Tag Archives: PNG development

Panguna: What the future holds – according to BCL

“The plan has the backing of the Bougainville government and strong support among project area landowners”.

The National aka The Loggers Times | November 23, 2017

Q: Can you give a brief overview of Bougainville Copper Limited?
HITCHCOCK: It is an exciting new era for BCL as an independently-managed Papua New Guinea company.
We are listed on the Australian Securities Exchange (ASX) and the people of Papua New Guinea  and Bougainville have a significant stake with the governments of PNG and Bougainville being our two major shareholders.
As a company, our core objective is to work cooperatively towards realising the vision of resuming active exploration and sustainable copper, gold and silver mining at Panguna, in central Bougainville, after mining ceased in 1989 due to conflict.
The successful redevelopment of the mine will deliver broad economic and social benefits and that is a prospect we are excited about.
Along with our Port Moresby office we have established a full-time team in Bougainville with an office in Buka. We were pleased to hold our first board meeting there in more than 27 years in August.
We are fortunate to have a strong board with a wealth of experience in PNG and Bougainville and a capable management team.
The board was further strengthened by the recent appointments of distinguished Bougainvillean Mel Togolo, who has extensive mining industry experience along with Peter Graham.
Peter served as managing director of ExxonMobil PNG Limited which was responsible for the US$19 billion (K57 billion) PNG LNG project and is also the current chief executive of Ok Tedi Mining Limited.
The board also features former Prime Minister Sir Rabbie Namaliu, Dame Carol Kidu, and Sir Moi Avei and is chaired by PNG and international mining industry veteran Robert Burns.

Q: Can you explain BCL’s plans to reopen the Panguna mine and what will that entail?
HITCHCOCK: There is certainly a lot of work to do if the vision of a new Panguna project is to be realised.
Our approach is being guided by a redevelopment plan which has four distinct stages.
The plan has the backing of the Bougainville government and strong support among project area landowners.
We estimate that we are around halfway through the first stage (stage zero) and community and stakeholder engagement remains a priority focus.
We are increasing our presence in the project areas with our local engagement team led by well-regarded Bougainvilleans.
Community inclusion and support is essential to the redevelopment process. With the agreement of landowners, we intend to commence the necessary technical, environmental and social baseline studies that will guide further work.
We will also negotiate with landowners the benefits of mining as the project advances.
The third stage would see us conduct a bankable feasibility study and obtain the necessary permits and approvals with the final stage being the construction and operation of the mine.
We have sufficient financial resources to complete the first two stages and will look to secure additional finance to help fund the feasibility study and project construction.
The company has set realistic objectives and if mining is to recommence, it would be several years away.

Q: Panguna mine has a sensitive history surrounding its closure. How is BCL catering for this in its plans to reopen the mine and what has been the feedback?
HITCHCOCK: We and the global mining industry have learnt many lessons from the past but see a bright future for Bougainville and are committed to supporting that future.
There is a sensitive history. But given BCL’s long-standing involvement in both Papua New Guinea and Bougainville, it is something we understand and appreciate as a company.
We have, for example, always retained a positive local presence throughout the period of the mine’s closure.
We have continued supporting initiatives such as Bougainville Copper Foundation which has provided educational opportunities for more than 1000 Bougainvilleans since the mine closed and we continue to support other community projects and initiatives.
BCL is also a very different company today, with Rio Tinto no longer involved and the people of PNG and Bougainville effectively our major shareholders.
We are governed and regulated by the Autonomous Bougainville Government and will be shaped and guided by the Bougainville people.
Since returning to Bougainville, our direct engagement with stakeholders, including landowners, the government and the community more broadly has been positive, and BCL has been extremely well-received overall, including in central project areas.
That is not to say there are no challenges and there are of course people with differing views.
A dispute for example over the leadership of one of the nine project area landowner associations has added a layer of complexity to our engagement.
This is subject to an ongoing National Court mediation process and we are hopeful of a timely, satisfactory resolution.

