Tag Archives: MCC

Tuke, Yama Want Fresh Deal For Ramu Mine

Politician’s love to make fancy promises – but do they ever actually deliver?

Post Courier | March 19, 2019

MINING Minister Johnson Tuke has said, before he signs any documents regarding the Ramu NiCo project, he needs to understand what is there for the landowners.

“When I understand and am really convinced then I will sign the agreement for the expansion, otherwise that will not happen,” Mr Tuke said.

He said he had discussed with Prime Minister Peter O’Neill the licence that government will issue for the expansion must be under a new agreement.

Mr Tuke said many mining companies usually say they will only give according to the MoA, however, there must be some form of kindness and humility when dealing with the local landowners whose land and water were given away for the project.

Madang Governor Peter Yama said the new expansion plan for the Ramu project will be properly discussed and he, as the head of the province, must be convinced that the people of Madang receive more benefits.

He said the old agreement that was signed before the construction and the operation of the Ramu Nickel Project must be done away with.

“The new agreement will be renegotiated, and the old agreement will be no more,”

He said that the Prime Minister Peter O’Neill during his visit to Usino had publicly announced that the new agreement will be a fresh start. Mr Yama said he is in full support of a new agreement for the Ramu NiCo Project, and stressed that all the parties that will be signing the agreement including the National Government, the provincial government, and the developer Ramu NiCo (MCC) must make sure the agreement provides better benefits to the people of Madang.

This is particularly for those from the impacted communities, the developer Ramu NiCo, Madang province, and the country.

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No Ramu extension until benefits are guaranteed: Govt

‘Ramu nickel mine is the worst ever State negotiated mine with no benefits to the locals’ – Yama

Loop PNG | February 12, 2019

Prime Minister Peter O’Neill has announced there will be no extension of the Memorandum of Agreement (MoA) for the Ramu NiCo mine in Madang Province.

The initial MoA was signed in 2000 and expired in March 2018. It is now due for a review, however the Prime Minister announced last Friday that there will be no agreement until government is sure there is fair benefit for the people and the State.

“The mine agreement has expired and we will renegotiate so that our people benefit most. Bai yumi stap na lukluk tasol ah? Nogat! Nogat! Em blong yumi. Yumi mas gat sampla sher stap insait. Bai yumi stretim, Gavana bai yumi stretim, mark my words. Yumi mas lukautim ol pipol blong yumi pastaim,” O’Neill said. (Will we just stand and watch? No! No! This is for us. We must have some share in this. We will fix this, Governor we will fix this, mark my words. We must first take care of our people.)

He told Governor Peter Yama that they had a big task ahead to negotiate the new terms and conditions of the new agreement.

Yama expressed passionately that the Ramu NiCo mine was the worst ever State negotiated mine with no benefits to the locals in Kurumbukari and Basamuk. Concerns have also been raised that other minerals apart from nickel and cobalt have been extracted and exported.

“The people of Basamuk must have spin off businesses. They must have good roads, good housing, health centres, schools, water supply and electricity. Right now Rai Coast and Usino-Bundi are the least developed districts in the country despite being hosts of the Ramu NiCo mine and also the Ramu Agro Industry for Usino Bundi,” Governor Yama said.

Minister for National Planning, Richard Maru, visited Basamuk last Thursday and met with the mine operator, MCC, and encouraged all stakeholders to now focus on a way forward that will benefit the company, province, landowners and the State.

At the moment, the State is not an equity partner in the mine project. There has not been any corporate tax and no Goods & Services Tax paid by the company since production began in 2012.

Furthermore, there is no benefit sharing agreement for the landowners in the project. Minister Maru said in the future, MoA’s must have benefit sharing agreements where landowners, the host province and the State must have shares in the project. This will be the case for Wafi-Golpu Mine, the Frieda Copper Mine and any other upcoming mines in the country.

“MCC is not the enemy, we are partners in development and so in the negotiations for the new MoA, we must ensure win-win situation for all parties involved,” Minister Maru said.

