Tag Archives: Harmony Gold

Harmony admits PNG political instability raises risk of MoU change on Wafi-Golpu

Wafi-Golpu mine site

David McKay | Mining MX | May 30, 2019

HARMONY Gold acknowledged the risk that political changes in Papua New Guinea (PNG) could create a situation where a memorandum of understanding (MoU) regarding its Wafi-Golpu copper/gold mining project would have to be changed.

“At this stage we are waiting to see what happens,” said Lauren Fourie, investor relations manager for Harmony on the matter of PNG politics. “The potential election of a new prime minister could potentially impact the memorandum of understanding (MoU) we signed with the government in December 2018,” said Fourie on May 28.

On May 30, PNG unveiled its new prime minister, James Marape, a former finance minister, who then said he intended to “tweak and turn” laws governing how natural resources are extracted from the South Pacific island.

“At the moment our resource laws are outdated … we will look into maximising gain from what God has given this country from our natural resources,” Marape was quoted by Reuters to have said in his first address to parliament as prime minister.

“I have every right to tweak and turn resource laws for my country, then it will empower my citizens as well,” Marape told the chamber to cheers and applause. “I truly want this country to be the richest black Christian nation on the planet,” he added.

The thrust of the discontent in PNG regarding the exploitation of natural resources is a gas drilling project involving French group, Total, and Chevron.

Granting of a Special Mining Permit for Wafi-Golpu have been a long-standing feature of getting the project on the road. Fourie said up until recent events various joint venture workstreams were tackling requirements of the permit which range from environmental authorisations through to the stake the PNG state will eventually hold.

The Wafi-Golpu copper-gold mine could cost Harmony Gold $2.82bn in initial capital expenditure to build to commercial levels of production as per a 2018 feasibility study. Of this, Harmony will shoulder about 50% with Newcrest Mining Limited, an Australian firm, carrying the balance. Average annual gold production was put at some 266,000 ounces.

Marape became prime minister after receiving 101 votes to eight in parliament, a day after Peter O’Neill resigned having lost the support of the house after almost eight years in power, said Reuters. Political instability is not unusual in PNG, but Marape’s resignation from cabinet in April tapped into growing concern over governance and resource benefits not reaching the poor, it said.

Harmony operates the Hidden Valley mine in PNG after taking the operation out of mothballs and buying Newcrest’s share in the business. It produced 100,000 oz at an 11% margin in the six months ended December, and was on track to achieve 200,000 oz for the full financial year, said Harmony in February.

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Locals Claim Earthquake Poses Great Threat To Wafi-Golpu Mine

“Newcrest and Harmony have never mentioned anything about earthquakes during any awareness”

See also: Magnitude 7.5 quake alongside proposed Solwara 1 mining site

Jerry Sefe | Post Courier | May 17, 2019

THE people of Yanta, Hengambu and Babwaf are concerned about the safety of their relatives who will be working at the underground Wafi-Golpu mine when it begins operations.

Their concern follows the recent 7.2 magnitude earthquake that struck Bulolo district last Tuesday. They described the quake as a wakeup call for the Wafi-Golpu underground mine developer Newcrest and Harmony.

They said the quake was disturbing to them as such natural occurrences may be hazardous in future for the Wafi-Golpu underground mine if it comes into full operation.

They said they are not representing any individual person nor its respective landowner presidents who were supposed to represent them to speak on behalf of them. “We are concerned about the lives of thousands of people including our children who will be working underground when the mine begins operation,” they said.

Provincial chairman of mines and petroleum and president of Mumeng local level government Okam Paton said he believes the resilience of these natural disasters would be captured in the mining environment impact statement.

However, he said it is in the best interest of the landowners that the responsible authorities respond to their concerns.

According to Wafi-Golpu project environmental impact statement chapter 21 of unplanned events, there is nothing mentioned about earthquakes.

“However, these events are often described as ‘low probability, high consequence’ events in reference to the position they occupy on a typical risk matrix.

“They can be broadly categorised as: natural events, significant seismic, weather or other natural events that occur infrequently but have the potential to cause significant damage.

“Accidental events, events originating from human activity that are considered unlikely due to the engineering design, operational controls and monitoring programs that are in place, but have the potential to cause significant damage if they do occur.