Q: What are some economic benefits that will be gained from reopening Panguna mine?
HITCHCOCK: The project certainly has the potential to generate significant broad-based economic benefits. While it was a different time, when the mine last operated between 1972 and 1989, the production value represented around 44 per cent of Papua New Guinea’s exports, with a production value of K5.2 billion.
It also resulted in the training of some 12,000 employees, including many apprentices who helped build capacity in the PNG and Bougainville workforce.
Under the new Panguna project, the construction phase alone will cost an estimated US$4-6 billion (K12- 14 billion) and that will present a range of opportunities for employment and local business in the provision of goods and services.
The mine would also generate significant tax and royalty revenue over the 25 year plus operational life of the project.
There will be a need for certainty in relation to the tax regime that would apply.
Benefits will also be negotiated with landowners in project areas and shareholders will see dividends from their project equity.
A project of this scale will help stimulate the economy in different and significant ways, training and employment, new business opportunities in the supply of goods and services and the provision of new infrastructure to name a few.

Q: What are your views on the distribution of Rio Tinto’s shares by the PNG government and the Bougainville referendum in 2019?
HITCHCOCK: The exit of Rio Tinto saw its 53.8 per cent shareholding transferred to the ABG and the Papua New Guinea government, with each now currently holding a 36.45 per cent share as the major shareholders.
The PNG government already held a 19.1 per cent share.
Prime Minister Peter O’Neill had said that 17.39 per cent of the PNG government shareholding will be transferred to the people of Bougainville.
As an independently managed company, we will continue to serve all of our shareholders to the best of our ability. But the final configuration of the shareholding is not something we have expressed a view on.
In terms of the proposed referendum, that is very much a matter for the people of Bougainville and we will respect whatever decision they make.
We also, of course, fully recognise and support the Bougainville peace agreement.

Q: Mining companies usually partner with the province they operate in to bring about development. What are BCL’s plans for Bougainville in non-mining sectors such as agriculture and tourism?
HITCHCOCK: BCL certainly recognises the challenges that come through the impact of a large mining operation on a smaller, lesser developed economy such as Bougainville.
Therefore, we will do everything we can during the operating life to encourage and nurture a broader-based economy that can flourish when mining is finished.
The continued development of Bougainville’s other important industries, including agriculture and tourism and other services
are critical to future economic success.
In terms of our efforts as a company in mineral resources and given the potential scale of our operation, we certainly see ourselves complementing other sectors and providing impetus for them to grow.
For instance, redevelopment would lead to much improved infrastructure and services which other sectors and industries would benefit from.
Employment opportunities are a major dividend of growth and economic diversity and we are certainly committed to being proactive in these areas, working with government, local communities and industry to support initiatives
that support sustainable development.
The goods and services requirements of a major mining operation, for example, provide all kinds of opportunities for such things as agriculture in the provision of fresh food and it will also be a catalyst in areas like transport and accommodation.
When you build capacity, you put structures in place to then cater for growth in non-mining related industries such as tourism, you also promote local innovation and business which is something BCL is very keen to foster.


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Angore Shut Down, Expat Worker Held Hostage

Post Courier | November 21, 2017

Angore has been shut down for an indefinite period since last week and an expatriate worker was also held hostage as an expression of their frustration for their nonpayment of funds.

Hides Gas Development Company chairman Tuguyawini Libe Parindali yesterday (Nov 20) confirmed this with the Post-Courier.

Mr Parindali said the landowners are frustrated because government has failed miserably to honor its commitments as result as threatened to shut down operations at the Hides Conditioning Plant.

“The government now needs to fast track its clan vetting process and release the K6.7 million owed to the landowners in infrastructure and the K35 million promised money for the Investment Development Grants.

“Businesses and individuals are now facing a serious security issue and we need government’s intervention.

