Tag Archives: Newcrest Mining

Landholders call on Government to fast-track Land Titles for Mining town and Benefits


Scott Waide | EMTV | 26 October 2016

Leaders from five villages  in the Bulolo District who will be affected by the Wafi-Golpu project  have called  on the  National Government to  fast track the hearing of the Land Titles Commission  to determine the  ownership of the land on which the future mine sits.

They have also called  on the National Government to outline plans for the development of  a township in the Mumeng-Bulolo area.

Leaders from the five villages,  gathered at Gurako  along the  Lae-Bulolo Highway calling on the National Government to fast track  a Land Titles Commission hearing.

The concerns are longstanding  and have come  to the fore again as work towards opening one of the largest mines in PNG  progresses.

They’ve also raised questions about the  future benefits of the mine, seeking clarification  from the MRA as to where a township if any will be built in the Bulolo District.

The leaders of the villages  previously called for a response from the National government but got none.  They are among several groups claiming ownership of the area where the mine will be developed.

Leave a comment

Filed under Financial returns, Human rights, Papua New Guinea

Mining industry to meet in Sydney to plan further exploitation of PNG resources


Frieda river mine camp

Papua New Guinea’s resources sector still has some ‘bright stars’, says Anderson

David James | Business Advantage | 19 October 2016

Times are undoubtedly tough in Papua New Guinea’s mining and petroleum sector, but as the industry prepares for its biennial conference in Sydney in December, the PNG Chamber of Mines and Petroleum’s Greg Anderson tells Business Advantage PNG there are still ‘bright stars’ to get excited about.

In spite of encouraging rallies this year from gold and silver, global prices for mineral commodities remain  low. PNG’s mining and petroleum industry is not alone in feeling the effects.

Profits are down worldwide and exploration activity is at a low ebb.

But experienced hands like Greg Anderson, Executive Director of the PNG Chamber of Mines and Petroleum, understand that the industry is cyclical in nature and that the preparatory work that will create the next upturn is already underway.

‘There are still some bright stars, in spite of the global situation,’ he tells Business Advantage PNG.

Anderson and his team at the Chamber are preparing for the 14th Papua New Guinea Mining and Petroleum Investment Conference, set to be held at the Hilton Hotel in Sydney from 5 to 7 December.

The biennial event, the industry’s major gathering, will provide a comprehensive overview of these positive developments, as well as providing updates on PNG’s many existing resource projects, including the ExxonMobil-led PNG LNG project.

More LNG to come

Anderson believes the takeover by ExxonMobil of InterOil (finally approved by a US court in the last week in September) will clear the way for greater synergies between the existing PNG LNG project and the Papua LNG project, the country’s second planned LNG development in which InterOil had a significant stake.

He expects ExxonMobil and France’s Total SA, which is the designated operator of Papua LNG, to optimise the project.

‘Papua LNG is expected to be in the lower cost quartile of LNG projects around the world,’ he observes, indicating that prospects for financing of the second LNG project are positive.

In addition to this, ExxonMobil’s promising efforts to develop the P’nyang gas field in Western Province could well underpin the opening of a third train at its LNG plant outside Port Moresby. That would be a significant expansion for a project already beating production targets.

Mining progress

‘The highly promising Frieda River and Wafi-Golpu copper-gold projects continue to make significant progress towards commencement,’ notes Anderson.

PanAust, the developer of the Frieda River project, applied for its mining lease in late June, less than a year after being acquired by Chinese provincial investment fund, Guangdong Rising Assets Management.

Newcrest Mining and joint venture partner Harmony Gold are not far behind, having applied for a special mining lease for Wafi-Golpu only last month.

Nor has exploration activity altogether stalled in PNG.

Harmony Gold, which only this month ramped up its presence in PNG by acquiring joint venture partner Newcrest’s 50% share of the Hidden Valley gold mine, is getting exciting results from its Kili Teke prospect in Hela Province. Latest estimates suggest a resource of some 1.2 million ounces of gold and half a million tonnes of copper.

Meanwhile, Anglo American and Highlands Pacific are continuing exploration activity in their joint venture in the Star Mountains in West Sepik Province, north of the Ok Tedi copper-gold mine. 

