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

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

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).

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

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. 

Newcrest dumps Hidden Valley mine, Harmony Gold takes control

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).

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.”

PNG’s biggest ever tailings dam for Frieda river mine

A massive wave of toxic mud swept away the lives of locals in Brazil when a BHP tailings dam failed recently. Photo: Romerito Pontes

Gedion Timothy | The National aka The Loggers Times | September 6, 2016
IT will take 12 months or longer to complete the technical assessments of two mining lease applications for Frieda in East Sepik and Wafi-Golpu in Morobe, according to the Mineral Resource Authority.
Managing director Philip Samar said both mines provided their own development plans.
PanAust Limited, the leader explorer and developer of the multi-billion kina Frieda copper-gold project in West Sepik lodged a special mining lease application for the project with the Mineral Resource Authority in June.
Likewise, the Wafi-Golpu Joint Venture lodged an application on August 25 for a similar lease.
The MRA is two months into the technical assessment of the Frieda proposal for development.
The authority has circulated within government the relevant sections on business development, equity and training to the appropriate government agencies for their review. These will then be collated by the MRA for submission to Cabinet for approval.
“The Wafi assessment is through the preliminary stages and should pick up within the next three months,” Samar said.
“It is anticipated that all mining approvals should be ready in the next 12 months. The 12 months (could be more) is the time it will take MRA to complete its technical assessments of the two proposals for the development of both projects.”
He said the MRA would prepare a submission to Cabinet which the Mining Minister would table in Parliament.
“The SML is not granted until and unless the Environment Permit by Conservation and Environment Protection Authority (CEPA) has been approved.
“Frieda will build Papua New Guinea’s largest land tailings storage facility (tailings dam) to ensure tailings are not disposed into the Sepik River over the life of the mine,” he said.
“This tailings facility will also double up as a hydro dam for purposes of generating electricity for operating the mine.
“The copper concentrate is shipped down the Sepik to Wewak for export to market.”
Wafi is a large long-life underground mine using a similar sized land tailings storage facility with an extensive pipeline infrastructure that delivers the copper concentrate from site to the port of Lae, Samar said.

Harmony and Newcrest submit application for Wafi-Golpu mining lease

Harmony and Newcrest already operate the Hidden Valley mine which is expected to close soon

Allan Seccombe  | Business Day Live | 25 August 2016

HARMONY Gold and its Australian partner Newcrest Mining have submitted an application for a special mining lease for its copper and gold Wafi-Golpu project in Papua New Guinea.

Harmony and Newcrest are equal partners in the Golpu deposit, which has a resource of 824-million tonnes containing 1.05% copper, 0.7 grams per tonne of gold and 1.25 grams a tonne of silver. It also contains 90 parts per million of molybdenum, which is used in various steel applications and as an alloy.

Harmony CEO Peter Steenkamp said recently the partners had pencilled in a two-year wait to secure the lease.

The partners are conducting further work to optimise the costs of bringing Golpu into production, giving Papua New Guinea its largest underground mine, Harmony said on Thursday.

“Further project development will be subject to the granting of the special mining lease, the obtaining of all necessary permits, approvals and agreements, and, ultimately, approval by the boards of both Harmony and Newcrest,” it said.

The Papua New Guinea government has the right to buy a 30% stake in the Golpu project at any time up to the start of mining, which would reduce the partners’ stakes to 35% each, Newcrest said on Thursday.

Harmony wants to grow its gold production to 1.5-million ounces in the next three years, from 1-million ounces this year, to give it the mass to take on the funding of the Golpu project, Steenkamp said.

Harmony has put three South African mines into harvest mode, stopping mining at the operations over the next three to five years and taking more than 200,000oz out of its production profile, leaving it too small to tackle the project, he said.

Government about to amend draft Mining Law to suit foreign miners

The government has delayed presenting the revised Mining Act to Parliament under heavy pressure from the foreign owned mining industry.

The revised Act is now being further amended to suit the likes of Barrick Gold, MCC, Harmony Gold, Newcrest Mining and, of course, Guandong Rising Assets Management (GRAM).

It is not hard to join the dots from the two stories below in today’s Post Courier newspaper…

Cabinet to gazette revised Mining Act
Gorethy Kenneth | Post Courier | August 10,2016
CABINET yesterday addressed the issue of getting the revised Mining Act 1992 approved which was reported in the newspapers yesterday.
Prime Minister Peter O’Neill announced in Parliament yesterday that there are plans to appoint a senior ministerial committee that would discuss with the stakeholders on some of the concerns that are being raised on this issue.
But Mr O’Neill assured that the particular submission to review the Mining Act 1992 is now before Cabinet.
“Cabinet has already started deliberating on this matter and of course again we have received the representations from the PNG Chamber of Mines and Petroleum raising some concerns about the mining proposal put forward by our people,” he said.
He was responding to questions raised by Chuave MP Wera Mori citing newspaper reports stating that Mining Secretary Shadrach Himata blamed the Chamber of Mines and Petroleum for being the stumbling block to getting the revised legislation approved.
But O’Neill defended that. “I want to assure the good Member that we will communicate with the industry, in fact the matter was discussed in Cabinet this morning but we have also deferred the discussions to next week because I want to put a senior Ministerial Committee that would discuss with the stakeholders on some of the concerns that are being raised. We have to iron out these concerns before we bring in the legislation.”
“This review has been going on since 2006, that was the first review that was conducted and it was stopped in 2009,” O’Neill said.
“I want to assure you that we are looking at this in a diligent manner, we want to be fair to everybody including investors Mr Speaker, without the investors large scale mines like Frieda and Wafi cannot be developed.”

Chamber wants mining law conducive to investment
Post Courier | August 10, 2016
The PNG Chamber of Mines and Petroleum says it wants a modern, internationally competitive mining legislation to underpin a world class industry and attract continued investments into the country.
The Chamber was responding to comments by secretary of the Department of Mineral Policy and Geo-hazard Management (DMPGM) Shadrack Himata who had accused it of being a blockage in getting the revised law approved.
In a statement released yesterday the Chamber said it and industry members had been involved in a lengthy discussion process with DMPGM in which they had made contributions drawing from the experience of its members operating in various countries.
Further, where required seeking independent and comparative analysis of the proposed changes to test its potential impact on the industry and the flow on impact to the overall economy.
“It is on the basis of those comparisons that the Chamber highlight edits significant concerns with the changes being proposed for the Mining Act.”
The Chamber said that the proposed changes to the Mining Act would cost Papua New Guinea billions in State revenue, millions of kina in landowner and stakeholder benefits, thousands of jobs and will also have drastic impacts on social development such as health, education and training, impact the growth of Small to Medium Enterprises (SMEs) and landowner businesses by driving away much needed direct foreign investment.
It said planned future projects like the Frieda River, and the Wafi-Golpu projects will also be impacted by the proposed Mining Act, rendering them economically unviable.
The Chamber said despite repeatedly raising these issues and making detailed explanations of their impacts, the DMPGM was not able or not willing to fully consider the impacts.
It also believes the proposed Mining Act will severely impact the attractiveness of PNG as a mineral exploration and development destination with these impacts to be felt throughout the PNG economy in the short, medium and long term.
“As the PNG economy is experiencing, as we go through weak economic conditions, the importance of maintaining large scale economic projects and the investments they bring becomes paramount.