Tag Archives: PNG development

Landowners ordered to stay away from LNG project site

Charred machinery at the PD8 LPG development site in Hela province, PNG Highlands. June 2018. Image: Michael Passingan/PNG News.

The National aka The Loggers Times | May 15, 2019

THE National Court has issued a restraining order to landowners of Angore in Hela to stay away from the ExxonMobil’s project site.

Justice Derek Hartshorn issued the restraining order to Mango Kurali, a local from Angore PDL 8 area, his agents, tribesmen, relatives and supporters after finding that he and his associates participated in causing damage to ExxonMobil properties on Nov 15, 2017, May 29, 2018, and June 7, 2019.

“The evidence is unchallenged,” Justice Hartshorn said.

The court found that Kurali and his accomplices not only damaged properties, but also participated in setting up roadblocks, issuing threats and intimidating employees and contractors. This caused ExxonMobil to cease operations from time to time.

“ExxonMobil has rights,” Justice Hartshorn said. “PDL 8 itself grants ExxonMobil service rights to fulfil its obligations and construction to work and upgrade its existing gas lines under its licence.

“I am satisfied that the defendant had no right to destroy the properties and intimidate ExxonMobil contractors or prevent ExxonMobil’s operations in PDL 8.

“The actions by the defendants are against the law, and if not restrained by this court, he will continue to do what he did.”

The court held that ExxonMobil suffered damage estimated at millions of kina in its properties and it was not practical for ExxonMobil to compensate anybody.

In another case concerning damage to ExxonMobil’s properties in PDL8 as well, Justice Hartshorn issued restraining orders to Steven Au and David Hayebe.

They were charged with damaging properties, creating roadblocks and threatening employees.

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Taking the Initiative – Engan man builds home made Gold Crusher

Vasinatta Yama | EMTV News | 13 May 2019

Joe Tomerop from the Enga province is an Alluvial Gold miner who has taken the bold steps in increasing mining production in his area.

Almost two years in the making, Tomerop has completed his own home-made gold crusher and is having it ready for transportation to the Kompiam district for an alluvial mine at his village.

Costing a Million Kina he says, he was challenged by the Mineral Resources Authority to have the mining capacity available before acquiring a mining license for the alluvial deposits in his mothers village in the province.

Tomerop who is a local business man says he used his own resources to build the machines proving that local Papua New Guineans have the capacity to do mining and export, and have the licenses to do so.

“I want MRA and Papua New Guinea sees that Papua New Guineans we can do it. That’s the difference. So we have completed it and I’m waiting for my license.”

An alluvial miner, in 2014, he discovered alluvial gold in his mother’s area, who’s landowners are the Kuralin tribe of Kompiam.

With agreements from his uncles, he took the initiative and brought the Warden Hearing to Kompiam.

“From that time on we followed MRA’s procedures and surveyed the area and gather landowners. We are nine clans from the Kuralin Tribe from that mountain. So we tried doing it and brought the Warden’s hearing and the Warden gave okay for us.”

The crusher he’s designed is built using local knowledge, and utilized the help of an Australian friend who guided the locals to complete building the gold crusher.

“It’s for alluvial gold. We did not bring it from China, Europe or Australia. This machine is locally built.  Few things like pipes and pumps are not in PNG so we brought it from Australia.”

According to Mineral Resources Authority, panning for alluvial gold mine can bring an estimated K300 million into the PNG economy, and Tomerop believes that with his crusher and machines, he can triple his own revenue as a result.

“But I don’t think a National has come to that capacity of what I had in mind. Because it’s hard to invest money in something you don’t know whether there’s something under the ground or not. You know that coffee season is good, the soil is good, and then you plant coffee because you know the market is there. This one has market but to start it is difficult so I took a gamble.”

Tomerop is now waiting for MRA to grant him and his tribesman their license to operate the alluvial mine.

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Morobe’s Interest In Wafi-Golpu Legal, Says Judge

Frankiy Kapin | Post Courier | May 13, 2019

A ruling of the national court in Lae affirms that Morobe Governor Ginson Saonu (plaintiff /applicant) is a party of interest to the Wafi-Golpu project as host province.

Acting Judge John Numapo granted leave for judicial review to the signing of the Wafi-Golpu memorandum of understanding (MoU) between the State and the developer without the host province’s governor.

Justice Numapo ordered a directional hearing set for May 24, followed by a pre-hearing conference on June 6 to set a date for a full hearing of the substantive matter.

