Will a $1billion cost saving at Lihir be a great outcome for local people and the environment?

“The company has spoilt our environment…I don’t know what the future holds for us”

Newcrest to expand Lihir for less

Esmarie Swanepoel | Mining Weekly | 15.02.2016

Australian gold producer Newcrest Mining on Monday reported that its board had approved the Lihir pit optimisation feasibility study, after a prefeasibility study (PFS) into a new plan proved viable.

The purpose of the new PFS was to optimise the integrated life-of-mine plan for the Lihir operation, in Papua New Guinea, including different mine sequencing and ore scheduling options, the most appropriate mining methods and civil engineering options.

The PFS estimated a forecast reduction in the estimated capital expenditure (capex) requirement for the seepage barrier to $125-million compared with the $1.29-billion price tag in a 2013 PFS, which included a cofferdam.

The mine plan now being evaluated under the feasibility study was based on three main stages, the first of which would occur from 2017 to 2021, and would include mining the Minifie and Lienetz deposits, using medium-trade stockpiles and prestrip work for successive cut backs.

Stage 2 would occur between 2022 and 2026, and would include mining at the Lienetz and Kapit deposits, medium- and low-grade stockpiles and prestrip for successive cutbacks.

Stage 3, which would occur between 2027 and 2031, would see mining continue at Lienetz and Kapit, as well as the accumulation of low-grade ore stockpiles. However, the average feed grade was expected to increase in this phase, owing to access to the higher grade Kapit ore.

“This project is a testament to the team challenging the existing thinking and developing a better solution. With the new operation strategy comes the potential for new, more cost-effective opportunities for accessing the Kapit orebody,” commented CEO Sandeep Biswas.

He added that a potential capital saving of $1-billion for the future seepage barrier was a great outcome for the Lihir operation and for Newcrest shareholders.

Foreign owned mining companies not good corporate citizens in PNG

Foreign owned mining companies operating in PNG are abusing our hospitality and trust by failing to pay any corporate tax.

Companies like Barrick Gold, Newcrest Mining and Harmony Gold make millions of dollars from their “World Class” gold, copper and silver mining in PNG.

But they manipulate their income and expenditure to avoid declaring profits and thereby avoid corporate income tax, according to figures released by the PNG government [pdf file].

The table below shows the corporate taxes paid by the mining industry in PNG in 2013.

Foreign owned Barrick Gold (zero), Lihir Gold (K4.5million), Hidden Valley (zero), MCC Ramu nickel (zero), Simberi Gold (zero), and Harmony Gold (zero) paid a total of K4.5 million in Corporate Income tax.

In contrast, PNG owned Ok Tedi Mining paid a whopping K105 million – so clearly 2013 was not a bad year for mining in PNG.

To compound the injustice, Lihir, Porgera and Hidden Valley actually produce 3 times as much gold (1.5 million ounces) as Ok Tedi (500,000 oz) – so these foreign owned entities should be paying the most in tax, but they manipulate the rules to avoid their liabilities.

In stark contrast to their miserly corporate tax contribution, the total value of the gold, copper and silver exported from Porgera, Lihir and Hidden Valley in 2013 was over K4,500 million.

YUP, FOUR THOUSAND FIVE HUNDRED MILLION KINA!

But these foreign mining companies paid NO corporate tax.

Desperately seeking legitimacy: Reducing the social impacts of extractives in PNG

Loss of control over your own land and future is a direct challenge to and erosion of self-determination; a right that should be defended and upheld by government…

Charles Roche | Mineral Policy Institute

The people of Papua New Guinea have a complex and varied relationship with the predominantly transnational extractive industry in PNG. At a national scale, the industry is as famous for it’s highs, with the wealth generated by extractives evident in Port Moresby, and for its lows, evidenced by mining related disasters at Panguna and Ok Tedi to name just two. At a more local scale, extractives bring positives in the form of benefits, opportunities and infrastructure balanced against the negatives of environmental harm, social and cultural fragmentation, entrenched gender discrimination and loss of agency. While this tale of impact and benefit at local and national scales raises many questions, this article, responding to a recent book chapter, responds to just one – how well do we monitor, evaluate and ameliorate the impacts from mining?

