Mine LOs Upset Over Change In Meeting Venue

Jerry Sefe | Post Courier | August 17, 2018

The landowners of Yanta and Hengambu in the Wafi-Golpu mining have agreed to work with the district and province to do what is right for the benefit of the mine.

The landowners, who did not attend the consultative meeting in Kokopo, described the forum as political maneuvering that was not in their interest.

Landowner representative Being Sombe alleged that there were suspicious deals made during the meeting.

Mr Sombe said since the closure of the meeting, they were not briefed or informed by their landowner association leaders on the discussions at the meeting.

“We are waiting for them to tell us why the meeting was taken to Kokopo and what was discussed and passed for the benefit of the impacted communities,” said Mr Sombe.

The landowners also questioned Bulolo MP Sam Basil and Morobe governor Ginson Saonu on why the consultative meeting was moved.

The leaders told landowners they were not happy with the move in meeting venue.

The leaders after discussions on the Kokopo forum assured the landowners to work with the provincial government to protect their interests.

Mr Basil said the authorities in mining areas will be engaged as stakeholders to represent the landowners’ issues and spearhead positive drive for landowners benefits in the mine.

They also admitted they were not properly consulted on the meeting to be held in Kokopo but were surprised to be invited.

“We must not repeat what has happened at Hidden Valley, whatever meetings for Wafi-Golpu mining in future must be held in Lae,” the leaders said.

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Morobe Leaders Unite On Wafi-Golpu Project

Benny Geteng | Post Courier | August 15, 2018

Several Morobean MPs including Governor Ginson Saonu have taken a united stand in calling for more Morobean presence in the Wafi-Golpu Mine Project.

This is first time ever for Morobe leaders to come together to show their concerns on the technical advisory and spinoff benefits from negotiations, construction phase, and the development of the Wafi-Golpu Project located between Bulolo district and Huon Gulf district.

The MPs – Morobe Governor Ginson Saonu, Bulolo MP Sam Basil, Huon-Gulf MP Ross Seymour, Tewae-Siassi MP Dr Kobby Bomareo, Nawaeb MP Kennedy Wenge and Lae MP John Rosso.

The emerging Morobe position aims to address lessons from the Bougainville Copper Limited and the crisis it ignited, the Ok Tedi Mining environmental issues that fueled the exit of BHP Billiton, landowner issues affecting the PNG LNG Project and the Hidden Valley Mining Project including other mines that will all be captured in a memorandum of agreement.

They have called for disclosure of pertinent information and engagement instead of limiting Morobe Provincial Government and the landowners to positions on Extractive Industries Transparency Initiative, special support grants and cooperation and assistance to the State and the developer.

“As leaders and stakeholders, we need to have in-depth information and knowledge to formulate our positions on matters of equity, royalties, business development grants, employment and training, compensation payments and infrastructure developments.

“We also need to know the source and independent checks that formed the basis of the figures used in the financial model and benefits by Department of Treasury. Inclusion of future ore discovery prospects, its implications on mine life and related financial benefits,” the leaders said.

Governor Saonu has expressed further concern that the recent second Wafi-Golpu Mining Development Forum in Kokopo has sparked criticism from Morobeans and said that from now on all meetings will be held in either Lae or Morobe.

“If we hold meetings outside of Lae and or Morobe we will fuel unnecessary suspicions among Morobeans that we have things to hide.

“Mining Minister Johnson Tuke has already taken note of this matter and has told Mineral Resources Authority and the Department of Mineral Policy and Geohazards Management in Kokopo to take note and not hold Wafi Golpu Mining Project related meetings outside of Lae and Morobe,” he said.

The MPs have taken the strong stance that the MOA to be signed must be right, and that as stakeholders and host province they demand access to the draft mining development contract before it will be signed by the Head of State and developers.

Wafi Landowners Slam Kokopo Meeting

Mine consultation meeting in East New Britain has left Wafi-Gulpu landowners feeling betrayed

Post Courier | August 13, 2018

The landowner group from Wafi-Golpu mine in Morobe Province has described the consultative meeting in Kokopo as political maneuvering.