Justice Numapo ruled that Mr Saonu, in his capacity as mandated representative of Morobe Province and its people, is granted the review on two decisions pertaining to the letter constituting the legal clearance issued by state solicitor Daniel Rolpagarea (second defendant) on December 10, 2018, for the execution of the MoU between Mr Saonu, Wafi Mining Limited and Newcrest PNG 2 Limited.

The second decision for the review, as set in the originating summons, pertains to the MoU signed on December 11, 2018, between Mining Minister Johnson Tuke (first defendant) and developers Wafi Mining Limited (fourth defendant) and Newcrest PNG 2 Limited (fifth defendant).

The independent State of Papua New Guinea is the third defendant in the originating summons (OS-JR No 18 of 2019).

Justice Numapo ruled that Mr Saonu, as duly-elected Morobe Governor, has sufficient interest in the Wafi-Golpu project located in his province, therefore has standing (locus standi) seeking review through submission of the proceedings.

“One of his responsibilities is to make sure that the province generates and raises sufficient revenue from various sources within the province to maintain government services and one such revenue source is from the mining activities carried out in the province such has the Wafi-Golpu mine,” Justice Numapo said.

He said the plaintiff has taken into consideration the potential of the mine changing the economic outlook of the province and the country once operational and wants to make sure the province is well-positioned to benefit through revenue generation, employment opportunities and other spin off benefits.

Justice Numapo said the province is mindful of the environmental impact and other social issues that may arise as a direct result of the mining project and wants to ensure these concerns are properly addressed.

“I am satisfied, therefore, that a prima facie (accepted as correct until proven otherwise) case on sufficient interest has been made out in favor of granting leave for review.,” he said.

“I am satisfied that the plaintiff has sufficient interest in the matter and therefore, has the locus standi to bring this proceedings seeking leave for judicial review.”

Justice Numapo also ruled for the review after being satisfied that the Mining Minister Tuke and the state solicitor, as holders of public offices, acted in respective capacities constituting a decision or act in clearing the MoU signing through discharge of their statutory duties.

Justice Numapo granted the plaintiff, Mr Saonu, leave on May 7 to seek a judicial review of the agreement.

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MRA Assures Wafi-Golpu Landowners Of Best Deal

WHY SHOULD WE BELIEVE YOU THIS TIME Mr GARRY?

MRA HAS FAILED THE LANDOWNERS AND PROVINCIAL GOVTS IN EVERY OTHER MINING DEAL IT HAS AGREED.

WHY AND HOW IS ANYTHING GOING TO BE DIFFERENT THIS TIME?

Post Courier | May 7, 2019

The Mineral Resources Authority’s (MRA) Managing Director Jerry Garry has assured the landowners of the Wafi Golpu project, and the Morobe Provincial Government that the MRA would ensure they get the best deal out of the project.

Mr Garry said this in light of the presentation of the position paper, by the Morobe Provincial Government (MPG), to his office last week Friday.

The paper was presented by the MPG administrator Bart Ipambonj who said the MPG’s position reflected the wishes, dreams and aspirations of Morobeans.

A position paper is a benefit sharing proposal, which individual stakeholders of mining projects propose to be tabled at an MoA negotiations forum.

“The national government will ensure that landowners and the province would get the best deal out of the project.

“This is the spirit in which the government will be moving into the MoA negotiation forum.

The MRA will do everything in its powers to ensure that all stakeholders are heard and no one is left behind in the negotiations.

“Everybody is important to the MoA process including the developer,” he said.

The other stakeholders who have submitted their position papers are the Wampar and Mumeng LLGs, the Special Mining Lease Landowners Associations of Hengambu, Yanta and Babuaf, and Deep Sea

Tailings Pipeline (DSTP) Association. Wampar Pipeline and Butibam Associations are yet to submit their papers to the state.

After all position papers are received, the MRA will consult relevant government agencies and stage another series of negotiations with all stakeholders under the ongoing development forum.
This is to ensure benefits are properly negotiated.

This process will gradually lead to the MOA for the benefit sharing arrangements of the mega-Wafi – Golpu Project.

Mr Garry said the block-cave mining method proposed for Wafi-Golpu proposed by the developer Newcrest Mining, is the first for PNG.

Newcrest is one of the leading experts in this mining method, given they have a very good track record with their deepest (1.2 km deep) panel cave mining in Cadia East, NSW, Australia.

The MD said given the narrow vertical geometry of the mine, Block-Caving is the only possible mining method.

The MD said he has every confidence in the joint venture partners to deliver the mining project successfully.

