Tag Archives: Harmony Gold

PNG police MOU with mining company concerning – academic

Radio New Zealand | 23 January 2019

A Papua New Guinean academic and lawyer says a new memorandum of agreement signed by police and an Australian miner sends the wrong message to the public.

PNG police commissioner David Manning this week announced that police would work together with Morobe Consolidated Goldfields to address law and order issues in the Wau/Bulolo area of Morobe Province.

“In doing so the [Royal Papua New Guinea Constabulary] acknowledges the importance of maintaining and preserving good order for a harmonious relationship between the mine and the affected community,” Mr Manning said.

The company is owned by Harmony Gold, which operates the Hidden Valley gold mine located about 150km south of Morobe’s provincial capital Lae.

The Hidden Valley mine operations have previously encountered problems with the death of a worker in relation to a landowner compensation bid.

An Australian National University PhD candidate and practicising PNG lawyer, Bal Kama, said that given a long history of conflicts between landowners and miners in PNG the newly-announced arrangement raised questions about the impartiality and objectivity of police.

Mr Kama said there were hardworking, honest police officers out there who were doing their best to uphold police values, but that such initiatives under the new agreement could undermine their good work.

“If the mining firm is willing to support bringing law and order and peace and harmony in the community then let them do it as part of their social responsibility.

“By funding community peace projects, funding NGOs that are engaged in making sure that there is harmony and law and order maintained in the community. They don’t have to go into a partnership with police.”

Mr Kama said operators in the extractive industries should also focus on paying their dues to the government and landowning communities on time in order to prevent conflict and ensure police received the resources they need in a timely fashion.

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MRA Updates On Porgera Mine Lease Application and Wafi-Golpu

Melisha Yafoi | Post Courier | January 7, 2020

Application for a Special Mining Lease for the Porgera gold mine is still in progress.

Mineral Resources Authority managing director Jerry Garry told the Post-Courier that the state is progressing the determination of the application which expired on August 16, 2019.

Mr Garry said during that process there will be two major streams of activities including the negotiations of the Mining development contract and recommendations from the Mining Advisory Council.

He said for the Mining development contract, the State Negotiation Team, (SNT) will recommence negotiations with the mine operators Barrick & Zinjin upon receiving directives from the NEC.

“This process will principally discuss fiscal regimes and other stability agreements in terms of taxes, royalties, equity, national content and other benefits teams,” he said.

While for the recommendations, he said this will be administered by the MRA whereby the technical and financial capabilities of the operator and compensation agreement pertaining to the extension application will be presented before special MAC for its deliberations and recommendations, either for refusal or grant to the Mining Minister & ultimately to NEC.

“We anticipate conclusion of the permitting, if, all goes well without any disruptions to the process, within first or second quarter of 2020,” he said.

Mr Garry said the permitting of Wafi-Golpu project after being halted due to a court injunction order was relieved preventing everyone from doing any work.

He said the injunction remains on foot and will SML application be dealt with only when the court injunction is resolved.

“Whenever the court injunction is relived, the MRA will formalise the remaining landowner associations along the pipeline and tailings outfall, and continue to hold development forum to develop the memorandum of agreements and compensation agreements with landowner associations, LLG and provincial government.

Concurrently, the SNT will re-open Mining Development Contract negotiations with the project development proponents, Harmony and Newcrest,” he said.

“It is anticipated that SML permitting may take 4-6 months from the date when the court injunction order is lifted.”

Mr Garry said as for the Revised Mining Act, whenever the Revised Mining Act is passed by the Parliament, the MRA will re-align itself to meet the new changes.

He said the Prime Minister has urged another consultation with the industry during the December 2019 PNG Mining Conference and the Department of Mineral Policy & Geohazard Management will be coordinating this process.

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Worrying sign for Harmony as Wafi-Golpu partner, Newcrest, scales back project activity

David McKay | MiningMX | October 24, 2019

AUSTRALIAN gold miner, Newcrest Mining, has scaled back its presence at Wafi-Golpu, a Papua New Guinea (PNG) project it holds in joint venture with Harmony Gold, after running into “continued delays”.

Sandeep Biswas, MD and CEO of Newcrest, said in the firm’s third quarter report today the project continued to be delayed “… by unresolved legal proceedings between the National Government and the Morobe Provincial Government” regarding how the economic benefits of the project would be distributed.

The PNG government was also running a separate review of the project in terms of broader economic participation and distribution policies.

