Tag Archives: Pacific Mining Partners

Papua New Guinea moves to launch new coal mining industry

In 2006, a young girl walks between coconut palms on the coastline of Puil Island, part of the Carteret Islands, where rising sea levels eroded much of the coastlines and contaminated crops and freshwater. In 2009, evacuation began to nearby Bougainville Island. Photo by Jeremy Sutton-Hibbert/Greenpeace.

Catherine Wilson | Mongabay | 16 May 2017

Recent plans call for both coal mining and coal-fired electricity generation, raising questions about the government’s commitments to climate change action and leadership.

  • Two years ago, the Papua New Guinea government allocated $3 million for research into the viability of coal extraction.
  • An Australian company plans to build three mixed coal power generation plants in the country.
  • Proponents argue affordable and reliable electricity is needed to boost economic growth, while opponents cite environmental risks including the threat of climate change and rising sea levels.
  • Analysts also question how much urban-based power plants will raise electrification rates, since most un-electrified households are in rural areas that cannot easily be connected to electrical grids.

The Papua New Guinea (PNG) government is actively pursuing the potential of developing a coal mining industry for the first time in the country’s history. Two years ago, it channeled 10 million kina (US$3million) to its Mineral Resources Authority for research into the viability of coal extraction. Now, an Australian company engaged in exploration is proposing to build three mixed coal power generation plants in the cities of Port Moresby, Lae and Madang, citing the need for affordable and reliable electricity to boost economic growth.

But environmental science experts and civil society groups are concerned about the potential environmental and climate impacts of developing a domestic coal industry, and the risk of undermining the country’s commitments to climate change action and leadership.

“It is no secret that the first ever climate change refugees in the world are from Papua New Guinea,” declared Dagia Aka, member of the youth climate change movement, 350 PNG.

In 2009 residents of the Carteret Islands in the far east of Papua New Guinea were forced to begin migration to nearby Bougainville Island after rising sea levels and the contamination of crops and freshwater sources rendered their island homes uninhabitable.

“Mining ventures in Papua New Guinea have a dark history of destroying the environment around them and there has been a failure to put measures in place to avoid such [damage],” Aka continued.

“Given the overall assessment of PNG’s energy policy and its natural resources, it is important not to develop the coal mining industry,” Chalapan Kaluwin, head of environmental science and geography and director of the Centre for Climate Change and Sustainable Development at the University of Papua New Guinea, told Mongabay.

“The sustainability of other energy sources, such as geothermal and renewable energy, including wind, solar and waves in the country, is significant. Coal mining has far more adverse negative impacts on the overall sustainability of PNG, its landowners and long-term health of its communities.”

Exploration underway

While three international companies — Waterford, Pacific Mining Partners and Mayur Resources — are currently engaged in coal exploration in PNG, the Department of Petroleum and Energy has yet to report the granting of any coal mining leases.

But Brisbane-based Mayur Resources, which is exploring for coal in the southern Gulf Province and claims to have discovered extensive reserves, is already planning to build three urban-based mixed coal electricity generation plants.

“The first project to build an Enviro Energy Park (EEP) at Lae with 2MW solar and 2x 30MW conventional generation fueled by domestic coal and PNG renewable biomass is in a very advanced stage waiting only the conclusion of a Power Purchase Agreement with PNG Power,” Paul Mulder, Managing Director of Mayur Resources told Mongabay.

He said the project already had environmental approval from the government’s Conservation and Environment Protection Authority (CEPA), which was granted in June last year.

While Papua New Guinea does not yet have coal mines, it has already faced severe environmental impacts from mines, such as this open-pit gold mine in the country’s Western Province. Photo by Glen Barry/Greenpeace.

PNG’s extractive industries: costs and benefits

PNG, with major reserves of gold, copper, nickel, silver, oil and gas, has been a natural resources-dependent economy since Independence from Australia in 1975. The mineral resources sector alone accounts for more than one-third of government tax revenue. In 2013, taxes on the extractive industry amounted to US$292 million. From 2011-2013, it contributed an average 15.6 percent annually to the country’s GDP.