Mr Garry assured Newcrest that the government would work with the company and other stakeholders to achieve a win-win for all parties.

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PNG THE BEGGING BILLIONAIRE

Linda Aniso | PNG Blogs | May 6, 2019 

Recently, I witnessed in dismay a tirade by a white man in the first class cabin of a mid-size airplane, admonishing another first class passenger, a Papua New Guinean male, for “begging” for his seat.

*What is wrong with you Papua New Guineans? All you do is beg, beg, beg for everything!! You can beg all you want; I am not going to give you my seat.*

Tempers finally cooled down, and the aircraft took off.

*Unfortunately, I was sitting next to this white man who, a few minutes ago, had insulted my whole race.*

With nothing else to do, I turned and asked him “What was all that about”?

Apparently, the Papua New Guinean man was travelling with his “wife”; they had been seated in 1st class on separate rows, and apart.

The man had asked this white man to exchange his seat, so the couple could be close.

The white man had refused, but the Papua New Guinean man had persisted with numerous “I beg you”; which eventually took the white man to his boiling point.

“So what would it have cost you to exchange your seat?” I asked.

His response, the essence of this article was this:

“I booked my flight the last minute, and got the last 1st class seat available, this one. This means it was also available to this man, if only he had asked to be seated close to his wife. He did not, but now comes “begging” for what WAS DUE HIM in the first place.”

“That still shouldn’t get your collar up”, I said.

“You may be right; unfortunately, I have just finished a month long negotiations with your ministers and government officials over your God-given mineral rights, and what my oil and gas company should pay.

I come to your country, see all this poverty everywhere, with wealth right under your feet.

Your own government gives only foreign companies the rights and privileges to rape and steal your country blind.

For a few thousand dollars, your government officials allow these foreign companies to walk away with:

(a) Perpetual tax holidays

(b) Duty free imports

(c) Bloated capital and operational investment costs

(d) under-declared mineral output

(e) minimum wages for local employees doing all the work, but FAT salaries and expense accounts for foreigners who do almost nothing

(f) exaggerated cost of shoddy school blocks and boreholes instead of meaningful royalty to local land owners and communities

(g) destruction of local farm lands with pitiful resettlement payments

(h) pollution of local drinking water

(i) destruction of local infrastructure, etc.

My bosses had counseled me at a briefing before my departure. I was asked to watch the interview of Sir John Guise on “Neo-Colonialism”. Then I was told: “be prepared, and the first, to offer the negotiating team:

(a) a few thousand dollars each

(b) a center, or a 6-room school block, or a few bore holes for the community; and there will be no mention of the usual above 10% royalties, or an actual government oversight of our operations, or adequate resettlement compensations, etc.”

I did not believe my bosses since I, a mere high school graduate, was coming to deal with officials with masters and degrees.

Imagine my shock and disappointment when these officials, instead of demanding what is INTERNATIONALLY ACCEPTABLE COMPENSATIONS AND ROYALTIES for their country and communities, only accepted the 3% royalties, and with ALL KINDS OF GIVEAWAYS, and then came to me later BEGGING me to deposit “something” in their foreign accounts (numbers written on pieces of paper). I do not want to hear the phrase “I beg you” again.

The irony here is that these so called educated people, after negotiating away their countries wealth, and depositing their “something”s into foreign banks, turn round to go and BORROW their own money from the IMF, World Bank, or “Donor” countries/ “Development Partners”.

It amazes me that your intelligentsia, ministers, Prime Minister’s, who have studied, or have travelled overseas, still don’t get the idea that “THERE IS NO FREE LUNCH”. THERE ARE NO “DONOR COUNTRIES” OR “DEVELOPMENT PARTNERS”. THE FOREIGN MINING COMPANIES TAKE YOUR MINERALS FOR NEXT TO NOTHING, DEPOSIT THEIR HAUL INTO THEIR BANKS, AND THEN TURN ROUND TO LOAN THE SAME TO OUR GOVERNMENTS, AGAIN WITH RIDICULOUS CONDITIONS SUCH AS “NO SUBSIDIZED” BASIC EDUCATION.

Surely, companies like Exxon and Newcrest are contributing to our economy, I offered.

“At what price? Have you been to Tari town recently to see the devastation and destruction of once a beautiful city? Exxon has over 800 sq. km concession in Hela; what did Tari town get in return for Exxon’s ANNUAL revenues of Billions? Almost NOTHING!!

This is exactly what your first Governor General was talking about in “Neo-Colonialism“. Have you watched his documentary? He asked me.

I was ashamed to answer “No”.

