Tag Archives: MRA

MRA gets new chairman

Cedric Patjole | Loop PNG | July 21, 2017

Deputy CEO of Ok Tedi Mine, Musje Werror, has been appointed as the new chairman of the Mineral Resources Authority (MRA).

Werror was elected last week by the MRA board members, replacing Robin Moaina, who served as chairman for 10 years.

In a statement prepared by MRA, Werror thanked the board for their confidence in him and said he will make it a priority to continue stakeholder engagement to improve MRA’s services.

“MRA regulates the mining sector, which is an international business,” he said. “The MRA therefore has to continue to improve its regulatory services to meet that international expectation but do so within the laws of PNG.

“I am confident that MRA has the Board and management expertise to effectively regulate the sector and to promote its growth to sustain the economic prosperity of the country.”

Moaina said he was proud of MRA achievement over the decade and is confident the Authority is now a competent and responsible agency that will continue to support the government in its role.

“As the founding chairman of the MRA board, it has been my greatest pleasure in providing governance and leadership oversight to MRA,” stated Moaina.

“This organisation has grown from strength to strength and developed very robust and competent systems to service stakeholders of the exploration and mining sector, including the government.

“I am very confident that chairman Werror will continue to provide a very strong leadership for the Board going forward and I wish the Board, management and staff of the Authority every success in the years ahead.”

1 Comment

Filed under Papua New Guinea

Mining amendments concern outgoing chairman

Cedric Patjole | Loop PNG | July 21, 2017

Outgoing chairman of the Mineral Resources Authority Board, Robin Moaina, has appealed to the incoming Government not to rush into passing the proposed amendments to the MRA Act and Mining Act.

In a statement announcing the new MRA Board Chairmanship of MRA, Moaina said the proposed amendments to the Mining Act and MRA Act remain a concern for him.

This is because the Government did not consult the MRA Board regarding the amendments.

He has called for the government to re-engage on the fundamentals of these proposed legislation to ensure the growth and investment of the exploration and mining sector in PNG.

In welcoming new chairman Muje Werror, he said the challenge going forward is to reposition MRA to effectively regulate the mining sector through the proposed amendments.

Leave a comment

Filed under Papua New Guinea

Govt commits 2% royalty from Tolukuma sales

Byran Chan

Loop PNG | June 9, 2017

The National Government has committed to pay landowners from the Tolukuma Project site a 2 per cent royalty.

This will come from the sale of gold from the gold mine.

This is the first of five major commitments outlined in the revised Tolukuma Gold Mine memorandum of agreement (MOA) signed yesterday in Port Moresby.

The commitments were announced by Mining Minister, Byron Chan, who urged the landowenrs to look after their money.

“Please ensure that royalty funds allocated to the Yulai Future Generation Trust are governed and operated under a Trust Deed and not to repeat the mistakes of existing operating mines where the stakeholders have wasted such funds on dubious investment proposals only to see no returns,” he said.

According to the agreement the state will pay project landowners royalty calculated at 2 per cent of free on board (FOB) of the sale of gold.

Landowners have agreed to split the royalty where Mining Lease Landowners recieve 80 per cent while the balance is split equally between Woitape LLG and Central Province Government.

Mining Lease Landowners have agreed to share 2 per cent of their royalty with the Women and Youth.

Other commitments in the MOA include:

  • The Special Support Grant (SSG) and Tax Credit Scheme (TCS);
  • The establishment of the Infrastructure Development Committee and Office;
  • Funding the annual operation cost of the Provincial Liason Officer to be based at Tolukuma; and
  • The establishment of a new Landowner Company with a clear clan-based shareholding structure and company requirements.

Meanwhile Yulai Landowner Association Chairman, George Gusi, refused to sign the MOA yesterday stating outstanding issues were yet to be discussed and that no proper consultation was done with the MRA.

MRA Managing Director, Phillip Samar, said the refusal of Gusi to sign does not affect the commericial agreement on the Tolukuma Mine.

