Tag Archives: Highlands Pacific

Australian miners in firing line of PNG law shake-up

The streets of Sydney are paved with Papua New Guinea’s gold

Jewel Topsfield | Sydney Morning Herald | 17 July 2018

Major Australian mining companies face the prospect of higher royalties, tough restrictions on fly-in fly-out workers and the potential nationalisation of assets under reforms under consideration by the cash-strapped Papua New Guinea government.

The proposed law changes have sparked warnings from the country’s peak mining body that they would pose “significant deterrents” to investment in future projects and “threaten the existing operations of current mines”.

Several Australian Securities Exchange listed companies including Newcrest, Highlands Pacific and St Barbara Limited operate mines in Papua New Guinea, which has significant resources including gas, gold, copper, cobalt and nickel.

Mineral exploration in Papua New Guinea

The PNG Chamber of Mines and Petroleum says the proposed changes to the Mining Act could clamp down on international fly-in fly-out workers, impose a right for the state to compulsorily acquire mining projects (on commercial terms) after 24 years and result in an increase in royalties.

It says some of the proposed changes – which have been under discussion for years – would have “severe negative impacts in the immediate and long term on both existing operations and proposed projects”.

But the Resource Owners Federation of Papua New Guinea claims existing laws are “primitive, unjust and self-harming”, and mining companies continue to reap benefits while keeping the landowners and citizens who own the resources poor.

PNG Deputy Prime Minister Charles Abel told Fairfax Media the government was concerned about a number of factors including increasing the share of benefits to landowners.

The Papua New Guinea resource industry is responsible for just 20,000 jobs in nation of over 8 million people.

“Any proposed amendment must address the underlying concerns and keep PNG competitive as an investment destination,” he said.

New copper and gold projects inlcuding the Newcrest-led Wafi-Golpu mine and PanAust’s Frieda River mine are currently awaiting special mining leases from the PNG government.

At an update last month Mr Abel said the PNG government was bringing on Wafi-Golpu, the expansion of a ExxonMobil-operated PNG liquefied natural gas plant and Papua LNG “under an improved fiscal template”.

The Wafi-Golpu project, a joint venture between Newcrest and Harmony Gold, is a key part of Newcrest’s future and is considered the company’s top growth asset.

Newcrest’s Wafi-Golpu joint venture mine in PNG.

Australian company PanAust holds an 80 per cent interest in the Frieda River copper-gold project, which has an estimated initial mine life of 18 years.

PNG Chamber of Mines and Petroleum executive director Albert Mellam said some of the proposed changes had undermined investor confidence in PNG.

“We are concerned that some of the draft amendments are internationally uncompetitive, are a serious deterrent to investment in future mining projects in PNG and will threaten the existing operations of current mines in the country,” he said.

Dr Mellam said the transitional arrangements were inadequate to protect existing operations and could affect permit applications that already been submitted. He also said businesses would have to wear increased royalties, fees and levies and “unreasonable penalties”.

He said the passing of legislation in February – which removed industry representation on the Mineral Resources Authority Board and doubled the production levy rate from 0.25 per cent to 0.5 per cent – had already created a “great deal of uncertainty in the minerals sector and for international investors watching PNG”.

“The industry has already observed a gradual decline of investment into mineral exploration over the past two years.”

Mr Abel, who is both the Treasurer and Deputy Prime Minister of PNG, told Fairfax Media the current system had yielded good returns to government from mining projects in the past but a number of circumstances had combined to greatly reduce these flows as a share of government revenue.

These included projects approaching maturation, tax concessions, low prices, PNG LNG and Lihir, the gold mine owned by Newcrest, accessing accelerated depreciation provisions and greater use of the tax credit scheme.

“The state is not necessarily seeking to increase its take but wants earlier returns and smoother flows at lower cost,” Mr Abel said.

The gold processing plant on Lihir Island in PNG. Photo: Reuters

“This may necessitate a tax regime that is more production based rather than profit, has longer depreciation periods, has an element of free carry equity and simpler, more transparent structural arrangements and doing away with tax concessions.”

Mr Abel said PMG also wanted to minimise international fly-in fly-out operations to retain more benefits in Papua New Guinea.