“Despite the low probability of occurrence of these events, the potential natural events considered most likely to affect the project are seismic events, tsunami, storm surge and flood events, bush fire and drought,” they said.

Knowing it would bring chaos to lives and properties, the landowners said they never thought of an earthquake at all, claiming the reason behind this was because they were not informed at all by the company.

“Newcrest and Harmony have never mentioned anything about earthquakes during any awareness or during the mining warden’s hearing over the years. “We were always limited to environmental destruction, compensation, royalty, and spinoff and so forth.

“Nothing was mentioned about earthquakes and its impacts on Wafi on both open cut and underground mine or how best the project can withstand the impacts during earthquakes,” they said.

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Wafi Golpu SML Grant In June, Highly Unlikely

Frankiy Kapin | Post Courier | May 14, 2019

Wafi-Golpu Joint Venture is unlikely to be granted a special mining lease (SML) by end of June. This timeline was agreed to by the WGJV mine developer and the PNG Government.

WGJV head of external a airs David Wissink said recent developments in PNG render the possibility of a SML being granted by 30 June not viable. Mr Wissink said this as a main hindrance to the developer achieving set goals that contribute to the achievement of the project.

Wissink said WGJV is aware of the recent issuance of a stay order in the matter of Morobe Governor Ginson Saonu and others against Minister for Mining and others.

“The matter is a judicial review application made by the Governor concerning the actions of the Minister for Mining in regard to the execution of the Memorandum of Understanding entered into between the developers of the Wafi-Golpu project and the State of Papua New Guinea.

“The WGJV hopes that this matter is resolved soon, and stands ready to continue to participate constructively in all negotiations to take the project forward when it is appropriate to do so.”

Mr Wissink added that WGJV has been working constructively with the PNG Government; the Morobe provincial government; and the landowners to take forward the negotiation of various agreements necessary for the permitting of the project.

In relation to progressive proceedings including reaching the Memorandum of Agreement (MOA) by parties to the Wafi-Golpu project, Mr Wissink said the MOA is one of a number of agreements necessary to be finalized to enable the permitting of the project.

“The Mineral Resources Authority has convened a development forum, and is collecting position papers from all identified stakeholders.

The Morobe provincial government is an important participant in this process and we are very pleased that it has recently submitted its position paper,” Mr Wissink said. He said the WGJV is yet to be given a copy of the MPG position paper and looks forward to going through the paper at an appropriate time to progress the project.

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Morobe’s Interest In Wafi-Golpu Legal, Says Judge

Frankiy Kapin | Post Courier | May 13, 2019

A ruling of the national court in Lae affirms that Morobe Governor Ginson Saonu (plaintiff /applicant) is a party of interest to the Wafi-Golpu project as host province.

Acting Judge John Numapo granted leave for judicial review to the signing of the Wafi-Golpu memorandum of understanding (MoU) between the State and the developer without the host province’s governor.

Justice Numapo ordered a directional hearing set for May 24, followed by a pre-hearing conference on June 6 to set a date for a full hearing of the substantive matter.

Justice Numapo ruled that Mr Saonu, in his capacity as mandated representative of Morobe Province and its people, is granted the review on two decisions pertaining to the letter constituting the legal clearance issued by state solicitor Daniel Rolpagarea (second defendant) on December 10, 2018, for the execution of the MoU between Mr Saonu, Wafi Mining Limited and Newcrest PNG 2 Limited.

The second decision for the review, as set in the originating summons, pertains to the MoU signed on December 11, 2018, between Mining Minister Johnson Tuke (first defendant) and developers Wafi Mining Limited (fourth defendant) and Newcrest PNG 2 Limited (fifth defendant).

The independent State of Papua New Guinea is the third defendant in the originating summons (OS-JR No 18 of 2019).

Justice Numapo ruled that Mr Saonu, as duly-elected Morobe Governor, has sufficient interest in the Wafi-Golpu project located in his province, therefore has standing (locus standi) seeking review through submission of the proceedings.

“One of his responsibilities is to make sure that the province generates and raises sufficient revenue from various sources within the province to maintain government services and one such revenue source is from the mining activities carried out in the province such has the Wafi-Golpu mine,” Justice Numapo said.

He said the plaintiff has taken into consideration the potential of the mine changing the economic outlook of the province and the country once operational and wants to make sure the province is well-positioned to benefit through revenue generation, employment opportunities and other spin off benefits.

