Tag Archives: Lihir mine

How do miners dispose of their waste in the sea?

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

Melanie Burton | Reuters | October 11, 2019

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

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

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

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

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

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

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


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

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

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


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


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


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

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

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

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

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

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

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

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Call to increase landowner royalties


Silul: ‘Newcrest has made K5 billion in profit from Lihir’

Post Courier | March 05, 2017

DEPUTY Governor of New Ireland Province Ambrose Silul has called for greater and more equitable distribution of wealth derived from resource projects in the country.

Mr Silul was responding to recent reports released by Australian miner-Newcrest Limited on royalty payments paid to the New Ireland government, Nimamar Local Level Government and the special lease landowners to the tune of K69.8 million in 2016.

Mr Silul said while this may seem like a lot of money, it is nothing compared to what the national government and the company are receiving.

“Newcrest has actually only operated the mine for six years, since late 2010.

“However, in the first 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 K37.6 million 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,” he said.

Mr Silul who is also president of the Nimamar Local level Government said that at 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.”

He said it was high-time this trend changed.

“We need to increase royalties to be consistent with international practice.

“Royalties should be set at 10 percent of annual revenues.

“Special support grant should be increased from the current level of one-quarter of one percent to 10 percent.

The same with the tax credit scheme increase it from three-quarters of one percent of assessable income to 10 percent of assessable income.

“We are not doing this for the people of New Ireland alone.

“Once we get these increases we will share 20 percent of our total benefits with the non-mining provinces in the country.

“We think every mining province should take this approach.

“It will benefit all Papua New Guineans,” he said.

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Filed under Financial returns, Papua New Guinea

MOAs for mining projects set to go before NEC


Post Courier | December 23, 2016

SEVEN of the memorandum of agreements (MOA) for the mining projects in the country have been completed and will be submitted to the National Executive Council (NEC) for approval in January, 2017. This is from the Mineral Resources Authority (MRA) while giving an update on the status of these agreements.

Each of the operating mining projects have in place an MOA that sets out the benefits sharing arrangements between the National Government, the host provincial and local level governments and the immediate mine area landowners. The MOAs are reviewed periodically as agreed by the stakeholders.

Those completed are for the Ramu mine in Madang Province, Simberi (New Ireland), Hidden Valley (Morobe), Ok Tedi (Western Province), Tolokuma (Central) and Sinivit (East New Britain). MRA’s managing director Philip Samar told the Post-Courier that once they have been approved by the NEC, the actual signing ceremony will be held at each of these project sites.

“This is to allow the project stakeholders to witness such an occasion,” Mr Samar said.

Also completed is Woodlark in Milne Bay, which is one of the two new approved mining projects. He said the review process for Porgera, Lihir and Crater Mountain are yet to be completed. The current exercise will continue in 2017 along with the country’s first ever deep sea mine – Solwara-1.

Mr Samar said this will be the first time that any government has submitted more than one revised MOA in the last 10 years.

He said one of the improvements that the MRA is embarking on to improve is administration and transparency of the revised MOAs by making allowances for autonomous parties to administer each of them, and to facilitate annual meetings where the independent auditor presents the implementation scorecards for each of them.

“This way all parties will be held to fully account for the implementation of their commitments on an annual basis,” he said.

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Filed under Financial returns, Papua New Guinea

Miners doing it tough

Wantok | PNG Industry News

PNG’s mining and exploration scene has moved from feast to famine after a decade of high commodity prices, record exploration and development activity.

The theme has been well captured by one of the erstwhile exploration highflyers, Frontier Resources, which has announced that following the final payment from Newcrest for a farm-in it will have $A500,000 left in the kitty.

“This will provide adequate ‘hibernation’ income for the remainder of 2013,” Frontier said, adding that all possible expenditures had been minimised with directors fees cut for the year.

Nevertheless, a small capital raising may be needed later this year to fund corporate costs and essential work programs for 2014.

Frontier has been among the front runners on the exploration scene with farmout deals with Newcrest and Ok Tedi Mining Ltd. Now it is at the mercy of market forces.

At the other end of the scale two projects that have appeared as highly prospective for early development – Marengo Mining’s Yandera copper-molybdenum project and the two billion tonne Frieda River copper-gold project – have both become victims of the deteriorating climate.

Short term funding from its major shareholder, Sentient Global Resources, appears likely to take that company’s equity stake from 22% to 33.8% in an essentially holding operation as further work is carried out on a longstanding feasibility study.

Work on the feasibility study, including power options and tailings disposal plans, could take another couple of years or more to finalise and given the relatively low current ore grades Yandera might miss the development opportunity till the next commodity upturn.

Frieda River is in a different category with generally better grades but very high capital costs for development and a corporate owner in Xstrata that has lost its sense of commitment to the project.

