Tag Archives: Newcrest

K660m in royalties from Lihir

“Sounds a lot, huh? But average it out – over 20 years that averages to K33m per year. And what about total revenues from the mine? Over 20 years total revenues have been K33 BILLION, or an average of K1.65 billion per year.

“Countries around the world get 8%, 12%, even ( in Canadian provinces) 18% royalties. What do we get? 2%!

“Lot of money coming out of the ground. And it is all going overseas. All we will be left with is a big hole (just look at Misima).” Bruce Harris

Loop PNG | March 20, 2018

The people of New Ireland have received K660 million in total royalties from the Lihir Gold Limited (LGL) since 1997.

Of the total royalty payments made between 1997 and December 2017 (K660m);

  • New Ireland Provincial Government (+ districts) had received K330,057,253
  • Nimamar Local Level Government had received K198,034,351
  • Special Mining Lease Block Owners had received K132,022,902

From January to December 2017, Lihir Gold Limited royalty payments to the people of New Ireland have added to a total of K75,065,077 as highlighted (in yellow) in the table below.

What are royalties?

The PNG Mining Act defines royalties as payments by a mining company to the State based on 2 percent of the value of all gold sold.

The Mining Act further states that it is up to the State to decide how it wants to redistribute the royalties.

For the Lihir operation, the State, in a Memorandum of Agreement (MOA) – signed with NIPG, NLLG and the Lihir Mining Area Landowner Association (LMALA) – agreed that the National Government shall ensure that all royalties be distributed in the following way;

  • 50 percent be paid to NIPG
  • 30 percent be paid to NLLG
  • 20 percent be paid directly to the SML block owners.

The MOA further states that the 50 percent portion for the NIPG be divided as:

  • 20 percent to the Namatanai District for infrastructure projects and programs pursuant to its district and provincial development plans. (Lihir comes under the jurisdiction of the Nimamar Local Level Government in the Namatanai district.)
  • 20 percent to the Kavieng District for infrastructure projects and programs pursuant to its districts and provincial development plans.
  • 10 percent for general administration as well as for the administration of the MOA obligations.

The MOA allocation of royalties for infrastructure projects and programs in both Namatanai and Kavieng fulfils Recital C of the MDC’s Social Impact Monitoring Plan for the Lihir operation. It therefore makes Lihir a business that is benefitting the whole of New Ireland Province.

For the 30 percent NLLG portion of total royalties, the MOA states that it be split further in the following way:

  • 20 percent to be spent on community development and programs
  • 10 percent to be spent on long term growth-driven investments

For the 20 percent royalty portion for SML block owners, an arrangement was made between the SML block executives and LMALA for Newcrest Lihir to deduct 20 percent and pay it directly to LMALA to put in a financial savings scheme for the landowners. The remaining 80 percent is paid to the SML block executive to distribute to the SML block owners.

In a statement, the mining rm said: “LGL as a corporate citizen and development partner for New Ireland and PNG honours the MOA and other agreements and complies with all laws of PNG.

“LGL pays royalties every month and reports to the Mineral Resource Authority (MRA), the Internal Revenue Commission and other stakeholder government agencies.”

Newcrest Mining Limited, owner of LGL, is a publically [sic] listed company on the PNG and Australian stock exchanges. As such it is required to regularly report its financial performance through various communications channels, including its website http://www.newcrest.com.au.



Filed under Financial returns

Call to increase landowner royalties


Silul: ‘Newcrest has made K5 billion in profit from Lihir’

Post Courier | March 05, 2017

DEPUTY Governor of New Ireland Province Ambrose Silul has called for greater and more equitable distribution of wealth derived from resource projects in the country.

Mr Silul was responding to recent reports released by Australian miner-Newcrest Limited on royalty payments paid to the New Ireland government, Nimamar Local Level Government and the special lease landowners to the tune of K69.8 million in 2016.

Mr Silul said while this may seem like a lot of money, it is nothing compared to what the national government and the company are receiving.

“Newcrest has actually only operated the mine for six years, since late 2010.

“However, in the first five years, according to Newcrest’s own annual reports, the difference between the cost of production and the sale price of gold means they have made nearly K5 billion in profit.

“So during the time that the people of New Ireland were receiving only K37.6 million per year in royalties, Newcrest was making nearly a billion kina per year.

“That is over twenty-five times as much as the people of New Ireland,” he said.

Mr Silul who is also president of the Nimamar Local level Government said that at the same time “the National Government has been making over K300 million per year in various taxes, mining levies and other fees.

“This means National Government is making nearly ten times as much as the people from whom the wealth actually comes.”

He said it was high-time this trend changed.

“We need to increase royalties to be consistent with international practice.

“Royalties should be set at 10 percent of annual revenues.

“Special support grant should be increased from the current level of one-quarter of one percent to 10 percent.

The same with the tax credit scheme increase it from three-quarters of one percent of assessable income to 10 percent of assessable income.

“We are not doing this for the people of New Ireland alone.