The proposal to reduce maximum mining licenses from 40 to 25 years was “still under consideration”.

Mr Abel said the government was determined to deliver Wafi-Golpu, the PNG LNG expansion and Papua LNG to early works and final investment decision by 2019.

“These and other imminent projects should be based on the current legal framework with negotiated terms to meet some of the requirements I mentioned.”

The Resource Owners Federation of Papua New Guinea said the Mining Act should be reviewed in its entirety, so the ownership of minerals was retained by customary landowners.

“Minerals can still be mined only after development agreements are reached between the landowners and mining companies,” it said in a statement.

“All parties then benefit from a project, in contrast to Papua New Guinea in the past and today, where the landowners are the ultimate losers.”

According to the 2018 PNG economic survey by the Australian National University and University of PNG, the country is experiencing an “urgent economic crisis” and a shortage of foreign exchange is worsening.

The economy is dependent on the resource sector, which makes up 30 per cent of GDP, but much of it is foreign owned and a large share of the benefits flow offshore.

“Since 2015, resources revenue (corporate taxes and dividends from mining and petroleum) have been at their lowest level since 1992,” the economic survey says.

It says accelerated depreciation and tax holidays meant new projects paid no or virtually no resource revenue but it was surprising that even older projects were paying very little revenue.

“On the one hand there are genuine concerns in PNG that the country and landowners haven’t been getting a good deal from resource projects and change is needed,” said Professor Stephen Howes, the director of the Development Policy Centre at ANU.

“On the other hand the economy is in a very precarious state and the government is desperately looking for stimulus from new resource projects. That’s the tension … I think the government is in a difficult position.”

Professor Howes said he did not believe big new projects would go ahead until the uncertainty was resolved.

“They want clarity on these issues because they are long-term investments and these issues are seen as very important.”

Austmine, the leading industry body for the Australian Mining Equipment, Technology and Services sector, said current macroeconomic conditions and mining regulations in PNG had proven to be “considerable roadblocks to investment, creating uncertainty and stifling exploration”.

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Basamuk People Threaten To Shut Down Ramu Mine Refinery

View of the Ramu Nickel mine refinery. Image by Christopher McLeod/Sacred Land Film Project.

Jayne Safihao | Post Courier | 6 July 2018

While deputy Prime Minister, Charles Abel and a large team of government officers arrived yesterday in Madang for the much anticipated royalty payment to those affected in the Ramu Nico project, neglected Basamuk landowners have threatened to shut down the Basamuk refinery on Monday.

The threat was issued to the Ramu Nico management yesterday by executives of the Basamuk Landowners Association, in what was a ‘strained meeting’.

Spokesman and activist in the fight against having the deep sea tailings placement in Basamuk, Sama Mellombo, spoke strongly against the Mining Resource Authority (MRA), saying it had no legitimate powers to negotiate royalty payments.

He said that the Lands Department made an Improvement Inspection Report in 1999 which stated that the land should be forfeited and given back to customary landowners to improve.

Mr Mellombo said this was before the Mining Lease 42 was granted, “as described as to the depth of 30 metre below the natural surface of land situated near Basamuk”.

“Basamuk land is exempted from compulsory acquisition. Since the first Lands Titles Commission hearing in 2011 there has been no decision made over the land title. So after two LTC hearings no one can claim the land. We’ve had to go to the National Court to sort ownership issues but the courts say they are not the proper authority to decide who owns the land. It’s been a volley between the courts and LTC since,” he said.

“Now who has given MCC, the Chinese developer, the Basamuk land?”

MCC spokesperson, who did not want to be named, confirmed the meeting with Mr Mellombo’s team saying that the issue of Basamuk landownership was an “in-house dispute” between factions of landowners which has been prolonged and has put the company in an awkward position.

“The company can go ahead and pay them outstanding land use payments and such but this is hindering us. We recognize Mellombo as an LOA chairman though,” he said.

Mr Mellombo when asked if this was an in-house dispute, scoffed the idea saying:

“There is no in-house matter because according to MOA review of 2013, doesn’t allow two associations in one area. The company and the government are playing games and interfering with LOA affairs which they have no right to.”