Paramount chief and landowner for Babuaf tribe Ezra Kwako said such political maneuvering is a disgrace to the Wafi landowners.

Mr Kwako accused the meeting of being hijacked over to Kokopo, East New Britain Province between the government and the miner, Wafi Golpu JV.

He questioned why the sharing consultative meeting was moved to Kokopo and not held in Lae.

He said legitimate landowners were left out when the meeting was moved to Kokopo.

He said only a few of their “paper landowners” attended the Kokopo and have ill-documented the meeting as the representative of the tribe when the case was still before the National Court pending decision, which is soon to be handed down.

“We were not properly consulted and the meeting venue over to Kokopo was a denial for the better process when we are yet to identify the real legitimate landowners of Wafi mine development area,” Kwako said.

“We do not want to keep on making mistakes like that of the Hidden Valley Mining, enough is enough.

“Political interference to propagate better process is not to be entertained. Bring your discussion points to the village and let’s share with the people of mine affected areas. The MOA signing is one key document that will benefit the landowners and thus be very mindful of this current trend after all clan vetting process if fully completed.

“This is Morobe resource and we must discuss this issue amicably with well-informed dialog including the legitimate landowners in Morobe and not elsewhere,” Kwako said.

Morobe opposes fly-in-fly-out for Wafi-Golpu mine workers

Wafi-Golpu joint venture mine.

The National aka The Loggers Times | 31 July 2018

THE Morobe government does not want “fly-in-fly-out” for workers for the Wafi-Golpu mine project, says Governor Ginson Saonu.

Saonu said the proposed Nadzab Airport City would cater for the accommodation of employees.

“We are prepared to share whatever land we have to make this happen,” he said.

“We cannot just talk about it. We have plans for accommodation and all facilities that are needed by the employees of the mine.”

Saonu said this when presenting Morobe’s five-year development plan to Planning Minister Richard Maru in Port Moresby yesterday.

Maru said the government would budget for land at Nadzab to be made available to the mining company.

“We would like all the families to be located there, housing estate to be located there and they can easily go up to the mine,” Maru said.

“We want to make sure that Nadzab has a city and supermarkets.

“We must look at water, sanitation and sewerage for the airport.

“We really must have a well-planned development around Nadzab.”

Maru said he had spoken to Lands Minister Justin Tkatchenko about putting a team together for Nadzab Airport City development.

“We are excited about the mine starting up,” he said. “Wafi-Golpu will be a game changer for Morobe.”

Australian miners in firing line of PNG law shake-up

The streets of Sydney are paved with Papua New Guinea’s gold

Jewel Topsfield | Sydney Morning Herald | 17 July 2018

Major Australian mining companies face the prospect of higher royalties, tough restrictions on fly-in fly-out workers and the potential nationalisation of assets under reforms under consideration by the cash-strapped Papua New Guinea government.

The proposed law changes have sparked warnings from the country’s peak mining body that they would pose “significant deterrents” to investment in future projects and “threaten the existing operations of current mines”.

Several Australian Securities Exchange listed companies including Newcrest, Highlands Pacific and St Barbara Limited operate mines in Papua New Guinea, which has significant resources including gas, gold, copper, cobalt and nickel.

Mineral exploration in Papua New Guinea

The PNG Chamber of Mines and Petroleum says the proposed changes to the Mining Act could clamp down on international fly-in fly-out workers, impose a right for the state to compulsorily acquire mining projects (on commercial terms) after 24 years and result in an increase in royalties.

It says some of the proposed changes – which have been under discussion for years – would have “severe negative impacts in the immediate and long term on both existing operations and proposed projects”.

But the Resource Owners Federation of Papua New Guinea claims existing laws are “primitive, unjust and self-harming”, and mining companies continue to reap benefits while keeping the landowners and citizens who own the resources poor.

PNG Deputy Prime Minister Charles Abel told Fairfax Media the government was concerned about a number of factors including increasing the share of benefits to landowners.

The Papua New Guinea resource industry is responsible for just 20,000 jobs in nation of over 8 million people.

“Any proposed amendment must address the underlying concerns and keep PNG competitive as an investment destination,” he said.