“Once we get these increases we will share 20 percent of our total benefits with the non-mining provinces in the country.

“We think every mining province should take this approach.

“It will benefit all Papua New Guineans,” he said.

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Filed under Financial returns, Papua New Guinea

Economic benefits promised if Namosi Joint Venture operations begin

A drill pad site. Photo: Namosi Joint Venture

A drill pad site.

By Semi Turaga | Fiji Village |  16/02/2017

736 full time positions are expected to be created every year if the Namosi Joint Venture gets a mining license and starts mining operations.

This was revealed by the Project Manager of Namosi Joint Venture Greg Morris in a presentation to the Parliamentary Standing Committee on Natural Resources.

Morris says the figures are based on a study about the economic benefits of the project which was done by a specialist consultant.

He also highlighted in the presentation that they expect a peak of 2,000 employees in the fourth year of the operation.

Morris says they also expect to generate $343 million in Gross Domestic Product per annum on average when the operation starts.

The Namosi Joint Venture was established in 2008 for the exploration and development of mineral resources in the Namosi area.

They currently have an exploration license.

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Filed under Fiji, Financial returns, Mine construction

Enough is enough: PNG does not need mining: Stop the Frieda mine



Moses Koliwan

I have just finished reading the Sinivit Cyanide Spillage and the SOE declared by ENBPG. I note that Minister for Mining has also directed an independent MRDC investigation.

The number and volume of mining related accidents and the severe impacts of mining in PNG cannot be underplayed any longer.

We need not look far at at lasting and severity of the effects and impacts of mining in PNG to acknowledge the realisties. Look at Panguna, Ok Tedi, Lihir, RamuNico and now Sinivit.

When must we say enough is enough and ask ourselves one simple question and that is “Can PNG do without mining?”.

And for argument sake “Singapore never needed a Panguna, a Ok Tedi, a Porgera, a Lihir, a Sinivit nor the proposed Freida River MIne?

Haven’t we learnt enough yet from the Panguna experience and from the now the irreversible damage by Ok Tedi Mine on one of PNG’s two most prevalent and prominent river ecosystems and what impact this is now having on the people who live there? And, mind you this is no ‘fly by night’ impact. Only God knows how long this will last but certainly not in decades, centuries maybe.

We just should no longer lay back and become passive individuals and communities of savvy people and who are ignorant and complacent and allow continued mining experiments which destroy environments, livelihoods and upset natural balance and well being.

More importantly, our future generations have as much right and prerogative to enjoy this world in its pristine form and state like our ancestors did and we do to now. We can’t sit back and relax and say let the status quo be and let us keep learning from the bad mistakes we continue to make from mining activities. We cannot!

The many bad lessons learnt from mining activities in PNG are largely due to arrogance and bad tasting intent and vision in the name of development. The time for that has gone. PNG is educated and informed enough to protect its people and its environment for sustainable livelihood and harmony between nature and people – something we have done for centuries.

We cannot to remain ignorant and silent as individuals, communities, regions and a nation anymore. What is money compared to human well-being now and in the future? How will the change to made to the environment by mining support a sustainable future for me, my children and the generations to follow?

Shouldn’t we be investing heavily in green economy (agriculture)? At least the potential return is still high and the overall impact and risk to environment and people are manageable at local level as I see.

The recently announced Freida Copper Project does not and will not have a reference in my genius book of world records for best environmental safety and mining practices in the world. The company that has been granted the license to operate the mine only 9 years experience in Cambodia or some country of that sort.

Freida River is a open pit mine same as Ok Tedi. In fact is across the ranges from Freida. Its situated on the Freida River which feeds into the Sepik River. The same as the tributaries linked to Ok Tedi Mine which fed into the main Fly River. If the effects of Ok Tedi is something to go by, I feel so sorry for the wonderful people of the mighty Sepik River.

The impacts of the Ok Tedi Mine are also felt in the adjacent Gulf Province. Will Madang Province feel the environmental impacts of Freida Copper and Gold Mining Project? YES!!!!!!!!!!!

The environment and lives of my Sepik River people and those of adjacent Madang Province is too high on the agenda, to say the very least.

I am committed 100% to ensure that the Ok Tedi experience is not repeated in the Sepik to reduce is to a bowl of poison for the people and all the plants and animals and living creatures that call the Sepik River home.

The fight begins now and we will resist Freida Copper Project until the last coin is squeezed out of the jelly bag.

All responsible PNG leaders and elites will only see why this is so important, and why it is crucial to act out and voice this concern now on behalf of the present and the future generations of this very beautiful part of PNG – the Sepik.

I am now pleading for public support for the ‘Stop Freida’ campaign. The preparations for this are well underway and its launch will be in Angoram Station around mid June, 2015.

If you wish to support this course by way of comments, advice and discussions’ email me on moseskoliwan@gmail.com or call me on +67571580576.

I need support for environmental groups and other pressure groups, including scientists and social scientists, NGOs, individuals and people with interest on environmental protection and protection of vulnerable indigenous populations and groups.

