Tag Archives: Solomon islands

Nickel mining set to start on Solomons’ San Jorge island

Axiom drilling activity on Isabel Nickel Project.

Radio New Zealand | 6 October 2018 

Nickel mining is finally set to commence on San Jorge Island in Solomon Islands’ Isabel Province.

An Australian company, Axiom, this week announced that mining will begin in December.

It said the mine’s first nickel ore shipment was expected to be made in the first quarter of next year.

Axiom, which was granted a lease by the Solomons government last month, said it was close to finalising finance for its project.

According to the company, it is in “advanced stages of negotiations with a number of parties” who are potential partners in the mine.

On the back of Wednesday’s announcement, shares in Axiom Mining rose sharply on the Australian stock exchange.

Isabel is considered to possess one of the largest clusters of nickel laterite deposits in the Pacific.

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Axiom says near supply agreement for Solomon Islands nickel mine

Axiom drilling activity on Isabel Nickel Project.

Melanie Burton | Reuters | October 3, 2018

Australia’s Axiom Mining on Wednesday said it was close to deciding on a partner to take nickel ore supplies from its mine in the Solomon Islands in exchange for finance.

Mining at the San Jorge project in the Pacific nation will start in December, with ore shipments expected to begin in the first quarter of next year, Axiom said in a statement.

The Solomon Islands approved a mining lease last month and ore loading facilities are currently being built, the firm said.

A previous mine finance arrangement with Gunvor Singapore, for A$5 million ($3.6 million) in funding and up to A$10 million towards mine construction, that was made in 2015 has now expired, Axiom said.

“With the recent grant of the mining lease there has been an increase of interest and demand from nickel ore consumers for Axiom’s San Jorge material,” it said.

The San Jorge mine is a nickel laterite ore deposit.

“Terms and conditions of proposed agreements continue to be refined and are in a final stage of negotiation,” Axiom said, without giving further detail. ($1 = 1.3953 Australian dollars)

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Axiom granted mining lease for Isabel nickel project in Solomon Islands

Imelda Cotton | Small Caps | September 20, 2018

Axiom is now fully permitted to commence mining of the Isabel nickel project (San Jorge), with first shipment of ore expected in Q1 of 2019.

Minerals explorer, via its 80%-owned subsidiary AxiomKB, has been formally granted a mining lease by the Solomon Islands government for the San Jorge nickel deposit, which sits within the company’s flagship Isabel nickel project.

The 25-year lease has been issued for the extraction, export and sale of nickel ore and associated commodities from San Jorge and allows Axiom to commence construction at Isabel, with a view to commercial production in early 2019.

In awarding the lease, Solomon Islands Minister for Mines, Energy and Rural Electrification Bradley Tovosia commented on Axiom’s contribition to the local region.

“The Isabel project is to be an important part of our economy, and it is exciting to see real production now moving forward for everyone’s benefit,” he said.

Upgrades of a temporary exploration camp to a long-term mining camp have commenced, in addition to the construction of supporting roads and loading facilities.

Community consultations are also underway in preparation for the first shipment of ore.

Financing for life of mine construction and development is in the advanced stages and due to be finalised over the coming weeks.

The Pacific’s largest nickel deposit

The Isabel nickel project is widely considered one of the largest nickel laterite deposits in the Pacific region, hosting a historical non-JORC deposit of 159 million tonnes at 1.1% nickel and 0.07% cobalt.

It comprises a number of deposits within the Solomon Islands’ Isabel province, including the key deposits of San Jorge and Kolosori, operated by AxiomKB (Axiom 80% ownership) in partnership with local landowners (20%).

Both are spread over 36 square kilometres each, with San Jorge accounting for approximately 50% of the known deposits within the Isabel acreage.

The deposits at San Jorge sit very close to the surface in uninhabited land along a shore which encompasses a natural deep water harbour – all qualities which will enable Axiom to bring a direct shipping of ore operation to the market in a timely and environmentally-acceptable way.

Project history

Axiom’s milestone signifies the first time in the Isabel nickel project’s history that an owner has been granted a mining lease.

Previous San Jorge tenement owner and former nickel major, Inco Ltd (now owned by Brazilian mining giant Vale) conducted feasibility studies during the 1970s based on results from over 7000 drill holes and pits and 10,000 samples.

In 1991, Kaiser Engineers completed its own study on Inco’s data, determining preliminary capital and operating expenditures and conducting economic analyses and financial modelling.

Development by either owner did not progress further due to a failure to win the support of customary landowners from the Kolosori and Bungusule tribes.