Samar said they will continue to speak with Gusi to address any of the outstanding issues.

Leave a comment

Filed under Financial returns, Papua New Guinea

Tolukuma LO refuses to sign deal

Picture: Signatories to the revised Tolukuma MOA having  a toast while Yulai Landowner Association Chairman, George Gusi, shows disinterest.

LOOP PNG | June 9, 2017

The Tolukuma (Yulai) Landowner Group representing landowners of the Tolukuma Gold Mine refused to sign the revised Memorandum of Agreement (MOA) in Port Moresby today.

Chairman George Gusi snubbed the long overdue revised MOA, claiming there are still outstanding issues to be settled.

Facilitated by the Mineral Resources Authority (MRA), the signing ceremony was attended by Mining Minister Byron Chan, Central Province Governor, Kila Haoda, Executive Director of Asidokona, Vincent Siou, Woitape LLG President Joe Geru, and MRA Managing Director, Phillip Samar.

Speaking at the ceremony, Gusi asked for an extension to iron out outstanding issues which they want to see contained in the current MOA as he claims there was a lack of consultation by the MRA.

He said some of the outstanding issues include:

  • Establishment of the Infrastructure Development Committee;
  • Environmental damage report on the waterway and tailings dam, which is a national issue on the reputation of the mine;
  • No proper mine development plan showing the lifespan and economic value of the mine; and
  • No proper landowner business plan under the spin off benefits and life after mine programs.

Gusi also asked why there was a rush to sign the MOA on the eve of the elections, questioning the legal basis justifying Minister Chan and Governor Haoda to proceed as signatories.

“We are confused as to why we are rushing to sign. I strongly recommend that we defer the MOA signing till after the return of writs. It’s only five weeks away,” he said.

“So after the elections, we have a legitimate Government and authority to execute our MOA.

“Ladies and gentlemen, both national and provincial governments have totally failed to implement many undertakings in the previous MOA.”

Despite his refusal, the signing ceremony went ahead with all parties content with the MOA. Gusi maintained his stance and did not sign.

Following the singing, Minister Chan said the previous MOA did not contain any Government commitment, however, the revised agreement contained guarantees which the government was willing to deliver.

They include, among others, the Tolukuma Highway upgrade project.

Chan said he would not have proceeded with any signing if he knew there were still outstanding issues.

However, he said the revision of the MOA was an ongoing thing and any outstanding issue would be catered for down the track.

“Whatever we sign today, it’s continuous, it’s a Government commitment to the people of Central Province, Goilala District and to your people. It is our commitment,” he said.

“This Government has committed all of these projects to you as of today.”

Meanwhile, Bonnie Gelu, from the State Solicitors office, who was present informed landowners and guests that Minister Chan and Governor Haoda, as signatories to the MOA, are acting within the legal parameters as they are still recognized as elected leaders until the return of writs.

1 Comment

Filed under Financial returns, Human rights, Papua New Guinea

Papua New Guinea moves to launch new coal mining industry

In 2006, a young girl walks between coconut palms on the coastline of Puil Island, part of the Carteret Islands, where rising sea levels eroded much of the coastlines and contaminated crops and freshwater. In 2009, evacuation began to nearby Bougainville Island. Photo by Jeremy Sutton-Hibbert/Greenpeace.

Catherine Wilson | Mongabay | 16 May 2017

Recent plans call for both coal mining and coal-fired electricity generation, raising questions about the government’s commitments to climate change action and leadership.

  • Two years ago, the Papua New Guinea government allocated $3 million for research into the viability of coal extraction.
  • An Australian company plans to build three mixed coal power generation plants in the country.
  • Proponents argue affordable and reliable electricity is needed to boost economic growth, while opponents cite environmental risks including the threat of climate change and rising sea levels.
  • Analysts also question how much urban-based power plants will raise electrification rates, since most un-electrified households are in rural areas that cannot easily be connected to electrical grids.