New Act

If there’s one key issue outstanding for miners, it is the proposed new Mining Act. Despite a lengthy drafting process, industry still has many major outstanding issues with the current draft.

Anderson says what PNG needs is ‘a continuation of our successful internationally competitive and stable legal, fiscal and regulatory regime so that benefits such as royalties, employment, education and training among others are maintained and that there is continuous growth in both the mining and petroleum sectors.’

The 14th Papua New Guinea Mining and Petroleum Investment Conference will be held at the Hilton Hotel, Sydney from 5 to 7 December. 

1 Comment

Filed under Exploration, Financial returns, Papua New Guinea

Benefit sharing remains a great challenge


Cyril Gare | PNG Blogs | 17 October 2016

Resource development, ownership, and fair and equal sharing of benefits accrued from development projects such as mining and oil and gas remain a biggest challenge yet for Papua New Guinea 41 years on as an Independent country.

And the people of Londolovit on Lihir island, New Ireland province are among one such group of resource owners who are still searching for a correct matrix to balance the scale.

They own the traditional Londolovit river where Newcrest Mining Limited (NML) operator of the Lihir Gold Limited (LGL) extracts water for its operations since 1995.

Their fight is three fold between LMALA (Lihir Mining Area Landowners Association) who are owners of the “gold”, LGL, and State.

Their issues have been to:

  • get LMALA to acknowledge them as “water” resource owners and remit adequate benefit as possible under the Integrated Benefit Package (IBP) of the Lihir mine Agreement which stand is justified on the premise that water is fundamental in gold processing without water there will be no gold;
  • LGL to acknowledge and sign a new water use and impact agreement with them as the current water impact agreement was obsolete since it was first created in 1998 and does not include payment for water use except environment impact; and
  • State to acknowledge them as original and traditional owners of the Londolovit river and not State as stipulated in the Environment Act 2000 so that State to create a separate facility (trust account) for them to share with State all monies paid to State by LGL as issuer of water permit and “owner” (in their stead) of Londolovit river. 

It has been four years since the search for answers began. Delegation after delegation and costly trips between Lihir and Port Moresby were taken only to become a “football” kicked here and there between MRA (Mineral Resources Authority) and CEPA (Conservation and Environment Protection Authority) each shrugging off liability and responsibility alike over the Londolovit water resource owners’ issue.

It was in February this year after LGL refused to become a party in a new proposed Londolovit river water use and impact agreement that prompted the Office of the Chief Secretary Isaac Lupari (Office of the Prime Minister and National Executive Council) to show some sign of interest and intervention.

Directions were issued to CEPA to re-look at the issues of the Londolovit community. This also prompted the Minister for Environment, Conservation and Climate, Hon. John Pundari to intervene and getting CEPA off its comfort zone at the Beemobile building at Gordons.

LGL had refused to become a party to sign on a new proposed water use and impact agreement that will supersede the obsolete Supplementary Agreement of 1998 which only cater for a minimal payment of K300,000 per annum for environment impacts on their traditional Londolovit river where LGL has a weir which extracts water for its mining operations.

The creation of the Londolovit Sagomana Association (LSA) through the Investment Promotion Authority (IPA) on 16th February, 2016 was a breath of relief and new lease of energy and confidence to further pursue their long standing water fight.

On the 09th September, 2016, LSA Chairperson, Ms. Roselyne Arau led a small delegation to Port Moresby and held talk with Minister Pundari.

Among others, the K113 million claim against LGL for water extraction “over and above” permitted rates were discussed. Failure by State (CEPA) to effectively regulate and monitor water extraction by LGL according to the conditions of the water permit was also discussed with the view for State to admit liability for negligence.

The good Minister agreed to look into these outstanding issues and sort these issues before Christmas out once and for all. Prior to doing so, he arranged for an advance team led by CEPA’s Deputy Managing Director, Mr. Dilu Muguwa to travel to Lihir for fact finding and for a report to be presented to him within two weeks.

The advance team travelled to Lihir on October 11, met with LSA on October 12 and went through a total of nine (9) terms of references (OR) set by Environment Ministry and returned to Port Moresby on October 13.