The Sepik River people, their culture and their environment is at stake. Come stand with me with one voice and one action on Freida and stop it.


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Filed under Environmental impact, Human rights, Papua New Guinea

Regency Mines applies for nickel licence in Papua New Guinea

Giles Gwinnett | Proactive Investors

Regency Mines has applied for a nickel and gold licence in Papua New Guinea, in the light of the upsurge in nickel prices following the Indonesian ban.

Lake Trist is 1,284 sq km and 15km from the coast and 75km south of the major port city Lae.

Apart from the nickel potential, the western half of the area is within the Wau-Bulolo goldfields, just 15km east of the Hidden Valley Gold Mine, a joint venture between Newcrest and Harmony Gold, which produces 250,000 ounces a year.

Regency chairman Andrew Bell said: “Since Indonesia enforced a total ban on the export of unprocessed nickel products less than four months ago, we have witnessed nickel prices increase by more than 40%.

“Asia’s major nickel consumers, who previously sourced up to half of their nickel from Indonesia, are competing to secure new supplies to cover the shortfall, and some have approached us. With no sign of Indonesia lifting the ban, we expect nickel prices to be strong for the foreseeable future.”

He noted Lake Trist, which the firm had previously applied for, may have potential for direct shipping ore (DSO).

“Regency has also been actively engaging potential partners in relation to its 162Mt Resource at Mambare and other nickel interests, and the Lake Trist opportunity would potentially add to the attraction of Regency’s nickel interests,” he said.

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Filed under Exploration, Financial returns, Papua New Guinea

Newcrest slashes mine jobs in PNG

Rowan Callick | The Australian

NEWCREST is axing hundreds of local and expatriate jobs in Papua New Guinea, where half its mine assets are located.

Its share price slid again yesterday, by 7.92 per cent, to $9.53. It hit a high of $30 eight months ago.

About 150 employees will be made redundant at the Lihir gold mine, where there are almost 3000 direct employees, 90 per cent of them Papua New Guineans, and a further 2000 contractors, some residential and some fly-in, fly-out.

General manager operations Karl Spaleck said “with the process plant upgrade behind us, we are now working on achieving reliable, predictable performance” towards a steady 1.2 million ounces annual output, “optimising the plant and simplifying operations”.

This meant, “a bigger focus on using the stockpiled ore, which is an asset that has been building for a number of years”.

Newcrest had spent, he said, about Kina 2 billion ($969 million) over several years to increase the plant’s capacity.

Mr Spaleck said conversations were under way with contractors at the mine — some of whom were also likely to lose work, as a result of “the implementation of a simplified business model”.

A Newcrest spokeswoman yesterday said “the consequential impact will depend on the kind of service a contractor provides”.

She said “we have gone to great lengths since the end of April to explain to our employees and contractors as well as landowners, local government and provincial and national government about the external conditions — the significant fall in the gold price, the biggest in the last 30 years — and what that means in terms of Lihir and its workforce”.

Lihir is in New Ireland province, which includes the constituency of Mining Minister Byron Chan, and of which his father, former prime minister Julius Chan, is the governor.

Jobs will also be lost at Hidden Valley, an open pit gold and silver mine in Morobe province — mostly a fly-in, fly-out operation — where about 1000 employees and 1600 contractors work.

Newcrest was cutting costs there by 20 to 30 per cent this year. But the spokeswoman said this “is not just about role reductions, it is also about efficiency, productivity, and simplifying and improving the operation”.

“For example, the primary crusher just commissioned at the front of the overland conveyor will reduce costly trucking of ore. There is also a plant recovery improvement project under way.”

PNG Prime Minister Peter O’Neill recently offered help — though not direct financial subsidies — to Newcrest “to help ensure operations continue”.

He said: “The company is highly regarded as a leading participant in our resource sector. When a company as big as Newcrest faces . . . problems, we have to be concerned at the possible impact on our resource sector and our economy generally.”

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Filed under Financial returns, Papua New Guinea

Fiji: Newcrest keen to rehabilitate land disturbed by prospecting

Radio New Zealand

The Namosi Joint Venture in Fiji, which hopes to mine copper and gold in Namosi and Naitasiri, says it is determined to rehabilitate land area disturbed as a result of the company’s prospecting.

The Namosi Joint venture is a partnership between the Australian mining company Newcrest and Japanese interests.

FBC News reports that as part of their rehabilitation programme, a nursery was opened at Nasevou village in Waidina this week.

The nursery is to provide an alternative livelihood for the villagers, so they can provide plants to the joint venture and also generate income as they sell the plants to other people.

While local villagers from Delailasakau and Nasevou are welcoming the programme, they have voiced ongoing concerns the effect from mining on their environment.

Meanwhile, the Environmental Impact Assessment of the venture has been currently put on hold due to what Fiji Village reports is environmental damage.

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Filed under Environmental impact, Exploration, Fiji