This is not a new question. Twenty years ago a National Resources Institute (1996) report into the social impacts of mining, based on fieldwork at Misima, Porgera, Ok Tedi and Lihir, found a number of common impacts. These included: (1) resource scarcity and over population; (2) influx of outsiders; (3) breakdown of law and order; (4) unequal distribution of income; (5) subordination of women; (6) power struggles with community; and (7) project dependency syndrome. Though not wholly or solely attributed to the extractive industries, this early identification certainly demonstrates a long-term awareness of and acknowledged responsibility to identify, measure and overcome these impacts. Nor is it a stale question, with the UNDP (2014) noting the ‘historically under-resourced’ Department of Conservation, which left environmental governance in the hands of mining companies. The assessment of monitoring of social impacts is even worse. For example, the UNDP (2014) reports that: “…SIAs and subsequent social monitoring programmes are typically the poor cousins of the EIA process, and are rarely able to deal with social and political complexity associated with the mines.” (p.66) These failings leaves PNG with only what can only be described as poor governance of environmental and social impacts especially in relation to reporting and data transparency.

This awareness of the importance of responding to social impacts was reinforced by the Asia/Pacific workshop on Managing the Social Impacts of Mining, also in 1996. There, Cook-Clarke (1996) outlined the centrality and importance of community information (data), which would identify and track positive and negative impacts from mining related socio-cultural issues. Cook-Clarke identified three distinct uses of the data; (1) impacts to be identified, defined and assessed, (2) development of mitigation plans, and (3) to inform negotiations between parties. Though in asking who acquires the data – a question which could also be extended to who owns, holds and uses the data – we need to understand that there are different perspectives and reasons for acquiring community data, whether it be for government, community or company purposes. What was already understood in 1996 was that the data collection needed to be transparent and allow for the substantive input of all parties (I would emphasise communities). This would allow the information to be used by communities to make informed decisions and maintain control over development decisions affecting, more than any other group, their own future.

The same seminar also identified a number of additional and specific impacts from the mine on Misima, which shares a matrilineal culture with Bougainville and Lihir. The impacts included: the disruption of the environment, social organisation and cultural values, unresolved issues of land access, and a loss of control by local people over major decisions (Clark & Cook-Clark, 1996). The last of these – ‘loss of control over your own land and future’ – is a direct challenge to and erosion of self-determination; a right that should be defended and upheld by governments and respected by transnational mining companies. At best, in 1996, this could be considered paternalistic colonialism. In 2015, however, such impacts could be more accurately seen and experienced as corporate imperialism. In sum, the identified social impacts represent a potential for significant, massive and long-lasting disruption to local communities affected by the extractive industries. This represents a significant and severe, if not catastrophic risk that should inform decisions and be featured in any environmental and social management or monitoring system.

These reflections and reminders of issues raised twenty years ago set the scene for an examination of Pacheco Cueva’s (2016) book chapter entitled From transnational trends to local practices: Monitoring social impacts in a Papua New Guinea mining community. While accompanied by a range of very interesting chapters focusing on the impacts of transnational capital, it is the only mining focused article in the aptly titled Globalisation and Transnational Capitalism in Asia and Oceania (Sprague, 2016). The article explores the impact of transnationalism on social monitoring through a Lihir Island case study, identifying many related issues to those outlined above. Pacheco Cueva starts by identifying three main functions that socio-economic monitoring fulfils for mining compliance; (1) comply with legislation, (2) to demonstrate the project is globally competitive, and (3) to legitimise the existence of the mining project. Limited by size and concerned about the applicability of competitiveness as a positive driver of better socio-economic monitoring in PNG, the following discussion will focus on two of these, legislative requirements and legitimacy.

