Tag Archives: PanAust

Highlands loses first round in Frieda River arbitration

Protest outside the Highlands Pacific offices against the Ramu nickel mine marine waste dumping. Nov 2010.

Esmarie Swanepoel | Mining Weekly | 10 April 2018

ASX-listed Highlands Pacific is facing a $12.4-million bill relating to the Frieda River copper/gold project, in Papua New Guinea, after the first stage of arbitration found in favour of project partner PanAust.

Highlands, which has a 20% interest in the Frieda River joint venture (JV), has been arguing that a feasibility study submitted to the Papua New Guinea government as part of an application for a special mining lease in June 2016, was incomplete, and that the company’s free carry should continue.

However, an arbitrator has determined in the first stage of an arbitration process that Highland’s free carry for the Frieda River project feasibility study ended on the date of the lodgement of an application for a special mining lease.

The arbitration will now proceed to the second stage, with Highlands telling shareholders that it will be contending that other provisions of the JV agreement should be applied to make PanAust liable in the first instance for the full cost of the feasibility studies undertaken since June 2016, with the right for Highlands to pay its share at a later date, if the project proceeds.

If Highlands is unsuccessful in the second stage, and if the cash calls made by PanAust are held to be valid, the ASX-listed company will be expected to pay its share of project expenditure from June 2016 to May 2018, which amounts to some $12.4-million.

In this case, the company could either elect to pay the amount, or have its share in the JV dilute by around 2.2%.

Meanwhile, the permitting process for the Frieda River project is continuing, although the Papua New Guinea authorities are awaiting the completion of current feasibility study work, which is scheduled for the second half of 2018. 

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Chinese looking to cut costs for Frieda river mine

What will be the costs for the environment and the mighty Sepik river as PanAust looks to “decrease capital expenditure”?

Frieda River upside options explored

PNG Industry News | 16 February 2018 

THE Frieda River copper-gold project in Papua New Guinea’s Sandaun Province represents PanAust’s long-term strategic growth opportunity.

This was said by PanAust managing director Fred Hess when he presented the company’s quarterly report for December 2017 this week.

[PanAust is wholly owned by Chinese State company, Guangdong Rising Assets Management Co. Ltd (GRAM)]

“In 2017, we made strides towards making the project a reality through identifying opportunities to increase the value of the project, decrease capital expenditure, and reduce its overall risk profile. 

“We will continue to evaluate these opportunities in 2018,” Hess said. 

The company says it continues to liaise with PNG authorities on Frieda River following lodgement of a special mining lease (SML) application and environmental impact statement (EIS) with the Mineral Resources Authority (MRA) of Papua New Guinea and Conservation and Environment Protection Authority (CEPA) of PNG, respectively in 2016.

“The overall approval and permitting process for the SML application and other permits and approvals is now being coordinated by a government appointed state negotiating team, chaired by the Department of Mineral Policy and Geohazards Management.

PanAust says it is investigating opportunities to increase the value of the project and access alternative development pathways to decrease capital expenditure and reduce the overall Project risk profile. Study work to investigate these opportunities continued throughout the quarter, and indicate several potential pathways for value enhancement. The outcomes of this work will inform a decision as to whether an update to the project’s SML application will be made.

Hess added: “Looking to the year ahead, PanAust will look to further strengthen the relationships that have become integral to the company’s success, and are synonymous with how it conducts itself where ever it operates.

“The common currency of PanAust’s success is the strength of its relationships; relationships with our employees, communities, host governments, suppliers, peers, and partners. These relationships depend on trust and consistent transparent communication. This is what pushes PanAust way ahead and will continue to do so throughout 2018,” Hess said.

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Pundari discusses impact of Frieda mine

Sssh – don’t mention the Chinese!

Funny how the media can report so many ‘facts’ about the proposed Frieda river mine, including, supposedly its ownership, but leave out the fact that it is the Chinese State owned Guangdong Rising Assets Management Co. Ltd (GRAM) that owns PanAust, the company developing the mine…

The National aka The Loggers Times | December 21, 2017

THE Conservation and Environment Protection Authority (CEPA) has received a notification of intention by PanAust to develop the Frieda gold mine as required under the Environment Act 2000.

As part of the process to obtain an Environment Permit to develop the mine, the company has met the initial requirements of the legal process by submitting to the Director for Environment an Environment Inception Report.

Information CEPA has to date on the proposed gold mine is contained in the Environment inception Report.

