Tag Archives: PanAust

New governor signals approval for Frieda river mine

East Sepik’s new governor, Allan Bird, has signalled his approval for the planned Frieda river mine – all he wants is a government assurance ‘everything will be fine’ – SURELY HE IS NOT THAT STUPID?

Possible mining impact on Sepik river a concern

By Dorothy Mark | The National aka The Loggers Times | August 30, 2017

EAST Sepik Governor Allan Bird has warned that the start of the Frieda gold and copper mine on the border with West Sepik will depend on an assurance by the government that the river will not be polluted.

Bird said the people depended on the East Sepik River daily and did not want it polluted by the activities of the Frieda gold and copper mines.

He was responding to the concern raised by Madang provincial mines director John Bivi on the operation of the Wafi gold mine in Morobe, Marengo in Madang and Frieda in East Sepik.

Bivi requested Bird to highlight this problem in parliament if there is debate on the three mines to begin operating quickly.

Bird said he would not comment on Wafi and Marengo but he would see that the people of East Sepik get the maximum benefit from the Frieda mine.

“We don’t  want what happened at OK Tedi to happen to us. So we will be very careful with this one,” Bird said.

Ramu development foundation director Dr Boga Figa asked Bird to assist in any way possible to have a feasibility study carried out to construct a road from  Banu Bridge to Forogo which could link to East Sepik.

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Frieda Awaits Approvals

New Deputy Prime Minister, Charles Abel, says PNG needs to reduce its reliance on large-scale resource extraction, so will the government have the guts to say no to the Frieda river mine?

Post Courier | August 4, 2017

The country’s next “worldclass” [sic] gold mine at Frieda River in East Sepik province is only awaiting formal permit approvals before securing a special mining lease (SML) to begin construction.
Highlands Pacific Ltd who owns 20 percent of PanAust in its June quarter report, stated that permitting processes were the focus activity for the project.
As a result, project manager, PanAust continues to liaise with Mineral Resources Authority to progress applications for a SML while at the same time explore refinements to the project design to improve development economics.
The report said the project was only waiting for the national election to be complete so that relevant government authorities can provide guidance on the permitting process.
PanAust is also investigating a larger hydroelectric facility that could deliver additional power potential.
Alternatives are also being considered for shared-use infrastructure, development of the Nena deposit and site layout.
Meanwhile, Highlands Pacific Ltd and PanAust have commenced arbitration proceedings to resolve a dispute regarding funding of project expenditure.
The parties are in dispute regarding their obligations under the joint venture agreement, including iwhether HPL is obliged to commence funding of project expenditures.
HPL previously has sought to resolve the dispute through mediation, however the parties have now agreed to seek a final and binding settlement before a sole arbitrator.
It is expected that the arbitration decision will be received before the end of the year.

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Where to dump Frieda’s raw waste just a ‘technical issue’: Minister

Frieda River mine set to start operations 
[the Post Courier loves a misleading headline!]

Post Courier | March 09, 2017

The giant Frieda River mine in West Sepik is now 60 percent ready of becoming a reality with the National Government waiting to issue the mining license for the project to start after few technical issues are sorted out, says Aitape Lumi MP and Minister for Treasury Patrick Pruaitch.

“Frieda River is 60 per cent reality now, we are ready to issue the license. We just need to work through with the technical people to on how they will dump the raw waste.”

“The company has put an application to convert mine waste into power generation system , but the State does not have the capacity so it is doing its best to hire people to give the best advice on how we can look at that and we can give the okay for that 40 per cent to be completed, for 100 per cent to give the mining license for project to start,” Mr Pruaitch said.

Mr Pruaitch said this at the opening of the first ever Frieda Mine Landowners Forum underway in Port Moresby’s Crowne Plaza Hotel that started yesterday and will end today.

Mr Pruaitch urged the people to work together and put together their benefits package for the National Government to consider during the project negotiation.

” Let us not send mix signals, it will give opportunity for company to go divide a few LLGs and MP’s to start the mine with the least cost possible so we can bring in impacted development for that region,

“I believe that is a big project that will transform Sandaun Province and Sepik region including Madang. This project will spread benefits across the region.”

YUP, JUST LIKE OK TEDI HAS TRANSFORMED WESTERN PROVINCE; LIHIR HAS TRANSFORMED NEW IRELAND; PORGERA HAS TRANSFORMED ENGA; AND THE LNG HAS TRANSFORMED HELA PROVINCE

HOW ARE OUR POLITICIANS STILL ABLE TO SPOUT THIS NONSENSE AND NOT GET LOCKED UP IN LALOKI PSYCHIATRIC HOSPITAL?