In December 2010, Axiom’s collaborative approach resulted in a partnership with the landowners and the Axiom KB joint venture was established. Then in September 2014, AxiomKB emerged successful after three years of litigation proceedings instigated by Sumitomo Mining Metals Solomon over the Isabel nickel deposit.

Last month, Axiom announced it would be recruiting key positions and growing its board of directors to enhance its operational expertise and strengthen its position during the project’s development.

At midday, shares in Axiom were trading 34.02% higher at $0.130.

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China looking under the sea for opportunities in the Pacific

Denghua Zhang* | East Asia Forum | 30 June 2018

China has hunted globally for land-based mineral deposits to fuel its economic development since the 1990s. Now, Beijing is devoting growing attention to seabed mining. As China’s Five-Year Plan on Mineral Resources (2016–2020) states, ‘China will actively participate in international surveys on deep sea mining and accelerate the exploration and development of ocean minerals’.

In the Pacific islands region, most countries are small in land area but have huge maritime exclusive economic zones (EEZs). Chinese enterprises have invested in seven land-based mining projects in Papua New Guinea (PNG), Fiji, New Caledonia and the Solomon Islands and have been interested in mining the Pacific’s seabed minerals since 2001.

China’s engagement with the Pacific on seabed mining started with research activities that have mainly been carried out by the China Ocean Mineral Resources Research and Development Association (COMRA). COMRA is affiliated with the former State Oceanic Administration, which was absorbed into the new Ministry of Natural Resources in March 2018.

The Qingdao Institute of Marine Geology has conducted many of COMRA’s research projects in the Pacific. Between 2001 and 2010, the Institute completed two research projects on China’s bilateral cooperation in ocean resources exploration and on seabed mineral resources in the South Pacific. Their research categorised marine areas as prospective sources of polymetallic nodules, cobalt nodules and hydrothermal sulphide deposits, and also compiled a seabed mining resources map of the Pacific. The research team suggested that China should incorporate seabed mining into its aid plans for Pacific states and use concessional loans to support exploration projects.

Based on these research activities, Chinese government agencies have directly reached out to their Pacific counterparts. In April 2013, a joint delegation comprised of officials from COMRA and Chinese mining institutions visited the Cook Islands, Fiji and Samoa and expressed their strong interest in exploring seabed mining in the three countries. In August 2014, Chen Lianzeng, Deputy Director of the China State Oceanic Administration, visited Vanuatu and Fiji and proposed that China and the two countries should strengthen cooperation on maritime resources exploration and development. Vanuatu’s then-prime minister Joe Natuman and Naipote Katonitabua, the acting permanent secretary of Fiji’s Office of the Prime Minister, responded positively to China’s suggestions.

China’s state-owned enterprises (SOEs) are also involved in seabed mining. Mawei Shipbuilding Limited, a Chinese SOE located in Fujian Province, is building a US$18 million seafloor production support vessel for Toronto-based Nautilus Minerals. The vessel was launched in March 2018, with approximately 75 per cent of it completed. It will be used for the Solwara 1 project — the world’s first seabed mining project, located in the Bismarck Sea off PNG.

The three seafloor production tools to be used in the Solwara 1 project were designed and built by the UK-based Soil Machine Dynamics Ltd. In April 2015, Soil Machine Dynamics Ltd was sold to Zhuzhou CRRC Times Electric Co, Ltd, which is an SOE ultimately owned by the State Council of China. The products from Solwara 1 will be processed by Tongling Nonferrous Metals Group — another Chinese SOE. In May 2017, China Minmetals Corporation and the International Seabed Authority (ISA) signed a 15-year contract that allows China to search for polymetallic nodules in the 72,745 square kilometres of the Clarion–Clipperton Fracture Zone in the Pacific Ocean.

Seabed mining in the Pacific is attracting interest from other foreign players. For example, Japan and Russia have brokered ISA contracts to explore cobalt-rich crust resources in sites close to the EEZs of the Marshall Islands and the Federated States of Micronesia.

Seabed mining is both an emerging field and one that is in a considerable state of flux. As shown by the proposed Solwara 1 Project, this new industry faces unprecedented financialenvironmental and social challenges. There are also notable gaps in the international and national laws that govern seabed mining. The International Seabed Authority is still in the process of developing a ‘Mining Code’ to regulate the prospecting, exploration and exploitation of seabed minerals. As of late 2015, only four of the 14 Pacific states (Palau, Tonga, Tuvalu and Nauru) have legislation that covers seabed mining issues. The PNG government is still developing a draft offshore mining policy.

