Tag Archives: Sepik river

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.

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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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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Onus on Chinese to build a safe dam if large Sepik mine proceeds

Vanimo Harbour, West Sepik, Papua New Guinea. Photo: RNZI / Johnny Blades

Vanimo Harbour, West Sepik, Papua New Guinea. Photo: RNZI / Johnny Blades

Minister’s advisor has ‘fingers crossed’ the Chinese do the right thing and we don’t end up with another Ok Tedi. VERY REASSURING!

Radio New Zealand | 25 November 2016

The onus is on a Chinese developer to build a safe tailings dam if it proceeds with developing Papua New Guinea’s Frieda River mine.

A feasibility study was recently completed for the copper and gold mine in West Sepik province for which Chinese-owned company PanAust has lodged a special mining lease application.

The study unearthed an even larger copper deposit than previously estimated.

However, local communities are worried about potential mine tailings polluting the major Sepik River system.

Katherine Karaya, the first secretary to the Mining Minister Byron Chan, said the government acknowledges the need to have sound environmental expertise incorporated before the mine is developed.

“Well let’s hope that the Chinese do a good thing, the right thing, to build a dam,” she said.

“Let’s keep our fingers crossed. They say they can do it, they’ve done it before in China, so let’s wait and see. Only time will tell whether they can prove they can do it, or if not there’s going to be another lawsuit like the Ok Tedi thing.”

Ms Karaya said the Environment Minister would have to be satisfied with the miner’s plans before a mining license is granted.

A pre-requisite for a license, according to the Mineral Resources Authority, is an environmental permit approved by PNG’s Conservation and Environment Protection Authority.

The MRA has also said PanAust would build a damn that would be part of PNG’s largest land tailings storage facility to ensure tailings are not dumped in the Sepik River and its tributaries.

The facility could double up as a hydro power damn for generating electricity.


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Frieda Mine Road Construction a Threat to Upper Sepik Environment

frieda road sepik

William H. Townsend, Ph.D., P.E.

It is clear that constructing the Frieda Mine Access Road from Nikie to Kubkain by way of Yabatawe in East Sepik Province will have major impact on the forest along the road, which runs through several Sanio-Hiyewe communities. By damaging their sago and other food sources, a sustainable food supply will be threatened in this challenging environment.

I lived with the Saniyo-Hiyewe for 20 months in 1966-1967 and shorter periods between 1980 and 1984. One of my activities during this time was mapping ridges, swamp forests, and paths between villages. Another was weighing food and measuring sago stands.

In 1981 through 1984 I served the PNG Government as its technical advisor on the Ok Tedi Mine, reporting to the Secretary of Minerals and Energy and the Secretary of Finance. As a civil engineer, I was responsible to monitor construction of the mine and report on OTML’s progress as it affected local facilities and environmental impact. 

Responding to a Directive from Parliament in 1982, I did an inspection of the Access Road from Kiunga to Tabubil and reported back to Parliament. This inspection revealed that the construction of the road through rain forest was slower and more difficult than anticipated. The side cast method of road construction used there discarded topsoil away from the roadway, pushing it into the adjacent forest.  (See photo.)

If the same construction methods for mine access roads are used on the Frieda Mine that were used in Western Province, runoff will deposit materials that will damage the prime sago areas, which have taken generations to develop, and other food sources. Damage to the fragile forest during construction would take decades to remediate and restore sustainable living to the people of the Upper Sepik tributaries.

While commentators are rightly concerned about the massive damage that occurs from riverine disposal of mine wastes during production or through the failure of poorly constructed tailings dams after mine closure, vigilance is also necessary from the beginning of construction. Environmental damage from construction shortcuts is especially likely during the pre-production and early production phases, before the project returns a profit, as Ok Tedi should have taught us all.

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Engineer warns of Frieda river mine impacts

A massive wave of toxic mud swept away the lives of locals living below the mining waste impoundment. Photo: Romerito Pontes

A mine in Brazil recently released a massive wave of toxic mud that swept away the lives of locals living below the site. Photo: Romerito Pontes

Joan Bailey | Post Courier | July 14, 2016

AN engineer from East Sepik Province has warned of massive environmental destruction if the proposed Frieda copper mine goes ahead. Thomsen Benguma said the volume of destruction will be unprecedented.

Mr Benguma has called on the Mineral Resources Authority and the West and East Sepik Provincial Governments to take high level precautions and insist on the developer  to design comprehensive waste management plans. This is to manage the tailings and the overburden or top soil that is dynamited and pushed off the side of the mountain.

Mr Benguma said the management of the tailings is normally captured in the waste management plan but the overburden which is also waste is never taken into account.

He explained that when the top soil is dynamited, unburden sodium mitrite and sodium nitrate is trapped in the soil and when this waste comes into contact with water, paste is formed.

“When this material is carried down by flood during rainy season, there will be heavy deposits in the river system which overtime will fill up the river, thus displacing aquatic life,” he said.

Mr Benguma who is also a waste management engineer by profession said the storage of tailings in high altitudes also poses a threat and suggested that it be put through a gas plasma system where the waste is burned or melted, resulting in the recovery of processions metals contained in the wastes.