The Papua New Guinea (PNG) government is actively pursuing the potential of developing a coal mining industry for the first time in the country’s history. Two years ago, it channeled 10 million kina (US$3million) to its Mineral Resources Authority for research into the viability of coal extraction. Now, an Australian company engaged in exploration is proposing to build three mixed coal power generation plants in the cities of Port Moresby, Lae and Madang, citing the need for affordable and reliable electricity to boost economic growth.

But environmental science experts and civil society groups are concerned about the potential environmental and climate impacts of developing a domestic coal industry, and the risk of undermining the country’s commitments to climate change action and leadership.

“It is no secret that the first ever climate change refugees in the world are from Papua New Guinea,” declared Dagia Aka, member of the youth climate change movement, 350 PNG.

In 2009 residents of the Carteret Islands in the far east of Papua New Guinea were forced to begin migration to nearby Bougainville Island after rising sea levels and the contamination of crops and freshwater sources rendered their island homes uninhabitable.

“Mining ventures in Papua New Guinea have a dark history of destroying the environment around them and there has been a failure to put measures in place to avoid such [damage],” Aka continued.

“Given the overall assessment of PNG’s energy policy and its natural resources, it is important not to develop the coal mining industry,” Chalapan Kaluwin, head of environmental science and geography and director of the Centre for Climate Change and Sustainable Development at the University of Papua New Guinea, told Mongabay.

“The sustainability of other energy sources, such as geothermal and renewable energy, including wind, solar and waves in the country, is significant. Coal mining has far more adverse negative impacts on the overall sustainability of PNG, its landowners and long-term health of its communities.”

Exploration underway

While three international companies — Waterford, Pacific Mining Partners and Mayur Resources — are currently engaged in coal exploration in PNG, the Department of Petroleum and Energy has yet to report the granting of any coal mining leases.

But Brisbane-based Mayur Resources, which is exploring for coal in the southern Gulf Province and claims to have discovered extensive reserves, is already planning to build three urban-based mixed coal electricity generation plants.

“The first project to build an Enviro Energy Park (EEP) at Lae with 2MW solar and 2x 30MW conventional generation fueled by domestic coal and PNG renewable biomass is in a very advanced stage waiting only the conclusion of a Power Purchase Agreement with PNG Power,” Paul Mulder, Managing Director of Mayur Resources told Mongabay.

He said the project already had environmental approval from the government’s Conservation and Environment Protection Authority (CEPA), which was granted in June last year.

While Papua New Guinea does not yet have coal mines, it has already faced severe environmental impacts from mines, such as this open-pit gold mine in the country’s Western Province. Photo by Glen Barry/Greenpeace.

PNG’s extractive industries: costs and benefits

PNG, with major reserves of gold, copper, nickel, silver, oil and gas, has been a natural resources-dependent economy since Independence from Australia in 1975. The mineral resources sector alone accounts for more than one-third of government tax revenue. In 2013, taxes on the extractive industry amounted to US$292 million. From 2011-2013, it contributed an average 15.6 percent annually to the country’s GDP.

Coal, which remains one of the cheapest available sources of energy and fuel, drove industrialization and modernization in Europe and North America. But the environmental impacts of coal mining include the depletion of forest cover, air and water pollution, and contribution to global warming through the release of methane, a greenhouse gas, from natural coal seams. Burning coal to generate electricity produces carbon dioxide and oxides of sulfur and nitrogen, further contributing to the greenhouse effect.

This is a major concern for small Pacific Island developing states which are disproportionately exposed to climate change, whether in the form of extreme weather or rising sea levels.

In April last year, in line with the forceful advocacy by many Pacific Island leaders for industrialized nations to reduce their carbon footprint, Charles Lepani, PNG’s High Commissioner to Australia, publicly called on the Australian Government to downsize its coal mining industry in light of the Paris Climate Agreement and its goals.

