Tag Archives: Papua New Guinea

Judgement on Mt Kare Project EL soon

Cedric Patjole | Loop PNG | April 21, 2018

judgement on the Judicial Review into a Government decision to refuse Summit Development Limited’s (SDL) application to renew Exploration Licence (EL) over the Mt Kare Project will be delivered on 27 April 2018.

The Judicial Review was instituted by Indochine Mining Limited in December 2015 following a Ministerial decision not to renew SDL’s EL 1093.

The Judicial Review was heard on 5th September 2017 by Justice Leka Nablu, who has reserved her decision till the date mentioned.

Indochine acquired the Mt Kare Gold Project in Enga Province in 2011.

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Deep-sea mining possibly as damaging as land mining, lawyers say

Deep-sea mining off Papua New Guinea’s coast. Legal and environmental groups warn of danger to the environment and Indigenous groups who live nearby

Environmental and legal groups warn of potential huge effects on Indigenous people and the environment

Ben Doherty | The Guardian | 18 April 2018 

The “new global gold rush” over deep-sea mining holds the same potential pitfalls as previous resource scrambles, with environmental and social impacts ignored and the rights of Indigenous people marginalised, a paper in the Harvard Environmental Law Review has warned.

A framework for deep-sea mining – where polymetallic nodules or hydrothermal vents are mined by machine – was first articulated in the 1960s, on an idea that the seabed floor beyond national jurisdiction was a “common heritage of mankind”.

But exploration has gathered momentum in the past three years, with licences granted off Papua New Guinea’s coastlines, and successful mining off Japan late last year. The International Seabed Authority, which is drawing up a draft mining code, has issued 29 exploration contracts for undersea mining in international waters beyond any national jurisdiction.

Proponents argue deep-sea mining could yield far superior ore to land mining – in silver, gold, copper, manganese, cobalt and zinc – with little, if any, waste product. Different methods exist, but most involve using some form of converted machinery previously used in terrestrial mining to excavate materials from the sea floor, at depths of up to 6,000 metres, then drawing a seawater slurry to ships on the surface. The slurry is then “de-watered” and transferred to another vessel for shipping. Extracted seawater is pumped back down and discharged close to the sea floor.

But environmental and legal groups have urged caution, arguing there are potentially massive – and unknown – ramifications for the environment and for nearby communities, and that the global regulatory framework is not yet drafted, and currently deficient.

“Despite arising in the last half century, the ‘new global gold rush’ of deep-sea mining shares many features with past resource scrambles – including a general disregard for environmental and social impacts, and the marginalisation of Indigenous peoples and their rights,” the paper, written by Julie Hunter and Julian Aguon, from Blue Ocean Law, and Pradeep Singh, from the Center for Marine Environmental Sciences, Bremen, argues.

The authors say that knowledge of the deep seabed remains extremely limited.

“The surface of the moon, Mars and even Venus have all been mapped and studied in much greater detail, leading marine scientists to commonly remark that, with respect to the deep sea, ‘We don’t yet know what we need to know.’ ”

Scientific research – including a recent paper in Marine Policy journal – has suggested the deep seabed, and hydrothermal vents in particular, have crucial impacts upon biodiversity and global climate regulations.

Hydrothermal vents act as a sink, sequestering carbon and methane. The mineral-rich vents and their surrounds are also home to animals and organisms including crustaceans, tubeworms, clams, slugs, anemones and fish.

“It is becoming increasingly clear that deep-sea mining poses a grave threat to these vital seabed functions,” the paper says. “Extraction methods would involve the operation of large, remote vehicles on the seafloor to chemically leach or physically cut crust from substrate and/or use highly pressurised water to strip the crust.

“All of these methods would produce large sediment plumes and involve the discharge of waste and tailings back into the ocean, significantly disturbing seafloor environments.”

The Harvard Environmental Law Review article says the exploratory phase of deep-sea mining has already adversely affected Indigenous people in the Pacific. In Tonga, large mining prospecting vessels have disturbed traditional fishing grounds, and in PNG villagers bordering the exploration site in the Bismarck sea have reported high incidence of dead fish washed ashore.

The paper argues for governments globally to reform the international seabed regime to reflect modern developments in law and science, and to protect potentially vulnerable communities.