He called on the Mineral Resources Authority to take heed and refrain from drawing conclusions that all will be fine and suggested that the developer must sign a memorandum of understanding to fully compensate the people of East Sepik, especially those living along the Sepik River if a environmental disaster occurred.

Related stories:

Frieda river mine will blow a huge hole right through Vision 2050

Mining Threatens Papua New Guinea’s Mighty Sepik River with Utter Ruin


Filed under Environmental impact, Papua New Guinea

Unfounded mining company promises and lies pollute Frieda River mine debate

tolukuma cursed

Will the people of the Sepik be the another people cursed by mining like those living along the Angabanga river?

The Chinese government wants to build a $3.6 billion copper and gold mine in the middle of one of Asia/Pacific’s largest pristine wild river systems.

The proposed Frieda River mine in Papua New Guinea’s Sepik region has alarmed local people and international scientists but the mining companies involved are using unfounded promises and lies to muddy the debate.

PanAust is the Australian registered, Chinese State owned company that wants to build the mine, along with another Australian company, junior partner, Highlands Pacific. 

Fred Hess, PanAust’s managing director, has been quoted on ABC news saying:

“The main driver for us is the economic benefit to an enormous number of communities who are deprived of any opportunity to gain better education or medical services because of their subsistence lifestyle.”

While we might all love this compassion from the international mining industry not only is the statement completely preposterous and highly misleading it is also legally and factually incorrect.

PanAust shares are owned by Guangdong Rising Assets Management Co. Ltd (GRAM), a Chinese State owned company. PanAust and its directors are under a legal obligation to deliver as much profit as possible to their shareholders – that is their primary legal duty. To claim the “main driver” for PanAust and its directors is the economic welfare of people living in the Sepik is not just plain nonsense it is untrue!

It is also completely false to suggest people in the Sepik are denied access to basic education and medical services because of their subsistence lifestyles. The reason people in the Sepik lack decent basic services is that as much as half of the PNG government’s annual budget is stolen by politicians, bureaucrats and lawyers in the nation’s capital. This corruption is denying people a decent standard of living and it is their subsistence lifestyles that provide them with their only incomes and social security. Destroy that lifestyle with mining and then people will really be plunged into poverty!

Even if the welfare of the people living in the area around the proposed mine is a concern to the Chinese government and the various mining companies involved, PNG provides plenty of evidence that large-scale mining is not going to help the locals and there is NO documented evidence to the contrary.

The same promises of economic benefits to local people and environmental stewardship were made by Rio Tinto to the people of Bougainville before the company’s Panguna mine destroyed the Jaba river and incited a war that killed as many as 20,000 people.

The same promises were made by BHP Billiton before its Ok Tedi mine destroyed the Fly river system and the company belatedly confessed it should never have opened the mine in the first place.

Anyone who has visited the Southern Highlands would be hard pressed to make the case that Barrick Gold’s Porgera mine has raised living standards and the same is true of New Ireland where there is the huge Lihir mine, owned by Newcrest, and the Simberi mine.

Perhaps given this history, to which we should also add Misima, Tolukuma, Sinivit and Bulolo, it should not be a surprise that there are NO published studies which make the case for large-scale mining being of benefit to rural people in PNG. Indeed, whenever the returns to rural people are subject to investigation, it is found that while a few ‘fat cats’ may capture some benefit, most people surrender their environment for not very much at all and many suffer some terrible social consequences.

The PNG government has been involved in two substantial evaluation reports on the economic impacts of mining for local people, one by the National Research Institute and one conducted by the United Nations.

A 2012 NRI case study on economic benefits from the Porgera mine [pdf file], concluded that:

Much of the financial benefits are thought to be consumed in Port Moresby (at the Crowne Plaza), with only a few individuals having access to a large slice of the wealth”

And, after 20 years of mining, “it is almost impossible to see where the money has gone”.

Papua New Guinea’s 2014 Human Development Report states:

“Papua New Guinea’s 40 year history of Independence has been dominated by the extractives sector. Large-scale mine and oil production … [have] provided significant improvements in incomes and livelihoods for some. At the same time however, this production has sparked civil strife, caused massive environmental damage, arguably distorted the economy, and brought about a range of negative impacts on communities.”

“Despite 14 consecutive years of economic growth, there has been little change in poverty levels in the country. In fact the level of inequality in the country has increased.”

Given the evidence, the onus must be on the Chinese government, PanAust and Highlands Pacific to come up with some hard evidence to support their claims that not only will the mine be environmentally safe, it will bring economic benefits to a huge number of people and communities.

Until they have that evidence they should shut up with their lies and misinformation.

Meanwhile in evaluating the mine’s likely impacts the PNG government and the local communities should trust history rather the rosy predictions of corporate scientists and company officials.

What is at risk is the Sepik River which flows 1,100 kilometres from the mountains in the centre of PNG, across a wide wetland-dotted plain to the northern coast and the lives of 100,000 plus people.


Filed under Environmental impact, Financial returns, Papua New Guinea