“I don’t blame you; none of your “educated” officials at the negotiating table had watched it either.

That documentary ought to be a must-watch in your schools and colleges, so that you can understand how foreign companies and governments strive to rob you blind, just as before. Only this time, their methods are cloaked in one-sided “agreements” with the connivance of your “Educated” Managing Directors, Ministers, and Prime Ministers.

“How can you accuse our officials of complicity?” I asked defensively.

Has your media asked why your minister keep defending the mining companies.

THE BIG COMPANIES LIKE, NEWCREST ARE NOT EVEN ASHAMED TO CONNIVE WITH YOUR GOVT OFFICIALS TO SIDESTEP TALKS WITH LANDOWNERS AND SIDESTEP PAYING THE INCREASED 7% ROYALTY. THEY ARE PAYING THE 5% BASED ON ANCIENT GOLD PRICE OF $300.00/OZ INSTEAD OF THE CURRENT WORLDWIDE PRICE OF $1500.00/OZ., SHORTCHANGING YOUR PEOPLE $75,000,000 in the process.

Unfortunately, your negotiating officials are happy to giggle to the foreign banks with their thousands, accompanied in some cases by “Honorable”s and“Sir”s.

Even the Chinese are getting in on the act, albeit ILLEGALLY.

They are buying off businesses and prime land, AND YOUR MINISTER RESPONSIBLE LOOKS ON UNCONCERNED.*

Your media is just as bad. With buffet lunches or dinners and a few Kina in their pockets, your print media become the propaganda machines of these mining companies.

They tout the few boreholes and the 6-room schools, but leave out the callous treatment of local employees and residents, and the destruction of the environment.

The airwaves are SILENT on all this. FACEBOOK IS THE LONE VOICE FOR THE PEOPLE.

Why don’t your media speak up by broadcasting and educating the masses, especially the officials that:

(a) THE UNITED NATIONS DOES NOT APPROVE OF FOREIGN COMPANIES ROBBING THE INDIGENES FULL BENEFITS OF THEIR GOD GIVEN MINERAL AND OIL DEPOSITS.

(b) Before 1980, foreign mining companies in PNG could not hold more than 40% interest in their partnership with the government; now the PNG govt. holds ZERO percent, while they hold 100%,; and therefore do not account to any authority.

A 50% annual return on investment (ROI) for the first 7 years, is generally considered EXCELLENT.

Foreign mining/ oil companies in PNG, are PERPETUALLY hauling away over 400% return on their investments, without any regard to the plight of the indigenous.

I feigned sleep, so he stopped talking. I was actually reflecting on all that he had said.

I realized that YES, we had become too “give me, give me”; “I beg”, “I beg you”; “My Christmas present”; “Give us something for water”.

I am reminded by this my brother’s analogy. His cat will “meow” for some food, usually crumbs, in his bowl outside.

The bowl of food will attract the resident mice. One would think the cat would opt for the juicy mice, NOO!!!

He would lay there and watch the mouse eat all his food, and then come back “meowing” for more crumbs.

WE WATCH OUR OFFICIALS GIVE AWAY OUR GOLD, OIL, BAUXITE, DIAMOND, ETC FOR THEIR MEAGRE KICKBACKS, WHILE WE WALLOW IN POVERTY.

IT IS TIME WE WAKE UP FROM OUR SLUMBER, AND TAKE WHAT IS RIGHTFULLY OURS AT THE NEGOTIATING TABLE

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O’Neill’s rushed Papua LNG deal could cost taxpayers $45 billion

Mekere Morauta

“Analysis of the gas agreement seen by the Financial Review claims that this missed condensate income, along with a fleet of exemptions from goods and services taxes, could cost the PNG exchequer $US20 billion-$US30 billion over the life of the project. The same analysis values exemptions from dividend and interest withholding tax at upwards of $US15 billion“.

Oil Search gas play a target in latest PNG power play

Matthew Stevens | Australian Financial Review | May 7, 2019

A former prime minister of Papua New Guinea has claimed that a technical study prepared for the government has raised doubt over the quality of a Papuan Basin gas and liquids discovery that has so far lured $4.5 billion of acquisition investment by Total, Oil Search and Exxon.

Sir Mekere Mourata said on Friday that a study “available” within the PNG Department of Petroleum says the Elk-Antelope gas and condensate discovery that has lured investment by two super majors and the Australian-listed Oil Search could prove a marginal and excessively risky investment for the state.