The recognised groups within the project area to benefit today are Maigari Inland pipeline, Coastal pipeline and Kurumbukari LOA groups excluding the Rai Coast people in Basamuk.

It seems while the in-house matter is yet to be sorted out and LTC, yet to decide land ownership, the Chinese have somewhat put a refinery and Deep Sea Tailings Placement.

Mra Officers Allegedly Mishandling Landowners Issues

Jayne Safihao | Post Courier | 6 July 2018

The alleged mishandling of landowner issues by concerned MRA officers (named), in one of the impact areas of the Ramu Nico project may lead to the possible closure of the refinery at Basamuk.

In a petition, chairman of the Baasamuk Landowners Association Sama Mellombo, had singled two MRA officers as being very biased, not properly organising quarterly meetings and giving a complete blackout on project developments to the Basamuk LOA.

“I call on the Governor of the province, MPs for Madang and Rai Coast to get rid of these two gentlemen as they are not doing what they are supposed to be doing. MRA has not been paying our grants since, despite a competency jurisdiction hearing by the courts recognising us. These two gentlemen have been taking sides with certain individuals, coming to Madang and using it as a holiday resort and playing smart,” he alleged.

In the petition, he gave the company 48 hours before the refinery is shut down unless both men are replaced forthwith; that the refinery landowners identified by the Department of Lands and Physical Planning in 1999 be served on the proprietor, fully supported by a study of the Yangonan People of Rai Coast 1999 sponsored by Highlands Pacific and National Court order 2005/2010 regarding the subject land; and that the state show proof that Basamuk ground identified by Survey File No, 12/257 was legally acquired.

“We have been reliably informed that one MRA officer had a meeting to brief all the chairmen and executive committees of KBK, Inland and Coastal LOAs and singled out a Willie Galuk for reasons known only to himself. Who does Galuk represent? Not Basamuk I hope,” he said.

“We are concerned because this is not the first time the two officers have deliberately avoided Basamuk LOA executive committee since the outcome of the appeal to the National Court seeking to set aside the court order declaring that the election facilitated and conducted in Mindire village in 2016, was illegal.

“The landowners of Basamuk have been denied natural justice caused by these two officers who fail to remain impartial at all times when it comes to landownership issues. They see fit to be personally and deeply involved in the affairs of Basamuk LOA in-house matters that is causing the current status quo.

“Their actions are not in the best interest of the National Government through MRA and Ramu Nico management as they have failed to ensure four LOAs in the Ramu Nickel\Cobalt project has legal standing in the MOA; failed to conduct due diligence to ensure when conducting elections for associations over the years made sure of legal and statutory requirements according to association extract provided by the IPA for each term.

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Citigroup limits financing for mines that dump tailings at sea

Jim Tan | Mongabay | 12 June 2018

  • Following pressure from advocates, Citigroup said last month that it will not fund any future mining projects over $50 million that dispose of mine waste in the oceans.
  • Tailings, a fine-grained, often toxic slurry left over after the processing of mined ore, are still disposed of in oceans, lakes and rivers in several countries.
  • Mines in Papua New Guinea, Norway and Chile are proposing to dispose of tailings in the ocean.
  • Local communities are often most affected by pollution from mines and have vocally opposed tailings disposal in the ocean in Norway and Papua New Guinea.

Several mines around the world dispose of potentially toxic mine waste directly into the ocean. Environmentalists have criticized the practice, arguing that the waste smothers ocean habitat and leaches harmful chemicals and heavy metals that can poison marine life. Last month Citigroup, a major shareholder in four mining companies that either actively dispose of mine waste into the ocean or propose to do so, agreed not to finance any new operations that pipe mine waste into the sea.

Citigroup’s move comes after pressure from an international coalition of NGOs that launched a campaign this year to end the disposal of mine waste in natural water bodies. The coalition, led by the Washington, D.C.-based environmental NGO Earthworks, is calling for a global ban on the practice and pressuring financial institutions to stop funding mining operations that engage in it. Earthworks announced Citigroup’s move in a May 2 press release.