In a short history of mining in PNG, Pacheco Cueva reminds us of some of the past crimes, excesses and impacts of the mining industry, and the disjunct between the potential benefits from extractive industries and PNG’s Human Development Index ranking of 156. He then outlines the regulatory requirements under the Mining Act which requires a ‘development forum’ to be convened to address land holder issues, including a system of monitoring and evaluating social impacts, as well as the requirement by DEC for proponents to produce a social impact statement (SIA). Clearly the structure is there, though its implementation is flawed, with Pacheco Cueva describing a situation where “(d)espite the development of a more complex legislative framework for mining and increased knowledge about the social impacts by the industry, many communities continue to be adversely affected by resource extraction in PNG” (p.231). This is followed by a discussion of the effect of global trends, which depicts PNG with a neo-liberalised regulatory regime consisting of uneven development and few local linkages between the extractive industry and local communities, thus rendering PNG politics and economy dominated by transnational companies.

From this base, Pacheco Cueva brings a different perspective to the examination of the social impacts from the extractive industry in PNG, grounded in his work on Lihir Island from 2010-12. During that time Pacheco Cueva was employed by the Centre for Social Responsibility in Mining (CSRM) at the University of Queensland (UQ) which had been providing research support for Newcrest’s impact monitoring program since 2007. Pacheco Cueva worked with the company’s Assurance and Impact Monitoring (AIM) section to undertake an economic study which analysed the flow of funds from Newcrest to the local economy. This research also involved conducting interviews to gather data on employment, household consumption, expenditure patterns, entrepreneurial behaviours and informal economic activities. The focus of Pacheco Cueva’s article is not on the data collected, however, but on the collection, use and distribution of the data.

Having already told us that Newcrest “…despite the fact that it possesses, arguably, the largest repository of local socio-economic information about the community in which in operates, makes very selective choices about the type of information it releases to the public” (p.234), Pacheco Cueva then sets out the numerous issues that undermine the purpose and intent of social impact monitoring and management. Though too many to discuss here, some of the key issues identified include: (1) Newcrest’s focus on reducing risk and tensions while securing legitimacy for the project – an approach echoed by Australia’s Export Finance Insurance Corporation (EFIC) (2) the defacto status of Newcrest’s AIM section as a statistical agency; (3) the lack of access to and transparency of the data; (4) comparative resources asymmetry, with the community not having the resources to analyse or maintain data leading to further information asymmetries; and (5) the weak government presence on Lihir.

Pacheco Cueva is not alone in these observations. Asymmetries in power, information and resources underlie almost every mining venture. This leaves experienced capital-intensive and politically influential enterprises interacting and negotiating with inexperienced, predominantly subsistence based communities often alienated from the regional or national polity. In short, transnational extractives operate in a state of inequity that produces ongoing tensions and sub-standard outcomes that cannot be defended from either an ethical or efficiency perspective. Nevertheless, this is the basis for most, if not all multinational operations in PNG, including Lihir, despite the communities’ ability to challenge and even temporarily shutdown mining operations.

Of most relevance to the discussion above and Newcrest’s ongoing operations at Lihir and in Morobe, however, are those relating to control over data collection, storage, analysis, use and distribution. This is a situation where “…as a result of different roles between the company as data manager and other stakeholders as data users, the data generated by the company is much more in line with the company’s conception of development in Lihir than that of landowners’ and/or the government, even if the data fulfils the IBP agreement” [Integrated Benefits Package – the mandated company-community agreement]. Pacheco Cueva describes the Lihir data as biased, which he regards as common practice in the PNG mining industry and beyond. Returning to Cook-Clarke’s three uses of social data, helps perpetuate asymmetries of power and knowledge and undermines community control and self-determination.

Perhaps of equal interest to Pacheco Cueva, is the impact this corporate dominated culture has on the future of Lihir. Certainly the mining operations have contributed to a limited and declining state presence on Lihir, leaving communities more distant from the State than ever. This encourages the increasingly capitalist based Lihir communities to look to the company for solutions, effectively making Newcrest a surrogate State. A situation which rather than delivering power to the company generates further and ongoing social claims against them, creating the tension and risks they sought to avoid by tight control of social monitoring and management.