As a result, the Wafi-Golpu Joint Venture (WGJC) has deferred the planned work programme whilst the company’s project team based in Brisbane and on site in PNG had been reduced. Other activities such as community and environmental programmes at the site would continue, however.

“It is difficult to estimate the duration of this delay and the market will be advised when discussions recommence,” said Biswas. He added that the PNG government had continued to “signal its support for the project”.

Harmony Gold said in May that following the appointment of PNG’s new prime minister, James Marape, there had been uncertainty about how quickly the project may progress. The PNG first focused its attention on natural gas projects against a backdrop of political unease in the country. Earlier this month, PNG authorities issued warrants for the arrest of the country’s former Prime Minister Peter O’Neill on suspicion of “official corruption”.

The O’Neill government signed a memorandum of understanding (MoU) regarding the development of Wafi-Golpu but it did not state the ownership that the PNG government may take in the project.

“Consequent delays in the work program will increase permitting costs,” said Morgan Stanley of Wafi-Golpu in July.

“We view PNG as a relatively high risk jurisdiction, and if permitting approvals are not forthcoming, development of the project could stall and exacerbate our concerns over Harmony’s long-term production decline,” said JP Morgan Cazenove in a note.

Significant delays in the development of Wafi-Golpu could also heighten risks about Harmony’s long-term production profile notwithstanding last year’s purchase of Moab Khotsong from AngloGold Ashanti.

Harmony is thought to be considering the possibility of making a bid for the Mponeng and Mine Waste Solutions assets in South Africa that AngloGold has put up for sale.

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.

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How do miners dispose of their waste in the sea?

MCC’s Basamuk Refinery in Madang pumps waste from the Ramu mine directly into the ocean

Melanie Burton | Reuters | October 11, 2019

Sea disposal of mining waste could spread as Indonesia weighs adopting the technique for new nickel projects, as Papua New Guinea is doing for a gold mine proposed by Australia’s Newcrest Mining.

The management of mining waste has drawn attention since two dam disasters in Brazil, and after red mud spilled into Papua New Guinea’s Basamuk Bay from Ramu Nickel’s operations in August.

An expert in chemical contamination has called test results from the Ramu Nickel spill “alarming,” media said this week. That spill resulted from an operational failure, however, rather than an issue with tailings management.

Proponents say deep sea tailings placement, which pipes unwanted pulverized rock into the sea, is cheaper and less harmful, especially on tropical islands where earthquakes or heavy rain limit storage on land, near deep sea trenches.

Critics say the impact of such marine disposal is poorly understood.

Fewer than 20 of the world’s 2,500 mines use the method to dispose of tailings waste, comprising rock, microscopic unwanted metals and traces of processing agents, such as cyanide.

Here are answers to some common questions, drawn from two research papers by Australia’s science bureau, the CSIRO.

WHAT IS DEEP SEA TAILINGS PLACEMENT?

Mining waste goes down a pipe 100 m (328 ft) or more offshore designed to sink rapidly to even greater depths, such as those off the continental shelf. The waste settles on parts of the ocean floor believed to be home to few creatures.

That keeps the waste out of the ocean’s most productive surface layer, where sunlight drives photosynthesis, and sealife is most abundant.

After the mine has closed, advocates say the deposit area will gradually be recolonised by the marine life and bacteria that were there before, as they now move back from surrounding areas.

WHEN WAS IT FIRST USED?

The first commercial use of deep sea tailings placement was at the Island Copper mine on Canada’s Vancouver Island in 1971 to 1996. Industry regarded that as a success, though it was also found to have affected the lake’s biodiversity. Some other early mines, such as Greenland’s Black Angel lead and zinc mine, however, contaminated surrounding water bodies.

WHERE IS DSTP USED NOW?

  • The Lihir gold mine in PNG run by Newcrest Mining. The Melbourne-based miner also proposed DSTP for its Wafi Golpu project with South Africa’s Harmony Gold.
  • The Simberi gold mine operated by Australian miner St. Barbara in PNG’s New Ireland province.
  • The Ramu nickel mine and plant run by Metallurgical Corporation of China in PNG’s Madang Province.
  • Batu Hijau, Indonesia’s second largest copper mine, run by PT Amman Mineral Nusa Tenggara.
  • Australia’s Kingston Resources is considering reopening PNG’s Misima gold mine and using DSTP.

WHAT ARE THE ISSUES?