He said Madang had the economic potential and opportunity to double and triple its internal revenue and become a major economic hub in the Momase region. Minister Maru challenged Governor Yama and all the other MPs from Madang to focus, cooperate, communicate more for the greater good of the province.

Minister Maru is certain MCC has by now recovered its initial investments in the mine. This also explains why the Ramu mine is looking to invest a further US$2 billion to double production. The State, provincial government and landowners must now take up equity in this lucrative mine under the new agreement that the Government will take on together with MCC. The challenge now is to properly identify the landowners and Mineral Resources Authority (MRA) must ensure this exercise immediately by MCC.

In saying that the company must not feel that it has to solve all the problems in the area, Minister Maru encouraged MCC management to participate in the new-look Infrastructure Tax Credit Scheme which will be launched in March. He also urged the company to work with the PNG Government to seek grant funding from the Chinese government to build most needed infrastructure in the Usino-Bundi and Rai Coast districts.

The particular focus would be to build a highway between Erima to Saido and other roads, health and education facilities within these two districts.

The Ramu NiCo mine has a 135km slurry pipeline that runs through Usino-Bundi and Rai Coast districts.

Minister Maru also maintained that mines should do away with the fly-in fly-out arrangement and return to the model of the Bougainville Copper Limited where mining townships must be built at the mine sites.

Governor Yama also supported the position of the Government of Morobe and the Tutumang Government that there shall be no “Fly in Fly Out”, for the Wafi -Golpu Mine Project and other Mines and Resource Projects into the future.

“We will maximize revenue flows from all these projects to go to the local people, landowners and to our Government and to remain in the country. Hospitals, schools, a township and other utility services are built there. There’s no reason why we shouldn’t use this model,” Maru said.

“If we want to allow the revenue from these mines to rotate within PNG and help build our country, in the form of taxes, employment and so on, we must walk away from the fly-in fly-out arrangement.”

Maru said the Government is committed to build a highway from Erima to Saidor in Rai Coast District to assist the people living along these areas access markets and services and is seeking the support of the Chinese government to focus their development grants away from Port Moresby to two the remote districts of Usino- Bundi and Rai Coast, which hosts the only Chinese owned mine in Papua New Guinea, the Ramu NiCo Mine.

A State Negotiation Team will be put together as soon as possible to commence discussion of the future of the mine and its stakeholders, including the State and the landowners.

The Prime Minister himself announced that he will chair the State negotiating team with the Madang Governor as key members of the State Negotiating Team.

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No tax paid by Ramu nickel mine

Terms Of Mine Extension To Be Renegotiated

Post Courier | February 11, 2019

Prime Minister Peter O’Neill, has announced there will be no extension of the Memorandum of Agreement (MoA) for the Ramu Nico in Madang province.

The initial MoA was signed in 2000 and expired in March 2018. It is now due for a review, however the Prime Minister announced last Friday that there will be no agreement until government is sure there is a fair benefit for the people and the State.

“The mine agreement has expired and we will renegotiate so that our people benefit most. Bai yumi stap na lukluk tasol ah? Nogat! Nogat! Em blong yumi. Yumi mas gat sampla share stap insait. Bai yumi stretim, Governor bai yumi stretim, mark my words. Yumi mas lukautim ol pipol blong yumi pastaim,” Mr O’Neill said.

He told Mr Yama they had a big task ahead to negotiate the terms and conditions of the new agreement.

Mr Yama said the Ramu Nico mine was the worst state-negotiated mine, with no benefits to the locals in Kurumbukari and Basamuk. Concerns have also been raised that minerals, apart from nickel and cobalt, have been extracted and exported.

“The people of Basamuk must have spin-off businesses. They must have good roads, good housing, health centers, schools, water supply and electricity. Right now, Rai Coast and Usino-Bundi are the least developed districts in the country despite being hosts of the Ramu Nico mine and the Ramu Agro Industry,” he said.

National planning minister Richard Maru visited Basamuk on Thursday last week and met with the mine operator, MCC, and encouraged all stakeholders to now focus on a way forward that will benefit the firm, province, landowners and the state.