OR MAYBE WE NEED TO CHANGE THE LAW TO MAKE PEDDLING FALSE CLAIMS AND PRAYING ON PEOPLES DESPERATION BECAUSE THEIR GOVT HAS FAILED THEM A CRIMINAL OFFENCE?

“I want initial support from landowners because if we don’t have a project, we will not talk about benefits. We have to have a project, we have to get a leg in and another one in than we can be able to negotiate for the benefits. If we are not supporting the project than we can be standing here as leaders driving a lost cost, we must have a project, we must have shareholding understanding with impacted landowners, we must have understanding with the Telefomin district, we must have that understanding with the Telefomin LLG and sandaun Provincial Government.”

“I want Frieda mine which is going to be the first mining for the next government to use LNG precedent to allocate these benefits.”

Landowners to discuss benefits amongst others

FRIEDA Mine landowners have come together to discuss issues including benefits for negotiations with the National Government and developer PanAust when Frieda Mine project comes into development.

Member for Telefomin Solan Mirisim who initiated the first ever landowner forum to discuss issues surrounding the Frieda River Project, the Political Leaders from the West Sepik Province. MRA and stake holders emphasised on how best they can work hand in hand and support the Company, landowners and the State to kick start the Project once the SM application is granted.

“I stand up here representing the views, the cries and the excitement of over 50,000 people from Telefomin District, including people from ward 21, particularly the seven impact Villages within the vicinity of Special Mine Lease area.”

Mr Mirisim said Telefomin is the host District of the Frieda River Project and is one of the most remotest districts in the country that has no road link, only mode of transport is by Air and the four LLG are all accessible by third level airline and it is very expensive District to deliver goods and services to our people on time.

“Frieda River Project is the only Project in this country that has taken over 40 years of exploration after exploration, I must take this time to thank many exploration companies who have worked on the Frieda River Project for many years to this time, it is long time awaiting for our People in Frieda River and Telefomin District.”

“I would like to thank the Highlands Pacific and the PanAust for taking the project closer to fruition. One final step to finish and we will have a world class Mine that will be mined and developed in our District which will no doubt create prime opportunity to impact and transform the lives of our people through employment, training, economic empowerment, contracts and all kinds.

“We want to see a Pathway that will improve our way of life, a pathway that will change the areas of Infrastructure, a pathway that will see a society transformed with Improved Social and Health Indicators.

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Greedy foreigners continue to fight over who profits from the destruction of the Sepik

The Chinese and Australians are fighting over who will control the destruction of the Frieda river and the region’s rainforests, swamps and staple sago trees

PanAust speaks out on HPL

Post Courier | March 08, 2017

MINER PanAust Limited has broken its silence on the rift that has developed with its joint venture partner-Highlands Pacific Limited (HPL).

Responding in a market report managing director Dr Fred Hess clarified the proposal was to reinvigorate its (HPL) board and that it had omitted material information to the proposal.

“PanAust also wishes to note that in its view each nominee would meet the test of independence as set out in the Australian Stock Exchange (ASX) Corporate Governance Principles and Recommendations.” he said.

“PanAust also wishes to clarify that the proposal to reinvigorate the Highlands board is unrelated to the ongoing dispute in relation to the Frieda River project and the proposed independent directors have no involvement in the Frieda River joint venture.

“In particular, the announcement failed to disclose that PanAust views each nominee as independent from PanAust, and that there is no arrangement or understanding that the proposed independent directors will act at the direction of, or report to PanAust.”

Dr Hess said the reasons for PanAust seeking to change the composition of the Highlands board include to implement a new strategy and direction for Highlands.

Dr Hess said this is with a view to increasing shareholder value in circumstances where the HPL share price has decreased significantly over the last five years.

“PanAust notes that voting patterns at the last annual general meeting reflect substantial shareholder discontent with the current board following the US$68 million loss in 2015 which included the payment of short term incentives to senior management.

“Sentiment is unlikely to have improved following the 2016 half year loss of US$23.5 million which has been exacerbated by the board’s delayed and ineffective response to implement austerity measures and also in the absence of any disclosure in respect of strategy to create shareholder value.

“Clearly, change is overdue with barely US$10.5 million cash left in the bank at year end after spending US$3 million on staff costs for the year,” Dr Hess said.

