly respected former treasury minister.

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Frieda river mining companies involved in internal war

The Chinese are fighting to get three Highlands Pacific directors off the PanAust board

The Chinese are fighting to get three Highlands Pacific directors, including Chairman Ken MacDonald off the PanAust board

Australian mining company Highlands Pacific is involved in a war with Chinese state-owned Guangdong Rising Assets Management (GRAM), over the future of the Frieda River mine. Highlands Pacific owns 20% of the proposed Frieda River mine through the joint venture company, PanAust. The Chinese own 80%.

Highlands Pacific has accused the Chinese of failing to complete the Frieda River mine feasibility study to the required standard. GRAM has responded by trying to throw three Highlands Pacific executives off the PanAust board… none of which bodes well for the future of the mine or the people of the Sepik…

HPL members asked to resign

Post Courier | February 17, 2017

REQUESTS by PanAust to Highlands Pacific Limited(HPL) for the resignation of three of its board directors have not gone down well. PanAust made the demand, in a notice it issued to HPL also seeking a special meeting be convened. PanAust, is a subsidiary of Chinese state-owned-enterprise, Guangdong Rising Assets Management Co Ltd (GRAM). PanAust holds 13.9 percent of HPL, and is a joint venture partner in the proposed Frieda River project.

The appointees PanAust is seeking to remove are Highlands Pacific’s Ken MacDonald (chairman), Ron Douglas (director), Mike Carroll and Dan Wood (independent director) and they be replaced with three nominees from GRAM. However, HPL on Tuesday had urged its shareholders, no action, stating it to be the strong view of the company that the replacement of four of the existing five non-executive board members with the PanAust nominees would not be in the interests of the other shareholders, who number over 7,500.

HPL said the PanAust proposal effectively would amount to a takeover of HPL without offering to acquire any shares, let alone with an appropriate premium.

“It is clear that a PanAust-dominated board would be at risk of operating in the interests of GRAM, rather than in the interests of all of our shareholders,” Mr MacDonald said.

“It is important for shareholders to be aware that HPL is currently in dispute with PanAust regarding the funding and methods of progressing the Frieda River project.

“HPL remains of the view that the PanAust approach to the project is suboptimal, and we have been urging it to adopt a different course of development that would generate better returns and reduced risks for our 7,500 shareholders.

“It also is our view that PanAust has failed to complete the Frieda River feasibility study to the standard required under the joint venture agreement,” Mr MacDonald said.

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MCC to build $4bn Sepik industrial park

Chinese owned MCC love to describe the Ramu mine as world class...

MCC have struggled to build a simple pipeline in Madang, can they really build an industrial park in the Sepik?

Chinese investors set to build $4bn industrial park in Papua New Guinea jungle

Global Construction Review | 3 February 2017

China has agreed to build a vast industrial complex in a jungle region of Papua New Guinea (PNG) with factories processing tropical foods and minerals.

A memorandum of understanding was signed in December between a group of investors from the southern Chinese city of Shenzhen and the government of PNG, a small South Pacific country that shares the island of New Guinea with Indonesia, just north of Australia.

Patrick Pruaitch, the country’s treasury minister, told Reuters that the plan was to build two processing and manufacturing plants in West Sepik province, a dense jungle region in the north of the country about 30km from the Indonesian border.

One will process timber, fish, cassava and tropical spices and the other will handle steel, cement and other industrial products.

The projects are to be developed in phases at a final cost of $3.8bn. The government of PNG said it hoped construction would start in 2017, but the plans were “very long term”.

The main contractor for the parks is expected to be the Metallurgical Corporation of China, which was responsible for the main Chinese investment in the country to date, a $2bn nickel mine completed in 2012.

The PNG projects fall under the heading of China’s “One Belt, One Road” strategy, which is being extended from the classical Silk Road to Europe to include the 16th-century “Silver Road” to America, developed by the Spanish navigator Andres de Urdaneta.

According to Reuters, investors from the Chinese coastal province of Fujian are close to signing a deal to build a huge industrial centre that will turn PNG’s lumber into furniture.

The nominal GDP of PNG in 2016 was around $19bn, so the size of these Chinese investments are enormous relative to the country’s economy.

Other Chinese developments on the horizon in West Sepik are a copper and gold mine – mining company PanAust has completed a feasibility study and launched an application to begin work – and a dam to provide hydro power for these new sites and provide a disposal site for the mine’s tailings.

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