New copper and gold projects inlcuding the Newcrest-led Wafi-Golpu mine and PanAust’s Frieda River mine are currently awaiting special mining leases from the PNG government.

At an update last month Mr Abel said the PNG government was bringing on Wafi-Golpu, the expansion of a ExxonMobil-operated PNG liquefied natural gas plant and Papua LNG “under an improved fiscal template”.

The Wafi-Golpu project, a joint venture between Newcrest and Harmony Gold, is a key part of Newcrest’s future and is considered the company’s top growth asset.

Newcrest’s Wafi-Golpu joint venture mine in PNG.

Australian company PanAust holds an 80 per cent interest in the Frieda River copper-gold project, which has an estimated initial mine life of 18 years.

PNG Chamber of Mines and Petroleum executive director Albert Mellam said some of the proposed changes had undermined investor confidence in PNG.

“We are concerned that some of the draft amendments are internationally uncompetitive, are a serious deterrent to investment in future mining projects in PNG and will threaten the existing operations of current mines in the country,” he said.

Dr Mellam said the transitional arrangements were inadequate to protect existing operations and could affect permit applications that already been submitted. He also said businesses would have to wear increased royalties, fees and levies and “unreasonable penalties”.

He said the passing of legislation in February – which removed industry representation on the Mineral Resources Authority Board and doubled the production levy rate from 0.25 per cent to 0.5 per cent – had already created a “great deal of uncertainty in the minerals sector and for international investors watching PNG”.

“The industry has already observed a gradual decline of investment into mineral exploration over the past two years.”

Mr Abel, who is both the Treasurer and Deputy Prime Minister of PNG, told Fairfax Media the current system had yielded good returns to government from mining projects in the past but a number of circumstances had combined to greatly reduce these flows as a share of government revenue.

These included projects approaching maturation, tax concessions, low prices, PNG LNG and Lihir, the gold mine owned by Newcrest, accessing accelerated depreciation provisions and greater use of the tax credit scheme.

“The state is not necessarily seeking to increase its take but wants earlier returns and smoother flows at lower cost,” Mr Abel said.

The gold processing plant on Lihir Island in PNG. Photo: Reuters

“This may necessitate a tax regime that is more production based rather than profit, has longer depreciation periods, has an element of free carry equity and simpler, more transparent structural arrangements and doing away with tax concessions.”

Mr Abel said PMG also wanted to minimise international fly-in fly-out operations to retain more benefits in Papua New Guinea.

The proposal to reduce maximum mining licenses from 40 to 25 years was “still under consideration”.

Mr Abel said the government was determined to deliver Wafi-Golpu, the PNG LNG expansion and Papua LNG to early works and final investment decision by 2019.

“These and other imminent projects should be based on the current legal framework with negotiated terms to meet some of the requirements I mentioned.”

The Resource Owners Federation of Papua New Guinea said the Mining Act should be reviewed in its entirety, so the ownership of minerals was retained by customary landowners.

“Minerals can still be mined only after development agreements are reached between the landowners and mining companies,” it said in a statement.

“All parties then benefit from a project, in contrast to Papua New Guinea in the past and today, where the landowners are the ultimate losers.”

According to the 2018 PNG economic survey by the Australian National University and University of PNG, the country is experiencing an “urgent economic crisis” and a shortage of foreign exchange is worsening.

The economy is dependent on the resource sector, which makes up 30 per cent of GDP, but much of it is foreign owned and a large share of the benefits flow offshore.

“Since 2015, resources revenue (corporate taxes and dividends from mining and petroleum) have been at their lowest level since 1992,” the economic survey says.

It says accelerated depreciation and tax holidays meant new projects paid no or virtually no resource revenue but it was surprising that even older projects were paying very little revenue.

“On the one hand there are genuine concerns in PNG that the country and landowners haven’t been getting a good deal from resource projects and change is needed,” said Professor Stephen Howes, the director of the Development Policy Centre at ANU.

“On the other hand the economy is in a very precarious state and the government is desperately looking for stimulus from new resource projects. That’s the tension … I think the government is in a difficult position.”