Finally, Pacheco Cueva describes a shift in corporate social monitoring objectives overtime, from regulatory compliance to risk reduction and the seeking of legitimacy. This evolution, however, doesn’t change the constant difference in motivation and development aims between communities, State and company. These differences become critical to the outcomes on Lihir and elsewhere in the extractive industry, where the obsession with corporate control over data undermines the very benefits sought through legislative requirements and even the corporate quest for legitimacy. This presents a depressing picture of the approach to monitoring of impacts on Lihir; made all the worse when compared with Cook-Clarke’s observations in 1996. If this is indicative of a transnational trend as Pacheco Cueva suggests, then it seems the industry needs a new approach, with motives that align with community rather than corporate interests. Only by prioritising local community interests in the social monitoring process will Newcrest and other companies secure the legitimacy they require to operate.

Clark, A. L., & Cook-Clark, J. (1996). The Misima mine: An assessment of social and cultural issues and programmes. Paper presented at the United Nations conference on trade and development – Managing the Social Impacts of Mining, Bandung, Indonesia.

Cook-Clark, J. (1996). Data requirements for social-cultural impact assessment in mining. Paper presented at the United Nations conference on trade and development – Managing the Social Impacts of Mining, Bandung, Indonesia.

National Research Institute. (1996). MRDC Draft PNG Mining Social Impacts

Pacheco Cueva, V. (2016). From transnational trends to local practices Monitoring social impacts in a Papua New Guinea mining community. In J. Sprague (Ed.), Globalization and Transnational Capitalism in Asia and Oceania. London: Routledge.

Sprague, J. (2016). Global capitalism and transnational class formation in Asia and Oceania. In J. Sprague (Ed.), Globalization and transnational capitalism in Asia and Oceania. New York;London;: Routledge.

UNDP. (2014). 2014 National human development report Papua New Guinea: From Wealth to Wellbeing: Translating Resource Revenue into Sustainable Human Development.

Norway stands alongside PNG in allowing the sea dumping of toxic mine waste

Norway moves to destroy another fjord 

Friends of the Earth

The government of Norway has doomed another of their world famous fjords to destruction by allowing the dumping of toxic waste from a copper mine into the Repparfjord Arctic fjord, reports Naturvernforbundet/Friends of the Earth Norway.

Two million tons of the mining waste, containing large amounts of heavy metals, will annually be deposited in spawning waters of cod and other fish stocks important to coastal fisheries in the far north of Norway. Small particles spreading in the water column could also harm the threatened Atlantic salmon in what has been classified as a ‘National Salmon Fjord’.

Lars Haltbrekken, leader of Friends of the Earth Norway, said:

“It is totally unacceptable to use Norwegian fjords as a dump site for the mining industry. Emissions from the copper mine will breach the limits for heavy metals, and in this cocktail of contaminants, the nickel content is alone enough to give poor chemical status in the fjord.”

The discharge permit is contrary to national and international environmental legislation regarding water management, and Friends of the Earth Norway will appeal to the Surveillance Authority of the European Free Trade Association (the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland), claiming that Norway is violating the European Water Framework Directive.

Friends of the Earth Norway believes the Norwegian Environment Agency has abandoned the role of professional environmental administrative body in mining matters.

Lars Haltbrekken said:

“For the Norwegian Environment Agency to give the green light for one of the most environmentally harmful industrial projects in Norwegian history, despite professional advice and warnings, is not environmental management. It is promoting a dirty industrial policy based only on uncertain assumptions about future revenues”.

Most countries have stopped the practice of dumping of mine waste into the sea, and today, Norway is the only country left that still practices sea dumping in Europe. Marine scientists, environmental organizations, fishermen and reindeer herders of the Sami people have also raised concerns about the plans.

Fatalities and mechanical failures give Newcrest a poor start to the year

Newcrest Mining has revealed an underwhelming set of production numbers for the September quarter. Photo: Bloomberg

Peter Ker | Sydney Morning Herald

Newcrest Mining has made a disappointing start to the 2016 financial year, with two workplace fatalities, mechanical failures at its two most important mines and below-par production rates.