He said PanAust disagreed with the comments that had been made by Highlands that, should the proposal be implemented, it would result in a “PanAust-dominated board” which “would be at risk of operating in the interests of GRAM, rather than in the interests of all its collective shareholders.”

“PanAust considers that the appointment of a new, independent board is an important step towards a strategic reinvigoration of Highlands with a view to stemming ongoing value destruction.

“PanAust notes that it is still waiting on a response from Highlands on the date of the shareholders meeting to consider Highlands board composition,” he said.

He urged investors to consider the resolutions being proposed by PanAust carefully, together with the information and reasons put forward by PanAust.

Further, that they vote in favour of the resolutions at the special meeting, which will be held in May, 2017.

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MCC to build $4bn Sepik industrial park

Chinese owned MCC love to describe the Ramu mine as world class...

MCC have struggled to build a simple pipeline in Madang, can they really build an industrial park in the Sepik?

Chinese investors set to build $4bn industrial park in Papua New Guinea jungle

Global Construction Review | 3 February 2017

China has agreed to build a vast industrial complex in a jungle region of Papua New Guinea (PNG) with factories processing tropical foods and minerals.

A memorandum of understanding was signed in December between a group of investors from the southern Chinese city of Shenzhen and the government of PNG, a small South Pacific country that shares the island of New Guinea with Indonesia, just north of Australia.

Patrick Pruaitch, the country’s treasury minister, told Reuters that the plan was to build two processing and manufacturing plants in West Sepik province, a dense jungle region in the north of the country about 30km from the Indonesian border.

One will process timber, fish, cassava and tropical spices and the other will handle steel, cement and other industrial products.

The projects are to be developed in phases at a final cost of $3.8bn. The government of PNG said it hoped construction would start in 2017, but the plans were “very long term”.

The main contractor for the parks is expected to be the Metallurgical Corporation of China, which was responsible for the main Chinese investment in the country to date, a $2bn nickel mine completed in 2012.

The PNG projects fall under the heading of China’s “One Belt, One Road” strategy, which is being extended from the classical Silk Road to Europe to include the 16th-century “Silver Road” to America, developed by the Spanish navigator Andres de Urdaneta.

According to Reuters, investors from the Chinese coastal province of Fujian are close to signing a deal to build a huge industrial centre that will turn PNG’s lumber into furniture.

The nominal GDP of PNG in 2016 was around $19bn, so the size of these Chinese investments are enormous relative to the country’s economy.

Other Chinese developments on the horizon in West Sepik are a copper and gold mine – mining company PanAust has completed a feasibility study and launched an application to begin work – and a dam to provide hydro power for these new sites and provide a disposal site for the mine’s tailings.

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Papua New Guinea’s Frieda River project still faces obstacles, says Managing Director Fred Hess

Image: PanAust’s Fred Hess. Source: Business Advantage International

PanAust’s Fred Hess. Source: Business Advantage International

EMTV News | 29 December 2016

PanAust [owned by the Chinese company, Guandong Rising Assets Management] is keen to start development of the Frieda River copper-gold project, Managing Director Fred Hess told the Papua New Guinea Mining and Petroleum Investment Conference in Sydney last week. But he warned there are many obstacles to overcome before a final decision to go ahead with the mine.

Hess said the nature of the resource at Frieda River in West Sepik Province is well understood, noting that the project ‘has been known about’ for almost 50 years.

‘We are now in the phase where we are waiting for permit approval to take place,’ he told the conference.

‘Realistically, with the elections due next year, and with the size and complexity of the project, we are expecting that may take a while to get through to completion.

‘Once that process is finished, we then sit down and look at what the environment is like for making an investment decision and essentially there are a number of conditions that will have to be met in order for us to proceed to that investment decision.’

‘The embankment will take up about 40 per cent of the total capital cost of the project.’

Environmental issues

Hess described the project as a substantial open cut mining operation dominated by a very large storage facility.

‘That facility is designed to take the tailings from the processing plant and the waste from the mine and all of that sits behind a very large embankment,’ he said.

Hess said the embankment will take up about 40 per cent of the total capital cost of the project.

‘It doesn’t produce any copper but it is a necessary requirement in order to produce copper,’ he told delegates.

‘It is distinctive in the sense that PNG has traditionally taken cheaper forms of tailings and waste disposal routes.

‘But, because of the issues that we have with Frieda River being upstream from the Sepik River, this is the solution we have come up with which we think addresses all the environmental issues that are so important to a project like this succeeding.

