Tag Archives: Japan

Mining Hopes for Independence

An aerial view of the Panguna mine located in the autonomous region of Bougainville on July 20, 2015, in Papua New Guinea.(USGS/NASA LANDSAT/GETTY IMAGES)

A copper quarry helps fuel Bougainville’s hopes for separation from Papua New Guinea, a move that would resonate across the Pacific.

By Geoff Hiscock | U.S. News | July 1, 2019

THE Pacific island of Bougainville is moving a step closer to potential independence from Papua New Guinea as preparations begin for a long-promised referendum later this year.

Whether it can survive as a stand-alone nation is a key question for its 250,000 inhabitants, and for other separatist movements in the Pacific. The future course of the island could ripple across the region, as the question of Bougainville’s independence will touch on a complicated mixture of business concerns, environmental worries and geopolitical interests stretching from Australia and New Zealand to ChinaJapan and the United States.

It’s an outsized international role for Bougainville, which lies 900 kilometers (560 miles) east of the Papua New Guinea mainland. The roots of the referendum stem from a bitter inter-clan and separatist conflict that ran from 1988 to 1997, fighting that claimed between 10,000 and 20,000 lives through a combination of violence, disease, poverty and dislocation.

A truce brokered and maintained by regional neighbors that included Australia, New Zealand and Fiji helped restore order, and a comprehensive peace agreement was signed between Papua New Guinea and Bougainville in 2001. The island has had its own autonomous government since 2005.

Bougainville’s people are expected to vote decisively for independence in the Oct. 17 referendum, according to Jonathan Pryke, Pacific Islands program director at the Lowy Institute, a Sydney-based policy think tank. The vote is not binding and any move toward independence will require agreement from the central government of Papua New Guinea, commonly referred to as PNG.

Most people hope the two sides can find a “Melanesian solution” that will deliver a workable form of autonomy for Bougainville, says Pryke, using the term that describes the region of the South Pacific that includes PNG, Fiji, the Solomon Islands and other island nations and territories.

James Marape, who took over as Papua New Guinea’s prime minister in late May, said on June 14 he would prefer Bougainville to remain part of a unified nation, but would listen to the people’s voice and then consult over future options.

Papua New Guinea’s new prime minister, James Marape, arrives at the house of Governor-General Bob Dadae to be sworn in as the new leader in Port Moresby on May 30, 2019.(GORETHY KENNETH/AFP/GETTY IMAGES)

Peter Jennings, executive director of the Australian Strategic Policy Institute in Sydney, says the desire for independence in Bougainville remains strong, but from a regional perspective it will be best if the Bougainville people decided to stay in Papua New Guinea. “We don’t need another microstate emerging in the Pacific.”

Australian Foreign Minister Marise Payne, who visited Bougainville on June 19 with PNG’s new minister for Bougainville Affairs, Sir Puka Temu, said Australia will work to ensure the integrity of the referendum and will not pass judgment on the result. Australia is by far the biggest aid donor in the Pacific region, giving $6.5 billion between 2011 and 2017, according to research last year by the Lowy Institute. Most of Australia’s aid goes to Papua New Guinea.

Scars Remain From a Civil War

The Bougainville conflict, in which rival clans on the island fought among themselves and with the Papua New Guinea Defence Force, evolved from multiple issues, including land rights, customary ownership, “outsider” interference and migration, mineral resource exploitation, and perceived inequities and environmental damage associated with the rich Panguna copper mine.

Under the terms of the 2001 peace agreement, a vote on independence within 20 years was promised.

A reconciliation ceremony will be held on July 2 between the central PNG government, the national defence force, the Autonomous Bougainville Government and the Bougainville Revolutionary Army.

Deep scars remain from the conflict, both physical and emotional. Much of the island’s public infrastructure remains in poor shape, educational opportunities are limited, and corruption is pervasive. Clan rivalry and suspicion persists, particularly in regard to land rights and resource development.

Since Panguna closed in May 1989, Bougainville’s people have led a life built around agriculture and fishing. The cocoa and copra industries ravaged by the war have been re-established, there is small-scale gold mining, and potential for hydroelectric power and a revived forestry industry. For now, a lack of accommodation inhibits tourism.