The deaths of workers at the Cadia Ridgeway mine in NSW and the Hidden Valley project in Papua New Guinea have continued a bad period for safety in Australian mines.

The fatalities prompted Newcrest to shut the two operations for 11 and 33 days respectively, meaning the company fell behind on its annual production target.

Newcrest plans to produce between 2.4 million and 2.6 million ounces of gold in the 2016 financial year, and will need to improve on the 583,745 ounces it produced in the September quarter if it is to achieve that target.

Despite being behind the pace, Newcrest maintained its full-year production guidance target for now.

Lower production saw all-in sustaining costs rise to $1088 an ounce during the quarter, well above the $941 an ounce the company achieved last financial year.

Investors reacted savagely to the lacklustre quarterly on Tuesday, sending Newcrest shares down by 5 per cent.

Fatalities aside, Deutsche analyst Brett McKay said the biggest focus for shareholders was news of a failure in one of the two semi-autogenous grinding (SAG) mills at Newcrest’s flagship Cadia mine on Saturday.

The SAG mills use steel balls to grind ores into smaller particles and are a crucial part of the processing phase.

Newcrest said the outage appears to be linked to the mill’s motor, and the issue is yet to be fixed.

Mr McKay said uncertainty over how long the mill would be out of action was troubling shareholders.

“The fact they have not put a time on that outage is concerning,” he said.

The company’s second most important asset, the Lihir mine in PNG, also suffered failures in the conveying and milling circuits.

Those failures are familiar to long suffering Newcrest shareholders, and come despite chief executive Sandeep Biswas staking his reputation on his ability to fix Lihir.

But Mr Biswas’ focus was on the tragic fatalities.

“We are deeply saddened that two of our colleagues were fatally injured during the quarter … I have instigated a full and detailed review of all aspects of safety management at all our sites with a particular focus on high-risk tasks,” he said.

Newcrest shareholders will be keen for an update on the Cadia SAG mill at the company’s annual meeting next week.

The miner will be hoping to avoid a second “strike” against its remuneration structure at the meeting, after more than 44 per cent of shareholders rejected the remuneration report at last year’s meeting.

A motion to spill the Newcrest board could follow if more than 25 per cent of shareholders vote against the remuneration report next week.

But influential proxy advisers ISS Governance and CGI Glass Lewis have both urged shareholders to avoid a board spill and approve the remuneration report, with CGI saying a spill would not be in the best interests of shareholders.

Julius Chan demands greater benefits from mining for people

Newcrest making K1 billion a year while the people of New Ireland get just 3% claims Chan…

But why didn’t Chan address the situation when he was Prime Minister?

Why is his son, New Irelander and current Mining Minister, Byron Chan so silent?

Maybe these politicians are just as greedy, narrow minded and selfish as the mining companies?

Julius Chan demands greater benefits from mining for people

Post Courier

NEW Ireland Governor Sir Julius Chan has issued a statement concerning the benefits received from the Lihir Gold Mine by the company Newcrest Mining, the State and the people of New Ireland.

“Recently Newcrest issued a press release saying the mine had paid K376 million in royalties over a ten year period.

‘It seems they think that is a lot of money.

“But when you look at it the total only represents K37.6m each year that the people of New Ireland have received in royalties.

“Compare that to what Newcrest and the National Government have received,” said Sir Julias.

Newcrest has actually only operated the mine for five years since late 2010.  However, in that five years, according to Newcrest’s own annual reports, the difference between the cost of production and the sale price of gold means they have made nearly K5 billion in profit.

“So during  the time that the people of New Ireland were receiving only K37.6m per year in royalties, Newcrest was making nearly a billion kina per year.  That is over twenty-five times as much as the people of New Ireland,” Sir Julias said.

Sir Julius also said that during the same time “the National Government has been making over K300 million per year in various taxes, mining levies and other fees.

“This means National Government is making nearly ten times as much as the people from whom the wealth actually comes.