Coal, which remains one of the cheapest available sources of energy and fuel, drove industrialization and modernization in Europe and North America. But the environmental impacts of coal mining include the depletion of forest cover, air and water pollution, and contribution to global warming through the release of methane, a greenhouse gas, from natural coal seams. Burning coal to generate electricity produces carbon dioxide and oxides of sulfur and nitrogen, further contributing to the greenhouse effect.

This is a major concern for small Pacific Island developing states which are disproportionately exposed to climate change, whether in the form of extreme weather or rising sea levels.

In April last year, in line with the forceful advocacy by many Pacific Island leaders for industrialized nations to reduce their carbon footprint, Charles Lepani, PNG’s High Commissioner to Australia, publicly called on the Australian Government to downsize its coal mining industry in light of the Paris Climate Agreement and its goals.

Australia produced an estimated 16.3 metric tons of carbon emissions per capita in 2013, compared to 0.8 tons per capita in PNG, the most populous Pacific Island nation of 7.6 million people.

Forest lining the Bairaman River in PNG. New Guinea Island has some of the world’s largest and most biodiverse remaining tropical forests. Photo by Paul Hilton/Greenpeace.

“To cry foul to the major contributors to the fossil fuel industry and climate change, yet participate in something that will only make matters worse for us definitely does not paint a good picture,” Dagia Aka responded. “Pacific Island countries have a moral responsibility to take a lead with the Paris agreement simply because we are the ones facing the worst effects of climate change at this point in time.”

Other regional governments have also expressed concerns about coal mining. In 2015 leaders of Pacific Smaller Island States — comprising the Cook Islands, Kiribati, Federated States of Micronesia, Republic of the Marshall Islands, Nauru, Niue, Palau and Tuvalu — issued the Port Moresby Declaration on Climate Change which calls for “a global moratorium on all new coal mines.”

In countries across the region, higher sea levels and temperatures have led to the flooding of villages, coastal erosion, deteriorating crop yields and freshwater supplies. Affected communities have been forced to relocate in the Carteret Islands in PNG, Nuatamba and Nararo Islands in the Solomon Islands and Vanua Levu in Fiji.

Internal migration is a very expensive undertaking for Pacific Island governments presiding over small economies and restricted budgets already over-stretched with a wide range of human and socioeconomic development goals.

And the burden of adapting to climate change is only forecast to increase.  In PNG alone, annual mean and extremely high daily temperatures, ocean acidification and sea levels are all predicted to rise this century, reports the Pacific Climate Change Science Program (pdf). Under a high emissions scenario, annual surface air temperatures could rise between 2.1-4.2 degrees Celsius and sea levels by 0.87 meters by 2090.

Aerial view of a coal mining operation in Palangkaraya, Central Kalimantan, Indonesia, illustrating the damage coal mining causes forests. Photo by Daniel Beltra/Greenpeace.

Future plans

The global pact reached at the COP21 United Nations Climate Change Conference held in Paris two years ago does not contain an explicit anti-fossil fuel stance. However, it does state “the need to promote universal access to sustainable energy in developing countries …. through the enhanced deployment of renewable energy” as part of the overall ambition of ensuring the global average temperature increase does not reach or exceed 2 degrees Celsius above pre-industrial levels.

In March 2016, PNG, the first nation to submit its national plan for climate action following ratification of the Paris climate agreement, stated “the main mitigation contribution for PNG would be in terms of an indicative replacement of fossil fueled electricity generation with renewable energy sources” with a target of employing “100 percent renewable energy by 2030, contingent on funding being made available.”