ECOLOGICAL DIVERSITY: A quarter of the world’s coral reefs faced rising exposure to sediments and nutrients, boosting stress from climate change and ocean acidification, Australia’s science agency said in 2016. Greater sediment could smother coral or choke off sunlight or oxygen, it said.

SUSPENSION: Fine dust or metal particles remain suspended in the ocean instead of settling on the sea floor. They can “shear off” in plumes, widely dispersed by ocean currents, and travel between layers of varying salinity or temperature.

The impact on marine life is not fully understood, but coral near the Lihir tailings disposal site suffered a “substantial impact,” according to the paper.

Plankton could be trapped in suspended solids and fine particles could clog the gills of fish, it added.

MIGRATION: Marine animals could carry trace elements of mine waste into the food supply chain after ingesting them and then moving to shallow waters from the deep ocean.

DEEP SEA: Wider use of DTSP could affect deepwater canyons and abyssal or underwater plains that are high in biodiversity, according to the research.

RECOLONISATION: Ocean warming and acidification could hamper efforts to recolonise a DTSP area, it added. (Reporting by Melanie Burton; Editing by Darren Schuettler)

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PNG demands Wafi-Golpu gold stays in-country, urges Newcrest, Harmony talks

Jonathan Barrett | Reuters | September 13, 2019

  • Papua New Guinea to offer duties, taxes concessions in exchange
  • *PNG govt wants to extract more wealth from its resources

Papua New Guinea wants to keep 40% of gold produced from the proposed Wafi-Golpu project, the country’s commerce minister said, creating a potential hurdle to an agreement with co-owners Newcrest Mining and Harmony Gold.

The miners had been hoping to secure a mining lease over the major gold and copper deposit earlier this year, before a change in PNG’s leadership and a shift in minerals policy led to delays.

“We’d like to see Newcrest come to the negotiating table on this,” PNG’s Minister for Commerce and Industry Wera Mori told Reuters in a phone interview late on Thursday.

“They get 60% of the production, we get 40%. If they don’t like it we’ll mine it ourselves – we own the resources.”

Mori said that the government could offer concessions on duties and taxes as part of the negotiations and he said he was confident a deal would be struck.

Newcrest and Harmony each own 50% of Wafi-Golpu, while the PNG government has the right to purchase an equity interest.

The companies were not immediately available to comment. Attempts to reach PNG’s mining minister were unsuccessful.

Located near the port city of Lae, the project is forecast to hit an annual production peak in 2025 of 320,000 ounces of gold and 150,000 tonnes of copper, according to the project website.

The proposed policy changes are part of a push by the South Pacific archipelago to transform its mineral-rich economy amid a perceived lack of benefits flowing from resources projects back to communities.

PNG is also negotiating to take a bigger share of the Porgera gold mine as part of lease-renewal talks with joint venture partners Barrick Gold Corp and Zijin Mining Group.

It has also sought concessions from French giant Total SA over a $13 billion plan to expand gas exports.

The Wafi-Golpu gold would be processed in-country, creating a downstream industry for PNG, Mori said.

Mori told Reuters that PNG wanted to build up its gold bullion reserves, acting as a peg for its kina currency.

PNG’s central bank currently fixes its currency to a narrow U.S. dollar band, propping up the kina’s value while creating a shortage of dollars available in the Pacific nation.

“When the stock market crashes we lose value,” he said.

“But if the stock market crashes and we have gold, the gold price goes up.”

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Wafi-Golpu To Be Delivered Under Marape-Led Govt

FORGET ‘TAKE BACK PNG’ – IT IS BUSINESS AS USUAL UNDER THE MARAPE GOVT

Gorethy Kenneth | Post Courier | September 4, 2019

Prime Minister James Marape announced that the government wants to get the Wafi-Golpu gold mine operational at the soonest.

And the government is already in serious discussions with the Morobe provincial government to resolve issues while it prepares to finalise discussions with developers, Harmony and Newcrest.

Mr Marape told a press conference in Port Moresby yesterday that they want this project to be their legacy as they look at other projects like the Porgera lease that has expired.

He said as the country is going through tough economic times, this project will help boost the country’s economy including others that they are now serious about addressing.

Mr Marape also revealed that the government has given the green light to Total to proceed with the implementation of the Papua gas project, claiming that additional gains have been negotiated for the country under the project agreement.

“As a government, we are finishing this one,” he said, adding: “It is signed by the (former) O’Neill government, (and) we allowing it to go.