At the moment, the state is not an equity partner in the mine project.

There has not been any corporate tax and no goods and services tax paid by the firm since production started in 2012.

Furthermore, there is no benefit sharing agreement for the landowners in the project.

Mr Maru said in the future, MoAs must have benefit-sharing agreements where landowners, the host province and the state must have shares in the project.

This will be the case for Wafi-Golpu mine, the Frieda Copper mine and any other new mines.

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Prices affecting Ramu mine sales: Chairman

 The National aka The Loggers Times | January 22, 2019

RAMU NiCo Management (MCC) Ltd in Madang is facing severe sales problem.
This was announced by the company’s chairman Zong Shaoxing during its annual working conference on Friday.
Zong said last year, the company sold 25,525 tonnes of nickel and 2388 tonnes of cobalt, which were only 75.05 per cent and 72.06 per cent of the annual plan of sales, leaving 11,704 tonnes of nickel unsold.
He said the main reason was that a large number of customers had requested to cancel or reduce orders due to worldwide economic downturn.
Nickel and cobalt prices plummeted.
As a result, the country’s major nickel/cobalt mine developer had no choice but to cut product price and reduce price coefficient.
Company president Gao Yongxue reiterated the chairman’s statement in saying 2018 had been another challenging year for it.
“Prices for our products have fallen dramatically and we have had some difficulty in selling our product,” he said.
“Once more, we have serious financial issues to deal with.”
Zong said the company would continue its high and stable production with all technical and economic targets delivered, securing the company’s leading position in the industry with high profitability and survivability, setting a new benchmark for global peers.
He said in 2019, MCC must make every effort to increase inventory turnover, prioritise capital efficiency and safety, boost revenue and be adaptable to the changing market environment.
Zong urged MCC to take advantage of its new energy project, balance sales volume and metal discount coefficient, make breakthroughs in expanding the market and achieve annual sales and production targets.
He said MCC must continue to optimise production organisation, improve work efficiency, create new production records and achieve the profit target.

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Landowner anger grows about continuing mining destruction

Peter S Kinjap | PNG Attitude | January 21, 2019

One of the world’s largest underdeveloped copper and gold deposits on the Frieda River, a tributary of the Sepik, is opposed by local indigenous landowners and all right-thinking Papua New Guineans.

The Frieda River deposit is thought to contain 13 million tonnes of copper and 20 million ounces of gold and tens of thousands of people fear the likelihood of serious river system contamination and the threat to the ecosystem that supports them.

A spokesman for environment group Project Sepik, Emmanuel Peni, said there was widespread opposition to the mine’s development plan.

“From Iniok village, which is where the barges and ships stop at the Frieda River, right down to the mouth of the Sepik, people are against the mine,” Peni said.

“They are concerned about possible contamination of the river system and the destruction of the environment along the Frieda and the Sepik River system.”

The East Sepik Provincial government and the national government had not yet responded to the concerns and grievances that have been raised.

Land in the Papua New Guinea context means the natural environment including land, rivers and seas.

In Madang Province, the landowners of Basamuk, Begesin, Ramu and Kurumbukari villages are affected by the Ramu nickel mine in various ways.  The Chinese state-owned mine has been polluting the beautiful coastal seas and people have been denied their food gardens and fishing waters.

In a recent documentary, ‘Uprooted’, the people clearly showed their pain about the river system contamination and the environmental destruction. They are fearful of losing their land to large scale development.

The deep sea tailings placement (DSTP) method of mine waste management and disposal which the Ramu mine proposed and was approved by the PNG government is causing a lot of environmental destruction and river contamination. 

“I belong to the government and the government belongs to me,” Martin Dampat, a Mindere landowner, said in the documentary. “How can it abandon me? It must do all that it can to ensure that I am able to feed myself.

“It has the ability to do so. But, if it chooses not to, then I know the government has no concern for me.  We have reached our limits. We have done all we can. They’ve rejected everything we’ve said.