Australia produced an estimated 16.3 metric tons of carbon emissions per capita in 2013, compared to 0.8 tons per capita in PNG, the most populous Pacific Island nation of 7.6 million people.

Forest lining the Bairaman River in PNG. New Guinea Island has some of the world’s largest and most biodiverse remaining tropical forests. Photo by Paul Hilton/Greenpeace.

“To cry foul to the major contributors to the fossil fuel industry and climate change, yet participate in something that will only make matters worse for us definitely does not paint a good picture,” Dagia Aka responded. “Pacific Island countries have a moral responsibility to take a lead with the Paris agreement simply because we are the ones facing the worst effects of climate change at this point in time.”

Other regional governments have also expressed concerns about coal mining. In 2015 leaders of Pacific Smaller Island States — comprising the Cook Islands, Kiribati, Federated States of Micronesia, Republic of the Marshall Islands, Nauru, Niue, Palau and Tuvalu — issued the Port Moresby Declaration on Climate Change which calls for “a global moratorium on all new coal mines.”

In countries across the region, higher sea levels and temperatures have led to the flooding of villages, coastal erosion, deteriorating crop yields and freshwater supplies. Affected communities have been forced to relocate in the Carteret Islands in PNG, Nuatamba and Nararo Islands in the Solomon Islands and Vanua Levu in Fiji.

Internal migration is a very expensive undertaking for Pacific Island governments presiding over small economies and restricted budgets already over-stretched with a wide range of human and socioeconomic development goals.

And the burden of adapting to climate change is only forecast to increase.  In PNG alone, annual mean and extremely high daily temperatures, ocean acidification and sea levels are all predicted to rise this century, reports the Pacific Climate Change Science Program (pdf). Under a high emissions scenario, annual surface air temperatures could rise between 2.1-4.2 degrees Celsius and sea levels by 0.87 meters by 2090.

Aerial view of a coal mining operation in Palangkaraya, Central Kalimantan, Indonesia, illustrating the damage coal mining causes forests. Photo by Daniel Beltra/Greenpeace.

Future plans

The global pact reached at the COP21 United Nations Climate Change Conference held in Paris two years ago does not contain an explicit anti-fossil fuel stance. However, it does state “the need to promote universal access to sustainable energy in developing countries …. through the enhanced deployment of renewable energy” as part of the overall ambition of ensuring the global average temperature increase does not reach or exceed 2 degrees Celsius above pre-industrial levels.

In March 2016, PNG, the first nation to submit its national plan for climate action following ratification of the Paris climate agreement, stated “the main mitigation contribution for PNG would be in terms of an indicative replacement of fossil fueled electricity generation with renewable energy sources” with a target of employing “100 percent renewable energy by 2030, contingent on funding being made available.”

Mayur Resources, developer of the Lae energy park, is keen to promote its support of the country’s transition to low carbon energy. It claims that its plants, by combining coal with renewable energy sources and employing state of the art clean emissions technology, will only result in PNG using coal for 10-20 percent of its power generation, in contrast to 71 percent in Australia. The company also argues the facilities will not increase emissions and comply with the nation’s commitment to the Paris climate agreement.

“The proposed [Enviro Energy Park] project will maintain the same level of carbon dioxide as the current level from the power generation sector, as nearly 40-50 percent of current power is being generated through diesel and heavy fuel oil. However, the EEP will bring in substantial environmental benefits to the ambient air quality [in Lae] by massively reducing the acid rain-causing gases, like oxides of sulfur, potentially 8-14 times less, and oxides of nitrogen, about 12 times reduced,” Mulder said.

However, while Mayur resources classes biomass as a carbon-reducing element of the project, many researchers question the tendency to classify biomass as a carbon-neutral energy source.

London-based Chatham House reports that “while some instances of biomass energy use may result in lower lifecycle emissions than fossil fuels, in most circumstances, comparing technologies of similar ages, the use of woody biomass for energy will release higher levels of emissions than coal and considerably higher levels than gas.”

