Tag Archives: MRA

MRA Act changes ‘create uncertainty’ as mineral prices rise

Cedric Patjole | Loop PNG | May 19, 2018

Changes to the Mineral Resources Act 1992 have created uncertainty in the mining industry, especially with rising mineral prices.

Former executive director and now advisor to the PNG Chamber of Mines and Petroleum, Greg Anderson, said this during the Resources Sector Media Workshop.

He said the uncertainty created will determine exploration activity as well as whether mineral projects are developed.

Anderson gave a detailed presentation on the impact of the MRA Act changes. Positives included:

  • The extension of Exploration License term from 2 years to 5 years, and maximum size o shore increased to 10,000km2
  • Documentation required for a Mining License application now prescribed. This includes:
  • Community engagement plan, LIS, social mapping study
  • Employment and training plan, goods and services procurement plan, business development assistance plan
  • Rehabilitation and mine closure plan
  • Feasibility study and mine waste management plan
  • Resettlement action plan
  • Timelines set for a decision on the State equity participation option linked to the application process for a Mining License (as per Kumul Minerals Authorisation Act)
  • A party to a Community Development Agreement (CDA) (MOA) that fails to sign cannot delay or ‘hold to ransom’ the approval process for the CDA

However he said the negatives significantly outweighed the positives. They included:

  • The State given the right to compulsory acquire (on ‘commercial terms’) any project upon the expiry of the 25th year of the first term of the ML or thereafter (expropriation)
  • Royalty increased to 3 percent (bringing it to 3.5 percent with the increased Production Levy in the revised MRA Act )
  • Limiting of the un-recouped sunk costs for State equity participation to: Only 50 percent of the accumulated exploration costs; and for he current tenement holder only, and for no more than 20 years prior to ML grant
  • Agreements to include a provision on the protection of minority shareholder rights including when and how dividends will be determined, declared and paid
  • There are no “grandfathering” provisions – existing operations are required to comply with all aspects of the new Act within 12 months (social disruption)
  • Very significant increase in reporting requirements; will increase costs and bureaucratic load on the MRA, MAC and explorer/developer. Are these additional plans and reports justified, how are they to be reviewed in a meaningful way, can they be combined or better managed?
  • Any changes to Government policy take precedence over the MDC (totally annuls the sanctity of the MDC). MDC subject to five year reviews
  • There is only one tenement for mining, the ML (SML abolished; one size ts all) & the MAC now approves all tenements (Minister formally grants tenement but has to abide by decision of MAC). Industry endorses MAC’s role in approval of ELs & smaller mining projects but believes direct NEC approval & grant of ML needed for larger projects
  • International FIFO banned under an ML (also financial impact)
  • Unworkable obligation to commence development and maintain production leading to cancellation of ML “Reservation of Land from Mining” provision that does not protect the right of:  existing EL applicants for grant or renewal (they are terminated); existing ML holder to renew when a reservation is in place (cannot lodge an application which could result in the forced closure of a mine)
  • Unsatisfactory conditions for ELs: maximum size of onshore EL reduced 50% to 1,250km2; requirement for year 3 external audit, at renewal (MAC), or anytime by MD fee of K5,000 to surrender an EL; no consolidation of ELs
  • Unsatisfactory Compensation Agreement that must take into account “possible changes in the landholder structure”
  • Powers and duties of authorising o cers excessive and in some cases open to abuse.
  • Penalties are excessive and punitive, eg. A person, engaging in FIFO (not defined) can be locked up for 15 years;
    not a tenement holder, can be locked up for 2 years for not providing information the MD deems “useful for the enforcement of this Act”
  • The definition of “offshore” will lead to confusion with existing projects that are onshore/onshore and the application of the “CAB” needs to be clarified
  • Impractical “Transparency Initiative Publications” – IRC, PG, developer, LOA must submit quarterly benefits report or CEO/chairman ned K25,000

“The Mining Sector is strongly opposed to the revised mining act of which I have just outlined. It is internationally uncompetitive, extremely so, especially with all the tax changes that have gone on as well. It will be a strong deterrent to any future mining projects and a serious impediment to the operations of the current mines,” Anderson said.

Anderson said currently mineral prices were on the rise as witnesses five years ago before a slump. And the uncertainty created by the legislative changes affected exploration and mine development.

“This present all of us with a serious dilemma. We’ve got a rise in commodity prices, the cycle was recovering and coming back in our favour like it did in 2003 and we captured it beautifully.

“Now we’ve got all these uncertainties facing us; how are we going to capture this rise in commodity prices, build new projects and expand our exploration sector?”

He said the PNG Chamber of Mines had done two independent reviews and had encouraged the Government to carry out its own review to authenticate the veracity of those reports and recommendations.