The study that has fired up Sir Mekere was written by a consultancy called Sarkal Energy and it was delivered on December 31. According to the widely respected former PM, the review reveals “five major problems” at Elk-Antelope. The most profound of them is the claim that there is less recoverable gas than had been stated in past communications with the government and that the gas is of poorer quality than assumed.

“The report suggests that progress on the project should cease until a detailed independent assessment of the Elk-Antelope field is carried out,” Sir Mekere said in the latest of a recent flood of his bellicose “public statements”.

“It says the financial risk to Papua New Guinea is too high not to conduct such an inquiry. If the project fails, according to the report, the cost to PNG could be up to K20 billion ($8.5 billion),” Sir Mekere advised.

Given the wild political times being lived in PNG and Sir Mekere’s standing as an MP opposed to the present leadership, these are claims that need testing. So, naturally, we asked Oil Search people to respond. They did not.

Not every expert’s view

Certainly though, it needs to be noted that this gloomy view of Elk-Antelope’s prospectivity stands in violent contrast to those of two rather better-known independent experts and of the usually equally informed internal technicians at Oil Search.

And the idea that gas majors both super and regional that are steering a $16 billion growth story might have so thoroughly and consistently overlooked the potential that recoveries at Elk-Antelope will be sub-standard is, frankly, a little hard to accept.

Separate assessments of Elk-Antelope in 2016 by sector-leading independent experts Netherland Sewell & Associates and Gaffney, Cline & Associates certified the fields’ contingent resources at 6.1 trillion cubic feet (tcf) and 6.9 tcf respectively. And Oil Search’s internal reserve modelling puts the gross resource near 6.45 tcf.

While that is not quite the potential that was marketed by the discoverer of the novel Elk-Antelope play, a Singapore listing called InterOil, it is certainly enough to justify its acquisition by Exxon for $US2.5 billion in 2017.

To secure that deal Exxon had to fight off Oil Search, which bid for InterOil after earlier acquiring a 22.84 per cent slice of the Elk-Antelope concessions. That 2014 deal cost $900 million. And it was funded from the proceeds of the $1.24 billion that was raised in delivering a 10 per cent stake in Oil Search to the PNG government.

PNG funded its recovery of a 10 per cent stake in Oil Search through a debt raising led by UBS that has been the subject of domestic and regional controversy pretty much ever since.

As The Australian Financial Review reported back in 2014, the then treasurer, Don Polye, lost his job after objecting to the debt raising on the grounds that it was unconstitutional and a breach of budget debt law.

In March the Financial Review reported that Swiss authorities were investigating the circumstances of the UBS loan to assess whether it breached local regulations.

Gas heats O’Neill dissent

PNG’s Prime Minister back in 2014 was Peter O’Neill. And, for the moment at least, the hardest man of PNG politics still has that job. O’Neill has successfully stared down frequent challenges over recent years, but this week his grip on power seems as vulnerable as at any point since his rise to the top in 2011.

One of the trigger points for a threatened no-confidence motion against O’Neill is the April 5 agreement the government signed with the proponents of $16 billion worth of expansions to PNG’s most successful resources developments, the PNG LNG project.

This is an expansion of two parts that involves adding three new liquid natural gas trains to the two that began their campaign back in 2014. One of those new trains will be fed by gas provided by the current joint venturers. The other two are supposed to be filled by gas from the Total-led Papua New Guinea joint venture, which will draw its gas from Elk-Antelope.

High among the issues of contest triggered by the April agreement is that it appears to preclude the usual free-carry arrangements that are offered to host governments of small nations that own equity in capital-heavy resources projects.

It seems, instead, that the agreement assumes that the state will borrow from the other joint venturers whatever funds are necessary to cover its 22.5 per cent equity participation in the expansion.

This prospect has created anxiety in some corners of government not least because there is no indication as to the potential interest rate on the lending nor, indeed, what appetite there may be among the partners to offer funding.

There is concern, too, that marketing rights for the entirety of PNG equity share of the expansion gas has been passed to Total, which is the major owner and operator of the Elk-Antelope play.

Through successive public statements of complaint about the content and processes of the April agreement, Sir Mekere has made particular complaint about the way the expansion gas project is to be taxed.

The expansion trains have been deemed a gas project. They attract a 30 per cent tax take in PNG. But the project will produce maybe 92 million barrels of condensate. It is light oil. Sir Mekere reckons this is extracted through a separate process and it should be taxed at the same 45-50 per cent rates that were demanded of the Kutubu oil development.