We will not touch the developer, they have our undivided support. All we want is for the Government to fix its outstanding issues,”  he said.

Meanwhile a spokesperson for ExxonMobil confirmed that despite rumors the Hides Gas Conditioning Plant is continuing to operate.

“ExxonMobil PNG continues to monitor the situation in Hela Province.

“The safety and security of our employees, contractors and the local community is a top priority.

Due to recent community tension in the Highlands (Hides, Angore, Komo), ExxonMobil PNG has suspended non-essential work. Non-essential personnel are being re-deployed to other areas,” the spokesperson said.

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Mixed bag for PNG in new risk report

We are always hearing about where is the best place for foreigners to ‘invest’ [i.e. extract profits] but what about looking at the equation from the perspective of people in the target countries? Who are the best and the worst investors based on their track records?

Probably mining companies, logging companies, and oil palm companies are among the worst ‘investors’ and the ones PNG should avoid?

Time for the World Bank / ADB / Australian Aid to fund something that would really be useful!

A COMPREHENSIVE study has just been completed about where in the world you would find the best – and the worst – jurisdictions in which to invest your hard-earned cash.

PNG Industry News | 22 November 2017 

Published by PNGIndustryNews.net sister publication, the Mining Journal World Risk Report (featuring MineHutte ratings) is a comprehensive piece of work which gives a ‘studied and balanced appraisal’ of what risks may be encountered in nearly every spot on earth.

“This report is not designed as a comprehensive risk-assessment document. Rather, it is an investment-risk guide that comes with the supporting data to start building a deeper-level risk assessment ahead of an investment decision,” is how it is summed up by the report’s author, Chris Cann.

Papua New Guinea has a mixed showing in the report. In ‘hard risk ratings’ it features 17th worst in the world, but scores roughly midway in ‘perceived risk ratings’.

On the ‘investment risk index’, PNG features two thirds of the way down on the list, where Canada is at the top and Democratic Republic of Congo, Laos and Guinea are at the bottom.

PNG is dead-on midway in the ‘opportunity index’, led by Canada and tailed, somewhat surprisingly, by Italy. 

Its 130 pages contain the results in an easy-read format, in which countries are judged on the following criteria:

  • Legal: Considers the mining code’s ability to protect investment;
  • Governance: Considers the ease at which miners should expect to set up and conduct business and how severe the challenges are likely to be related to corrupt bureaucracy;
  • Social: Considers the level of underlying political and social tension that could lead to unrest, protests, activism or violent conflict; and
  • Fiscal: Considers how punitive the tax structure is as well as the health of the underlying economic environment;
  • Infrastructure: Considers a jurisdiction’s energy security and how well it is set up with mining-related transport infrastructure.

Other areas covered in MineHutte’s analysis drills into specifics, such as exploration exclusivity, exploration duration, the right to mine, tenure certainty and other factors which could influence investors’ decisions to step into projects.

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Exxon moves non-essential workers away from PNG’s Hela

Armed clansmen in the town of Komo in Papua New Guinea’s Hela Province. Photo courtesy of Michael Main

Radio New Zealand | 23 November 2017

The oil and gas multi-national ExxonMobil says it has moved non-essential staff away from its LNG project operations in Papua New Guinea’s Hela province.

This comes amid a surge in unrest and tribal fighting in the remote Highlands region where the gas fields for Exxon’s LNG project are located.

Three days ago an expatriate worker with the project was kidnapped and held hostage by landowners who are reportedly frustrated with the government over non-payment of project commitments.

Police said the hostage was released without harm two days ago.

A spokesperson for ExxonMobil PNG said that due to recent community tension in Hela areas Hides, Angore and Komo, the company has suspended non-essential work.

She said non-essential personnel were being re-deployed to other areas.

According to Exxon, the Hides Gas Conditioning Plant is continuing to operate, as the company monitors the security situation in Hela Province.