As a State Team comprising officers from State Solicitor, MRA, CEPA, and department of PM and NEC is set to follow suit on October 24, the people of Londolovit were grateful of Minister Pundari and Chief Secretary, Ambassador Isaac Lupari for their interventions and are hoping for better soon.

In its six page written submission to CEPA’s advance team, LSA stated among other issues and demands that: “Water and Gold are two different resources. Under the existing benefit sharing arrangements such as the Integrated Benefit Package (IBP) only “gold” resource owners through LMALA tend to enjoy all the benefits compared to “water” resource owners and rest of the impacted surrounding communities on Lihir island. Although water remains the single most important resource needed to process gold, this fact has been long overlooked since the start of the mine in 1995/1997.

“The IBP is subject to jurisdiction of the LMALA management which experience so far has proven that LMALA was only bias and lack the virtue of ‘equal and fair sharing’ of benefits to the water supplying community of Londolovit and or other impacted surrounding communities. Perhaps this is to do with the mineral resource development regime in the country where “gold” resource owners are given more recognition by State and developers than “water” resource owners in mining activity areas in PNG.

“Poor management resulting in recent investigations (Business Audit) into the affairs of LMALA can only further confirm the general feeling of mistrust for LMALA management and its executives among the impacted communities on Lihir island.

“What we want:  The formation of the Londolovit Sagomana Association (LSA) which was registered with the Investment Promotion Authority on the 16th February, 2016 was an affirmation for succession away from the umbrella of LMALA who has failed to adequately stand for and in the interest of the Londolovit water resource owners since 1997.

Among others, LSA’s principal objectives in the Association’s Constitution are simply straight to the point: 

  • to conduct, encourage, promote, advance and administer development aspirations of the Londolovit people from the proceeds of Londolovit River Weir where the Lihir Gold Limited (LGL) is extracting water from for its mine operations; and 
  • to act, at all times, on behalf of and in the interest of the Members and the Association as a mining impact community. 
  • In a letter dated 14th March, 2016 to Coordinator of the Lihir Agreement Review (LAR) committee, LSA blatantly stated: “We intend to pursue our own interest as “water” resource owners in the Lihir gold project for a separate benefit package of our own. We want to have nothing to do with LMALA and the LAR process. 
  • LMALA and LGL to honour all outstanding benefits owed to Londolovit under IBP. 
  • MRA (Mining Warden) and LGL to review and honour all outstanding benefits/compensation owed to Londolovit under LMP 34 and ME 73 tenements. 
  • Option A – State to create a trust account where payments receive from LGL for the “use” of water is shared with Londolovit as traditional (original) owners of the water. The metamorphosis ‘State’ is supposed to be “custodian” to properties of traditional and customary landowners and not itself “owner”. The sacrosanctity of customary/traditional properties rights is in this way lost and stolen by this beast forever. 
  • Option B – State to intervene and impose on the LGL to review its decision why it refused to become a party to the new proposed water agreement by LSA (Londolovit). This proposed water agreement stemmed from Recommendation # 4 of the CEPA sanctioned Londolovit River Environmental Audit Report –August 2015 by Moroka Pty Ltd. 
  • Option C – All State, LGL and LSA to become parties to an all new proposed water agreement over the Londolovit river for its use, impact, and benefit sharing with the view to reaching a long lasting win win situation for all parties in future. 
  • State and LGL to resolve to an amicable outcome and pay K113 million as compensation to the Londolovit people for over extraction of their water illegally.
  • LMALA and LGL to honour all outstanding benefits owed to Londolovit under IBP. 
  • Copy of the Business Development Audit Report be provided to us forthwith for perusal and record.
  • Until Londolovit is more involved and participating from the benefits from the Lihir mining operation Lihir Agreement Review (LAR) is insignificant to the Londolovit water resource owners at its current stage. 

At the time of meeting (October 12) in Lihir, the LAR process attended by a State Team, LMALA, and LGL was in progress in Kavieng without LSA attendance after request by LAR coordination team was turned down.

