Tag Archives: MRA

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.

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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.”

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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.

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MRA says government policy welcomes coal mining

coal-mining

Mayur yet to submit application for lease

Rosalyn Albaniel | Post Courier | December 21,2016

MINERAL Resources Authority (MRA) says no application has been made for a mining lease for coal to date.

However, it says mining for this mineral is permissible under the government’s open policy on minerals, exploration and development.

MRA was responding to questions put to it by the Post-Courier on government’s policy on coal and the likely implications that it may be contrary to the climate change agreements PNG has signed.

This is in light of announcements by Australian based Mayer Resources of their intention to mine coal in the Gulf Province for the power plants they are proposing to build in Lae, Madang and Port Moresby.

“Obviously MRA cannot comment on matters it is not involved in such as PNG’s international and other treaty commitments-that is a matter for those familiar with those arrangements.

“Let me be very clear the MRA has not received any contrary instructions from government on the development of coal mines. Until and unless we do, we continue to maintain the government’s open policy on minerals (including coal) exploration and development,” MRA managing director Philip Samar told the Post-Courier.

Mr Samar said from the outset while there had been some exploration, no mining lease had been granted as yet, adding that any such application would require an environmental permit issued by the Conservation and Environmental Protection Authority (CEPA).

“Part of CEPA’s assessment would include the matters being raised about environmental concerns over coal.

“Mayur Resources, Waterford and Pacific Mining Partners are some of a number of companies who have been exploring for coal in PNG for a number of years. Waterford recently presented a report on PNG coal potential, based on its findings to date,” he said.

He said exploration licenses are valid for two years and may be renewed, provided the tenement holder has been compliant with the license terms and performed its work program.

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MRA focused on implementing an outdated and discredited government plan

StaRS is the government's new strategic blueprint but MRA seems totally unaware

StaRS is the government’s new strategic blueprint but MRA seems totally unaware

The Mineral Resource Authority is focused on implementing an old and outdated national strategic plan that was based on a discredited economic strategy.

While the government, led by the Department of National Planning, is focused on the implementation of the National Strategy for Responsible Sustainable Development (StaRS), which calls for a reduction in our dependence on resource extraction in favour of a sustainable, people friendly economy focus on agriculture and local industries, the MRA says it is still working to implement the old 2010 Development Strategic Plan that called for a doubling of revenues from the mining sector by 2030 [see story below].

The new planning framework - which sidelines the old DSP

The new planning framework – which sidelines the old DSP

Someone needs to tell the MRA that in October 2013, the National Executive Council ordered a review of the DSP and “approved the adoption and use of the Sustainable Development Paradigm as the guiding principle for the review and update” [NEC Decision 347/2013]

This was inline with one of the 78 key priorities identified and agreed on in the Alotau Accord at the formation of the O’Neill-Dion government after the 2012 election – a review of the current Development Strategic Plan – and one of 16 major activities identified by the government in the 2013 National Government Critical Activity Matrix.

As a result of the review, StaRS was published in January 2014, with the full endorsement of the Prime Minister and NEC.

StaRS provides a blisteringly critical denunciation of the old DSP, with its emphasis on large-scale resource extraction and export growth which has failed to deliver tangible benefits for most people in PNG while causing widespread environmental destruction, war and community breakdown, and which was completely at odds with the Constitution and National Goals.

The Prime Minister says StaRS represents a “revision of our long-term plans” – but it seems someone has forgotten to tell the MRA!

MRA responded to State’s plan
The National aka The Loggers Times | December 13, 2016
THE Mineral Resources Authority says it has responded favourably to plans by the Government to double revenue levels from mineral receipts by 2030.
The average mineral revenue between 2013 and 2016 is around K8.15 billion.
The Government’s medium development plan of 2010 challenged the mining industry to double the mineral receipts by 2030.
MRA in a statement said to help achieve that, its geological survey division initiated several survey programmes across the country.
The objectives are to update existing mineral occurrence data and obtain new data to boost mineral exploration.
These data sets are important to lure potential mineral investors into the country.
Under normal circumstances, geological mapping for mineral occurrence is done by exploration companies.
But the Government has decided to do this on its own.
MRA executive manager for geological survey division Nathan Mosusu said during the Mining and Petroleum Investment conference last week in Sydney that they had so far surveyed and mapped out areas including Wau/Biaru in Morobe, Yule, Wasa and Kubuna in Central, and Kokoda , Northern.
Mosusu said MRA carried out an aerial geophysical survey along the western part of the country between Ok Tedi and Frieda mines.
Other areas surveyed include Kainantu and the New Guinea Islands region.