Justice Numapo said the province is mindful of the environmental impact and other social issues that may arise as a direct result of the mining project and wants to ensure these concerns are properly addressed.

“I am satisfied, therefore, that a prima facie (accepted as correct until proven otherwise) case on sufficient interest has been made out in favor of granting leave for review.,” he said.

“I am satisfied that the plaintiff has sufficient interest in the matter and therefore, has the locus standi to bring this proceedings seeking leave for judicial review.”

Justice Numapo also ruled for the review after being satisfied that the Mining Minister Tuke and the state solicitor, as holders of public offices, acted in respective capacities constituting a decision or act in clearing the MoU signing through discharge of their statutory duties.

Justice Numapo granted the plaintiff, Mr Saonu, leave on May 7 to seek a judicial review of the agreement.

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Proposed Wafi-Golpu Mine On Hold

MOU was signed  “when the constitutional process had not been fully exhausted and, therefore, not only premature but also a clear breach of the Mining Act and the Constitution”.

Jimmy Kalebe | The National aka The Loggers Times | May 10, 2019

A COURT has put on hold operations of the K9 billion Wafi-Golpu copper-gold mining project in Morobe pending a review of a deal signed between the Government and developers.

Morobe Governor Ginson Saonu took the matter to court challenging the legality of the signing of the memorandum of understanding last December between the Government and Newcrest Mining Limited and Harmony Gold.

Saonu on behalf of the Morobe government claimed that the signing of the memorandum was done without proper consultation with, and input from, the provincial government and other stakeholders.

The memorandum was signed on Dec 11 following a clearance letter from State Solicitor Daniel Rolpagarea.

National Court acting judge Justice John Numapo ruled that the stay order also applied to any representation by Saonu or the parties who signed the memorandum regarding the project, including any meetings or consultations.

Saonu and the provincial government had asked the court to review the letter constituting the legal clearance issued by Rolpagarea for the execution of the memorandum.

Lawyer Paul Mawa, representing the State, asked the court to refuse the leave for review because the application was premature, misconceived and defective.

He argued that it was not supported by any clear and tangible evidence.

He said the legal clearance purportedly issued by Rolpagarea was not the decision of a public body or authority and therefore could not be reviewed.

But Justice Numapo stated that Rolpagarea was public office holder and what he did fell under a public body or authority which was subjected to review.

Justice Numapo dismissed the claims by Mawa and ruled that the issues raised by the plaintiffs were prima facie as they contained substantive issues of law.

He said the issuing of the letter to clear the memorandum for signing was done when the constitutional process had not been fully exhausted and, therefore, not only premature but also a clear breach of the Mining Act and the Constitution.

He said the second issue related to the terms of the memorandum was that the Morobe government wanted to benefit fully from the project.
Saonu and the Morobe government had wanted half of the 30 per cent State equity to be awarded to the Morobe government. Justice Numapo said this was not accommodated in the memorandum.

He also highlighted the fourth goal of the national goals and directive principles enshrined in the Constitution which called for collective benefits and equal distribution of natural resources and environment for all citizens.

The case will return for a directions hearing on May 24 at the National Court in Lae.

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MRA Assures Wafi-Golpu Landowners Of Best Deal

WHY SHOULD WE BELIEVE YOU THIS TIME Mr GARRY?

MRA HAS FAILED THE LANDOWNERS AND PROVINCIAL GOVTS IN EVERY OTHER MINING DEAL IT HAS AGREED.

WHY AND HOW IS ANYTHING GOING TO BE DIFFERENT THIS TIME?

Post Courier | May 7, 2019

The Mineral Resources Authority’s (MRA) Managing Director Jerry Garry has assured the landowners of the Wafi Golpu project, and the Morobe Provincial Government that the MRA would ensure they get the best deal out of the project.

Mr Garry said this in light of the presentation of the position paper, by the Morobe Provincial Government (MPG), to his office last week Friday.

The paper was presented by the MPG administrator Bart Ipambonj who said the MPG’s position reflected the wishes, dreams and aspirations of Morobeans.

A position paper is a benefit sharing proposal, which individual stakeholders of mining projects propose to be tabled at an MoA negotiations forum.

“The national government will ensure that landowners and the province would get the best deal out of the project.