“Citi’s decision says loud and clear: ocean dumping is dirty, unnecessary and wrong,” Ellen Moore, who coordinates the Ditch Ocean Dumping campaign for Earthworks, told Mongabay.

There are few signs of life on the bottom of Jøssingfjord in southern Norway 35 years after dumping ceased at the Tellnes titanium mine. Scientists believe it may never recover. Image by Erling Svensen.

Toxic tailings

One of the key problems miners face is how to safely dispose of the huge quantities of waste rock and tailings produced in the mining process. The tailings, a fine-particle slurry left over after the target metal has been extracted from the mined ore, are particularly tricky to handle. Tailings often contain potentially harmful chemicals used to process the ore, like cyanide and petroleum, as well as by-products like sulphuric acid and heavy metals like lead.

Nowadays, the vast majority of the world’s 2,500 industrial-scale mines dispose of their waste on land. But several mines still dump into water bodies, including at least seven into the ocean, in Papua New Guinea (PNG), Indonesia, Turkey and Norway; at least three into rivers, in PNG and Indonesia; and at least five into lakes in the U.S. and Canada, according to a non-exhaustive list from Earthworks. The group calculated that mines dispose of more than 220 million metric tons of waste in water bodies every year — enough, the group says, to fill 55 sports stadiums.

“Although mine waste dumping in water has been phased out in many parts of the world, mining companies still use it, governments still allow it, and the world’s largest banks and investment firms still profit from it,” Moore told Mongabay.

This is partly the result of geography. In Norway, suitable and stable terrestrial locations to store mine tailings are hard to find because of the mountainous terrain. In PNG, mines face a similar problem and must also contend with frequent earthquakes and flooding during the rainy season that can destabilize tailings dams.

Tailings pipes from the Marcopper mine in Marinduque, the Philippines, enter the sea at Calancan Bay. Image by Catherine Coumans/MiningWatch Canada

It is now widely accepted that tailings disposal can have a catastrophic impact on rivers and the creatures that live there. But the effect of tailings disposal in the ocean is somewhat more contentious.

Companies including Oslo-based Nordic Mining, which proposes to pump tailings from a rutile mine into Førdefjord, a fjord in southwestern Norway, suggest that deep-sea tailings disposal can be safe. They argue that, due to the layered nature of the ocean, so long as tailings are piped deep enough, ocean currents will not spread them, and their impact on marine life will be minimal and localized.

Charles Roche, executive director of the Mineral Policy Institute, an Australian NGO that assists communities affected by mining and is a signatory to the campaign, is less convinced. He points to the very limited peer-reviewed literature as evidence of the impact of submarine tailings. Two studies conducted around the Lihir gold mine in PNG found fewer deep-water fish and reduced marine life on the sea floor compared to the surrounding areas.

Part of the problem is that there is very little independent research into the effect of submarine tailings disposal, Roche told Mongabay.

“Research into submarine tailings is generally done by or for proponents [of submarine tailings disposal],” he said.

Many of the studies are environmental impact assessments conducted on behalf of mining corporations applying for a licence to operate and are rarely publicly available, according to a 2015 article in Oceanography magazine.

The lack of peer-reviewed research on the topic is a problem for Lisa Levin, an oceanographer with the Scripps Institution of Oceanography in California. A 2015 review she co-authored in Marine Pollution Bulletin suggests that a major reason is the high cost of conducting research in the deep sea.

Despite the limited research, Levin is also convinced tailings disposal has a negative impact on the ocean. “It will never be good for marine ecosystems,” she told Mongabay.

Citigroup acts

Citigroup, a multinational investment bank and financial services corporation based in New York, is among the top 20 largest financial institutions in the world, with total assets of $1.84 trillion in 2017.

Citigroup’s business is split into two divisions: consumer banking under the Citibank brand, and investment banking. It was Citigroup’s investments that attracted Earthworks’ attention. Citigroup is the third-largest shareholder in the Australian mining companies Highlands Pacific and St. Barbara Limited, which Earthworks says have together disposed of 54 million tons of toxic tailings in the ocean around PNG. Citigroup also holds shares in Norway-based Nussir ASA and Nordic Mining, which have both proposed disposing of tailings at sea in Norway.