Copper Mine Underscores Doubts over Bougainville’s Economic Viability

Almost 40 years ago, Bougainville’s Panguna mine was the biggest contributor to Papua New Guinea’s export income and the largest open-cut in the world. But the mine, operated by BCL, a subsidiary of Conzinc Riotinto Australia (now Rio Tinto Ltd.), became a focal point for conflict over pollution, migrant workers, resource ownership and revenue sharing, and has been dormant since 1989.

Apart from any foreign aid it may receive, Bougainville’s future prosperity may well depend on whether it can restart the mine, which contains copper and gold worth an estimated $50 billion. But customary ownership claims – land used for generations by local communities without the need for legal title – remain unresolved and at least three mining groups are in contention, which means an early restart is unlikely. Jennings cautions against investing too much hope in Panguna, with remediation costs after 30 years of disuse likely to be high.

Likewise, Luke Fletcher, executive director of the Sydney-based Jubilee Australia Research Centre, which studies the social and environmental impacts of resources projects on Pacific communities, says reopening Panguna would be a long, expensive and difficult proposition. He says the challenge for any mine operator would be developing a project that is environmentally safe, yet still deliver an acceptable return to shareholders and to the government.

Bougainville’s leader, President John Momis, believes that large-scale mining offers the best chance for income generation and is keen both to revive Panguna and encourage other projects. That would require outside investment, which was a factor contributing to the outbreak of violence in the late 1980s. The local community perceived that it was not getting its fair share of Panguna’s wealth.

Rio Tinto gave up its share in BCL in 2016, and ownership now rests with the government of PNG and the Bougainville government, each with 36.4%. Independent shareholders own the remaining 27.2%.

At least two other groups are vying to operate Panguna. Sir Mel Togolo, the BCL chairman, told the company’s annual general meeting on May 2 that continued uncertainty about Panguna’s tenure remains a big challenge. “We will need to work cooperatively with all stakeholders to achieve our objective of bringing the Panguna mine back into production,” he said.

Regional, International Eyes on October Referendum

With doubts persisting about Bougainville’s economic viability if it cuts ties with the central government, the referendum outcome will be closely watched by other PNG provinces pushing for greater autonomy, such as East New Britain, New Ireland and Enga.

Across the region, some parts of neighboring Vanuatu and the Solomon Islands are agitating for their own separate identities. In the nearby French overseas territory of New Caledonia, voters rejected independence from France by a 56 percent to 44 percent margin in November 2018. European settlers were heavily in favor of staying part of France, while indigenous Kanak people overwhelmingly voted for independence.

At the international level, Australia will be keen to ensure that whatever the outcome of the Bougainville referendum, stability is maintained in Papua New Guinea, if only to counter China’s growing interest in offering aid and economic benefits as it builds a Pacific presence.

Along with Japan, New Zealand and the U.S., Australia has committed to a 10-year $1.7 billion electrification project in Papua New Guinea. Australia and the U.S. have agreed to help Papua New Guinea redevelop its Manus Island naval base, which sits 350 kilometers north of the mainland and commands key trade routes into the Pacific.

Jennings says Australia would be likely to give aid to an independent Bougainville to try to keep China at bay. “China is everywhere. Its destructive connections co-opt leaderships in a way that doesn’t work out well for people.”

From a strategic perspective, Jennings says it would be best if Melanesia looked to Australia as its main partner on matters of security.

While China gives most of its aid to PNG and Fiji, the region’s two biggest economies, Jubilee’s Fletcher says China giving aid to an independent Bougainville was “feasible.”

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Japan to oppose new or expanded coal-fired power plants in blow to Australian exports

Japan’s environment minister has announced he will ‘in principle’ oppose any new plans to build or expand coal-fired power stations. Photograph: David Gray/Reuters

Australia’s top export market for thermal coal gives further signs of dramatic energy pivot to renewables

Ben Smee | The Guardian | 31 March 2019 

Japan’s environment minister has announced he will “in principle” oppose any new plans to build or expand coal-fired power stations, as further signs emerge of a dramatic energy pivot by Australia’s top export market for thermal coal.