In addition the feasibility study it conducted has been found wanting; it doesn’t look in retrospect that Xstrata had its heart in the right place in completing the feasibility, more intent on meeting its joint venture deadline with Highlands Pacific than with carrying out a thorough job. This, in spite, of the huge amounts of spending that has already been involved.

The production costs used by Highlands in the feasibility of $US3 a pound of copper and $1500 an ounce gold no longer appear realistic projections for the short to medium term given the recent fall in gold prices, albeit briefly, below $1,200.

Copper is still holding up above $3/lb but it is well below historical highs and global copper stockpiles appear to be building.

In short, it does appear that Frieda River may be missing the development opportunity in the medium term as it continues to struggle with corporate issues, uncertainty over power options and lack of full clarity on tailings disposal plans.

Newcrest has also announced plans to further streamline its Lihir gold operation, including minimisation of waste handling in the open pit and great reliance on stockpile processing. Its recently completed million ounce upgrade will probably provide a valuable buffer in the next term as production ramps up and costs begin to fall.

Barrick will also be casting an eye over potential economies at its Porgera mine as it battles the ever-present issue of illegal miners, while Ok Tedi may need to reassess its mine extension plan in view of new market conditions.

In both mines the problems related to overburden removal and handling loom large. In the case of Porgera they contribute to open pit mining problems while at Ok Tedi it is a crucial aspect of mine life extension. Falling fuel prices could aid in more economic handling of this waste, though most analysts do not appear to see reducing oil prices as a likely outcome in the present climate.

In surveying the mining scene it is at the Hidden Valley silver-gold mine where the mining fraternity appears to have lost its grips on reality.

Both equal owners Newcrest and Harmony Gold have announced they will take significant impairment costs on Hidden Valley, which is loss-making with little hope of a turnaround in the current climate.

If the current climate persists, some tough decisions can be anticipated on Hidden Valley with the rest of the sector remaining under a cloud.


Filed under Financial returns, Papua New Guinea

Newcrest accused of land rights breach by encroaching outside lease area

Newcrest accused of Cadia East licence breach

Joe Aston, James Chessell and Nabila Ahmed | Australian Financial Review

A private exploration company backed by high-profile shareholders including Leigh Clifford, Mark Carnegie and Jeremy Barlow has lodged an extraordinary legal claim aimed at preventing Newcrest Mining from going ahead with a key part of its $2 billion Cadia East project.

The private company, Gold and Copper Resources, lodged the claim in the NSW Land and Environment Court on Thursday, arguing that construction of the Cadia East mine such as the extension of a dam had occurred on land over which Newcrest doesn’t have a mining lease.

Australia’s biggest gold producer, which is in the midst of marketing a $1 billion bond offering in the United States, hopes to complete Cadia East, near Orange, by the end of December. The new underground mine is expected to contribute an additional 800,000 ounces of gold and 90,000 tonnes of copper to Cadia’s total annual production.

It has emerged that the claim in the Land and Environment Court is the fourth in a series of legal actions launched by GCR against Newcrest in the past two years. The actions include a breach of confidentiality claim in the NSW Supreme Court over discussions involving an “induced polarisation” technology championed by Canadian mining identity Robert Friedland, as well as another dispute over key exploration licences next to Cadia.

A spokeswoman for Newcrest on Sunday said the company was and will be “vigorously defending” all of the actions. “We are very confident of our position, including in relation to this latest one involving permitting at the eastern boundary of the Cadia east operation,” she said.

“We take our permitting for all our operations very seriously and are in regular contact with all the relevant departments. The NSW government through the minister for mines is the first respondent in two of the four proceedings.”

She said Newcrest was also confident in “our position regarding all necessary disclosures”.


Newcrest told the Australian Stock Exchange in April 2010 that it had secured “NSW government planning approval” and “other regulatory requirements in relation to [Cadia East]”. However, it is understood the company has requested new mining leases in the past week after learning that GCR was poised to lodge a claim.

GCR’s claim states that Newcrest extended a dam onto areas “for which no mining lease is held”. The company claims trees and vegetation covering about 30 acres were removed to allow for the extension of the dam. It also claims Newcrest has constructed a slurry pipeline and a pumping ­station on land over which it does not hold a mining lease. It also claims that “surface cracks are expected to develop” in the disputed area, “causing potential harm to fauna, topography, soil and water flow”.

It seems likely that the latest action is related to the earlier claim by GCR to secure the two exploration licences. If Newcrest were found to be in breach of the Mining Act or Protection of the Environment Operations Act – as GCR alleges – it could also be in breach of the exploration licences that are in strategically important positions close to Cadia’s existing operations.

The two licences cover 99 square kilometres of land. The Minister for Resources and Energy has the power to cancel exploration licences.