“They should recognise the risks of operating in an unknown environment, fully embrace the precautionary approach, and protect and conserve the ocean for the benefit of current and future generations,” it says.

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‘PNG is on the cusp of a super cycle in mining investment’

Illustrator: Holly Wales

Dr Kishti Sen* | ANZ | 20 April 2018

Papua New Guinea’s real gross domestic product averaged around 2 per cent per annum in 2016 and 2017.

This is a significant step down from the previous two years when growth averaged over 10 per cent thanks mostly to the sizeable liquefied natural gas (LNG) exports. These benefits have now largely faded.

Recently released ANZ research expects growth to remain subdued in 2018 and 2019 as the benefits of the LNG expansion diminishes and as non-mining sectors struggle owing to an overvalued currency and foreign exchange shortages. 

Infrastructure investment associated with the upcoming APEC meeting and higher agriculture output should be the main drivers of activity in the short term.

The national budget is in deficit with debt already at 32 per cent of gross domestic product (just 3 per cent below the self-imposed limit of 35 per cent) and the government is limited in its ability to support the economy.

However, PNG’s longer-term prospects are more encouraging as it would appear to be on the cusp of a ‘super cycle’ in resources investment, particularly in gas, gold and copper projects.

The challenge for the government and business is to manage the next upturn so that a boom-bust cycle is minimised.

Meanwhile, the Kina remains an overvalued currency and better macro balance could be achieved if faster depreciation occurred.

The currency’s fair value on our estimate is around $US0.23-0.25.

At this level, the Kina would likely remove uncertainty in the foreign exchange market, add liquidity and help clear the backlog of import orders, maximise import substitution and assist Kina-exposed industries including agriculture and mining.

*Dr Kishti Sen is an international economist at ANZ

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Samar Exits MRA

Post Courier | April 17, 2018

Mineral Resources Authority’s (MRA) managing director (MD) Philip Samar’s term in office has expired since April 9.
Mr Samar served as the managing director for four years since his permanent appointment as MD from 2014-2017.
He was appointed acting MD for the MRA in 2012, a post he held until 2014 when he was made permanent.
The outgoing managing director also took the opportunity to thank the Prime Minister Peter O’Neill and the government for the opportunity given to lead the MRA in the last six years since 2012.
Mr Samar thanked the Prime Minister for his confidence in appointing him to be head of the statutory authority responsible for regulating the exploration and mining sector in PNG. The last six years have been the highlight of his career over the last 21 years as a public servant.
“I am privileged to serve the government, the people of Papua New Guinea especially the mining project stakeholders and the exploration and mining industry.
“I am satisfied I have done my part in nation building through managing the MRA and servicing the mining industry. Since the MRA’s establishment in 2007, the statutory authority has performed well in regulating and promoting Papua New Guinea’s mineral sector,” he said.
Mr Samar said for the last 10 years, the mining industry has been the single largest contributor of revenue to the national purse contributing over 60 percent of revenue annually.
“This makes the sector important and the government must continue to support the sector by creating a conducive environment where the industry is allowed to operate sustainably, safely, profitably and responsibly,” Mr Samar said.
He said the government must realise the expected benefits to be derived from these projects such as employment, taxes, duties, royalties, dividends, compensation, training and business spinoffs.
As outgoing MD, Mr Samar said there was still room for more improvements and urged the government to consider to:
– Support the MRAs ongoing regulatory roles by strengthening its governance, independence and resourcing.
– Revise the proposed amendments to the Mining Act to capture additional practical administrative improvements.
– Review and revise the Mining Safety Act 1977.
– Strengthen the regulation of the small scale mining alluvial gold sector.
– Improve training, create awareness and provide capital and appropriate technology to the alluvial miners around the country.
– Change the current benefits sharing arrangements via MOAs to a more project delivery model.
– Review and revise the government’s equity participation in major mining projects.
– Better organise itself to optimise its participation in the Wafi and Frieda copper projects.

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Amendments Made To Ok Tedi Agreement

Post Courier | April 16, 2018

PARLIAMENT has made amendments to the Ok Tedi Agreement to allow the company access to US$35 million (K116m) to sustain its operations and growth.

Prime Minister Peter O’Neill, who introduced the Ok Tedi Continuation, Ninth Supplemental Agreement Act in Parliament last week, said Ok Tedi Mine Limited is obliged to establish a reserve account to be kept in US dollars in an account approved by the company and the State.