“We feel we can’t do anything anymore. Some have given up trying,” he said.

“There is a great heaviness in all our hearts. I don’t think anyone can remove it from within us. We will go. But our grandchildren bear hardships even greater that what we’re experiencing.”

Another disgruntled landowner, John Oma from Ganglau Landowner Company, said: “They don’t have the land to grow their food. They won’t have an ocean to catch their fish.

“Where will they eat from? Nowhere. Great hardship awaits them. We won’ be able to avoid the troubles that will come. It’s the same sea. Life will be difficult for them too.”

And Sama Mellombo from the Pommern Land Group in Ramu said:

“It’s a fearful feeling when you think about the health effects on people and the inhabitants of the seas. If we take action now to tell China to find an alternative method, I think that’s the right approach. Find an alternative method instead of dumping waste into the sea. We live by the sea.”

Former Madang governor, Sir Arnold Amet, said:

“The government has endorsed the actual deep sea tailings deposit and an environmental plan. I think it is our assurance that the laying down of the pipe will not affect the lives of our people.  

“And the whole project has been signed and sealed by the national government and relevant agencies.”

A confused landowner from Ramu said:

“We hear that the minister has come. We hear that the member has come. We hear that the mine boss has come. But we’re confused. For the people here in Mindere and Ganglau, we feel like we’re about to die because we don’t have a Father. Our Father – the government – isn’t here.”

Bong Dampat, a mother and a Mindere villager, said:

“We fear for our children’s future. It’s going to be a long time. When waste dumped here, unborn children could be affected. The government and the company must pay attention. They cannot ignore us. What kind of a future will our children have? They have to pay attention.

“When a mining development contract allowed the Chinese to own and operate the mine, there was no concept of safety or environmental standards.  It was a cowboy operation. You did whatever you wanted and it didn’t matter if you were injured. It seems they came with a set of rules that didn’t comply with the rules of our country.”

“This is not a fight against development. No. That isn’t why we’re campaigning,” said Ramu landowner Michael Kasuk.

“We are fighting to protect and save our environment, our forests, our land, our river systems and our seas because our existence is connected to the land, forests, river systems and the sea,” Mr Kasuk said.

Peter S Kinjap is a freelance journalist, email pekinjap@gmail.com

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Rising tide of opposition to large-scale mining in Papua New Guinea

Porgera Landowners protest against Barrick Gold (2018).

PNG Mine Watch

Opposition to large-scale mining in Papua New Guinea is becoming more and more visible as communities become much more vocal in expressing their anger and disapproval.

Both existing and proposed new mines are feeling the heat from landowners who are realising the benefits they are promised are illusory and it is they and their families who suffer the severe negative environmental and social consequences of large-scale resource extraction.

Landowners in Enga have lodged a US$13 billion claim against the government over unfilled promises and environmental and social damage from the Porgera mine. The miner is owned by Barrick Gold and Zijin Mining and has been operating since 1989.

Meanwhile landowners in Madang are petitioning the government not to allow a planned K5 billion expansion of the Ramu nickel mine and they want the existing Basamuk refinery shut down. Again, it is the lack of tangible benefits and the environmental and social costs that are angering local people.

Proposed new mines in Morobe and the Sepik are also facing opposition.

Last week, landowners in Morobe forced the evacuation of the site of the proposed Wafi-Golpu mine. They are unhappy at the terms of an MOU agreement signed by the government with the mine owners, Harmony Gold and Newcrest Mining.

The landowners protest is supported by Morobe governor Ginson Saonu, who has already declared his opposition to the mine:

“People are not like before, when they had no knowledge, no idea, no education to read what’s happening in other parts of the world where there is environmental damage and so forth. Everybody is knowledgeable about what’s happening in other mines around the world, and even in Papua New Guinea like Ok Tedi, Bougainville and others.

The governor has identified agriculture and tourism as better development options in his Province.

At the same time, the Morobe Provincial government has passed a resolution rejecting the MOU for the mine and landowners living along the coast have declared their opposition to the planned dumping of toxic tailings in their seas.

