Self interested foreign mining industry threatens and bullies new MPs

Peter Aitsi addresses the new MPs

Proposed amendments must not affect revenue: Chamber

Cedric Patjole | PNG Loop | August 20, 2017

Members of Parliament have been informed that proposed amendments to the mining act must not affect investors’ confidence in the country.

PNG country manager for Newcrest Mining Limited and vice-president of the PNG Chamber of Mining and Petroleum, Peter Aitsi, recently told new MPs that regulatory frameworks that are detrimental to investment will have a direct impact on revenue streams for the country.

The comments were made during the National Parliament Induction Programme.

Speaking to recently elected MPs, Aitsi said they needed to be aware of the delicate correlation between PNG remaining an investment destination as well as regulations introduced for the country.

He said this when stressing how signi cant revenue streams from the mining sector contributed to the country’s purse.

“As new members of parliament, you have to be very aware of that sensitive relationship between ensuring that PNG remains an attractive investment destination, and the aspirations of our nation in terms of our legal frameworks that we develop.

“Because a change that is detrimental to investment will have a direct impact in those revenue streams. So you need to be very much aware of that,” said Aitsi.

Aitsi’s comments come in light of the proposed amendments to the Mining Act which the Chamber has continually emphasised must not scare investors away.

To drive home the importance of the mining sector, Aitsi revealed that the industry contributed 10 percent to the country’s total revenue, with personal income tax (PIT) the major contributor with just over 20 percent.

He said so not only did the state receive revenue through mineral production tax and dividends, but through employment from PIT.

“This means we need to sustain employment in order to receive the kind of revenue to look after our country and growing demand.

“What we’re promoting in terms of our regulatory framework, our fiscal regime and our regulatory must be attractive to global market,” Aitsi said.

Lihir to get Newcrest on target

An overall view of the Cadia mine in Orange, NSW.

Paul Garvey | The Australian | 25 July 2017

For much of its recent history, Newcrest Mining has been relying on its Cadia mine in NSW to make up for the problems at its Lihir mine in Papua New Guinea. Now, the roles are being reversed.

With Cadia out of action ­following an earthquake earlier this year, it was a record quarter from the oft-maligned Lihir that helped the Melbourne-based miner reach its annual production guidance.

Lihir produced 276,230 ounces of gold during the June quarter, up 20.3 per cent for the period in what was a record quarter for the operation.

The strong performance of Lihir — which had historically been the cause of several operational headaches during its early years under Newcrest ownership — helped make up for the sharp decrease in output at Cadia, which was hit by an earthquake in mid-April.

One of two panel caves at Cadia has since restarted production, with the outstanding panel scheduled to come back into operation during the ­September quarter.

The unexpected outage and the cost of remediation work at Cadia will likely weigh on Newcrest’s earnings when it posts it full-year result next month, with the costs associated with the ­incident likely to show up as an exceptional item in its accounts.

Newcrest managing director Sandeep Biswas said the record numbers out of Lihir reflected the “relentless drive for improvement” at the mine.

“Given the disruption to ­production at Cadia due to the seismic event, the overall ­performance this quarter was ­remarkable and demonstrates the resilience of Newcrest’s ­assets,” Mr Biswas said.

Newcrest’s total output for the quarter came in at 551,815 ounces of gold and 12,968 tonnes of ­copper, down from 598,602 ­ounces of gold and 22,074 tonnes of ­copper in the March quarter.

The outage at Cadia, which has historically been Newcrest’s highest-margin mine, meant the company’s all-in sustaining cost margin fell to $US360 an ounce during the June quarter, down from $US521 per ounce in the ­previous three months.

RBC Capital Markets analyst Paul Hissey said that while he ­expected the Cadia incident to affect Newcrest’s upcoming results, the company had been able to limit the damage with improved output from its other key mines.

“While events at Cadia appear largely beyond Newcrest’s control, this result shows that the company has been able to move other levers to broadly mitigate the impact,” he said.

Brokerage Goldman Sachs says the cost guidance in the full year results will be a key driver of sentiment towards Newcrest.