Anderson said the Government must renew discussions with a multi-disciplinary team drawn from all relevant key government organisations, with all meetings chaired by an eminent, independent chairman.

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Ramu NiCo landowners assured royalty payment ‘soon’

The National aka The Loggers Times | May 4, 2018

The Government has assured landowners of the Ramu NiCo project in Madang that they will receive their outstanding royalties soon.

Mining Minister Johnson Tuke reassured the four landowner association chairmen of the Ramu NiCo project, and Madang acting provincial administrator John Bivi, that as soon as procedural matters were executed by relevant authorities, the amount owed to them would be paid.

Tuke, while sympathising with the landowners, said this matter had been dragged on for too long as a result of officers not doing their jobs as expected.

He added that as soon as the appointment of the acting managing-director of Mineral Resources Authority was approved by Cabinet, royalty payment matters would be the first thing he would address.

Ramu Nico Management said it had the money to pay landowners.

Chairmen present during the meeting included Toby Bare (Kurumbukari Landowners’ Association), Sama Mellombo (Basamuk Landowners’ Association), Peter Tai (Maigari Landowners’ Association) and Jeffrey Kinang (Coastal Pipeline Landowners’ Association).

Meanwhile, the landowner chairmen were concerned that opportunists from the recent crime upheavals in Madang would use the current situation with the mine landowner against the State to instigate trouble and damage mine properties and assets in the province. Tuke, however, assured them that as minister responsible for mining he would not allow that to happen.

He told the leaders that he would be visiting landowners and the people of Madang next Friday with the new acting managing director of MRA to attend to their needs.

Ramu NiCo Mining Ltd community affairs manager Albert Tobe said the company was ready to pay royalties to the landowners as soon as the State gave them clearance.

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Samar Exits MRA

Post Courier | April 17, 2018

Mineral Resources Authority’s (MRA) managing director (MD) Philip Samar’s term in office has expired since April 9.
Mr Samar served as the managing director for four years since his permanent appointment as MD from 2014-2017.
He was appointed acting MD for the MRA in 2012, a post he held until 2014 when he was made permanent.
The outgoing managing director also took the opportunity to thank the Prime Minister Peter O’Neill and the government for the opportunity given to lead the MRA in the last six years since 2012.
Mr Samar thanked the Prime Minister for his confidence in appointing him to be head of the statutory authority responsible for regulating the exploration and mining sector in PNG. The last six years have been the highlight of his career over the last 21 years as a public servant.
“I am privileged to serve the government, the people of Papua New Guinea especially the mining project stakeholders and the exploration and mining industry.
“I am satisfied I have done my part in nation building through managing the MRA and servicing the mining industry. Since the MRA’s establishment in 2007, the statutory authority has performed well in regulating and promoting Papua New Guinea’s mineral sector,” he said.
Mr Samar said for the last 10 years, the mining industry has been the single largest contributor of revenue to the national purse contributing over 60 percent of revenue annually.
“This makes the sector important and the government must continue to support the sector by creating a conducive environment where the industry is allowed to operate sustainably, safely, profitably and responsibly,” Mr Samar said.
He said the government must realise the expected benefits to be derived from these projects such as employment, taxes, duties, royalties, dividends, compensation, training and business spinoffs.
As outgoing MD, Mr Samar said there was still room for more improvements and urged the government to consider to:
– Support the MRAs ongoing regulatory roles by strengthening its governance, independence and resourcing.
– Revise the proposed amendments to the Mining Act to capture additional practical administrative improvements.
– Review and revise the Mining Safety Act 1977.
– Strengthen the regulation of the small scale mining alluvial gold sector.
– Improve training, create awareness and provide capital and appropriate technology to the alluvial miners around the country.
– Change the current benefits sharing arrangements via MOAs to a more project delivery model.
– Review and revise the government’s equity participation in major mining projects.
– Better organise itself to optimise its participation in the Wafi and Frieda copper projects.

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Ok Tedi Mine Landowners Get Share Certificates

Post Courier | April 17, 2018

The people of Western Province finally own 33 percent of the giant Ok Tedi Copper Mine following the handover of equity share certificates by Ok Tedi Mining Limited Board Chairman Sir Moi Avei to Governor Taboi Awi Yoto yesterday in Kiunga.

“OTML is now a third owned by the people of Western Province,” Sir Moi told a large gathering of locals and invited guests in front of the grand Cassowary hotel.

“We have heard so much about this 33 percent. Is it every going to happen? The board in its wisdom made a decision that the only way to move this share transfer is loan MRDC K30million to pay for the stamp duty. Governor the stamp duty has been paid. OTML is now one third owned by the people of Western Province,” Sir Moi Avei told the excited crowds.