Hydro power

‘The other special part of this project is that, because of the size of the embankment, because of the size of the catchment it sits in and the amount of water that falls as rain and gets collected in the catchment, and because of the height of the embankment, the opportunity to produce hydro-electric power also presents itself.

‘There are no free lunches. We must be mindful of the risks of developing large scale projects.’

‘That makes it a unique storage facility in our assessment in being able to store not only tailings, mining waste and water but it can generate a return in terms of hydro electricity.’

World scale deposit

Hess said the project is of national significance, describing it as a ‘world scale deposit’ that is in the top 10 undeveloped copper deposits in the world. He said it will create many jobs for locals, but he warned that there are challenges.

‘There are no free lunches. We must be mindful of the risks of developing large scale projects. Frieda River has substantial logistical challenges. It is inland; there are no roads.

‘It is ‘crucial not to jeopardise the livelihoods and environment for all those people downstream.’

‘For access to the site for the main logistics required you go up the Sepik River for 600 kilometres and then you need a road for another 100 kilometres, up to the actual mine site.

‘If you look at the terrain, it is relatively mountainous and it has a high level of rainfall all year round. That makes a challenging environment in terms of building stable structures and just undertaking the whole construction effort.’

Hess added that downstream of the project is ‘some 30,000 people who are very mindful and watchful of what is happening upstream’. He said it is ‘crucial not to jeopardise the livelihoods and environment for all those people downstream.’

Challenges

Hess said there are no port facilities capable of supporting the mine and no electricity grid. ‘There are no roads. We are significantly infrastructure-challenged in this location. That challenge represents an additional capital burden to the project.

‘When making an investment that is multi-billion dollar, you want to have confidence over those multiple political cycles that the policy environment will remain constant.’

‘Over the last four or five years there has been a significant decline in the price of copper and that represents a significant challenge to making an investment decision. Notwithstanding the recent jump, it still represents a long term challenge. What will the copper price be in order to support an investment decision?

‘The other major risk we face is the policy environment in which we invest. This project, to generate a return, will probably take at least two political cycles in PNG and to actually realise the benefits of those returns, many more political cycles.

‘When making an investment that is multi-billion dollar, you want to have confidence over those multiple political cycles that the policy environment will remain constant, support investment decisions and underpin confidence that we are doing the right thing by investing in PNG and not some other jurisdiction.’

Rewards

Hess added that the potential rewards are substantial, balancing the risk. He said the existing resource base of 2.5 billion tonnes of ore is ‘not closed off’ and that there are further opportunities.

‘We have a lot of confidence in developing the project. But I want to make it clear that we have to overcome a number of challenges.’

PanAust [owned by GRAM] controls 80% of the Freida River project, with Highlands Pacific the remaining 20%. As with all mining projects in PNG, the State has the option to buy in to up to 30% of the project prior to the granting 0f a special mining lease. PanAust applied for a Special Mining Lease in June 2016.

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Mining industry uses the same old false promises to sell Frieda river mine

The Frieda River mine in the Sepik will enhance PNG’s prosperity, claims Fred Hess. Just like Panguna did for Bougainville, Ok Tedi has done for Western Province and Porgera is doing for Enga, Mr Hess?

Anyone with the slightest interest in evaluating Fred Hess’s claims should visit Arawa, Wabag and Daru and see how the same claims by made by Rio Tinto, Barrick Gold and BHP have proved to be false.

And don’t be fooled by Hess’s claims that the Frieda river mine will be constructed and operated by PanAust and Highlands Pacific. The mine is owned and will be operated by the Chinese company Guandong Rising Assets Management (GRAM).

Now why is Mr Hess so keen to hide that little fact?

Delly Waigeno | EMTV News | 9 December 2016

The Frieda River Project in West Sepik will contribute to enhancing the prosperity of Papua New Guinea.

Dr. Fred Hess, Managing Director of PanAust said this when talking about the risks and rewards of this project.

Frieda River has the largest known gold and copper deposits in the world with over 2 billion tonnes, and the O’Neill-Dion Government has committed to assisting the project at its various stages of development.

Dr. Hess said the Frieda River Project is one that’s been known for about 50 years. PanAust and its joint venture partner, Highlands Pacific are aiming to bring the project into development very soon.

They have already submitted a special mining lease application.

Prime Minister, Peter O’Neill, said the government was committed to the project.

The Project is a substantial open cut mining operation, dominated by a large storage facility.

Dr. Hess said the project will generate substantial revenue that will be shared around a number of stakeholders including; local communities, provincial government, the national government, the company and its shareholders who will all benefit from this project going forward.

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