Professor Howes said he did not believe big new projects would go ahead until the uncertainty was resolved.

“They want clarity on these issues because they are long-term investments and these issues are seen as very important.”

Austmine, the leading industry body for the Australian Mining Equipment, Technology and Services sector, said current macroeconomic conditions and mining regulations in PNG had proven to be “considerable roadblocks to investment, creating uncertainty and stifling exploration”.

Morobe government eyeing 20pc stake in Wafi-Golpu mine

Junior Ukaha | The National aka The Loggers Times | 16 July 2018

THE Morobe government wants an equity of no less than 20 per cent in the Wafi-Golpu Mine.

Governor Ginson Saonu made this known last Wednesday during a two-day stakeholder forum in Lae regarding development of the proposed mine.

He said the Morobe government wanted to be an active partner in mine development.

“Apart from the legislated 2 per cent royalties, my government and people need better and attractive incentives in the form of equity,” Saonu said.

“We have made our position clear and have requested the National Government to acquire extra equity on top of the 5 per cent free carry.

“We are prepared to assist the Government to acquire this equity ourselves. We expect no less than 20 per cent equity in the project.

“We want to be a major partner with the Wafi-Golpu Joint Venture in the construction and operation phase of the project.”

Saonu also asked the Government to uplift the curfew on the tax credit scheme (TCS) programme so that money could be used to fund infrastructure projects in mine-impacted communities.

“In this case, we request that over 50 per cent of the TCS be used in Morobe alone and a further 20 per cent to be used in the SML areas of landowners and impacted communities,” he said.

He said the Morobe government remained committed to see this project get off the ground during this term of government.

Saonu thanked the project area and pipeline landowners for giving their land for the project.

Basil wants Wafi-Gulpu not to repeat Hidden Valley mistakes

“Are they [Harmony Gold and Newcrest Mining] willing to admit the mistakes they have done up at Hidden Valley?” – Minister Sam Basil

Junior Ukaha | The National aka The Loggers Times | 13 July 2018

BULOLO MP Sam Basil says he does not want to see a repeat of problems faced by landowners of the Hidden Valley Mine to happen at Wafi-Golpu.

The Mineral Resources Authority, however, countered that the fault was with the landowners themselves.

Basil was speaking yesterday during the second day of the Wafi-Golpu Project Development Forum in Lae.

Basil, whose district hosts Hidden Valley Mine, said despite the mine operating for a number of years, living standards of the mine-area landowners had not improved.

He said the Biangai and the Watut people, traditional landowners of Hidden Valley, had not seen any tangible developments and benefits from the mine.

“We have not fixed the problems of Hidden Valley and now we are talking about Wafi,” Basil said.

“These two same companies that have mined Hidden Valley now want to mine Wafi. Are they willing to admit the mistakes they have done up at Hidden Valley?

“Is the Mineral Resources Authority willing to shoulder the blame so that we can forge a new way forward?

“Our landowners in Biangai and Watut are still walking around without money.

“They have not been given much.”

Basil said there was also the issue of environmental damage at Hidden Valley, which is now before the courts.

He said the two per cent royalty given to mine landowners was not enough and should be increased to five per cent.

“Before you present this document to us, you have to tell us the failures of the past mines,” Basil said.

“MRA needs to outline them and find a way forward.

“The benefits of the past projects, you have to tell us now?

“What steps are we going to take from here on?”

Basil urged landowners not to quickly sign the mine memorandum of agreement (MoA) but ensure they understood how it would affect their lives and those of their children.

Sean Ngansia, MRA’s executive manager of development coordination, said the problem was not with the authority but the landowner leaders.

Ngansia said Basil was referring to how royalties from Hidden Valley had been managed.

“We don’t necessarily manage royalties on landowners’ behalf,” he said.

“It (royalties) is usually given directly to the landowners through their landowner associations.

“The issue now is really about how these monies are managed.

“You will find that in Hidden Valley and all the other mines, the landowner association leaders are not managing their royalties well.

“There’s a lot of misuse and mismanagement. These leaders also do not report to their people and that’s where the problem is.”