Tag Archives: Newcrest Mining

How do miners dispose of their waste in the sea?

MCC’s Basamuk Refinery in Madang pumps waste from the Ramu mine directly into the ocean

Melanie Burton | Reuters | October 11, 2019

Sea disposal of mining waste could spread as Indonesia weighs adopting the technique for new nickel projects, as Papua New Guinea is doing for a gold mine proposed by Australia’s Newcrest Mining.

The management of mining waste has drawn attention since two dam disasters in Brazil, and after red mud spilled into Papua New Guinea’s Basamuk Bay from Ramu Nickel’s operations in August.

An expert in chemical contamination has called test results from the Ramu Nickel spill “alarming,” media said this week. That spill resulted from an operational failure, however, rather than an issue with tailings management.

Proponents say deep sea tailings placement, which pipes unwanted pulverized rock into the sea, is cheaper and less harmful, especially on tropical islands where earthquakes or heavy rain limit storage on land, near deep sea trenches.

Critics say the impact of such marine disposal is poorly understood.

Fewer than 20 of the world’s 2,500 mines use the method to dispose of tailings waste, comprising rock, microscopic unwanted metals and traces of processing agents, such as cyanide.

Here are answers to some common questions, drawn from two research papers by Australia’s science bureau, the CSIRO.

WHAT IS DEEP SEA TAILINGS PLACEMENT?

Mining waste goes down a pipe 100 m (328 ft) or more offshore designed to sink rapidly to even greater depths, such as those off the continental shelf. The waste settles on parts of the ocean floor believed to be home to few creatures.

That keeps the waste out of the ocean’s most productive surface layer, where sunlight drives photosynthesis, and sealife is most abundant.

After the mine has closed, advocates say the deposit area will gradually be recolonised by the marine life and bacteria that were there before, as they now move back from surrounding areas.

WHEN WAS IT FIRST USED?

The first commercial use of deep sea tailings placement was at the Island Copper mine on Canada’s Vancouver Island in 1971 to 1996. Industry regarded that as a success, though it was also found to have affected the lake’s biodiversity. Some other early mines, such as Greenland’s Black Angel lead and zinc mine, however, contaminated surrounding water bodies.

WHERE IS DSTP USED NOW?

  • The Lihir gold mine in PNG run by Newcrest Mining. The Melbourne-based miner also proposed DSTP for its Wafi Golpu project with South Africa’s Harmony Gold.
  • The Simberi gold mine operated by Australian miner St. Barbara in PNG’s New Ireland province.
  • The Ramu nickel mine and plant run by Metallurgical Corporation of China in PNG’s Madang Province.
  • Batu Hijau, Indonesia’s second largest copper mine, run by PT Amman Mineral Nusa Tenggara.
  • Australia’s Kingston Resources is considering reopening PNG’s Misima gold mine and using DSTP.

WHAT ARE THE ISSUES?

ECOLOGICAL DIVERSITY: A quarter of the world’s coral reefs faced rising exposure to sediments and nutrients, boosting stress from climate change and ocean acidification, Australia’s science agency said in 2016. Greater sediment could smother coral or choke off sunlight or oxygen, it said.

SUSPENSION: Fine dust or metal particles remain suspended in the ocean instead of settling on the sea floor. They can “shear off” in plumes, widely dispersed by ocean currents, and travel between layers of varying salinity or temperature.

The impact on marine life is not fully understood, but coral near the Lihir tailings disposal site suffered a “substantial impact,” according to the paper.

Plankton could be trapped in suspended solids and fine particles could clog the gills of fish, it added.

MIGRATION: Marine animals could carry trace elements of mine waste into the food supply chain after ingesting them and then moving to shallow waters from the deep ocean.

DEEP SEA: Wider use of DTSP could affect deepwater canyons and abyssal or underwater plains that are high in biodiversity, according to the research.

RECOLONISATION: Ocean warming and acidification could hamper efforts to recolonise a DTSP area, it added. (Reporting by Melanie Burton; Editing by Darren Schuettler)

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PNG demands Wafi-Golpu gold stays in-country, urges Newcrest, Harmony talks

Jonathan Barrett | Reuters | September 13, 2019

  • Papua New Guinea to offer duties, taxes concessions in exchange
  • *PNG govt wants to extract more wealth from its resources

Papua New Guinea wants to keep 40% of gold produced from the proposed Wafi-Golpu project, the country’s commerce minister said, creating a potential hurdle to an agreement with co-owners Newcrest Mining and Harmony Gold.

The miners had been hoping to secure a mining lease over the major gold and copper deposit earlier this year, before a change in PNG’s leadership and a shift in minerals policy led to delays.