Fishing boat on Repparfjord, Norway, where Norwegian mining company Nussir ASA proposes to dispose of tailings from a copper mine. Image by Kjerstin Uhre.

The campaign wrote an open letter to Michael Corbat, Citigroup’s CEO, in January 2018 asking the bank to sever ties with companies that dispose of waste at sea.

“Citi was immediately responsive after we launched the public campaign,” Moore told Mongabay. “It was clear that the bank did not want to be associated with the harmful and outdated practice.”

Following negotiations, Citigroup revised its Environmental and Social Policy Framework to state:

“Citi will not directly finance new mining projects … that utilize submarine waste disposal.”

The policy will only apply to future projects requiring corporate loans over $50 million, and does not apply to the bank’s brokerage business, which holds shares on behalf of clients.

When asked about the company’s new policy, Citigroup spokesperson Laura London responded:

“Citi has a comprehensive Environmental and Social Risk Management Policy that covers our business with a range of sectors, including the mining sector, and we carefully review any sensitive environmental and social impacts of activities we finance, in line with our global standards and good industry practice.”

London declined to respond to detailed questions, and the bank has not publicly announced the move itself.

Roche welcomed Citigroup’s policy change, but he recommended the bank “extend the policy and prohibit any involvement, including company or nominee shareholdings, of riverine and [marine tailing disposal projects].”

Nevertheless, Moore believes this quick win for her campaign is the first step in the right direction. She said Citigroup also agreed to add companies that dispose of mine waste in lakes, rivers or the ocean to the bank’s internal watchlist and subject them to tighter scrutiny.

Levin agrees that Citigroup’s move is significant.

”[Citigroup’s] policy certainly helps to raise awareness of the negative effects of submarine tailings disposal,” she said. “Because the economic sector drives so much of human behavior I believe it is an important first step to engender change.”

The campaign is also targeting the multinational financial institutions Bank of America, Credit Suisse and J.P. Morgan, contending that they also “have ties” to mines that dispose of waste into water bodies.

Local communities pay the price

View of the Ramu Nickel mine refinery where mine waste is disposed of into the ocean in Papua New Guinea. Image by Christopher McLeod/Sacred Land Film Project.

When mine tailings cause environmental damage, it is often local communities and indigenous groups that pay the highest price. Moore is critical of brokerage businesses, such as Citigroup’s, that hold so-called nominee shares for clients, which can be used to shield the clients’ identities. She said that if affected community groups could identify shareholders and then communicate their concerns directly to them, it would make a difference.

In PNG, tailings from the Tolukuma gold mine resulted in elevated levels of arsenic, lead and mercury in the drinking water and flooded croplands for communities downstream, according to a 2013 report prepared for the International Maritime Organization and the United Nations Environment Programme. The report also notes anecdotal reports from local communities of increased illness and deaths after drinking and bathing in the river where the mine disposed of its tailings.

In both PNG and Norway, local community groups have been vocal in their opposition to the disposal of tailings at sea. Landowners in PNG attempted to prevent the Ramu Nickel mine, majority owned by the Metallurgical Corporation of China, from dumping its tailings in the sea through a class action lawsuit, but were unsuccessful. In Norway, Saami indigenous people have frequently voiced their opposition to proposals by Nordic Mining and Nussir ASA to dispose of tailings in Førdefjord and in Repparfjord, in the northern part of the country.

“It is illogical and immoral to sacrifice our traditional, sustainable and profitable fisheries for an uncertain mine project that relies on outdated practices to turn a profit,” said Silje Karine Muotka, a member of the Saami parliament, in Earthworks’ press release.

Nevertheless, both projects appear to be moving forward.

Citations

Brewer, D.T., Milton, D.A., Fry, G.C., Dennis, D.M., Heales, D.S., & Venables, W.N. (2007). Impacts of gold mine waste disposal on deepwater fish in a pristine tropical marine systemMarine Pollution Bulletin 54(3): 309-321.

Hughes, D.J., Shimmield, T.M., Black, K.D., & Howe, J.A. (2015). Ecological impacts of large-scale disposal of mining waste in the deep seaScientific Reports 5:9985.