Leave a comment

Filed under Financial returns, Papua New Guinea

Two un-named mining companies hired Chinese to survey New Britain Trench

The Shangai is reporting two un-named mining companies operating in PNG hired a Chinese reaserch vessel

Chinese media is reporting two un-named mining companies hired a Chinese research vessel to survey the New Britain Trench. Lihir, Porgera and Hidden Valley are PNG’s largest gold mines.

Golden task for vessel’s maiden trip

Echo Yang | Shanghai Daily | September 24, 2016

CHINA’S first privately funded oceanic research vessel “Zhang Jian” returned to Shanghai yesterday after its maiden voyage off the coast of Papua New Guinea in the Pacific Ocean.

Hired by two mining companies in Papua New Guinea, the ship carried out surveys offshore near two gold mines to assess the influence of mining operations on the environment.

“Zhang Jian,” the mother ship of China’s deep-diving submersible “Rainbow Fish,” docks in Shanghai yesterday after its maiden voyage to the New Britain Trench in the Pacific Ocean. — Dong Jun

“Zhang Jian,” the mother ship of China’s deep-diving submersible “Rainbow Fish,” docks in Shanghai yesterday after its maiden voyage to the New Britain Trench in the Pacific Ocean. — Dong Jun

The ship also tested scientific equipment during the 73-day voyage, said Wu Xin, chairman of Shanghai Rainbow Fish Ocean Technology Co, the ship’s operation company.

Samples of ocean water and marine macro organisms were collected at the 8,000-meter-deep New Britain Trench, testing the ship’s capability in oceanic research to prepare for future missions aiming at depths of more than 10,000 meters.

The ship also carried 15 Chinese deep sea exploration enthusiasts, each paying 100,000 yuan (US$15,000).


Filed under Environmental impact, Exploration, Papua New Guinea

Harmony buys Hidden Valley from Newcrest for $1

Local communities and government shut out as international mining companies play with ownership of PNG land and resources

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

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

Esmarie Swanepoel | Mining Weekly | 19 September 2016

Australian gold miner Newcrest Mining has agreed to sell its half of the Hidden Valley mine, in Papua New Guinea, to its South African joint venture (JV) partner Harmony Gold.

Harmony will buy the 50% interest in the Hidden Valley JV for a cash consideration of $1, the companies announced on Monday. 

A“Having completed the strategic review of Hidden Valley, Newcrest determined that the best outcome was to exit the operation and focus our attention on safe, profitable growth at our other assets,” said Newcrest MD and CEO Sandeep Biswas said in a statement.

Harmony CEO Peter Steenkamp said that the acquisition of the Hidden Valley mine was aligned with the South Africa-based group’s overall aspiration to increase its yearly production profile to 1.5-million ounces within three years.

“We believe that Hidden Valley has the potential to contribute approximately 180 000 oz/y of gold to Harmony’s production profile at an all-in sustaining cost of less than $950/oz within the next three years,” he said.

At June 30 2016, the Hidden Valley mine had an estimated mineral reserve of 1.4-million ounces of gold at 1.6 g/t and 27-million ounces of silver at 31 /t, resulting in total gold equivalent ounces of 1.8-million ounces at 2 g/t. The estimated mineral resource includes four-million ounces of gold at 1.6 g/t and 73-million ounces of silver at 29 g/t.

Harmony stated that mining the stage 5 and 6 cutback would extend the current mine life by seven years and require an initial capital investment of about $180-million.

Harmony will assume all liabilities and expenses related to the mine, including all closure, rehabilitation and remediation obligations, effective from August. Newcrest said that it would reverse the $35-million provision for rehabilitation obligations for Hidden Valley, which it made at the end of the financial year in June.

As part of the transaction, Newcrest has funded its Hidden Valley vehicle Newcrest PNG 1 with $22.5-million, which represents the company’s one-off contribution towards the future Hidden Valley closure liability partially offset by the option value of the possible future cash flows of the asset.

Harmony has made commitments to Newcrest in relation to the standard of closure to be undertaken at the mine.

In addition to its 50% shareholding in Hidden Valley, Newcrest has also signed an agreement to sell its 50% interest in certain regional exploration tenements adjacent to Hidden Valley, to Harmony.

The completion of the sale is subject to South African regulatory approvals.

Harmony and Newcrest will continue to work together on the Wafi-Golpu project, also in Papua New Guinea.