“So when you look at it, between the company and the National Government they are making about K1.3 billion per year, while the province is only receiving K37.6 million in royalties and a pittance in special support grant.

“So the people of New Ireland are only getting about 3% of the benefits coming from their own ground.  This is unacceptable.”

“The situation must change, we need to increase royalties to be consistent with international practice.

“Royalties should be set at 10% of annual revenues.  Special Support Grant should be increased from the current ridiculous level of ¼ of 1% to 10%.  The same with the tax credit scheme, increase it from ¾ of 1% of assessable income to 10% of assessable income.”

Sir Julius concluded by saying that the people of Papua New Guinea should refuse to allow any further exploitation of their natural resources until the National Government and the mining companies are willing to direct the lion’s share of the benefits to the people from whose land the wealth comes.

Newcrest admits non-compliance revealed in Lihir water audit

Newcrest accepts non-compliance but fails to reveal details of its extent or impacts…

Mine to work with audit team

The National aka The Loggers Times

Lihir Gold Ltd says it will work with the government in implementing recommendations of government sanctioned environmental audit into the extraction of water at Londolovit River on Lihir Island that it extracts.

The audit had confirmed that LGL has complied with its water extraction permit conditions for the overwhelming majority of the period and identified some brief periods of non-compliance.

Australia’s North Victorian based company Moroka Pty Ltd carried out the environmental audit of the Londolovit River between May and August after it been commissioned to do so by Conservation and Environment Protection Authority (CEPA) of the Government.

“LGL acknowledges these and while the periods and levels of non-compliance were relatively minor, we will work with the Government and local stakeholders to implement all of the changes recommended in the report” a statement released by the company said. The LGL said it acknowledged those brief periods of non-compliance and supported the recommendation to work with CEPA to agree a longer term water supply strategy to ensure this does not happen in the future.

“LGL has introduced innovative measures to manage the use of water during the current extended dry spell at Lihir,” the company said.

“ We are monitoring water extracted from Londo River supplies the mining operation and others.”

Sir Julius: Newcrest claims not true

As usual it is very hard to know if Chan is being sincere or just trying to save his own backside…

Post Courier

Sir Julius Chan, Governor of New Ireland Province, has refuted claims by Newcrest Mining concerning the amount of royalties paid to the Provincial Government.

He said that for almost half that period, royalties were paid by the previous owner of the mine, Lihir Gold Limited contradicting the claims by Newcrest.

He said the media reports by Newcrest Mining gives the impression that huge sums have gone to the province, when in fact this is not the case.

He explained that it was not until late 2010, when Newcrest finalised purchase of the mine, that Newcrest began paying royalties.

“The total return of the mine to both the company and the National Government is between five and ten times what comes to the province.

“Between the two, they make literally billions of kina per year, while the province, the LLG and the landowners combined make around K40m. There is something wrong here. It is true that the mine under both LGL and Newcrest has paid K374m in royalties over the past ten years. Of this amount, half has gone to the landowners and the Local Level Government. The other half has come to the Provincial Government,” Sir Julius said.

However, under a PEC decision on the 50 per cent received by the Provincial Government, only 10 per cent is retained as 30 per cent is given to the Namatanai District, where the mine is located and 10 per cent to Kavieng District.

According to this calculation, the provincial government has only received directly about K37 million over the last ten years.

“The Provincial Government came to an agreement with the two Districts that royalty funds should be used for the ‘benefit of all New Irelanders.”

Environment Act queried by Lihir landowners

Gedion Timothy Lapan | The National aka The Loggers Times 

THE Londolovit community on Lihir Island, New Ireland, whose water reservoir supplies the operations of the gold mine there, has expressed disappointment over the Environment Act of 2000.

Community spokesperson Roselyn Arau said the provision in that law denied (them) the right to be paid for the use of their water. She said the laws recognised their water as “property of the Independent State of Papua New Guinea” and therefore payments for the use of their water were made to the State and not the traditional owners.