He also said this ensures that politics cannot interfere now because they own more than thirty percent of the mine.
Western Governor Taboi Yoto said in the past we were told that we own 63 percent but we do not have direct control of the funds.

“We have direct control of the 33 percent and that’s the difference,” Mr Taboi Yoto said.

According to the Governor out of the 33 percent, 12 percent is owned by CMCA communities through their board, the mine villages own 8.4 percent and the Fly River Provincial Government owns 12.6 percent.

“For the government with the four MPs, the PEC members and the LLG presidents, we will decide how we will use the money for development purposes.

“I thank the government of Prime Minister Peter O’Neill for this.”

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Aggrieved landowners say they are missing out on Ramu mine benefits

Post Courier | April 6, 2018

The RAMU Nickel Project has life span of over 35 years, according to project developer Ramu NiCo Limited.
And with exploration continuing, the project life’s span could even increase, vice president of Ramu NiCo Management (MCC) Limited, Wang Baowen said on Wednesday when addressing aggrieved landowners at Mindre village.
Mr Wang was accompanied Mineral Resources Authority cheif executive officer Philip Samar, MRA senior officers and a legal officer from the Investment Promotion Authority.
Mr Wang was addressing aggrieved landowners who petitioned the Government and the developer over what they claimed were missed business opportunities, compensation payments, royalties and environmental issues.
Certain community leaders alleged at the gathering that minerals were being shipped out of the country in ship loads after ship loads and they were suspicious that the mine life of the project was coming to its end soon.
However, Ramu NiCo Community affairs manager Albert Tobe said such stories that are being speculated were not true.
Mr Wang said that initially the mine’s life-span was about 25 years, however, with recent exploration and discoveries of ore up at the Kurumbukari plateau, the mine life may extend to over 30 years.
He told landowners of Basamuk that the developer is also a local company with interests of landowners, State and the province at heart.
“Am very clear regarding your concerns on business opportunities,” Mr Wang said.
Mr Wang said the company had to face many difficult challenges initially from the start until it went into production.
He said it is also a big challenge for Chinese employees working in PNG particularly with the language, cultural here, and the challenge of leaving behind their families to come to PNG just to operate the project.
However, that was a big commitment they have made for the development of the economy and its people.
Mr Wang said it was only last year that the company achieved full production capacity.
He also told the landowners at Mindre that all compensation claims which they were seeking must come within an agreement.
“With regards to business opportunities, we want to give business to landowners and we provide what we can, but there are other businesses that require strict management requirement” Mr Wang said.
He said the company is willing to discuss further with the landowners through Ramu NiCo community affairs department business development section to deliver their requirements in business opportunities.

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Tuke Praised For Alluvial Mining Plans

Post Courier | March 12, 2018

PLANS to reserve alluvial mining for locals has attracted praise from local landowner companies across the country.

Minister for Mining Johnson Tuke said he wants to enable locals to build up wealth and capital to prosper in the next stages of the mining-especially in the mineral rich areas.

An aspiring umbrella landowner company, Tundaka PNG Limited of Mt Tundaka exploration licence area, applauded the move.

The new prospect is located in Enga’s Kandep district along the border with Magarima in Hela.

“As the chairman of the umbrella company, I congratulate Mr Tuke and support this initiative to empower landowners to the landowners to venture into such lucrative businesses on extractive industries,” chairman Pokya Pea said.

He said to break the barrier of landowners being the collectors of royalties only and spectators in their own resource developments is the step in the right direction.

“We can’t be bystanders for foreigners to extract our valuable resources and giving us 2.5 per cent only as equity share especially in the extractive industries.

“The proposal, when established, will strengthen our economy through setting up our bullion bank and financially empowered,” he said.

Mr Pea called on the government to amalgamate the Mineral Resource Authority and the Department of Geo-hazards Management to bring about new extractive projects as well as to build the capital wealth of people.

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NGO fights mining plan on seabed

Image: Alliance of Solwara Warriors

Lemach Lavari | The National aka The Loggers Times | February 27, 2018

The Mineral Resources Authority (MRA) has received an objection by a non-governmental organisation representing impacted communities of the seabed mining project.
The Alliance of Solwara Warriors represents impacted communities from New Ireland, East New Britain, Madang, Manus and Milne Bay.
Spokesman Jonathan Mesulam told The National the group had lodged its objection against exploration licence 1196 (EL1196) in the waters off west coast Namatanai, New Ireland, and the Duke of York Islands, East New Britain.
Mesulam said MRA had received their objection.
He said MRA would conduct a stakeholder meeting for all parties to discuss their views.
These included Nautilus Minerals, Conservation and Environment Protection Authority (Cepa) and National Fisheries Authority (NFA), Mesulam said.
According to MRA, exploration licences are to be renewed every two years.
Any stakeholder can protest against the issuing of an exploration licence.

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