Ramirez-Llodra, E., et al. (2015). Submarine and deep-sea mine tailing placements: a review of current practices, environmental issues, natural analogs and knowledge gaps in Norway and internationallyMarine Pollution Bulletin 97(1-2):13-35.

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Time PNG govt exercised better control over its own resources

A Britten Norman Islander, the first plane to land at Frieda River in 1970. Kiap John Pasquarelli had discovered gold and copper in 1963. Now, 55 years later, the mine is still undeveloped and the object of great controversy

Gabriel Ramoi | PNG Attitude | 12 June 2018

Resources firm Pan Aust (wholly owned by the Chinese state company, Guangdong Rising Assets Management, GRAM), has lost its way with the Frieda River copper-gold project in Papua New Guinea’s Sandaun Province.

It is now time for the PNG government to exercise leadership and rein in control over the Frieda asset if the PNG is to sustain its free education and health policies and lift the rest of the country out of poverty, disease and ignorance.

The view from Frieda is now very different compared with the corporate carnage of 2013 following Glencore’s hostile takeover of Xstrata Mining. In that epic battle for world copper supremacy, Mike Davis’s Xstrata lost to Ivan Glasenberg’s Glencore and with it went a chunk of PNG’s national asset, the K260 billion Frieda mine.

Glasenberg has gone on to become the king of copper and head of the number one mining house in the world.

But then, for a deposit of just K80 million, little known Australian miner Pan Aust Ltd moved in and acquired Frieda from Glencore while PNG government advisers and ministers slept on the job despite warnings from industry that the government should exercise control and reclaim ownership over its strategic asset.

Pan Aust went on to the sell out to GRAM in 2015 for a reported K1.2 billion although officially the deal was closed at K450 million.

GRAM is owned by the municipality of the city of Guangzhau in southern China, although the deal maker in this transaction was a leading Australian Chinese billionaire Dr Chau Chak Wing, the subject of a current controversy because of allegations that he is an agent of the Chinese Communist Party.

Additionally, the influential South China Morning Post reported in September last year that the chairman of GRAM, Li Jinming, as well as the CEO and chief financial officer had been arrested and are facing prosecution in China for failing to account for a number of acquisitions made by GRAM in Australia, including Pan Aust, leading to a loss by GRAM of more than K3.2 billion.

None of these corporate maneuverings went unnoticed by the government of China and eventually Glencore was forced to sell a number of its copper assets to China in order to keep selling its copper ore to the communist country.

I suspect the sale of the Frieda copper mine may have been part of an arrangement between Glencore and the government of China for a number of its assets to be sold to Chinese-controlled companies.

But the question that now needs to be asked in PNG following the arrest of the GRAM directors is what can the PNG government do with Frieda?

Last week, the PNG Mineral Resources Authority reported that Pan Aust had advised it of the withdrawal of an application for the mine development license over Frieda that was filed in 2016.

I suspect the real reason for this is that Pan Aust does not have the required capital to follow through with the development of Frieda Mine since the arrest of the GRAM executives in China and the freeze on GRAM’s activities pending finalisation of court proceedings in China.

Pan Aust and its junior partner Highlands Pacific are already in arbitration over the issue of the costs relating to each partners contribution to the feasibility study.

In the wake of this total mess, an opportunity exists for the PNG government to open dialogue directly with the government of China to revisit the Frieda project.

Already two leading Chinese state companies – China Energy Engineering Ltd and China Railway Yunnan Construction & Development Ltd – have expressed interest in developing the infrastructure associated with the mine.

The PNG government and the provincial governments of West and East Sepik – the ministers of the two provinces in particular – should take the lead in opening dialogue with China on the Frieda project.

How the Frieda project will be developed is part of the unfolding resource war being waged worldwide between private capital (represented by figures such as Glasenberg, Donald Trump and Malcolm Turnbull) and powerful state actors such as the gvernment of China and other savvy emerging states such as Russia and Indonesia.

The leading US-based mining journal Behre Dolbear reported last week that the Republic of Congo, Ghana, Tanzania, Zambia and Mauritania have recently enacted new legislation apportioning greater revenues from mining in favour of the state to the rejection of Barrick Gold in Tanzania and Glencore in Congo.