On the exploration front, Newcrest revealed it had applied for 40 exploration tenements in Ecuador, which is emerging as a new gold exploration hotspot. Newcrest has already entered Ecuador through its investment in SolGold, whose Cascabel copper-gold discovery is shaping up as particularly promising.

Newcrest spent another $US40 million on a further 4.5 per cent stake in SolGold during the quarter, taking its interest in the London and Canadian-listed group to 14.54 per cent.

Shares in Newcrest closed 18c, or 0.9 per cent, higher at $19.76.

Harmony Gold achieves fatality free quarter in SA and Papua New Guinea

Harmony Gold Mining’s Kusasalethu mine in South Africa

If a fatality free quarter is a ‘milestone’, how many deaths are normally recorded?

Harmony Gold Mining has announced that its South African and Papua New Guinean operations achieved a milestone fatality free quarter during the June 2017 quarter.

Mining Review Africa | 14 July 2017

Harmony gold’s gold production for the 30 June 2017 financial year is estimated to be 1.088 million oz, which exceeds production guidance of 1.05 million oz. Underground recovered grade increased for a fifth consecutive year to 5.07 g/t.

“We will continue to focus on increasing cash margins through safe, predictable and profitable production” says Peter Steenkamp, CEO of Harmony.

Harmony will announce its operating and financial results for the year ended 30 June, 2017 on Thursday 17 August 2017, during a live presentation at the Hilton Hotel, Sandton, at 09h00 South African time.

In October last year Harmony Gold completed the acquisition of Hidden Valley mine in Papua New Guinea.

The Hidden Valley mine is an open pit gold and silver mine, jointly owned and managed as part of the joint venture between Harmony and Newcrest Mining.

The mine is situated in the highly prospective area of the Morobe province in Papua New Guinea, some 210 km northwest of Port Moresby.

The major gold and silver deposits of the Morobe goldfield and Hidden Valley are hosted in the Wau Graben.

The Hidden Valley-Kaveroi and Hamata pits, located approximately 6 km apart, are in operation.

Ore mined is also treated at the Hidden Valley processing plant.

How resource companies exploit a corrupt and dysfunctional government

There has been a barrage of media recently about mining companies teaming up with a range of parters to deliver health-care and other services direct to the community.

Newcrest Mining and the Australian government have announced a partnership to improve maternal health, Exxon-Mobil is partnering the Cancer Foundation and The Voice, Barrick Gold is delivering agriculture training in Porgera.

Praise be to the resource companies, willing and able to step in where government fails its people – and no matter the role these same companies play in causing the very diseases, illnesses and other problems they are so happy to patch up with their band-aid PR!

But there is an even more sinister side to these good news stories that further illustrates how mining and other resource companies feed off a corrupt and dysfunctional government.

If government was doing its job and delivering decent basic services to the population, mining and resource companies would not have the opportunity to appear as ‘knights in shining armour’ the good news stories would disappear and, most importantly, customary landowners would not feel compelled to give away their land in the desperate hope that mining and logging companies might provide some basic services.

Resource companies are able to thrive in PNG because of, not despite, a corrupt and dysfunctional government. They rely on bad governance to open the doors to what they most desire – land and the resources it contains.

No matter the environmental and community destruction, their logging and mining cause, no matter the deaths, the violence against women, the unwanted pregnancies, the rape and prostitution, the pollution of rivers and loss of sustainable livelihoods when they can parade their social conscience in the media and have us all believe they are our saviours – just as long as we continue to give them what is most precious to us, OUR LAND!

Compensation demand for Lihir airport land use

The Lihir gold mine in Papua New Guinea’s New Ireland Province. Photo: Supplied/ Newcrest Mining Limited

Radio New Zealand | 2 June 2017

Landowners on Lihir in Papua New Guinea’s New Ireland province are threatening to close the island’s airport if their demand for compensation is not met.

Operation of the Lihir gold mine, which is run by Australian company Newcrest, are dependent on the small Kunaye airport, known also as Londolovit.