“We’d like to see Newcrest come to the negotiating table on this,” PNG’s Minister for Commerce and Industry Wera Mori told Reuters in a phone interview late on Thursday.

“They get 60% of the production, we get 40%. If they don’t like it we’ll mine it ourselves – we own the resources.”

Mori said that the government could offer concessions on duties and taxes as part of the negotiations and he said he was confident a deal would be struck.

Newcrest and Harmony each own 50% of Wafi-Golpu, while the PNG government has the right to purchase an equity interest.

The companies were not immediately available to comment. Attempts to reach PNG’s mining minister were unsuccessful.

Located near the port city of Lae, the project is forecast to hit an annual production peak in 2025 of 320,000 ounces of gold and 150,000 tonnes of copper, according to the project website.

The proposed policy changes are part of a push by the South Pacific archipelago to transform its mineral-rich economy amid a perceived lack of benefits flowing from resources projects back to communities.

PNG is also negotiating to take a bigger share of the Porgera gold mine as part of lease-renewal talks with joint venture partners Barrick Gold Corp and Zijin Mining Group.

It has also sought concessions from French giant Total SA over a $13 billion plan to expand gas exports.

The Wafi-Golpu gold would be processed in-country, creating a downstream industry for PNG, Mori said.

Mori told Reuters that PNG wanted to build up its gold bullion reserves, acting as a peg for its kina currency.

PNG’s central bank currently fixes its currency to a narrow U.S. dollar band, propping up the kina’s value while creating a shortage of dollars available in the Pacific nation.

“When the stock market crashes we lose value,” he said.

“But if the stock market crashes and we have gold, the gold price goes up.”

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Wafi-Golpu To Be Delivered Under Marape-Led Govt

FORGET ‘TAKE BACK PNG’ – IT IS BUSINESS AS USUAL UNDER THE MARAPE GOVT

Gorethy Kenneth | Post Courier | September 4, 2019

Prime Minister James Marape announced that the government wants to get the Wafi-Golpu gold mine operational at the soonest.

And the government is already in serious discussions with the Morobe provincial government to resolve issues while it prepares to finalise discussions with developers, Harmony and Newcrest.

Mr Marape told a press conference in Port Moresby yesterday that they want this project to be their legacy as they look at other projects like the Porgera lease that has expired.

He said as the country is going through tough economic times, this project will help boost the country’s economy including others that they are now serious about addressing.

Mr Marape also revealed that the government has given the green light to Total to proceed with the implementation of the Papua gas project, claiming that additional gains have been negotiated for the country under the project agreement.

“As a government, we are finishing this one,” he said, adding: “It is signed by the (former) O’Neill government, (and) we allowing it to go.

“Our government will enter into discussion with Wafi -Golpu and we are bringing to conclusion our issues with the Morobe provincial government.

“Those issues will be brought to conclusion and as whole of government, we will sit in one and we will go into discussion with both Harmony and Newcrest so that is one other project that is looming on the horizon.”

Mr Marape also told the press that the government “is not considering” any more concessions to be given to resource project developers.

“…and as I stated, the existing laws we have in place will not consider anymore concession (to give), but where we will win, as provided for by law, we will win, and where they (developers) win they will win,” he said.

“We are also looking into the Porgera lease that has expired.

“So those announcements will come in due course, as the nation has some big projects on the horizon.

“Not all is looking gloom, although our economy is stressed a little at the moment and our treasurer is going through the numbers and hopefully tomorrow (today) or Thursday he will announce the numbers (as) he has seen (the) possibility of a supplementary budget that we have been talking about all along.

“And that will come in due course but let me inform the country that all is not bad as it seems…we are working on the three or four projects that we have on the horizon and that will bring some economic activity and life into economy and hopefully going 2020 and beyond, we will gain some traction in the economy, and we have started with Wafi-Golpu.”

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Landowners threaten to shut down mine PNG’s Lihir mine

Radio New Zealand | 30 August 2019

Landowners in Papua New Guinea have given an Australian mining company a deadline to reinstate its manager.

The New Ireland landowners have given Newcrest until the 10 September to reinstate Craig Jetson as its executive general manager.

If the company doesn’t do that, villagers say they will shut the mine’s operations on Lihir Island.

Newcrest has appointed Craig Jones to replace Mr Jetson and this has not gone down well with the landowners.

A landowners spokesman, Newman Sana, said they wanted compensation for damage the mine had caused to the environment.

He said that Mr Jetson, who has been on Lihir for two years, had worked well with the landowners in their negotiations with the company.

“If he (Jetson) leaves, we don’t trust and we don’t believe anyone can take up that fight,” Mr Sana explained.

“Even he has challenged our own governor and the mining minister. We are not going to stop fighting until we make that change.

“We are concerned that if Craig goes, if this is not going to work out we are going to shut down the mine.”