“Our government will enter into discussion with Wafi -Golpu and we are bringing to conclusion our issues with the Morobe provincial government.

“Those issues will be brought to conclusion and as whole of government, we will sit in one and we will go into discussion with both Harmony and Newcrest so that is one other project that is looming on the horizon.”

Mr Marape also told the press that the government “is not considering” any more concessions to be given to resource project developers.

“…and as I stated, the existing laws we have in place will not consider anymore concession (to give), but where we will win, as provided for by law, we will win, and where they (developers) win they will win,” he said.

“We are also looking into the Porgera lease that has expired.

“So those announcements will come in due course, as the nation has some big projects on the horizon.

“Not all is looking gloom, although our economy is stressed a little at the moment and our treasurer is going through the numbers and hopefully tomorrow (today) or Thursday he will announce the numbers (as) he has seen (the) possibility of a supplementary budget that we have been talking about all along.

“And that will come in due course but let me inform the country that all is not bad as it seems…we are working on the three or four projects that we have on the horizon and that will bring some economic activity and life into economy and hopefully going 2020 and beyond, we will gain some traction in the economy, and we have started with Wafi-Golpu.”

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PNG turbulence dampens Newcrest’s bumper gold harvest

Peter Ker | Australian Financial Review |  25 July 2019

Newcrest Mining’s most important growth project is facing indefinite delays on the back of political turbulence, with the miner redeploying staff in the expectation its US$2.8 billion ($4.01 billion) Wafi-Golpu project will be delayed.

The scaling back of work on Wafi-Golpu came as Newcrest’s gold production in the year to 30 June rose to the highest level since fiscal 2011.

 Political unrest in Papua New Guinea has prompted Newcrest to scale back its work on the project, which is located in the highlands of Australia’s northern neighbour.

 Development schedules for the project had always been uncertain, with Newcrest for years telling investors that construction would take 4.75 years beyond the awarding of a special mining lease.

 That special mining lease has continued to be elusive, even after Newcrest dramatically updated its plans for the project in February 2018.

 On Thursday, Newcrest was pessimistic about the chances of progress at Wafi-Golpu any time soon.

 “Recent developments in PNG have resulted in a delay to permitting,” said Newcrest.

 “These developments include a period of internal political contest culminating in the parliament’s election of a new Prime Minister as well as the delay associated with the legal proceedings between the national government and the Morobe provincial government regarding the internal distribution of PNG’s economic interests in the project.”

 Newcrest said those developments had convinced it to “defer and revise” the work program it had planned for the coming year.

 “The project team in Brisbane has been redeployed and reduced in order to mitigate the costs of the delay,” said Newcrest.

 “It is difficult to estimate the duration of this delay.”

 The rise of James Marape to become PNG’s new Prime Minister has raised concerns for some resources companies operating in the nation, with Marape vowing to “take back the economy”.

 “Who says one conglomerate from outside can come and tell me I can’t change the laws for my country,” he said in May.

 “I have every right to tweak and turn resource laws. We are all about maximising resources for our country.”

 Newcrest already operates the Lihir gold mine in PNG, while gold miner St Barbara also operates there.

 Oil Search, Santos and ExxonMobil have gas interests in the country.

 Aside from royalties and taxes, PNG may become an equity investor in Wafi-Golpu, given it has an option to buy up to 30 per cent of the project at a price determined in reference to sunk costs on development of the mine.

 If PNG takes up that option, the respective 50 per cent stakes held by Newcrest and its partner Harmony Gold would fall to 35 per cent.

 The continuing delays in PNG will raise doubts over whether it can be Newcrest’s next major growth project, particularly with the miner close to completing the acquisition of a controlling stake in Imperial Metals Red Chris mine.

 Newcrest produced 2.48 million ounces of gold in the year to 30 June, a 6 per cent improvement on last year.

 It was also Newcrest’s biggest production result since it produced 2.7 million ounces of gold in 2011; the last year before the Mt Rawdon and Cracow mines were divested into what would become Evolution Mining.

 Prices for gold in Australian dollar terms reached a record high of $2049 per ounce in the past month.

 Gold was fetching $2040 per ounce on Thursday, having been bolstered by sliding interest rates and geopolitical tensions between the US, China and Iran.

 UBS had expected Newcrest to produce 2.47 million ounces of gold in the year at an all in sustaining cost of $US740 per ounce.

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