He said to meet that purpose a fund (referred to as the financial assurance fund, or FAF, was established. The sole purpose of the FAF is to ensure funds are set aside to meet the mine closure obligations.

“On a regular basis (every four years from the time it was first done in 2009), Ok Tedi Mining Limited reviews the mine closure liability, with such review being independently audited, and submitted to the MRA and CEPA for approval,” Mr O’Neill said

He said the most recent review and audit was completed in 2017 with the approved mine closure estimate being $196 million.

He said the FAF currently has a balance of approximately US$231 million and is therefore over funded by approximately US$35 million.

“OTML, operating as a commercial entity, has high value opportunities to better use those funds for sustainment and growth investments in the business, and would like the ability to withdraw excess funds subject to approval by the State.”

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Barrick Calls For State Intervention in Porgera

Women search for gold downstream from the Porgera mine

After more than 25 years of mining by international companies, local people are still waiting to see the promised development benefits. They are becoming increasingly frustrated and desperate…

Post Courier | April 16, 2018

Barrick (Niugini) Limited , operator of the Porgera Mine in Enga, reported that operations in the Porgera open pit were temporarily suspended last week after a violent confrontation broke out between groups of illegal miners.

The company reported that mining operations in the open pit were suspended at around midnight, after two large groups of aggressive illegal miners, including some armed with firearms, began a violent confrontation near the stage 5C area of the open pit mine.

The fighting between the groups continued until about 2:30am on Tuesday morning.

BNL executive managing director, Richmond Fenn, confirmed that while all Porgera mine employees and contractors are safe and no injuries have been reported, the confrontation was a dangerous escalation of recent violent behaviour among illegal miners, due to the use of firearms by the opposing groups.

“More than 18 shots were fired by these people over a period of about two hours,” Mr Fenn said.

“While at this stage we have not confirmed whether there have been any casualties among the illegal miners from this latest outbreak of violence, the fact that violent people are engaging in gun battles on the mine’s open pit is of critical concern, and we are calling on State authorities to provide urgent assistance in bringing this under control,” Mr Fenn said.

“It is simply unacceptable that these criminals believe they can behave in this way with impunity,” Mr Fenn said.

“Mining operations in the Open Pit have resumed, but this escalation of violence needs to be stopped before someone is killed or injured.

“We have advised the relevant authorities about the situation, and will be working closely with the police and others in responding to this latest outbreak of violence,” Mr Fenn said.

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ExxonMobil Resumes LNG Production in Papua New Guinea

Photo: Michael Nagle

EMTV | 13 April 2018 

ExxonMobil said today that production of liquefied natural gas (LNG) has safely resumed at the PNG LNG project in Papua New Guinea following a temporary shutdown of operations after a severe earthquake occurred in the region on Feb. 26. LNG exports are expected to resume soon.

One train is currently operating at the LNG plant near Port Moresby. The plant’s second train is expected to restart as production is increased over time. During the period that production was shut-in, ExxonMobil was able to complete unrelated maintenance scheduled for later in the year to allow for more efficient operations in the months ahead.

“Resuming LNG production ahead of our projected eight-week time-frame is a significant achievement for ExxonMobil, our joint-venture partners and our customers,” said Neil W. Duffin, President of ExxonMobil Production Company. “We will continue to support those communities impacted by the earthquake as we work toward fully restoring our operations. We hope our contributions and assistance will provide comfort to those in need”.

ExxonMobil is supporting multiple local and international relief agencies involved in the humanitarian response to the earthquake. In addition to the company’s previously announced $1 million contribution for humanitarian relief, ExxonMobil crews have donated and delivered more than 37 tons of food, 14 tons of drinking water, 600 tarpaulins used as emergency shelters, 1,000 solar lights for households, 20 larger solar lighting units for institutions, as well as other essential supplies including water purification tablets, cooking aids and hygiene kits.

The company is also assisting with the restoration of health care facilities and community food gardens, and is providing resources to help the government address the significant task of restoring roads in the Highlands region.

“While a lot of work remains to be done, we are confident that with the support of all our partners and stakeholders, we can help our friends and neighbors recover from this tragic natural disaster,” said Andrew Barry, managing director of ExxonMobil PNG.

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