Mr Sana said at a meeting last week with mine officials including Mr Jetson, the landowners issued the company with a 21-day notice to reverse its decision to replace Mr Jetson or face a shutdown of its operations.

He said Mr Jetson is the only company executive to reside on Lihir and engage with the community and landowners.

“His removal in the middle of a review of the compensation package for the landowners is a breach of trust,” Mr Sana said.

“Under Craig’s leadership, he has delivered cash profits for the company and I believe his dismissal is to derail a better compensation package for the landowners.”

Mr Sana said Newcrest has been operating in Lihir for almost 20 years and the landowners have suffered.

“But Mr Jetson brought hope. He is respected by all Lihirians not just the affected landowners,” he said.

Mr Sana said the landowners will meet with company officials again next week.

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President Calls For A Fair Share Of Lihir Gold Mine Benefits

Post Courier | August 12, 2019

Newly elected president of Nimamar local level government (LLG) Stanley Tunut has called on the national government to allocate its share of service delivery funds owing over the years.

Mr Tunut, a National Alliance party member unseated deputy governor and incumbent president Ambrose Silul of the People’s Progress Party (PPP).

His election was witnessed by locals who gathered in numbers at the Tumbawinlam House last week Thursday.

He said Lihir island has been deprived of government services despite having the third largest gold mine in the world.

“Over the years, the people of Lihir have not felt the impact of the funds from the national government’s service improvement programs directed to the provincial, district and the local level government,” Mr Tunut said.

But he said that the royalties worth millions paid into the Nimamar local level government have made no impact in the livelihood of the people.

“The first thing I will do is to overhaul how the budget of the Nimamar local level government will revolve to the people of Lihir with the royalties that is directed into the administration.”

He said the budget of the LLG will be well structured to benefit the people rather than the administration consuming the entire internal revenue.

“I intend to make some changes in the administration the budget was delivered in past and make a fresh start,” he said.

“If you visit the entire island on the western and to the eastern tip, you will notice the run down state of infrastructures and road conditions. To get to the western tip of the island will only require four-wheel vehicles to manoeuvre through. School and health infrastructures are wearing to and drug supplies in the aid posts and clinics are inadequate,” Mr Tunut said.

He said only a fraction of the population that reside within the perimeters of the mine site receive benefits from the mining company Newcrest Mine Limited.

Mr Tunut said to look after the affairs of the people of Lihir, there has to be an audit made on the works of the previous administration in order to make a fresh start.

“The people of Lihir do not want any political affiliation but want services to be delivered.”

He said the Nimamar local level government under his leadership will support and work alongside Namatanai member Walter Schnaubelt to deliver projects for his local level government.

He urged all stakeholders, churches and the entire population including the landowners of Lihir Gold Mine to unite because the future of Lihir will depend entirely on them.

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PNG turbulence dampens Newcrest’s bumper gold harvest

Peter Ker | Australian Financial Review |  25 July 2019

Newcrest Mining’s most important growth project is facing indefinite delays on the back of political turbulence, with the miner redeploying staff in the expectation its US$2.8 billion ($4.01 billion) Wafi-Golpu project will be delayed.

The scaling back of work on Wafi-Golpu came as Newcrest’s gold production in the year to 30 June rose to the highest level since fiscal 2011.

 Political unrest in Papua New Guinea has prompted Newcrest to scale back its work on the project, which is located in the highlands of Australia’s northern neighbour.

 Development schedules for the project had always been uncertain, with Newcrest for years telling investors that construction would take 4.75 years beyond the awarding of a special mining lease.

 That special mining lease has continued to be elusive, even after Newcrest dramatically updated its plans for the project in February 2018.

 On Thursday, Newcrest was pessimistic about the chances of progress at Wafi-Golpu any time soon.

 “Recent developments in PNG have resulted in a delay to permitting,” said Newcrest.

 “These developments include a period of internal political contest culminating in the parliament’s election of a new Prime Minister as well as the delay associated with the legal proceedings between the national government and the Morobe provincial government regarding the internal distribution of PNG’s economic interests in the project.”

 Newcrest said those developments had convinced it to “defer and revise” the work program it had planned for the coming year.

 “The project team in Brisbane has been redeployed and reduced in order to mitigate the costs of the delay,” said Newcrest.

 “It is difficult to estimate the duration of this delay.”

 The rise of James Marape to become PNG’s new Prime Minister has raised concerns for some resources companies operating in the nation, with Marape vowing to “take back the economy”.

 “Who says one conglomerate from outside can come and tell me I can’t change the laws for my country,” he said in May.

 “I have every right to tweak and turn resource laws. We are all about maximising resources for our country.”