The proposed Frieda river mine, to be developed by the Chinese company Guandong Rising Assets Management, is also facing strong opposition from landowners worried about the impacts of mining on the Sepik river, which is their lifeblood.

Communities have been organising their own protest meetings and have banned Mineral Resource Authority representatives from entering some areas.

Similarly, communities around the abandoned Panguna mine on Bougainville, have successfully petitioned against any moves to reopen the mine, forcing the Autonomous Bougainville Government and governor John Momis into an embarrassing climb down.

In another blow to the mining industry, Nautilus Minerals is on the brink of financial collapse, unable to complete preparations for its proposed experimental seabed mine, Solwara 1. Local communities and environmentalists have been waging a long running campaign against the mine.

Although the PNG government still seems determined to press ahead with new mining operations, the resistance from local communities, both those affected by existing mines and those threatened by the new operations, shows no signs of abating .

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Ramu mine stake to change hands in overseas deal

Cobalt 27 Capital to acquire Highland Pacific

Mining Technology | 2 January 2019

Cobalt 27 Capital has signed a scheme implementation agreement (SIA) to acquire all of the issued ordinary shares in Highlands Pacific which it does not already own through a scheme of arrangement (SoA).

Currently, Cobalt 27 is the largest holder of Highlands shares, with an interest of around 13%.

As per the terms of the SoA, shareholders of Highlands will receive A10.5 cents cash per share, provided all applicable conditions are being met or waived and the scheme is being implemented.

This consideration represents a premium of 43.8% over the closing price of Highlands shares on 24 December 2018 of A7.3 cents and takes the equity value of Highlands to around A$115m ($80.9m).

The consideration will increase by A1.0 cents cash for every share to A11.5 cents, provided before the end of this year, the closing spot price of nickel exceeds $13,220 per tonne over a period of five consecutive trading days.

This SoA will need the approval of 75% of shareholders of Highlands who are entitled to vote. Voting will take place at a shareholder meeting, which is expected to be held in mid to late April this year.

Additionally, the scheme will have to be approved by the PNG National Court.

The major asset of Highlands is its 8.56% interest in the Ramu nickel-cobalt mine (Ramu), located near Madang in Papua New Guinea.

After repayment of Highlands’ attributable construction and development loans for the Ramu project, its ownership will increase to 11.3%.

Ramu is majority-owned and operated by Metallurgical Corporation of China (MCC).

MCC holds a 67.02% stake in MCC-JJ Mining that owns all of MCC Ramu NiCo (MCC – Ramu), which inturn holds 85% joint venture interest in Ramu.

The Government of PNG and local landowners own 6.44% stake in Ramu. This stake would increase to 8.7% following repayment of construction and development loans.

MCC financed and constructed the Ramu mine for $2.1bn.

Cobalt 27 chairman and CEO Anthony Milewski said: “The acquisition of Highlands will allow Cobalt 27 to gain a direct interest in the Ramu nickel-cobalt mine and materially increase its attributable exposure to the mine’s nickel production from 27.5% to 100% and cobalt production from 55% to 100%, relative to the previously announced Ramu Cobalt Nickel Stream.

“It does so at nearly half the cost of the previously announced Ramu Cobalt Nickel Stream, provides increased balance sheet flexibility, and enhances value for Cobalt 27 shareholders. It also brings cash flow to our business, something we have told our shareholders was important from the beginning.”

In October 2018, Highlands announced that MCC is exploring a potential expansion of the Ramu mine, which could cost around $1.5bn. The details with regard to a potential expansion, however, have not been finalised yet.

Cobalt 27 expects to have the opportunity to take part in any potential expansion and boost its attributable production through its purchase of Highlands following the SoA.

Highlands has interests in the Star Mountains Copper Gold exploration project in PNG and is reviewing the Sewa Bay laterite nickel project in PNG along with Sojitz Group, a Japanese trading firm.

Cobalt 27 plans to review strategic alternatives with regard to these non-core assets.

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