Guardian Australia reported in March that Japan had cancelled a large percentage of planned investments in coal-fired power, while Japanese investment vehicles were ditching coal projects and instead seeking to back large-scale renewable projects across Asia.

Market analysts expect the price of thermal coal will remain dictated by China, whose recent restrictions on Australian exports have already tempered near-record prices, and would likely continue to reduce its value.

A faster-than-anticipated transition by the Japanese energy sector, which buys 39% of Australian-mined thermal coal, would affect future volumes and the viability of some new mines.

The resources sector believes forecasts for slowing demand in north and east Asia will be offset by growth in demand in parts of south Asia and south-east Asia.

But the financing of new coal-fired projects in developing Asia will likely come from investment vehicles based in China, Japan and Korea, and be closely linked to domestic policy in those countries.

Late last week, three separate announcements added to a growing belief that a renewed, positive focus on the Paris goals is emerging in Japan, among government and large corporations.

The Japanese environment minister, Yoshiaki Harada, announced a “policy initiative” to oppose new or expanded coal-fired power plants, the national newspaper Asahi Shimbun reported.

The environment minister does not have the final say on new power generation projects, but his opinion is considered a fundamental part of the planning process.

On Friday, Japan’s largest utility, Kansai Electric Power, announced it would expand its renewable energy portfolio to 6GW by 2030, earmarking US$5bn in capital expenditure for clean power projects in the next two years.

The same day Japan’s Marubeni Corporation, a significant developer of power projects in developing Asia, announced it would target a doubling of renewable energy revenues by 2023.

Marubeni announced last year it was exiting coal. Its divestment decision was followed by fellow conglomerates MitsuiMitsubishiItochu and Sojitz. Three coal-fired power plant projects have already been cancelled in Japan this year.

Observers in Japan remain cautious, as the country has coal-fired power projects under construction and some already approved. The prime minister, Shinzo Abe, has signalled he wants to show global leadership on climate change, ahead of the next G20 summit in June in Osaka.

The speed with which Japanese government and industry have shifted focus is significant, market analysts say. It comes as global financial institutions are increasingly exiting coal. On Saturday, Australia’s largest insurer, QBE, said it would stop insuring new thermal coal projects – including mines and power generation – from July this year, and underwrite no thermal coal projects by 2030.

Australian coalminers might not feel the direct impacts of these pivots for a decade or more, as most recent announcements relate to new projects, or offer staged exit commitments.

Tim Buckley, the director of energy finance studies for the Institute of Economics and Financial Analysis, said the next decade would be critical for those most heavily dependant on thermal coal.

Buckley said the Australian economy, mining communities and workers would be at greater risk if governments failed to understand the changing sentiment of global financial markets, particularly Japan, and ignored the need to implement effective transition strategies.

“We have a decade to prepare, and that’s the decade that is critically important to building the industries of the future,” Buckley said.

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Japan Starts Mining Hydrothermal Deposits

Subsea News | 28 September, 2017

Japan has carried out the world’s first mining and lift test of hydrothermal deposits at about 1,600 meters depth in the ocean near Okinawa, the country’s Ministry of Economy, Trade and Industry and the Japan Oil, Gas and Metals National Corporation (JOGMEC) confirmed earlier this week.

The success of this test, which reportedly extracted zinc and other metals, should be a major step toward establishing the technologies required for ocean mineral resource development.

In addition to the results of this test, Japan plans to carry out economic evaluation such as resource amount assessment and environmental survey. According to the Ministry, the first test confirmed that there is no serious influence on the surrounding environment.

“We are planning to comprehensively promote efforts towards commercialization of submarine hydrothermal deposits by promoting economic evaluation and environmental investigation,” the Ministry said in a statement.

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Mining the Ocean Floor: Good Idea?

seabed mining japan

Adam Minter | Bloomberg

While commodities traders still work their way out of a historic slump, Japan is looking ahead to the next boom. According to Bloomberg News, next year a group of Japanese companies and government agencies will start mining minerals at a site 1,000 miles southwest of Tokyo — and one mile beneath the ocean’s surface. It will be the first large-scale test of whether mineral deposits can be mined commercially from the seafloor.