Based on the EIR the following information is known by CEPA:

Copper mineralisation was first identified at Freida River in 1966/67, with the first exploration permit (termed a Prospecting Authority) held by Mount Isa Mines Ltd.
Since that time, the area has had a long history of exploration activities undertaken by numerous companies, with exploration permits held from 1967 to the present day.
The project is located within the Sepik River catchment and would comprise development of the Horse-Ivaal-Trukai, Ekwai and Koki (HITEK) copper-gold deposit in Telefomin district, West Sepik.
The project lies some 200km south of the northern coastline of mainland PNG and 75km east of the border with the West Papuan province of Indonesia.
The project would be developed by FRL, a company owned by copper and gold producer PanAust Limited on behalf of the joint venture between FRL and Highlands Frieda Limited (HFL), a wholly-owned subsidiary of Highlands Pacific Limited (HPL).
These deposits contain significant gold and copper with an estimated mine life of 17 years.
The main activities associated with the development of the project would include:

  • A sire access road from the Sepik River to the mine site;
  • mining will be done via an open pit mine;
  • placing waste rock and tailings into an integrated storage facility;
  • processing ore in a conventional concentrator at a site adjacent to the open pit;
  • copper-gold concentrate transportation by pipeline to a Sepik River port then barging along the Sepik River and northern coast of PNG to the proposed concentrate export facility located at Cape Moem near Wewak;
  • power generation during operations using an intermediate fuel oil (IFO) power station then augmented by a hydroelectric power station;
  • an airport constructed at Kaugumi Creek to transport personnel to and from the site;
  • the viability of the Project reflects a combination of economic, engineering environmental and social consideration that have been assessed and presented in FRL’s proposal for development; and,
  • The proponent for the project is FRL as manager of the Freida River Joint Venture and on behalf of joint venture participants FRL and HFL.
  • The participants and their equity in the project are: PanAust Ltd (80 per cent), Highlands Freida Limited (20 per cent).

Pan Aust Limited is a copper and gold producer in Southeast Asia and has a portfolio of organic growth projects in Laos and Chile.

Processing method
The mine processing method will involve conventional crushing grinding and flotation circuit.
Mine tailings and waste rock will be contained within an engineered Integrated Storage Facility (ISF).
The mine will also have quarries to provide materials for the construction of dams, roads, water diversion bunds, infrastructure pads and the construction of the ISF embankment.

Power supply
During the construction phase, power generation will be provided by diesel generators.
Following construction phase and during operations, a portion of the power will be supported by hydroelectric power.

Raw water requirement & supply
The Nena River will supply all raw water requirements for the mine.

Main access road
A main access road will connect the Sepik River port, Kaugumi Creek airport, Freida River airstrip, IFO power station, ISF, process plant, mine infrastructure area and accommodation camps.

River ports
Construction: Freida River port and Sepik River port will accommodate transport of construction materials to the mine site.
The Wario River port, adjacent to Nekiel, will provide access for construction of the main access roads.
Operations: The Sepik River port will be used for import of equipment and consumables and export of concentrate. A tugboat refuelling facility will be located at Pagwi and a mooring point will be located upstream of Yambon Gate.

Logistics
Mine equipment and consumable will be received at the Port of Wewak where it will be transferred to barges, transported to the Sepik River and then trucked to site. Concentrate will be transported in barges along the Sepik River and the Bismark coast to a new concentrate export facility at Cape Moem.
Accommodation construction: Main (mine camp) – accommodation for 1500 personnel and various other accommodation facilities at different locations.
Construction: Peak construction workforce of 3720 personnel.
Operations: About 2000 personnel with a further 1000 ISF contractors in Years 1 to 9 ongoing construction campaigns for the ISF.

Main airport
Existing Freida River airstrip to start followed by a new airport to be constructed at Kaugumi Creek.

Tailings management
Integrated Storage Facility (ISF) will be constructed in the lower Nena River catchment about 4.5km upstream of its confluence with the Ok Binai.
Along with the large open-pit void, it will be the most prominent feature of the mine.
The primary design objective of the ISF is to safely store tailings and waste produced by the mining and milling operation.
This design has been subject to international expert peer review by Pan Aust’s ITGRP, which has been established to access the adequacy of the design of the ISF and the underlying studies informing this design, and to provide recommendations on additional studies or evaluations to address areas of uncertainty.

Environment regulatory process
The environment regulatory requirements for satisfying the environment impact assessment process as contained in the Environment Act 2000 is as follows:

  • Submission of EIR;
  • approval of EIR;
  • conduct of environment impact assessment;
  • submission of EIS;
  • stakeholder consultation on EIS;
  • preparation of submission to Environment Council;
  • Environment Council recommendation to Minister;
  • minister’s approval-in-principle; and,
  • Director of Environment issues Environment Permit.

The above process can take up nine months to complete and is also dependent on adequacy to technical information submitted.
CEPA will also conduct its independent peer review on critical aspects of the project submissions will then be presented to the Environment Council for deliberation and recommendation to the minister to issue an AIP.

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Mining Minister Tuke meets Einstein’s definition of insanity

Panguna, Porgera, Ok Tedi, Tolukuma all tell the same story – large-scale mining is a disaster for local communities and the environment.