“In the case of Londolovit River where Lihir Gold Limited is extracting water under Environmental Permit WE – L3 (143), only K380, 160 is paid annually to the State at a permitted rate of 4400 cubic metre per hour or 38,544 cubic metre per year,” Arau said.

She said in the absence of a formal arrangement with the State, Londolovit completely missed out on payment for water use and queried where thee monies had been kept by the State since. Arau was reacting to findings in an environmental audit report on Londolovit River by an Australian consultant  which was commissioned by the Conservation and Environment Protection Authority (CEPA) between May-August this year.

It was claimed that CEPA among other Government departments and agencies were in receipt of a K113 million claim by Londolovit water resources owners for water extraction “over and above” permitted rates.

Last month, a Government delegation led by CEPA was on the island and presented the report to all stakeholders including landowners and LGL officials.

To Get and Get Out: The story behind Lihir

It seems an immutable trade off: the greater the rights of corporations, the less the rights of real persons, we indigenous people…

“The company has spoilt our environment…I don’t know what the future holds for us”. Mrs. Francisca Wesparo and Thecka Inial are the only remaining elderly women at Londolovit.

Cyril Gare | PNG Blogs

When the Airlines PNG Dash 8 aircraft touched down on Lihir airport on Aug 9, 2015 I couldn’t believe that this rich gold mining township airport runaway is bare soil, sending clouds of dust backwards as we taxi in to park at the small terminal nearby. For a first timer, first impression counts. The miner is not serious in sealing the runway. ‘They’re here to get and get out’. The ring road around the airport parameters are bare soil. Even Camp 1 and 2 which houses the official residence of the Newcrest Mining Limited (NML) general manager, Craig Jetson is bare soil causing dust everywhere each time a vehicle passes through.

Parts of Lihir Island have sealed roads and permanent houses because of mining benefits except the West Coast where almost nothing is there; roads are neglected for years, people leave in traditional hamlets and evidence of neglect are sporadic. But thanks to the missions especially the Catholic Church for being there with them and providing basic health and education opportunities.

Newcrest Mining Ltd (formerly Lihir Gold Limited, a subsidiary of Rio Tinto) is the world’s sixth largest gold producer. It abstracts gold from the Luise Caldera, an extinct volcanic crater that is geothermally active, and holds one of the largest known gold deposits in the world.

Lihir Island has a population of about 8,000. This is about the size of one big Motuan village alone. One wonders why the rich gold mine operating on their island or group of islands provides for few and not all.  In fact, the Lihir mining agreement – which I wasn’t privileged to see a copy – covers for Kapit and Putput villages only all to the great disadvantage of the rest. Their landowner company – Lihir Mining Area Landowners Association or LMALA is currently under fraud investigations causing uncertainties among beneficiary villagers.

There isn’t a thing called ‘mine affected villages’ like in other resource development agreements in Papua New Guinea. Hence, villages in the West Coast and that of Londolovit situated in the bay miss out greatly.

To the left is the Lihir township and to the right is the mine wastes from both the town and mine impact on Londolovit. NML dumps waste rocks into the sea to reclaim land by some 200 metres so far and is still extending is prowess on reclamation. Land claimed is where the processing plant, incinerator, etc are built.

Whether land reclamation is in the mining agreement or not cannot be ascertained. The facts are that the beautiful shoreline between Londolovit, Kapit and Putput villages is gone forever. Their children now can only see photographs to imagine their once very beautiful coastline.

Villagers say fish and other marine lives are not as tasty like before and each day fear is mounting among villagers whether mine wastes (tailings) that are being dumped into the ocean do not affect marine lives which people feed on.

“In the past things were ok. Today mining has damage our natural environment.

“In the past we use salt water to cook with. Today, we are scared of using salt water because of mine wastes being dumped into the sea so we are forced to buy salt in shops with money.

“We use to wash and drink from fresh streams and creeks. Today there are no more fresh streams and creeks as the company gets all the water and later sends it back in taps which we now use to wash and drink from. This is not good water.