Mayur Resources, developer of the Lae energy park, is keen to promote its support of the country’s transition to low carbon energy. It claims that its plants, by combining coal with renewable energy sources and employing state of the art clean emissions technology, will only result in PNG using coal for 10-20 percent of its power generation, in contrast to 71 percent in Australia. The company also argues the facilities will not increase emissions and comply with the nation’s commitment to the Paris climate agreement.

“The proposed [Enviro Energy Park] project will maintain the same level of carbon dioxide as the current level from the power generation sector, as nearly 40-50 percent of current power is being generated through diesel and heavy fuel oil. However, the EEP will bring in substantial environmental benefits to the ambient air quality [in Lae] by massively reducing the acid rain-causing gases, like oxides of sulfur, potentially 8-14 times less, and oxides of nitrogen, about 12 times reduced,” Mulder said.

However, while Mayur resources classes biomass as a carbon-reducing element of the project, many researchers question the tendency to classify biomass as a carbon-neutral energy source.

London-based Chatham House reports that “while some instances of biomass energy use may result in lower lifecycle emissions than fossil fuels, in most circumstances, comparing technologies of similar ages, the use of woody biomass for energy will release higher levels of emissions than coal and considerably higher levels than gas.”

Rounded white stones line the Bairaman river in West Pomio district. Photo by Paul Hilton/Greenpeace.

Mayur Resources further says its planned coal mines will result in minimal land disturbance mainly due to “the scale of these operations being very small compared to most other mines globally…..being in the bottom 1 percent of the smallest mines.”

But the University of Papua New Guinea’s Kaluwin claims the full potential impacts of the company’s planned operations are still to be thoroughly assessed.

“The impacts on the environment, destruction of land, atmospheric pollution, water, livelihoods, health, housing, education, culture and traditions, economic benefit sharing and most importantly governance, have not been properly evaluated for such a project to be implemented in PNG,” he said.

Businesses and the government also make an economic argument for coal. Mayur Resources believes that low electricity generation costs of about $0.10 per kilowatt hour, about 35-40 percent lower than the average wholesale cost of power in the local area, will boost business and industrial growth in the eastern coastal city of Lae. The urban center is strategically located between a major cargo shipping port and the Highlands Highway, the only overland transport network into the country’s heavily populated interior.

However, these urban-based plants will contribute little to increasing electricity coverage in rural and remote areas of the country where more than 80 percent of PNG’s population resides and energy deprivation is the greatest.

In this 2003 image, Melanie John, Lulu John, Aebi Sakas and Warume Sakas walk along a logging road in Western Province. The majority of PNG’s population continues to live in rural areas, which are nearly impossible to connect to a national electrical grid. Photo by Sandy Scheltema/Greenpeace.

Energy poverty is a major development challenge in the region.  Only 20 percent of households across the Pacific Islands region, and 12 percent in PNG, have access to electricity, hindering human and socioeconomic development.  An estimated 40 percent of PNG’s population live in hardship, only 63 percent are literate and only 40 percent have access to clean water.

Geographical barriers, such as arduous mountain terrain, dense forest and scattered islands, separated by the sea, make a national power grid virtually impossible. In this context, energy experts recommend greater investment in off-grid and standalone power systems, especially those compatible with renewable technologies, to achieve a substantial improvement in rural and, therefore, national electrification.

“Papua New Guinea, being a tropical island state, is a prime area for solar and hydro clean energy,” Dagia Aka emphasized.

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MRA says government policy welcomes coal mining

coal-mining

Mayur yet to submit application for lease

Rosalyn Albaniel | Post Courier | December 21,2016

MINERAL Resources Authority (MRA) says no application has been made for a mining lease for coal to date.

However, it says mining for this mineral is permissible under the government’s open policy on minerals, exploration and development.

MRA was responding to questions put to it by the Post-Courier on government’s policy on coal and the likely implications that it may be contrary to the climate change agreements PNG has signed.

This is in light of announcements by Australian based Mayer Resources of their intention to mine coal in the Gulf Province for the power plants they are proposing to build in Lae, Madang and Port Moresby.