Over the last six months we have also seen the rise of resource nationalism in Indonesia with a direct challenge to BHP Billiton and Freeport Copper to divest up to 51% of their interest in the Grasberg mine to the Indonesian state.

At the time of writing, BHP has agreed to sell its 40% stake to the state and current negotiations continue on the quantum of compensation for environmental pollution by Freeport.

While there is a much kneejerk reaction by our neighbours about Chinese checkbook diplomacy in the region, it must be remembered that China is Australia’s number one trading partner.

Despite just 70 years ago China being rolled over by Japan after a long period of being pushed around by colonial powers, it has emerged in recent times as a super power extending its hand of friendship to countries around the world as it builds a new world order with itself at the centre.

“Developing countries where 90% of the world lives are at a crossroad,” says the leading black African woman of our generation, Zambian economist, lawyer and banker Dambisa Moyo. “They are facing a choice between the United States model of democracy and private capitalism or the Chinese model of state capitalism and no democracy.”

This may be too unequivocal as many third world countries including PNG are now better poised to consider bartering our copper, gold and other mineral wealth for infrastructures such as roads, ports, railways, universities and hospitals rather than simply allowing private capital through direct foreign investment.

Our experience over 40 years has been dismal as highlighted by reports such as that by Jubilee Australia. As PNG struggles to build its next generation of mines, the young lawyers and technocrats advising our leaders must take it upon themselves not to repeat the mistakes of the past but to look at recent deals between China and a number of counties in Africa and negotiate a new mining development contract for PNG that we all can be proud of.

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Frieda Mine Lease On Hold

Frieda River mine camp

Frankiy Kapin | Post Courier | May 31, 2018

Frieda mine project developer PanAust Limited has indicated further alterations to its initial proposal for mine development thus holding back the Special Mine Lease (SML) application.

Mines regulator, Mineral Resources Authority (MRA) revealed this week that the assessment of the application had to be put on hold as the applicant has indicated there may be significant changes to the initial proposal for development and feasibility study.

According to MRA, PanAust is considering a range of potential material changes.

These include the relocation of the integrated storage facility to Frieda River from the Nina River, and increasing the hydro potential to over 300 Megawatts.

The project is also considering development of a public road corridor between Vanimo and Hotmin instead of using the Sepik River.

“This is to significantly reduce its activities within the river system.

“The proposed airport may be upgraded to a regional status and there may be consequential changes to tenements. Some relocation of landowners may also be required,” said the MRA.

MRA confirmed that PanAust’s application for a SML for the Frieda project is on hold pending the company’s lodgment to the government indicating amendments to the development proposal.

According to MRA, the tenement holder initially lodged the SML last year in June 2016 but has indicated to the State negotiating team that it may submit an amended proposal for development and feasibility study by October this year.

“Mining Act and Environment Act approvals will be delayed as a result against the original timetable.

“To date, PanAust has yet to submit its amended proposal two,” MRA issued.

MRA further stated that PanAust will also be required to lodge any amended environment impact assessment report to the Conservation Environment Protection Authority (CEPA) if the original proposals alter.

East Sepik Governor Allan Bird said as the host province, the provincial government will have a say once all mine development documents are assessed by MRA and submitted to the provincial heads.

The Frieda River project is copper dominated with gold and silver as bi-products and presently the project’s mine life is 17 years with a potential to extend.

Current indications from initial submissions are that the porphyry copper gold deposits contain an estimated total combined mineral resource of over 2.7 billion tones at an average grade of 0.42 per cent copper and 0.23 grams per tonne gold.

From this assessment, the project has a total mineable ore reserve of 608 million tonnes at 0.49 per cent copper and 0.27 grams per tonne gold.

The Frieda River project operator is Frieda River Limited (FRL), a subsidiary of PanAust.

Frieda River Project is located in the provinces of West and East Sepik and jointly owned by PanAust (80 per cent) and Highlands Pacific (20 per cent).