“This is the spirit in which the government will be moving into the MoA negotiation forum.

The MRA will do everything in its powers to ensure that all stakeholders are heard and no one is left behind in the negotiations.

“Everybody is important to the MoA process including the developer,” he said.

The other stakeholders who have submitted their position papers are the Wampar and Mumeng LLGs, the Special Mining Lease Landowners Associations of Hengambu, Yanta and Babuaf, and Deep Sea

Tailings Pipeline (DSTP) Association. Wampar Pipeline and Butibam Associations are yet to submit their papers to the state.

After all position papers are received, the MRA will consult relevant government agencies and stage another series of negotiations with all stakeholders under the ongoing development forum.
This is to ensure benefits are properly negotiated.

This process will gradually lead to the MOA for the benefit sharing arrangements of the mega-Wafi – Golpu Project.

Mr Garry said the block-cave mining method proposed for Wafi-Golpu proposed by the developer Newcrest Mining, is the first for PNG.

Newcrest is one of the leading experts in this mining method, given they have a very good track record with their deepest (1.2 km deep) panel cave mining in Cadia East, NSW, Australia.

The MD said given the narrow vertical geometry of the mine, Block-Caving is the only possible mining method.

The MD said he has every confidence in the joint venture partners to deliver the mining project successfully.

Mr Garry assured Newcrest that the government would work with the company and other stakeholders to achieve a win-win for all parties.

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US and allies to use ‘aid’ to subsidise tax-dodging foreign mining companies

Rather than sustainable solar panels for village communities, the United States and it allies will use promised aid money to subsidise the expansion of foreign owned large-scale mining

Rather than providing sustainable solar power for village communities, the United States, Australia and New Zealand will use their promised electrification program to subsidise the expansion of foreign owned large-scale mining in Papua New Guinea. Mining that is proven does not improve the livelihoods of ordinary people but causes massive social and environmental problems…

U.S, allies propose financing for power plant for Papua New Guinea gold mine

Colin Packham | Reuters | 6 May, 2019

The United States and a group of Pacific allies are proposing to finance a power plant to kick-start the Wafi-Golpu mine in Papua New Guinea, one of the world’s largest untapped gold resources, two sources familiar with the plan said.

The proposal would be the first to be funded by a partnership of the United States, Australia, New Zealand and Japan that pledged to support electricity projects in Papua New Guinea (PNG) during the Asia Pacific Economic Co-operation Summit held in November in the capital of Port Moresby.

The countries promised to fund projects to provide electricity for up to 70 percent of the PNG population by 2030, a centerpiece of efforts to undercut Chinese influence in the Pacific.

Officials from the four countries met last month in Port Moresby with the PNG government to discuss the power plant funding for Wafi-Golpu, jointly owned by Newcrest Mining and Harmony Gold, the two sources said.

The exact size of the investment has yet to be concluded, but the coalition is seeking to back a power natural gas-fired station that would eventually be owned and operated by the PNG government, the sources said.

“If the mine can get reliable power, it could be a major revenue earner for PNG,” a U.S. source who attended the meeting told Reuters.

He declined to be identified as he is not authorized to talk to the media.

Representatives for Australia’s Foreign Minister Marise Payne and the country’s Department of Foreign Affairs did not immediately respond to requests for comment.

“We would welcome any proposal that would bring reliable power to the region,” said Christopher Maitland, a spokesman for Newcrest.

Wafi-Golpu is located about 65 km (39 miles) southwest of Lae, the second-largest city in Papua New Guinea, according to the joint venture’s website.

UBS estimates the mine could produce 270,000 ounces of gold and 160,000 tonnes of copper each year from around 2025.

Newcrest and Harmony hope the government will grant a mining license for Wafi-Golpu in July, said Newcrest’s Maitland.

By providing support for the mine and its power supply, the U.S.-led group is hoping to boost its diplomatic standing in the Pacific.

“Infrastructure is the proxy for the greater competition happening between the U.S with its allies and China,” said Nick Bisley, professor of international relations at Melbourne’s La Trobe University. “The U.S. has to deliver on major projects to ensure it doesn’t lose ground on China.”

The United States and its allies worry that China is increasing economic aid to the Pacific region to exert influence over vast swathes of resource-rich ocean and international forums like the United Nations.

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