“This is the situation today. The company has spoilt our environment…I don’t know what the future holds for us”

Asked if their worries have been brought to the attention of their local Member of Parliament and Mining Minister, Byron Chan (Namatanai Open) and other leaders, Mrs. Wesparo said: “they know about our problem but can do little”.

At the time of my visit – Aug 9-11, 2015 – several coconut trees were uprooted as a result of high sea level and crushing waves which locals blamed on NML’s waste rock dumping activity. Coupled with climate change and sea level rise, Londolovit is destined for more trouble. Yet Londolovit and all other villages on the island are not covered under the mining agreement.

The next day visit to inland deep forested mountains of Londolovit passed through resettlement sites at Sepuk Bual, Kuanmakiat, Huonatunuo, and Lilitop finishing off at 228 dead-end. It holds settlers relocated from Kapit village, one of the two coastal villages in the Special Mining Lease (SML) area.

Firstly, the Kapi villagers lost their beautiful beach after the mine started its land reclamation activity. Secondly, their whole village was bulldozed and place taken for stockpiling of ores. NML has sighted more gold beneath their village and told them to relocate with cash incentives. Relocate to where?…into the mountains on land belonging to the Londolovit people. Again, there was no consultation. NML has no formal agreement with the Londolovit people for this repatriation exercise. If any, it would base on individual traditional landowners’ consents and not with the consent of the holistic community. This is dangerous which could result in serious repercussions in future.

Electricity and Water Cables: Pardon my limited technical knowledge but true water and electricity cables are connected parallel to each other through the main highway between the mine and the township. How safe are these connections come moments of disaster? How safe come moments of road maintenance works? Scary but true as this workmanship by NML shows.

Londolovit Dam or Weir: Newcrest is currently undertaking a major expansion of the Lihir process plant known as the Million Ounce Plant Upgrade (MOPU). The MOPU includes installation of a new crushing facility, and upgrades to the ore processing plant. Additional power generation capacity and water supply is therefore planned.

Londolovit is not getting paid for the use of their traditional water hole but the State through the Department of Environment and Conservation (DEC) because the agreement states that “water belongs to the State”.

NML formerly through Lihir Management Company (LMC) in a 1998 agreement pays Londolovit only for damages or “impact” on the Londolovit river environment and not for “usage” of water. The dam upstream caused decrease water level and lose of aquatic lives and other social inconveniences to the community. Payment is very minimal: K35,000 per annum then to K60,000 pa to K120,000 pa and currently at K300,000 pa.

“Yes, we’re receiving these payments but it is for environmental damages and not for actual usage of our water,” said Steven Massau, spokesman for the Londolovit impact community.

Last year, Londolovit commissioned an independent water usage investigation by a consultant and the report found gross extraction of water by LMC now NML “over and above” the permitted rates: 113,949,504,000 litres of water valued at K113, 949,504.

Currently, a delegation from Londolovit is in Port Moresby pursuing the K113 million claim.

After weeks of pursue, neither the DEC, Mineral Resources Authority, or NML owns up to pay the K113 million. They are paying marbles on them and keep passing the buck.

The last time gorgors are placed at the Londolovit weir/dam and at other mining sites was on June 6, 2015 forcing the mine to shut down for 36 hours. Collaborating with the State (MRA), NML flew in 17 heavily armed policemen who removed the gorgors and prevent further disruption by resource owners.

When the creature ‘State’ compromises with corporations the end result is political suppression and economic deprivation of fair benefits and opportunities. In addition, they leave massive and irreversible damages and destructions to our environment which holds our land and cultural heritage.

It seems an immutable trade off: the greater the right of corporations, the less the right of real person, we indigenous people.

The Ailaya rock is the only landmark left along the Lihir coastline to show where the original sea boundary was. Continuous land reclamation by NML currently is suspected of causing sea level rise and damage to marine lives to villages like Londolovit but without proof of scientific studies.

That once was Kapit village is now bulldozed to the ground and people relocated to inland mountains of Londolovit without proper agreements in place. NML eyes the place because of promise of more gold deposits beneath. Pics by CYRIL GARE.