The project is fairly bold. The seafloor is home to priceless deposits of minerals such as gold, copper and cobalt. And thanks to new technologies, it might soon be exploitable. That’s potentially good news for miners and commodity speculators. But it poses some alarming challenges for the marine environment — and the economies that depend on it.

At least as far back as the 1960s, scientists have known that rich deposits of minerals could be found in metallic nodules strewn like stones across the deep seabed. In 1977, researchers discovered hydrothermal vents on the ocean floor, along with some of the richest ore bodies in the world. In both cases, though, slumping commodity prices and high extraction costs doomed exploitation efforts.

China changed everything. As its economy picked up earlier this decade, and demand for commodities surged, the search for alternative sources of raw materials gained steam. Resource-poor Japan resuscitated its interest in seabed mining. China started building its own underwater mining capabilities, including a proposed partnership with India. Between 1984 and 2011, the International Seabed Authority — which oversees seabed mining under a United Nations convention — issued just six exploration permits. Since 2011, it’s issued 21, covering nearly 400,000 square miles of ocean floor that could one day be mined.

Exploration isn’t disruptive to the environment. But seabed mining will be. For one thing, it requires underwater harvesters that will suck up those valuable rocks — and any organisms or habitats that get in the way. Some will recover, but others never will: Nodules, which support an abundance of organisms, require millions of years to form. Even worse, the harvesters will kick up huge sediment clouds that could spread over vast areas of the seabed, potentially ravaging corals and sponges.

These disruptions might even ricochet through the aquatic food chain. Last year, New Zealand denied a permit to mine the seabed off its coast after the seafood industry argued that it could deposit 45 million tons of sediment into its fisheries each year — fisheries that help feed people around world.

The deep sea also plays a crucial role in regulating the climate by serving as a giant carbon sink. Anything that churns up the seafloor has the potential to disturb that sink — with unpredictable consequences. Craig Smith, an oceanographer at the University of Hawaii, recently speculated that seabed mining “will probably have the largest footprint of any single human activity on the planet.”

The key word there is “probably.” As Smith and others point out, scientific knowledge of the seafloor is thin. That’s begun to change as regulators and mining companies sponsor environmental reviews. But that research is moving slowly in light of what looks like a looming gold rush.

Fortunately, the International Seabed Authority has yet to issue its first permit to actually mine a claim. In fact, it only issued the first draft of its mining regulations last month, and they’ll likely be under review for years. But the ISA can only adjudicate claims in international waters. Territorial projects, such as Japan’s, can proceed according to local law, regardless of the methods used or their potential effects on fisheries.

That makes addressing the environmental impact even more urgent. The ISA should place a moratorium on new exploration permits until a reliable way to shield vulnerable habitats and species from mining is devised. Extending the concept of Marine Protected Areas — which are used to preserve sensitive ecosystems — to parts of the international seabed that haven’t yet been licensed for exploration would also help.

Such restrictions won’t please everyone. But as this new gold rush speeds up, they could offer a chance to preserve some of what will be lost in the chase.


Filed under Environmental impact, Financial returns, Pacific region

Axiom Mining’s nickel license revoked by Solomon Islands’ court

Solomon Islands


The development of a large nickel deposit in the Solomon Islands is back to square one this week, as the nation’s highest court ruled that neither of the two firms in Japan and Australia fighting over the discovery were entitled to the license.

The Solomon Islands Court of Appeal on Monday rejected a portion of Sumitomo Metal Mining’s appeal that the country’s government should not have cancelled in 2011 Sumitomo’s license to develop the Isabel nickel laterite discovery.

In the same ruling, the Court of Appeal accepted another portion of the appeal by revoking Axiom Mining’s current license for the Isabel site.

The ruling also returns the site of the Isabel discovery to government ownership without restoring Sumitomo’s earlier license.

Japanese mining giant Sumitomo and tiny Australian explorer Axiom Mining have been fighting over the Isabel discovery since 2011.

Sumitomo won an international tender for prospecting licences in 2010. The licences were cancelled in 2011 and similar rights were later that year awarded to Axiom.