“Obviously MRA cannot comment on matters it is not involved in such as PNG’s international and other treaty commitments-that is a matter for those familiar with those arrangements.

“Let me be very clear the MRA has not received any contrary instructions from government on the development of coal mines. Until and unless we do, we continue to maintain the government’s open policy on minerals (including coal) exploration and development,” MRA managing director Philip Samar told the Post-Courier.

Mr Samar said from the outset while there had been some exploration, no mining lease had been granted as yet, adding that any such application would require an environmental permit issued by the Conservation and Environmental Protection Authority (CEPA).

“Part of CEPA’s assessment would include the matters being raised about environmental concerns over coal.

“Mayur Resources, Waterford and Pacific Mining Partners are some of a number of companies who have been exploring for coal in PNG for a number of years. Waterford recently presented a report on PNG coal potential, based on its findings to date,” he said.

He said exploration licenses are valid for two years and may be renewed, provided the tenement holder has been compliant with the license terms and performed its work program.

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PNG climate position inconsistent with recent investment in coal

PNG UN FCCC

The Papua New Guinea government has recently spent K10 million on developing a coal mining industry in the country while telling the United Nations climate conference in Paris it is committed to a renewable energy.

As well as pursuing new coal mines the PNG government is also being heavily lobbied by Australian company Mayor resources to invest in new coal powered electricity generation in the major centres of Port Moresby, Lae and Madang and is working with international companies Waterford and Pacific Mining on coal exploration in Gulf Province.

None of this is mentioned in the PNG governments statement of its intended contribution to global efforts to reduce greenhouse gas emissions.

According to PNG’s ‘Intended Nationally Determined Contribution (INDC)’ the country will make “a big effort” to reduce fossil fuel emissions by transitioning as far as possible to renewable energy with a target of 100% renewable energy by 2030.

PNG UN FCCC 1

All of which is completely inconsistent with the government spending K10 million in developing a coal mining industry and the efforts of Mayor Resources to get new coal powered electricity generation – facts which the PNG government conveniently fails to mention in the INDC document:

PNG UN FCCC 2

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COAL – PNG’s next big thing?

As if the gold, copper, silver and nickel miners have not done enough damage already, now the government and MRA want to open PNG up to the most destructive and damaging mining of all – dirty old, climate destroying, coal… 

And they are wasting K10 million subsidizing the prospective coal miners – money that could be spent on our hospitals!

coal

HOT … SAMPLES OF COAL FROM SMIPEN AND NINGERUM WELLS IN PNG’S WESTERN PROVINCE.

Sam Vulum | Islands Business

COAL might be the next big thing for Papua New Guinea after gold, copper, silver, nickel, oil and gas.

Though research into coal mining potential is slow, it is now being religiously pursued with the Papua New Guinea Government for the first time ever taking ardent interest.

The Government has committed K10 million to Mineral Resource Authority (MRA) for research into coal mining and coal seam gas industries in the country.

Three international private backers are also behind the investigations to determine whether Papua New Guinea has feasible resources to underpin future coal mining and coal seam gas industries.

Mining Minister Byron Chan said in a unique cooperative approach, the three exploration companies are spearheading the coal exploration initiative.

Mr Chan said Waterford, Mayur Coal and Pacific Mining Partners have come together in Gulf province where highly-prospective discoveries have been made and a drilling program has started.

He said coal has also been identified in various other provinces and it is a mineral that provides much opportunity for PNG, including direct export, power generation and manufacturing.

MRA has confirmed this strong potential for coal and coal seam mining based on its ongoing research. MRA team leader for mapping Chris Wamugl indicated this in a presentation in November 2014 during a the 50th annual session of the Coordinating Committee for Geoscience Programs in East and South East Asia, in Kokopo, East New Britain Province.

He said PNG had the potential to go into coal mining and there was a need to develop this mining activity.

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