Nimarmar Local Level Government Council Media Officer, Tony Sapan said that landowners were frustrated that the mine had operated for over twenty years without any formal compensation for use of their land.

He said the landowners wanted $US900 million or $K3 billion, in compensation.

“They’ve played around with their calculations and they think that’s what the compensation outstanding is worth. And then they can come up with a future for the continued use of that land where the Kunaye airport stands,” said Tony Sapan.

Despite the existence of memorandums of agreement between the provincial government and various local stakeholders for operation of the mine, there is no formal agreement between landowners for use of the airport.

“The airport physically supplies the mine. And there is no such agreement. That is what the landowners are up in arms about,” he said.

The landowners earlier gave notice of their demands in April and have been in discussions with the mine owners, the government and the Mineral Resources Authority.

According to Mr Sapan, the landowners were planning for a meeting next Wednesday, where it was hoped a representative of the mining company could be present for discusssions.

He said the landowners were trying to exhaust negotiation options before carrying out their threat.

“At the last resort, I’m sure, they would want to do that,” Mr Sapan explained.

“But they are talking to the mine, they are talking to the government, they are talking to the Mineral Resources Authority that handles mines in Papua New Guinea. So they are trying their best to do this under the law.”

Landowners shutdown Lihir airport

Gregory Moses | NBC News via PNGFacts | 29 May 2017

Landowners on Lihir, have threaten to shut down the Londolovit Airport today, over outstanding compensation demand of about K3bn, for more than 20 years.

Nimarmar Local Level Government Council Media Officer Tony Sapan, says the closure will affect the Lihir Mine’s Fly In Fly Out services, medicinal supply to the island, businesses, banks and emergencies if they occur during the closure.

“Ol papa giraun ting olsem company has used it long enough and they need to be compensated for it.

“Imas igat compensation agreement. The company has forgone meetings ol ibin plenim long toktok long dispela compensation.

“Na nau, failure blo ol ibai affectim mine, na the whole Lihir community.

“Ol (landowners) ibai planim gorgor long airport tomorrow.”(Monday 29.05)

Mr Sapan also says the landowners have set the April 15 as the deadline to talk about their compensation demand with the company, but this has lapsed and they now have opted to shut down the airport for an indefinite period.

New Ireland refuses to sign Simberi MOA approved by NEC

State Solicitor’s office accused of dishonesty 

Sharon Lowa | Post Courier | May 22, 2017

The New Ireland provincial government has refused to sign the Simberi Gold Mine memorandum of agreement recently approved by the National Executive Council (NEC) in April.

Deputy governor and chairman for natural resources in the provincial executive council Ambrose Silul said they are sick and tired of being misled by the state team negotiating the new MoA for both Simberi and Lihir Gold Mines.

Mr Silul insists that the state keep its word, and until it does, the New Ireland government will not sign any new MoA.

The New Ireland team had been renegotiating the Simberi MoA for over four years and a provisional MoA had been agreed in 2013, but that it was conditional on approval by the PEC.

“Our team wrote to the state team and Mineral Resources Authority (MRA) on October 6, 2013 that the draft MoA must include the provisions approved by the New Ireland PEC on May 21, 2013.

“That includes increasing the rate of royalties from two percent (FOB) annual revenues to 10 percent, as well as similar increases in the special support grant and tax credit scheme,” Mr Silul said.

Mr Silul further stated that the state solicitor’s office agreed that the changes the New Ireland government wanted made to the MoA would be included in the draft to go to the NEC.

He said that in a meeting in April 2015 in Kavieng, the state solicitor agreed they would include New Ireland’s provisions in both the Lihir and Simberi MoAs and allow the NEC to make a final decision.

“All we are asking is that NEC – and not the state bureaucrats – decide on the merits of our suggestions. Instead, we have a bunch of bureaucrats making decisions that should be made by NEC.”

“We will not accept this dishonesty on the part of the state team,” Mr Silul said.

Mr Silul is calling on the mining minister to conduct an immediate investigation into this affair.

The MRA mining coordinators and the state solicitor’s office deliberately and willfully misled the NEC by submitting an MoA that did not include the provisions they promised would be included.