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Man builds gold-dredging machine from scrap metal

The National aka The Loggers Times | November 20, 2017

A man from Aseki in Morobe has built a simplified alluvial gold dredging machine using pieces of scrap metal.
The machine, powered by electricity and water, will greatly assist small-scale alluvial miners.
Sam Sky is a Grade 6 dropout from Asini in Salamaua and Bangulum in Bulolo. His alluvial gold-dredging machine was launched during the 103rd Yabem district conference in Aseki which was attended by 14 circuits in the presence of Morobe deputy governor Waka Daimon.
Daimon last Thursday delivered 44 bags of 10kg rice to support and feed the delegations.
Sky said that his first invention was a machine used to husk peanuts after a woman farmer in Markham requested him to build it.
Sky said that it took him two weeks to design and four months to collect materials and tools and another four months to build the peanut pulper.
Sky later designed and built the alluvial mining machine launched last week.

“My aim is to help small coffee farmers and alluvial miners who did not have easy access to services in Lae,” Sky said.

“I also designed and built another alluvial mining machine, soon to be completed that will be powered by water alone that doesn’t need electricity.”

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Lunch & Learn: Women Miners as Change Makers in Papua New Guinea


Join Earthworks and Community Solutions Program International Fellow, Immaculate Javia, for a Lunch and Learn talk on Wednesday, November 29th from 12 – 1pm.

Immaculate has more than 7 years of experience, training and working with women in the small-scale mining sector in Papa New Guinea.

She will talk about how empowering women through a policy framework can give a voice to women to advocate for change in the ASM industry in Papua New Guinea.

Lunch will be provided, from Taylor Gourmet

LOCATION: Earthworks, 1612 K St. NW, Suite 904, Washington, DC 20006, United States

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Lihir Royalties on hold

Sally Pokiton | PNG Loop | November 15, 2017

temporary hold on royalty payments from Newcrest Mining Limited, has been ordered by the Waigani National Court today.

The people of Namatanai district, claim they have not received their share of royalties in the last 10 years, an amount that equates to K7 billion.

With the restraining order in place, only the Nimamar LLG and Lihir Landowners will receive their royalties this month.

Kavieng and Namatanai districts and the New Ireland Provincial governments will not receive any payments until parties present their case, on how much they should be paid, and get a clarity on the gures in court next month.

Member for Namatanai, Walter Schnaubelt and member for Kavieng Ian Ling Stucky led a case in the National court, against Sir Julius Chan as Governor for New Ireland Province Government, and Lamiller Pawut as Acting Provincial Administrator of New Island Province.

The sitting MPs are seeking clarity on all the past payments, and how much should have been paid between the New Ireland Provincial Government and the two districts as per the Lihir MOA.

They want an account of all those monies and how much should have been paid to them through the Provincial Treasury accounts.

Schnaubelt said the Provincial Government received K168 million under the governorship of Sir Julius Chan, from 2007 till now.

“I’m fighting for my people’s share. As a district, we never received our portion for the last 10 years. Hopefully the National Government can give us what we deserve initially, in accordance to the Lihir MOA, where Namanatani district is supposed to receive 20% of the Lihir royalties,” he said.

The Lihir Landowners and Nimamar LLG gets 50% payment. From the other 50%, Kavieng and Namatanai districts are to receive K20% each while the 10% is retained by the provincial government.

“The Lihir MOA was very clear, outlining the recipients but unfortunately, Namatanai district has not been receiving its share for 10 years, and that equates for K7 billion years, hence why Namatanai district is in the state its in, a total neglect.

“Hopefully all these corrective measures will now be put in place, and the challenge is now on me as member to deliver the services I promised during the election,” Schnaubelt said.

The two members believe the Lihir MOA is unfair, as royalties have been unfairly administered among the two districts, and they want an account to be given on the payments that should to be received on behalf of the two districts.

In the meantime, their royalty payments will be made to the National court trust accounts. Whether the orders will continue, that will be determined on December 4.

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