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Mayur Resources to Develop PNG's First Iron and Industrial Minerals Project
by PNG Business News - January 12, 2021
Following the lodgement of a mining lease (ML) application of its Orokolo Bay project in the Gulf, Mayur Resources Ltd says it is on its way to developing the first iron and industrial minerals project.
According to the firm, the application is about the full-scale development of the project with a planned saleable production rate of 0.5 million tonnes per annum (Mtpa) of vanadium titano-magnetite (VTM) and dense medium separation magnetite. This is also expected to produce 8,000 to 10,000tpa of a zircon rich heavy mineral concentrate and one Mtpa of high-grade silica construction material.
The Mineral Resources Authority (MRA) will now assess the application.
According to Mayur Resources Ltd managing director Paul Mulder, this was the final step of the project for it to be shovel ready.
“As Mayur’s second project to be advanced to final legislative approval in PNG, Orokolo is a simple, onshore, near-surface mining and processing operation with no requirement for grinding or chemical processing and a capital cost of only US$22 million (K77.19mil),” he said. “We, therefore, anticipate being able to work quickly with the MRA on this assessment. We’ve secured funding for the project which will not require further dilution and is exposed to an attractive forward-looking earning profile from next year.”
In the definitive feasibility study (DFS), the financial analyses used a pricing assumption for the VTM product founded on a cost of conservative long-term iron ore price of US$66.30/t (K231).
“This compares to a current iron ore price above US$150/t (K175), a major potential upside to the economics of the project,” he said. “In addition to the supportive iron pricing, and subsequent to the completion of the DFS, considerable work has also been undertaken and continues to be progressed to assess the suitability of the Orokolo Bay material to supply Singapore’s construction sector that imports huge amounts of this material. This potential opportunity is in addition to the supply of material to the Sydney market.”
He added that he was excited for the opportunity of establishing a mechanised sago harvesting operation post-mining.
“Our plan is to provide the community with sustainable employment and revenue opportunities that will continue well beyond the life of the mine, where sago production can serve both local demand and also be transported and sold in the larger Port Moresby market,” he said. “The MRA’s consideration of our application will occur in parallel with Orokolo’s pilot plant bulk sampling activities, for which the key plant and equipment is awaiting shipment into PNG. Construction of the pilot plant and the full-scale operation may overlap depending upon the timing of the mining lease approval process and the easing of the Covid-19 travel and transport restrictions into PNG.”
PNG Business News - March 01, 2021
Landowners Support National Government on Wafi Golpu Project
The Wafi-Golpu landowners have finally voiced out their support to the National Government on the environmental permit given to mine developers. The five associations chairmen - Victor Geactuluc (Yanta Development Association), John Nema (Hengambu Landowner Association), Jack Raban (Babuaf Development Corporation) of the Special Mining Lease (SML) area including Joseph Tetang (Wampar Pipeline Association) and Gae Galang (Wagan Outfall Association) - said they want the project to proceed and are asking Morobe Governor Ginson Saonu to desist from any purported court proceedings against the Sate about the deep-sea tailings placement (DSTP).Saonu, however, said that Morobe’s position still stands. “I will do what is right, just and fair for everyone,” he said.According to an independent body monitoring and evaluating process for the last four years, the landowners shouldn’t rush into things. The leaders argued that this process may cost Morobe and the provincial government millions of kina and added that the mining forum is the best place to discuss this problem. Nema said that he has lost more than 20 of his community members to common natural calamities and lack of basic health services. “I am against the move by our governor to register another court proceeding against the National Government while my people are suffering and dying without seeing any real developments or benefiting from their land,” he said.Geactuluc said that they don’t support the intention of the governor to take this to court. “We urge the good governor to refrain from wasting his time with his consultants and advisers but instead commit his time and resource to mobilise the SML, Pipeline and Outfall landowners through their associations in preparation for the upcoming Wafi Project MoA,” he said.For his part, Tetang urged the governor to have a discussion on how he intends to recognise the Huon Gulf coastal communities benefit-sharing instead of fighting a losing arrangement to prevent DSTP. “That is why the developer has chosen DSTP because it is much safer and could not harm the marine resources or the coastal communities based on the research and studies conducted,” he said.
PNG Business News - February 23, 2021
St Barbara Transitions from Mining Oxide to Sulphide
St Barbara Ltd’s Simberi operations in New Ireland is set to transition from mining oxide ore to sulphide. The mine which has been producing gold since 2009 said that its social and environmental impact studies (SEIS) are presently being finished for submission to the Conservation and Environment Protection Authority (Cepa) and Mineral Resources Authority (MRA) in March.Sulphide mining is predicted to extend its mine life for at least another 10 years and produce more benefits for stakeholders.St Barabara managing director and chief executive Craig Jetson said, “We are at an important stage of operations at Simberi, as we continue to productively mine the oxide deposit and plan for a bright future via the Simberi sulphide project.”He added, “Iso will capably lead us through this transition as we support our Simberi community, contribute to New Ireland and deliver on our commitments to PNG.”Meanwhile, the firm said that since 2009, the mine has brought K84.3 million in royalties, paid an annual 0.5 per cent production levy and contributed over K97.4 million in contracts to landowner businesses.“In 2020, the company paid over K28 million in income tax,” according to St Barbara. “Other community benefits delivered since 2012, when St Barbara acquired the mine, amount to over K119 million. They include health and education infrastructure development, roads and bridges maintenance, cocoa farming, mariculture projects, education scholarships and employment and training.”
PNG Business News - February 23, 2021
Iso Ealedona Appointed General Manager for Simberi Mine
St Barbara Limited’s Simberi operations in the New Ireland province has a new general manager in the person of Iso Ealedona.Ealedona was previously the head of operations for the past seven months and is a mining engineer and pioneer of the PNG University of Technology mining degree program. With over 26 years of experience in the industry working in Australia for Rio Tinto Iron Ore and in PNG at Misima, Ok Tedi, Hidden Valley, Lihir and St Barbara’s Simberi Operations, his expertise includes operational leadership, technical services, maintenance, safety management and business transformation.“As a recognised employer of choice, we are proud to be the first public company (ASX listed) operating in PNG to entrust this important role to a capable Papua New Guinean with the right skills and experience to lead our 1200 strong workforce at Simberi,” he said. “We are at an important stage of operations at Simberi, as we continue to mine the oxide deposit and plan for a bright future via the Simberi sulphide project. Iso will capably lead us through this transition as we support our Simberi community, contribute to NIP and deliver on our commitments to PNG,” said Craig Jetson, St Barbara’s managing director and CEO.”He said, “It’s an honour to lead, on behalf of St Barbara, a mining operation in my home country. With the St Barbara executive, Simberi leadership team and the workforce behind me, I am determined to lead Simberi safely and successfully through this transition period of oxide to sulphide mining for the benefit of all stakeholders.”
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.