 Newcrest already operates the Lihir gold mine in PNG, while gold miner St Barbara also operates there.

 Oil Search, Santos and ExxonMobil have gas interests in the country.

 Aside from royalties and taxes, PNG may become an equity investor in Wafi-Golpu, given it has an option to buy up to 30 per cent of the project at a price determined in reference to sunk costs on development of the mine.

 If PNG takes up that option, the respective 50 per cent stakes held by Newcrest and its partner Harmony Gold would fall to 35 per cent.

 The continuing delays in PNG will raise doubts over whether it can be Newcrest’s next major growth project, particularly with the miner close to completing the acquisition of a controlling stake in Imperial Metals Red Chris mine.

 Newcrest produced 2.48 million ounces of gold in the year to 30 June, a 6 per cent improvement on last year.

 It was also Newcrest’s biggest production result since it produced 2.7 million ounces of gold in 2011; the last year before the Mt Rawdon and Cracow mines were divested into what would become Evolution Mining.

 Prices for gold in Australian dollar terms reached a record high of $2049 per ounce in the past month.

 Gold was fetching $2040 per ounce on Thursday, having been bolstered by sliding interest rates and geopolitical tensions between the US, China and Iran.

 UBS had expected Newcrest to produce 2.47 million ounces of gold in the year at an all in sustaining cost of $US740 per ounce.

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Total’s PNG Gas Plan Faces Fresh Test as Deal Changes Proposed

Logo at French oil and gas company Total gas station in Marseille, February 11, 2015. REUTERS/Jean-Paul Pelissier

Stephen Stapczynski | Bloomberg | July 26, 2019

Papua New Guinea’s petroleum minister said he’s completed his review of a recent natural gas agreement with Total SA and will recommend changes, creating a potential hurdle for the delayed $13 billion effort to double the nation’s exports of the fuel.

The potential changes cover both regulatory and commercial terms of the so-called Papua LNG agreement and must be approved by the National Executive Council before submitting them to venture partners, which include Exxon Mobil Corp. and Oil Search Ltd., Kerenga Kua said in an interview Thursday.

Kua said he’ll send his findings as soon as Monday to the council, a top policy making body, and expects a revised agreement with the companies completed within six weeks. In response, Total’s Chief Executive Officer Patrick Pouyanne pushed back against any potential overhaul.

“All issues are capable of discussion and compromise,” Kua said. “Even though we may have our wish list and they may have their wish list, finding the middle ground where all of us can benefit is an important principle.”

Oil Search shares added 0.6% to A$7.09 as of 10:43 a.m. in Sydney and are headed for a 6.3% rise this week. The Australia-based producer declined to comment. Exxon didn’t respond to requests for comment.

“We are confident that it’s in the best interest of PNG to respect the agreement that has been signed in order to move forward with the project,” Pouyanne said on a conference call Thursday. “We expect the new government to respect” the deal signed by its predecessor, and Total has “many” LNG projects in its portfolio.

Political Flash-Point

Separately, Newcrest Mining Ltd., Australia’s top gold producer, and Harmony Gold Mining Co. said they are facing a hurdle with the development of the $5.4 billion Wafi-Golpu gold-copper project in PNG amid heightened political uncertainty. The delay in permitting is associated in part with legal proceedings between national and provincial authorities and the PNG government continues to signal support for the project, Newcrest said in a statement Thursday.

Liquefied natural gas exports have developed into a political flash-point for the country as its existing venture, the Exxon-led PNG LNG project, has been criticized as not benefiting the domestic economy as much as expected. The nation’s new prime minister, James Marape, swept to power in May amid a wave of criticism of the Papua LNG deal signed by his predecessor. He tasked Kua with reviewing the agreement after appointing him petroleum minister in June.

“For too long we have allowed external forces to dictate the direction we take,” Marape said Thursday at the Lowy Institute in Sydney. The government must work with its partners “to ensure a fair and equitable distribution of our resources.”

In the interview, Kua described the suggested changes as a “short list,” but declined to provide specifics. He said he’s been in communication with the partner companies.

“We haven’t rejected the signed agreement,” he said.

The review has delayed plans to double gas exports from Papua New Guinea, which involves a $13 billion expansion across separate but interlinked projects. Talks on the second gas agreement, for the Exxon-led P’nyang venture, won’t begin until the Papua LNG deal is revised, Kua said.

Oil Search said last week that it expects front-end engineering and design work on new LNG production units to be pushed back pending those agreements. That may move a final investment decision until as late as 2021, which puts the expansion projects at risk of greater competition for building resources and customers, according to analysts at Sanford C. Bernstein.

Marape said his government assembled a group of advisers to assess the country’s resource laws to find the right balance between encouraging foreign investment and boosting local involvement in the sector.

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