Greater China–Pacific engagement on seabed mining has upsides and downsides. Pacific states have flagged seabed mining as a new potential driving force of economic growth. PNG, Fiji, Tonga and the Solomon Islands are among the first countries in the world to issue exploration licenses for seabed mining in their EEZs, and Pacific states might be able to seek more financial and technical assistance from China to develop this new industry. But any such project needs to consider the environmental and social impacts of seabed mining and must fully comply with international and national laws.

Looking into the future, China is expected to engage actively with Pacific states on seabed mining and focus on exploration and establishing official contacts. But China is unlikely to commit substantial resources to seabed mining projects before the industry becomes more commercially and environmentally viable.

*Denghua Zhang is a Research Fellow at the Department of Pacific Affairs, The Australian National University.

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Australian miner loses bauxite licence in Solomons

NASA picture of Nende in Solomon Islands’ Temotu province. Photo: NASA

Radio New Zealand | 30 May 2018 

An Australian company wanting to mine bauxite in Solomon Islands has had its exploration licence rescinded.

AU Capital Mining was exploring in Nende in the remote eastern province of Temotu, but it has been notified by the Mining Minister, Bradley Tovosia that their prospecting to date has been unsatisfactory.

The minister went on to say that the company had failed to establish amicable relations with the local communities in Nende – something that is required under the agreement.

AU Capital Mining obtained an initial provincial business licence a year ago but it has been confronted by significant opposition in Nende ever since.

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Tensions in Temotu as expiry of Aus miner’s licenses loom

NASA picture of Nende, known also as Santa Cruz, in Solomon Islands’ Temotu province. Photo: NASA

Radio New Zealand | 15 March 2018 

Tensions are rising in Temotu as an Australian miner’s licences to prospect and operate in the Solomon Islands’ province approach their expiry date.

Pacific Bauxite secured a prospecting license in 2016 with the support of some local landowners and obtained a provincial business license, after a change in the local government, to begin working on Nende Island.

But it has met with stiff opposition from other landowning groups who accuse the company of operating illegally and are trying to take it to court.

Koroi Hawkins has more – audio link 

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Can the Solomon Islands’ Gold Ridge Mine serve as a new model for resource extraction in the South Pacific?

The coastline view near the capital, Honiara. Photo by Paul Hilton/Greenpeace.

Catherine Wilson | Mongabay | 15 November 2017

  • After 17 years of foreign ownership and a checkered environmental history, the Solomon Islands’ Gold Ridge mine is now being led by a local landowner-driven joint venture.
  • The company saw its first major test in April 2016, when rainfall triggered a spillover from the mine’s tailing dam. However, independent tests found the water quality downstream remained safe.
  • Though concerns still remain, the new ownership structure could be a model for mining operations elsewhere in the region.

In April 2016, thousands of villagers living in the vicinity of the Gold Ridge Mine in the southwest Pacific nation of the Solomon Islands braced themselves for a major disaster as torrential rainfall triggered a spillover of thousands of cubic meters of untreated water from the mine’s tailings dam.

The Ministry of Health issued instructions to people to cease using water from the nearby Kwara, Tinahula and Matepono rivers for drinking, washing or fishing, due to possible risk of chemical contamination.

The gold mine is situated on the country’s main island of Guadalcanal, 40 kilometers (25 miles) from the capital, Honiara.

Stanley Holmes Vutiande, who lives in Navola village, located along the Gold Ridge Road leading to the mine and 2 kilometers (1.2 miles) from the dam, remembered when it happened.

“We fled because there was water overflowing from the dam and we thought it might burst, so people just panicked and took off,” he recounted. “There was general information to look for safety, for higher ground, but no specific instructions as to what to do.”

Joe Horokou, the environment and conservation director at the Ministry of Environment, said the incident “was bad because it took us by surprise,” even though the company had been given approval to discharge tailings from the dam. “The approval was given with conditions like before it is discharged the water has to be treated to acceptable standards.”

Despite the dire warning, the expected disaster didn’t materialize. The dam held, and stakeholders, including Gold Ridge Mining and the ministries of environment and health, commissioned numerous independent tests of nearby rivers and streams.

“Based on the findings of those analyses we were able to determine that, even if the water was discharged untreated at the time, it caused no immediate harm to the downstream communities … the water quality was safe within the dam,” Horokou said.

Vutiande also said that, at the time, he noticed nothing of concern in the water quality of the Tinahula River near Navola.

A palm oil plantation in the Solomon Islands. The land used to be grassland and bush. Photo by Lorette Dorreboom/Greenpeace.

The incident was the first major test for the new landowner-led company, Gold Ridge Community Investment, which had taken ownership of the mine only the year before. After 17 years of foreign ownership and a checkered environmental history, the Gold Ridge mine is now being led by a local landowner-driven joint venture that is emerging as a potential new mine management model in the Pacific Islands region.