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Highlands Pacific to increase its stake in Ramu mine

Poor workmanship and construction has hampered the Ramu nickel mine

Highlands’ ownership of Ramu will increase to 11.3 percent from 8.56 percent”

Cobalt 27 agrees to streaming finance deal with Australian miner

Nicole Mordant | Reuters | 23 May 2018

Canada’s Cobalt 27 Capital Corp said on Tuesday it has agreed to the world’s first cobalt-nickel streaming finance deal on a producing mine with an Australian miner as the industry looks to bolster supplies of the key battery metal.

Streaming is a type of alternative finance that allows an investor to make an upfront payment in exchange for future production at a discounted price. The transaction is the world’s first cobalt-nickel streaming deal on a producing mine, Cobalt 27 said in a statement.

The transaction comes as Brazilian miner Vale SA was seeking to sell cobalt from its Voisey’s Bay mine in eastern Canada in a streaming deal worth around $500 million, Reuters reported in January.

Prices of cobalt, a critical component in rechargeable lithium-ion batteries for electric vehicles, have soared fourfold over the past two years to close to $100,000 a tonne on concerns of a shortfall as demand is forecast to spike.

Cobalt 27 said it had reached a C$145 million ($113.33 million) deal with Highlands Pacific Ltd to buy cobalt and nickel from a Papua New Guinea mine that the Australian miner has a stake in.

Cobalt 27, a small buyer of physical cobalt, is also in advanced talks with other owners of the Ramu mine on Papua New Guinea’s north coast for a further $87 million stream, it said. Both transactions can be funded from cash or a new debt facility.

Under the transaction with Highlands, Cobalt 27 will purchase 55 percent of Highlands’ share of cobalt production and 27.5 percent of its share of nickel output from the mine.

That will result in Cobalt 27 receiving an estimated 450,000 pounds of cobalt and 2.25 million pounds of nickel in concentrate a year from Ramu.

As a result of the deal, Highlands’ ownership of Ramu will increase to 11.3 percent from 8.56 percent. The mine is majority-owned and operated by Metallurgical Corporation of China Ltd. Other shareholders include the Papua New Guinea government, landowners and other Chinese investors.

Cobalt 27 has also agreed to buy a 13 percent stake in Highlands, a Papua New Guinea-focused mining explorer, developer and producer.

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Aggrieved landowners say they are missing out on Ramu mine benefits

Post Courier | April 6, 2018

The RAMU Nickel Project has life span of over 35 years, according to project developer Ramu NiCo Limited.
And with exploration continuing, the project life’s span could even increase, vice president of Ramu NiCo Management (MCC) Limited, Wang Baowen said on Wednesday when addressing aggrieved landowners at Mindre village.
Mr Wang was accompanied Mineral Resources Authority cheif executive officer Philip Samar, MRA senior officers and a legal officer from the Investment Promotion Authority.
Mr Wang was addressing aggrieved landowners who petitioned the Government and the developer over what they claimed were missed business opportunities, compensation payments, royalties and environmental issues.
Certain community leaders alleged at the gathering that minerals were being shipped out of the country in ship loads after ship loads and they were suspicious that the mine life of the project was coming to its end soon.
However, Ramu NiCo Community affairs manager Albert Tobe said such stories that are being speculated were not true.
Mr Wang said that initially the mine’s life-span was about 25 years, however, with recent exploration and discoveries of ore up at the Kurumbukari plateau, the mine life may extend to over 30 years.
He told landowners of Basamuk that the developer is also a local company with interests of landowners, State and the province at heart.
“Am very clear regarding your concerns on business opportunities,” Mr Wang said.
Mr Wang said the company had to face many difficult challenges initially from the start until it went into production.
He said it is also a big challenge for Chinese employees working in PNG particularly with the language, cultural here, and the challenge of leaving behind their families to come to PNG just to operate the project.
However, that was a big commitment they have made for the development of the economy and its people.
Mr Wang said it was only last year that the company achieved full production capacity.
He also told the landowners at Mindre that all compensation claims which they were seeking must come within an agreement.
“With regards to business opportunities, we want to give business to landowners and we provide what we can, but there are other businesses that require strict management requirement” Mr Wang said.
He said the company is willing to discuss further with the landowners through Ramu NiCo community affairs department business development section to deliver their requirements in business opportunities.

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