GCR was founded by Brian Locke, an entrepreneurial farmer who sued Macquarie in 1997 over breach of confidentiality over an irrigation infrastructure proposal he took to the investment bank.

Mr Locke, who settled the case with Macquarie in 2003, teamed up with Mr Barlow, a well-known energy consultant and former director of Arrow Energy, to form the exploration company five years ago with a focus on gold and copper in NSW.

Mr Barlow’s connections in the resources industry enabled GCR to secure a list of wealthy shareholders that, according to corporate searches, include Qantas chairman and former Rio Tinto boss Leigh Clifford as well as venture capitalist Mark Carnegie.

GCR has accumulated explorations rights over 2200 square kilometres of ground in NSW, making it one of the biggest private exploration companies in the state.

In particular, the company hopes to discover similar ore bodies to Cadia, which produced 473,195 ounces of gold and 44,778 tonnes of copper for Newcrest in 2011-12.

Land controlled by Gold and Copper and Newcrest has a 70 kilometre common border.

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Julius Chan’s unrealised dreams

OneCountry on PNG BLOGS

I think it is most most most unfortunate that a person who has single-handedly done a lot for the Mining & Petroleum Industries of this country would be singled out and demonized in the way a lot of your readers have done on the PNG Blogs site. Those who seek to do so demonstrate very clearly that they have very little understanding of the industry, nor responsibility for the future of the industries in PNG. Greg Anderson deserves a medal and it is way way overdue.

Having said that, let me point out that what is driving Byron Chan at present is clearly the unrealized dreams of Sir Julius Chan, mingled with a certain guilt for the past mistakes Sir Julius has made.

Sir Julius’s mistakes in the past in respect of Lihir ( how that deal was structured was done under the Leadership of Sir J as PM- and he fixed the gold price- without being an expert- he fixed the nations interest at a certain gold price -and he fucked all of us up. All the gold in one of the richest Volcanic calderas dug up for the last 15 years and shipped out of here with minimum or no state equity, minimum or no taxes, very little return to the people. That is Sir Julius’ legacy.

Sir J’s other legacy is the planned mass murder of hundreds of thousands of Bougainvilleans a during with the Sandline Mercenaries.

Byron can be excused because he was just a young fellow and away overseas at school at those relevant times. However, he cannot be excused for whats been happening in recent times with Allied Gold.

Sir Julius started 5 years ago working on a plan to takeover the Allied Gold mine on Tabar Island. He used locals to cause instability on the ground and tried to frustrate the Mining company. Sir J used New Irelanders in MRA and Dept of Mines to do his bidding. Fortunately or unfortunately, he had an opposite number in Mike Carruso of Allied who is just as stupid and bloody minded. They both succeeded in creating a very unstable mine on Tabar.

Sir Julius has been looking for a way to redeem himself but he couldn’t succeed with any of the abrasive plans he mounted. The memory of his plan to mass murder is still fresh in our minds…and Bougainvilleans are unlikely to forget him. He is now through his son mounting this rear guard action to what? appease the Bougainvillean Landowners? To give more power to landowners to throw out Mike Carrusso? If you sense a degree of vindictiveness, then you could be on the ball…because what Sir J has lacked in size, he has always made up for it in vindictiveness.

However, what is in it for Byron? Nothing. He has been sitting with his father and idolizing him for too long. He needs to get away from his father so that he does not inherit his father’s legacy. He has 7 days to do this. He needs to make a policy diversion. Byron, let me as a PNGean warn you, the rest of us PNGeans who are also resource owners are not prepared to stupidly throw away the credibility and stability of this industry.

The real direction that this debate should be aimed at is the method and equation of benefit sharing under current policies- not ownership. In relation to ownership I refer readers to my article in response to Peter Donigi published on 28th April 2011. Our real issues relate to how we share benefits and how the public service machinery fails to distribute it. We also have an additional problem with politicians trying to do resources deals like Sir J with Lihir and BCL and Arthur Somare with LNG.

Ownership of resources must always remain in the realm of common ownership, under the care of the State to ensure fairness in distribution of benefits. I encourage young PNGeans not to get too excited or have premature verbal ejaculations over this issue like young Byron. Now that we understand where he is coming from, we know how to treat him.

We need serious reform on the equity distribution equation. we need to hold companies to deliver benefits to our people, not destroy our environment ( like BHP and CRA), build permanent infrastructure, and ensure our people participate meaningfully. This must happen now, not meaningless utopic idealism like ownership/or needless fear mongering without a proper responsible commercial exit plan for the 6.5 million people of this country.

I thankyou all for reading my words. May God bless you all, as he has already done by placing you in this rich and beautiful Paradise. Laikim yupela olgeta na wanbel oltaim.


Filed under Financial returns, Papua New Guinea