Sumitomo in 2013 sued the Solomon Islands Government and Axiom, claiming that the government wrongly cancelled Sumitomo’s rights and wrongly granted similar rights to Axiom, even though Axiom did not take part in the 2010 international tender.

The High Court of the Solomon Islands in 2014 rejected all of Sumitomo’s claims, and Sumitomo filed an appeal to the nation’s Court of Appeals, the country’s court of final appeal.

Analysts estimate the Isabel discovery compares in size or grade to other large South Pacific nickel mines, such as Vale SA’s Goro mine in New Caledonia and the China-owned Ramu mine in Papua New Guinea.

“We will look closely into the court’s decisions and think about what steps we would take next,” a spokesman for Sumitomo Metal Mining said, adding that the company had no information on whether the Solomon government will conduct a new tender.

Sumitomo Metal’s shares were up 1.4 percent against the 1.9 percent rise in benchmark Nikkei average.

Axiom halted trading in their shares on Monday, according to a release to the Australia Stock Exchange, without giving a reason for the halt.

Axiom officials were not available for immediate comment on the decision.

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Japanese government set to mine mineral resources off Okinawa

japan seabed

The Yomiuri Shimbun | The Japan News

The Natural Resources and Energy Agency intends to conduct deep-sea test mining of minerals found on the seabed off Okinawa Island, in fiscal 2017.

The government aims to mine as much as 1,000 tons of zinc, silver and other mineral resources at a depth of about 1,600 meters in the sea off the island.

It is a world first to conduct such large-scale mining of minerals that lie under the seabed, according to the agency.

A large number of mineral deposits have lately been found one after another in waters near Japan.

Currently, the Hishikari gold mine in Kagoshima Prefecture is the only domestic commercial mine in the country, the agency said.

Japan is 100 percent dependent on imports for minerals such as iron, copper and zinc, which are indispensable for the production of cars and home electrical appliances.

The test mining is expected to be the first step to realizing commercial exploitation in the future, observers said, which would end Japan’s reputation as a country with limited natural resources.

The agency plans to conduct the test mining on deposits found at the so-called Izena sea hole at about 100 kilometers northwest of Okinawa Island. It plans to use two mining machines developed by the Japan Oil, Gas and Metals National Corporation, the agency said.

The agency plans to conduct the test mining by the end of fiscal 2017, using a special-purpose pump — which is expected to be developed in fiscal 2016 — to pull up unearthed minerals to a mother ship on the surface.

It plans to mine about 100 tons of minerals every day for two to four weeks. The costs are expected to come to around ¥15 billion to ¥20 billion, according to the agency.

Meanwhile, a Canadian company has launched the development of a machine to mine seabed minerals at a depth of more than 1,000 meters in the sea.

A successful operational test of a Japanese-made mining machine at the Izena hole in the summer of 2012 confirmed the existence of about 3.4 million tons of mineral deposits including zinc, silver and gold.

Mineral deposits also have been found in the coastal seas of Kumejima island in Okinawa Prefecture and Hachijojima island in Tokyo.

The agency also plans to conduct a detailed survey of such mineral deposits.

The government plans to conduct a full-scale project to conduct an integrated operation from exploitation to refinement in cooperation with private companies in the 2020s.


Filed under Exploration, Mine construction

Japanese mining giant threatened aid cut in bid to win Solomon Islands deal

State-linked corporation asked the Japanese ambassador to tell Solomon Islands PM that foreign aid to hospital in his home town would be suspended

Joshua Robertson | The Guardian

A Solomon Islands judge gave a damning assessment of Sumitomo’s bid to gain developer rights to the nickel deposit. Photograph: Norbert Wu/Getty Images

A Solomon Islands judge gave a damning assessment of Sumitomo’s bid to gain developer rights to the nickel deposit. Photograph: Norbert Wu/Getty Images

A mining giant financed by the Japanese government threatened to have foreign aid withdrawn from the Solomon Islands in a campaign to win rights to a lucrative nickel deposit.

Sumitomo’s attempts to manipulate Solomon Islands officials included asking the present Japanese ambassador to threaten the prime minister with funding cuts to a hospital in his home town.

Revelations from the longest-running trial in Solomon Islands history give a rare insight into the tactics a powerful transnational corporation can use to put pressure on a developing country.