Rounded white stones line the Bairaman river in West Pomio district. Photo by Paul Hilton/Greenpeace.

Mayur Resources further says its planned coal mines will result in minimal land disturbance mainly due to “the scale of these operations being very small compared to most other mines globally…..being in the bottom 1 percent of the smallest mines.”

But the University of Papua New Guinea’s Kaluwin claims the full potential impacts of the company’s planned operations are still to be thoroughly assessed.

“The impacts on the environment, destruction of land, atmospheric pollution, water, livelihoods, health, housing, education, culture and traditions, economic benefit sharing and most importantly governance, have not been properly evaluated for such a project to be implemented in PNG,” he said.

Businesses and the government also make an economic argument for coal. Mayur Resources believes that low electricity generation costs of about $0.10 per kilowatt hour, about 35-40 percent lower than the average wholesale cost of power in the local area, will boost business and industrial growth in the eastern coastal city of Lae. The urban center is strategically located between a major cargo shipping port and the Highlands Highway, the only overland transport network into the country’s heavily populated interior.

However, these urban-based plants will contribute little to increasing electricity coverage in rural and remote areas of the country where more than 80 percent of PNG’s population resides and energy deprivation is the greatest.

In this 2003 image, Melanie John, Lulu John, Aebi Sakas and Warume Sakas walk along a logging road in Western Province. The majority of PNG’s population continues to live in rural areas, which are nearly impossible to connect to a national electrical grid. Photo by Sandy Scheltema/Greenpeace.

Energy poverty is a major development challenge in the region.  Only 20 percent of households across the Pacific Islands region, and 12 percent in PNG, have access to electricity, hindering human and socioeconomic development.  An estimated 40 percent of PNG’s population live in hardship, only 63 percent are literate and only 40 percent have access to clean water.

Geographical barriers, such as arduous mountain terrain, dense forest and scattered islands, separated by the sea, make a national power grid virtually impossible. In this context, energy experts recommend greater investment in off-grid and standalone power systems, especially those compatible with renewable technologies, to achieve a substantial improvement in rural and, therefore, national electrification.

“Papua New Guinea, being a tropical island state, is a prime area for solar and hydro clean energy,” Dagia Aka emphasized.

2 Comments

Filed under Environmental impact, Papua New Guinea

MRA says mine MoAs should be public and independently audited every year…

porgera1

… so what are Philip Samar and MRA doing to make sure that happens? 

Freddy Mou | Loop PNG | 18 January 2017

The Mineral Resources Authority (MRA) is calling for an improvement on how revised mining projects Memorandum of Agreements (MoA) are administered.

MRA Managing Director Philip Samar made this call when presenting six revised MoAs to the Mining Minister Byron Chan on Monday.

The revised MoAs are for Hidden Valley, Tolukuma, Ok Tedi, Simberi and Sinivit. The only new mining project MoA is for Woodlark.

Samar said that there is definitely a need to improve on how these MOAs are administered.

“The negotiations, as difficult and challenging as they might be, is actually the easy part.

“The real challenge is, and has always been, for the various parties to these MOAs to fulfil and deliver on their various commitments.”

Samar added that the MRA is proposing that an open and transparent process be built into these respective MoAs.

He said this is to enable each MoA to be self-administered where an independent party is engaged under the respective MoAs to conduct an annual audit of how each of the parties have performed in terms of fulfilling their various commitments and to have this report made available publicly to the various stakeholders and the general public.

“A complimentary initiative given PNGs participation in the EITI protocols is for these MOAs to be made public documents.

“The MoA review process itself is a public process involving various stakeholders in numerous public forums and as such the final product itself should therefore be a document that the various stakeholders and the general public can have access to.”

1 Comment

Filed under Financial returns, Human rights, Papua New Guinea

MOAs for mining projects set to go before NEC

mra

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.

1 Comment

Filed under Financial returns, Papua New Guinea