And neither Frieda or Wafi-Golpu have yet come up with a credible plan for managing their toxic tailings – but heck, lets go ahead anyway… 

Govt adamant to get two new mines operating: Tuke

The National aka The Loggers Times | November 22, 2017

THE Government is adamant to get two new mines operating in this term of Parliament, Mining Minister Johnson Tuke, pictured, says.
Tuke, who is also the Kainantu MP said in Lae after returning from a familiarisation visit to the Hidden Valley mine and Wafi-Golpu exploration site in Bulolo, Morobe.
Tuke earlier visited the Porgera gold mine, K92 mine, Frieda River exploration site and the Ramu nickel mine.
He said under the O’Neill-Abel government’s 100-day plan, ministers holding economic portfolios were tasked to ensure their respective departments aligned their operations towards producing revenue for the Government and bail the country out from economic down turn.
“This government is doing the ground work to have at least two mines operating,” Tuke said.
“This government is fully committed.
“In this term of Parliament we will initiate something.
“The developers and landowners are also serious in having the mines off the ground.”
Tuke said the companies doing exploration at the Frieda and Wafi-Golpu sites have already submitted their proposals to dig for minerals. It was for the relevant government agencies to study their proposals and advise the National Executive Council to grant the miners special mining leases.
“Frieda has conducted exploration for the last 40 years or more,” he said.
“Last week, I was at Frieda and talked to the people there. Their response was positive.
“My visit there was to identify issues with the people and the company, so that I can better advice the Government so that it can make well informed decisions.
“That is the case with Wafi too.”

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Australian govt using ‘aid’ money to promote their mining industry

Bruce Davis, left, and Fred Hess signing a memorandum of understanding at Frieda River last week. Looking on are East Sepik Province Governor Allan Bird, Ambunti-Drekkir MP Johnson Wapunai, Vice Mines Minister Bari Palme, women’s mentor, Fredah Wantum along with women from Paupe village and PanAust employees

Approval processes for any Frieda river mine have not yet been completed – but the Australian government is already spending ‘aid’ money to help ensure the mine does go ahead.

PANAUST, the beneficiary of this ‘aid’ subsidy, is, of course, an Australian company…

Long-term plan for women at Frieda River

PANAUST and the Australian government are working together to empower women through the Frieda River copper-gold project under a new initiative called the Papua New Guinean Women in Mining Project.

In terms of an agreement signed at Frieda River last week, the partners say a three-year work program will strengthen the participation of women in the development forum process and ensure women receive lasting benefits over the life of the mine and beyond.

“The project will provide a mentor to work with women from the Frieda River area to prepare them for participation in the development forum and help organise their governance and representative structures. Selected Frieda River employees will become women’s empowerment and safety champions,” PanAust said.

The partners will also work to build literacy skills, and promote cooperative approaches to decision-making, workloads and budgeting, leadership and coalition building.

At the signing PanAust managing director Fred Hess emphasised the role mining could play in supporting women.

“Mining, perhaps more than any other industry, has the ability to empower women in remote communities. At PanAust, we consider it our responsibility to encourage that development. At our operations in Laos, we have provided pathways for women to acquire trades, become leaders in the company and start small businesses. Our partnership with the Australian government will help us emulate this success in Papua New Guinea,” Hess said.

Australian high commissioner Bruce Davis said Australia was taking part to strengthen women’s participation in resource development negotiations.

“We will help build literacy and financial skills, as well as support women to take on leadership and decision-making roles in the development negotiations, to ensure they directly benefit from mining activities in the region,” Davis said.

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Frieda river mining company in corruption investigation in China

Guangdong Rising Assets Management is under investigation for a series of bad investments including the purchase of PanAust and the Frieda river mining rights. Four people are already being prosecuted for corruption and now the former Chairman is in the spotlight over losses of more than $1 billion

Chinese probe big mine loss

Rowan Callick | The Australian | October 16, 2017

The former chairman of a Chinese state-owned enterprise has been handed over to prosecutors for investigation after the company’s investments in several Australian mining ventures lost more than $1 billion.

Li Jinming, who chaired Guangdong Rising Assets Management, which is owned by Guangdong province, was earlier expelled from the Communist Party following an investigation that began in 2014 over losses that the disciplinary inspection team described as “dreadful”.

The company was established 17 years ago with $2bn capital, the South China Morning Post reported, and it began investing in Australia after the Global Financial Crisis pushed down asset and commodity prices.

It acquired, through different subsidiaries, lead-zinc producer Perilya for $45.5 million, coal producer Caledon Resources for $500m, copper and gold company PanAust — with a massive prospect awaiting commitment in Papua New Guinea at Frieda River — for $180m, and rare earths producer Northern Minerals for $60m,

It also paid $15m for a large stake in gold and base metal explorer Hawthorn Resources.

Leading Chinese financial website Caixin reported that most of these deals had since made losses, with calls on further capital from GRAM.

Li Zezhong, who worked for GRAM for 11 years, ultimately as president, was then appointed mayor of Zhuhai, a thrusting city of 1.5 million on the western side of the Pearl River Delta, just north of Macau.

It was his successor at GRAM who urged a deepening of the investigation into the company’s management.

Last month it was announced that Li Zezhong was being investigated for “serious violations of party discipline,” believed to relate to his time at GRAM.

Four colleagues from his time at the company are already being prosecuted for corruption.

Caixin has reported that investigators are also seeking to interview Liu Facai, now living in Australia. He chaired the committee responsible for all state assets in Guangdong province when he led a team to Australia 11 years ago to explore investments in mineral projects.

Caixin said that he and his son, who was already living in Australia, introduced GRAM to firms in which the company went on to invest.

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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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