Plans to mine the nickel deposit – according to some estimates one of the largest in the world – on Santa Isabel island have been two decades in the making.

They were interrupted by civil war and then a legal battle which a Solomon Islands high court judge said had left the local people that stood to benefit from the project “no doubt thoroughly confused”.

The judge gave a damning assessment of Sumitomo’s bid to gain developer rights to the deposit, saying its top executive in the Solomon Islands lied in dealings with officials and landholders.

The spectre of diplomatic pressure wielded by state-backed enterprises looms particularly large for nations such as the Solomon Islands, which rely heavily on aid from foreign governments.

Japan is one of the largest donors to the Solomon Islands, where foreign aid averages about 44% of national income, according to the World Bank.

Sumitomo subsidiary SMM Solomon Ltd (SMMS), a joint venture with the Japanese government, won a government tender to prospect for the nickel in 2010 but lost the crucial backing of landholders.

The landholders, who wanted a share of profits and have legal veto power over mining projects, instead cut a deal involving a 20% stake in a venture with the Brisbane-based mining minnow Axiom.

In a bid to be recognised as the rightful developer, Sumitomo then sued the Solomon Islands government and Axiom.

Justice John Brown in the Solomon Islands dismissed the legal action in September as an abuse of process, finding that the company had been devious and needed to “reconsider its relationship with the government of Solomon Islands and its people”.

Brown found SMMS cultivated sources inside the Solomon Islands government to obtain confidential information and used spurious accusations of corruption to threaten ministers and bureaucrats.

The company also used an offer of an overseas trip to try to coerce the mining minister into signing an agreement, the judge found.

Brown also found SMMS’s case that the landholders who spurned them had stolen the land from its rightful owners was “contrived”.

Court documents show the managing director of SMMS, Yoritoshi Ochi, took instructions from a superior in Tokyo on how to put diplomatic pressure on the Solomon Islands government.

Ochi was told in September 2010 to ask the ambassador to tell the then prime minister Danny Philip that Japan would temporarily suspend its aid, including to a hospital in Philip’s home town of Gizo.

Ochi replied by email that he had told the ambassador the company had “cornered” the mining minister but needed “diplomatic pressure on the prime minister” to seal a deal.

“Deputy ambassador Iwanade said that it would be best to play the ODA [overseas development aid] card, but instructions from the ministry had not gone that far,” he wrote.

“The ambassador [Hiroharu Hashi] only said ‘yeah true’, and did not clearly state that the ODA card would be played.”

Ochi’s Tokyo based-boss replied:

“I get the sense that [the PM] may not be aware the nickel project is in fact a national project of Japan.”

“I wish ambassador Hashi would approach [the PM] with the spirit to go as far as temporarily suspending assistance to [the Solomon Islands]. As this affects the national interests of Solomon, this shouldn’t constitute interference in domestic affairs.”

Ochi eventually told a meeting of the Solomon Islands mining officials in March 2013 that Japan had cut foreign aid, sending ripples of concern through the board.

Brown found no wrongdoing by Japanese officials who lobbied the Solomon Islands government on Sumitomo’s behalf, seemingly without adopting the threats the company had asked for.

However he found the Japanese government’s involvement in SMMS, via a 20% stake held by a state energy company, was relevant to any diplomatic pressure applied.

“Where [lobbying] has taken place I am sure the Japanese consular representatives have acted in full knowledge and awareness of the commercial nature of SMMS business and the sovereign powers of the Solomon Islands government,” Brown said.

“There is no doubt those representatives will continue to honourably represent their country’s interest in the Solomon Islands although it should be pointed out that the Japanese government has an indirect interest in SMMS.

“It consequently behoves the company to reconsider its relationship with the government of the Solomon Islands and its people for by my findings it is apparent the company has acted with obliquity.”

SMMS has lodged an appeal to Brown’s findings, which is due to be heard in February.

Axiom in the meantime is exploring the deposit, which the chief executive, Ryan Mount, said would become a pillar of the Solomon Islands’ economy once developed.

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Filed under Corruption, Exploration, Financial returns, Solomon Islands