In 2015, Gold Ridge was sold for 100 million Australian dollars ($73.8 million at the time) to Gold Ridge Community Investment (now Gold Ridge Mining), by its Australian owner, St. Barbara. The company decided to abandon the mine, which contains an estimated 3.18 million ounces of gold, in the wake of extensive damage caused by Cyclone Ita and flooding the previous year.

The mine hasn’t been operational since, but following the signing of an agreement with Australia-based AXF Resources, which will provide the majority of investment, plans are now in place to resume extraction by the end of next year.

Walton Naezon, chairman of the landowner-led Gold Ridge Mining, said he is now keen to both reduce any risk the tailings facility poses to the surrounding environment and communities, and to increase public transparency of the company’s environmental processes. The top priority, he said, is dewatering, or emptying out the dam to ease pressure on its wall and decrease the chance of any further overflows.

Naezon spoke to Mongabay about implementing his vision of an extractive project where local communities are part of the corporate structure. About 3,000 to 5,000 people live in villages surrounding the mine, and traditional landowners own 30 percent of the company. They have already participated in making key decisions, such as the selection of an independent environmental consultant. They also observe operations at the tailings dam and take part in the company’s environmental testing and monitoring of nearby rivers and streams.

Larger than life in a blue Pacific print shirt, Naezon is bullish in his drive and optimism about the enterprise when we meet in a Honiara hotel. But he also comes across as astute, widely informed about the industry and its issues, and attuned to the sensibility and needs of his own people. No doubt this is a product of his previous career in politics, as well as skills and grasp of the cultural context as a traditional leader. He was minister of mining and energy from 1997 to 2001, minister for state government until 2003, and minister for commerce for another two years.

Naezon is visibly relaxed about the attention given the mining industry worldwide by what he refers to as the “greens” movement, commenting that it “makes the developer and company stronger.”

The revived Gold Ridge venture, at this stage, comes across as more than ticking the right boxes in order to be assessed a responsible corporate citizen. There is evidence of an attitudinal shift, a genuine motivation to alter the structure of power, participation and accountability.

The Gold Ridge Mine tailings dam in Guadalcanal Province, Solomon Islands. Photo by Catherine Wilson for Mongabay.

Community Involvement

As I stood in the water treatment plant at the edge of the vast blue expanse of the dam, reflecting the brilliant tropical sun, Gaheris Porowai, the supervisor, readily answered questions. He said that we were looking at 1 million to 2 million cubic meters (264 million to 528 million gallons) of water, with the water level currently 1.5 meters (5 feet) below the spillway. Treated water was being discharged, as permitted, at 500 cubic meters (132,086 gallons) per hour or 12,000 cubic meters (3.17 million gallons) per day, with water testing conducted twice weekly.

This will be done persistently, Naezon said, until the dam is empty.

“There should be no water there. In the next two years, no water, we don’t want to see water there,” Naezon said emphatically, adding that Golder Associates, the company responsible for the dam’s construction has also been reengaged to review its current state and potential future.

Phil Fairweather, Gold Ridge’s general manager, said that he and many other people had been attracted to the venture by the vision of building an enterprise on greater transparency, community inclusion and social and environmental sustainability.

“Any dewatering that is happening at the moment, for example, involves the communities,” Fairweather said. “It actually involves unqualified community people coming and observing the testing, coming and being involved in community awareness prior to any discharge and during.”

Local village chiefs, landowners and students are all invited to visit the tailings dam to learn about the water treatment process and witness its discharge.

“We want to see the mine open, but the health and safety and environmental responsibility is an utmost priority to us,” said Robert Rafaniello, the company’s deputy CEO. “And that is why as we lower the water, we will do more investigations into the stability of the dam, assess it. Does it need any strengthening to future-proof it for any other unknown event? Do we use the tailings dam in its current form, do we look at alternatives?”

Tropical forest, Vella Lavella, Solomon Islands. Forests cover more than three quarters of the country’s land area, but illegal logging remains a serious problem. Photo by Lorette Dorreboom/Greenpeace.

In hindsight, the lack of continuity in the mine’s foreign corporate ownership since the late 1990s — and intermittent periods of closure resulting in inconsistent environmental practices — can be seen as factors in the problems being experienced today.