Analysis of the gas agreement seen by the Financial Review claims that this missed condensate income, along with a fleet of exemptions from goods and services taxes, could cost the PNG exchequer $US20 billion-$US30 billion over the life of the project. The same analysis values exemptions from dividend and interest withholding tax at upwards of $US15 billion.

“On most of the country’s standard fiscal terms we have exempted the developers of the two important projects, the PNG LNG and Papua LNG,” the analysis complains.

“The critical issue is will a project of such magnitude and size ever be developed in the country again where PNG will have chance to negotiate better deals for the country?

“The gas resources we have discovered left for future development account for smaller volumes if each discovery is to be developed along like the case of Papua LNG.”

Total go slow?

Now, separate to that, we understand there is growing frustration at the lack of urgency of Total’s efforts to procure development approval for Elk-Antelope.

An internal petroleum ministry briefing note written as recently as March 27 complains that the documentation so far presented by Total lacks the “technical detail that the department requires in order to make a decision” on the application for a development licence.

The note, which was written by the acting secretary of the department, Lohial Nuau, made its way into the public arena via Facebook.

“Based on the fact that none of the required documents have been submitted and the Department of Petroleum has no ability to verify any of the important economic parameters provided by Total in the economic analysis,” Nuau wrote.

The point about the complaint is that the department was being asked to make assessment of the terms of the landmark PNG LNG-Papua LNG gas agreement.

The acting secretary noted that the want of Total’s development application and its supporting technical data made it difficult for the department to make informed input to the landmark gas agreement. The agreement was signed just nine days after Nuau’s briefing note was written.

Would it be too cynical to imagine that, with the PNG LNG-Papua LNG agreement now a done deal, Total’s deeply informed application will now land with a thump with the acting secretary?

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US and allies to use ‘aid’ to subsidise tax-dodging foreign mining companies

Rather than sustainable solar panels for village communities, the United States and it allies will use promised aid money to subsidise the expansion of foreign owned large-scale mining

Rather than providing sustainable solar power for village communities, the United States, Australia and New Zealand will use their promised electrification program to subsidise the expansion of foreign owned large-scale mining in Papua New Guinea. Mining that is proven does not improve the livelihoods of ordinary people but causes massive social and environmental problems…

U.S, allies propose financing for power plant for Papua New Guinea gold mine

Colin Packham | Reuters | 6 May, 2019

The United States and a group of Pacific allies are proposing to finance a power plant to kick-start the Wafi-Golpu mine in Papua New Guinea, one of the world’s largest untapped gold resources, two sources familiar with the plan said.

The proposal would be the first to be funded by a partnership of the United States, Australia, New Zealand and Japan that pledged to support electricity projects in Papua New Guinea (PNG) during the Asia Pacific Economic Co-operation Summit held in November in the capital of Port Moresby.

The countries promised to fund projects to provide electricity for up to 70 percent of the PNG population by 2030, a centerpiece of efforts to undercut Chinese influence in the Pacific.

Officials from the four countries met last month in Port Moresby with the PNG government to discuss the power plant funding for Wafi-Golpu, jointly owned by Newcrest Mining and Harmony Gold, the two sources said.

The exact size of the investment has yet to be concluded, but the coalition is seeking to back a power natural gas-fired station that would eventually be owned and operated by the PNG government, the sources said.

“If the mine can get reliable power, it could be a major revenue earner for PNG,” a U.S. source who attended the meeting told Reuters.

He declined to be identified as he is not authorized to talk to the media.

Representatives for Australia’s Foreign Minister Marise Payne and the country’s Department of Foreign Affairs did not immediately respond to requests for comment.

“We would welcome any proposal that would bring reliable power to the region,” said Christopher Maitland, a spokesman for Newcrest.

Wafi-Golpu is located about 65 km (39 miles) southwest of Lae, the second-largest city in Papua New Guinea, according to the joint venture’s website.

UBS estimates the mine could produce 270,000 ounces of gold and 160,000 tonnes of copper each year from around 2025.

Newcrest and Harmony hope the government will grant a mining license for Wafi-Golpu in July, said Newcrest’s Maitland.

By providing support for the mine and its power supply, the U.S.-led group is hoping to boost its diplomatic standing in the Pacific.

“Infrastructure is the proxy for the greater competition happening between the U.S with its allies and China,” said Nick Bisley, professor of international relations at Melbourne’s La Trobe University. “The U.S. has to deliver on major projects to ensure it doesn’t lose ground on China.”

The United States and its allies worry that China is increasing economic aid to the Pacific region to exert influence over vast swathes of resource-rich ocean and international forums like the United Nations.

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