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PNG Ministers and MRA all set for Xmas shopping in Sydney

Prime Minister O'Neill, Treasurer Patrick Pruaitch, Mining Minster Byron Chan and

Prime Minister Peter O’Neill, Treasurer Patrick Pruaitch, Mining Minster Byron Chan and Petroleum and Energy Minister Nixon Duban will lead the exodus of Ministers, MPs, Governor’s and MRA staff to Sydney for tax-payer funded Xmas shopping next month

All set for Sydney conference

Post Courier | November 19, 2016

The PNG Mining and Petroleum Investment Conference in Sydney will give potential investors a comprehensive overview of the resource sector in Papua New Guinea.

The PNG extractive industry’s flagship summit is scheduled for December 5 at the Hilton Hotel in Sydney, Australia. Prime Minister Peter O’Neill and Treasurer Patrick Pruaitch open the conference and give presentations.

Over 900 delegates and exhibitors representing companies, state agencies, landowner, aid organisations and international investors and financiers will attend the 14th PNG Mining and Petroleum Investment Conference.

Other Cabinet ministers who will make presentations include Mining Minister Byron Chan and Petroleum and Energy Minister Nixon Duban while other ministers, provincial governors and members of parliament are expected to attend.

PNG Mining and Petroleum Chamber executive director, Greg Anderson, said the conference has always been a significant event for PNG, not only to showcase the country’s mineral and petroleum potential to the international market but also to provide investors and financiers a forum to meet industry players and discuss investment opportunities.

“Despite the depressed global commodity market situation and the impact this has had on the PNG economy, there are some exciting resource opportunities emerging in PNG.

Mineral exploration in recent years has resulted in the discovery and early appraisal of two significant copper-gold prospects – Kili Teke west of the Porgera mine, and in the Star Mountains north of the Ok Tedi mine,” he said in a statement yesterday.

“Lihir and Simberi are performing very well and Ok Tedi is well on the path to recovery. There have been two applications this year for Special Mining Leases for Frieda River and Wafi-Golpu projects.

“On the petroleum front, the PNG LNG project has proved to be one of the best LNG start-ups anywhere in the world. With nameplate capacity of 6.9 million tonnes annually, the project was able to ramp up production to a rate of 8 million tonnes per annum in the first quarter of 2016.

This has set the scene for further LNG investment in PNG through the P’nyang gas field in Western Province and the Elk-Antelope gas fields in the Gulf Province.”

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Hidden Valley landholders furious at MRA delays

Newcrest has sold its stake in the Hidden Valley mine to Harmony

Sampson Bonai | Post Courier | November 18,2016

THE revised Memorandum of Agreement (MOA) of the Hidden Valley gold mine in Wau is gathering dust at the Mineral Resource Authority head office in Port Moresby pending its endorsement two years ago.

A furious Nakuwi Landowners Association president Rex Mauri questioned the motive behind MRA’s delay in its endorsement of the revised agreement during a media conference in Lae yesterday:

“Why has MRA delayed the endorsement of the revised and initial agreement of Hidden Valley gold mine for its implementation two years ago?

“The revised agreement had been negotiated by all stakeholders including Morobe Mining Joint Ventures, Mineral Resources Authority, Treasury, Morobe Provincial Government and the Hidden Valley landowners in 2013-2014”.

It had been initialed and is awaiting endorsement from the government for its implementation, since four years ago.

“I’m very disappointed over the long delay and call on the relevant state agencies to fast track the approval process and endorse the revised agreement for the benefit of all stakeholders,” he said.

The outspoken president said the delay had greatly affected the three landowner villages of Nauti, Kwembu and Winima from participating in all the major spin off business activities from the mine.

He said the original Memorandum of Agreement was signed in August 5, 2005 by the developer and all the stakeholders in Wau before the commencement of the construction work on the mine in 2006. The mine began mining operations and poured its first gold bar in the first quarter of 2009. The mine was commissioned by Prime Minister Peter O’Neill on September 30, 2010. The review of the original MoA had been done after four years of operations between 2013-2014 and a revised agreement had been initialed.

He explained that the landowners have become spectators on their own land and outsiders have capitalised on the delay by taking out most of the major contracts from the mine. He called on Prime Minister Peter O’Neill to intervene and direct MRA to forward the revised agreement to the Government to have it signed and endorsed.

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