The start of mining in 1998, by the Australian company Ross Mining, coincided with the stirrings of civil unrest. The mine was forced to close a mere two years later when the violence escalated. While a peace agreement was achieved in 2003, Gold Ridge didn’t reopen until 2010 after acquisition by Allied Gold. The venture changed hands again in 2012, this time to St. Barbara. Then, in April 2014, calamity struck when a cyclone and torrential rain caused massive flooding that damaged mine infrastructure, raising concerns about the stability of the tailings dam and forcing a second shutdown. Losses and damages at the mine amounted to $27.7 million, 26 percent of the total economic impact of the disaster on the country.

Soon after, St. Barbara decided to exit the country, selling the mine and its legal liability to Gold Ridge Community Investment the following year, while the Solomon Islands government declared the site a disaster zone.

A model for the region?

The Solomon Islands is not the only Pacific Island state to experience environmental problems in the mining industry.

Natural and mineral resource extraction has, over decades, generated major revenues in a number of other countries in the region, such as Papua New Guinea and Nauru, while many more are now considering the lucrative potential of deep-sea mineral extraction. But in both island states the extractive industries have been plagued by environmental disasters. Both have failed to achieve environmental sustainability, and the economic windfalls have not led to substantial improvements in human development.

Glaring examples include the Panguna copper mine in Bougainville, Papua New Guinea, where the fallout from the destruction of land and waterways nearly 30 years ago remains unaddressed; as well as the OK Tedi copper and gold mine in the country’s Western Province, where massive discharge of mine waste into local river systems since the mid-1980s decimated fish and animal species and contaminated water sources and farmland. In the tiny state of Nauru, aggressive phosphate extraction has ravaged 80 percent of the country’s landscape.

In the Solomon Islands, the government is looking to mining as the next big revenue earner as it faces the challenges of post-conflict economic recovery and the exhaustion of commercial forestry after decades of unsustainable logging. The country is known to have significant mineral resources, including gold, silver, nickel and lead.

“The Gold Ridge mine reopening is very important for the government and Solomon Islands as it contributes significantly to the economy,” a spokesperson for the Ministry of Mines, Energy and Rural Electrification told Mongabay.

Nevertheless, the economic, social and environmental success of mining ventures over the next generation depends on not repeating the problems of the past.

A 2013 UNDP symposium on managing extractive industries in Pacific Island states highlighted some of the steps needed to overcome the hurdles. These include conducting better consultations with stakeholders and communities, developing a more complex understanding of customary land tenure, improving the transparency of political processes and revenue management, and achieving greater commitment to environmental protection, over and above the basic requirement of developers producing environmental impact assessments.

Expert observers have also expressed concerns about the influence of corruption and limited capacity of the government to manage the demands of regulating and overseeing mining activities.

Logging road in a deforested area in Vangunu Island. Photo by Paul Hilton/Greenpeace.

“Too close an identification of political leaders with resource extraction companies has not served Solomon Islands well,” Graham Baines of the Bergen Pacific Studies Research Group has written (pdf). “The chance to build an economy based on sustainable timber production has been lost. And just as government institutions have been shown to be ineffective in controlling logging abuses, so, too, their role in guiding and controlling mining is weak and compromised.”

Recently the government has tried to address some of these issues with the launch of a new National Minerals Policy (2017-2021). It aims to guide reformed financial practices, industry oversight, and procedures for tailings management, corporate environmental audits, biodiversity management and the mitigation of deforestation and soil erosion.

“With the policy now launched, the ministry is working closely with the World Bank to begin implementing the policy, and this process is already under way, focusing mainly on the regulatory framework,” the Ministry of Mines spokesperson confirmed. This includes reviewing resource and manpower capacity and rolling out public outreach and awareness of the new policy.

Progress in these areas is vital to turning around the suspension of the Solomon Islands by the Extractive Industries Transparency Initiative (EITI), which in March of this year sanctioned the country due to assessed deficiencies in areas including licensing procedures, monitoring and control of production, and revenue distribution.

The revival of the Gold Ridge mine will bear witness to how much progress the government has been able to make in the short term.

In May, the government and company began consultations with landowners about the mine’s proposed reopening next year, seeking to address issues such as royalties and environmental impact.

There is evidence, though, that not everyone is satisfied and local environmental concerns persist.

Vutiande said that in Navola, “the water system was always a long-term concern since the opening [of the mine] by the previous companies. The water issue is an ongoing issue. There were a few times when there were people who found things that have died in the river, such as fish and frogs.”

Despite the company’s stated commitment to transparency, Gold Ridge Mining remains tight-lipped while it considers the range of options for dealing with mine waste. The decision as to whether the dam will continue to be used is still to be made, and the government is still awaiting the environmental management plan.

The contents of these will be the first step in translating the new Gold Ridge vision into reality and establishing, or debunking, its standing as a model for the rest of the region.

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