“Acquiring 100% of the Hidden Valley mine and its surrounding exploration tenements meet our acquisition criteria. After the initial investment phase Hidden Valley will generate strong free cash flows, which could be applied to the development of the Wafi-Golpu project and our exciting exploration portfolio in Papua New Guinea,” Steenkamp added. 

1 Comment

Filed under Financial returns, Papua New Guinea

Newcrest dumps Hidden Valley mine, Harmony Gold takes control

Hidden Valley

Peter Wells | Financial Times | 19 September 2016

Harmony Gold will take full control of the Hidden Valley mine in Papua New Guinea after Newcrest Mining, the Australian gold producer, said it was selling its half of the joint venture.

Newcrest said in a statement to the ASX today it was selling its share in the 50/50 Hidden Valley joint venture to its South African partner. Harmony will now assume all liabilities and expenses related to the JV and mine, including rehabilitation costs and remediation obligations with effect from August 31 this year.

As a result of the exit, Newcrest will recognise a loss on the sale of approximately $10m. The miner also said that as part of the transaction and to help cover a one-off contribution towards Hidden Valley’s future closure liability it was funding its subsidiary which held the stake in the JV with $22.5m

Sandeep Biswas, Newcrest’s CEO, said:

Having completed the strategic review of Hidden Valley, Newcrest determined that the best outcome was to exit the operation and focus our attention on safe profitable growth at our other assets.

Located 300km north-west of Papua New Guinea’s capital, Port Moresby, Hidden Valley is an open pit gold and silver mine. Production commenced in September 2010 and in the 12 months to June 30 the mine produced 145,132 ounces of gold (on a 100 per cent basis).

Leave a comment

Filed under Financial returns, Papua New Guinea

Govt queries amendments to Newcrest water permit on mining island


The weir at Londolovit River where Newcrest Mining extracts water from.

PNG Loop | September 12, 2016

The Government has expressed grave concern over “sudden and unknown amendments” made to a water use permit currently held by Newcrest Mining Limited (NML), operator of the Lihir gold mine on Aniolam Island, New Ireland province.

In a letter dated Aug 23, 2016, Chief Secretary Isaac Lupari wrote to the Conservation & Environment Protection Authority (CEPA) Managing Director, Gunther Joku, asking why there were “sudden and unknown amendments to the Water Use Permit (WUP) that allows Lihir Gold Ltd to extract 4,400 cubic metres of water per hour…” instead of the permitted rate of 3,800 cubic metres per hour.  

CEPA is tasked with the job of issuing various water usage and water disposal permits to major resource projects in the country, including mining companies like Lihir Gold Ltd.

According to CEPA records, these amendment were fixed on Sep 26, 2014, just months after the Londolovit community instigated an environmental audit (investigation).

The Chief Secretary said the Londolovit people, who are traditional owners of Londolovit River, where the mine extracts water from for its operations, have lodged a complaint at his Office and are claiming K113 million in compensation for water extracted “over and above” permitted rates.

“However, they (Londolovit people) demonstrated dissatisfaction in a separate letter and expressed disappointment that CEPA, as the State Agency responsible, has not perused the matter appropriately as per their initial demand.

“They have been initially demanding compensation for non-permitted extraction periods and durations which means the river has been over extracted beyond the permitted extraction volume (38,016,000 cubic metres per year) that had consequential negative impacts on the livelihood of the people and ecological environment.

“It was noted the permitted low flow level is 200 litres per second however, to date, it has been below the permitted low flow level,” said Lupari.

“Environment Permit requires that a minimum flow level of 200 litres per second be maintained in the Londolovit river weir. The Environment Audit Report confirms and identifies instances of the breach of low flow compliance (from April 2000 to April 2015) that shows less than 200 litres per second.

“Sudden and unknown amendments to the Water Use Permit (WUP) that allows LGL to extract 4,400 cubic metres of water per hour is the principal cause of the negative impacts.

“As the State Authority responsible for such matters, you are therefore requested to assess the situation and provide an update that can be deliberated to avoid such recurrence on the same matter in future.”

Leave a comment

Filed under Environmental impact, Papua New Guinea