Photo credit: Wafi Golpu JV
The State Negotiation Team (SNT) chairman, Dairi Vele, has expressed optimism about the future of Papua New Guinea, stating that the country is currently in a "golden era" of resource projects. Speaking after the signing of the Wafi-Golpu Framework Memorandum of Understanding (MoU), Vele noted that the country has the potential to benefit from significant revenues from a range of projects.
"It’s a golden era of resource projects. I did my first deal in 2008 for the PNG LNG and at that time we were looking at US$30 billion (K105 billion) in revenue over a short period of time," said Vele. "We now have Papua LNG which is just under another US$30 billion in revenue over a period of time. We have P’nyang which overall will get almost US$7 to US$9 billion (K24-K31 billion) and there’s another US$14 billion (K48 billion) in the project."
Vele went on to highlight the potential revenues from the Porgera and Wafi-Golpu projects, stating that Porgera is set to generate US$10 billion (K34 billion) over a 20-year period, while Wafi-Golpu is expected to generate US$23 billion (K80 billion) over a similar period. He also noted that the Golpu deposit, which is part of the Wafi-Golpu project, is still being explored and may yield even greater returns.
Despite the positive outlook, Vele acknowledged that Papua New Guinea must be mindful of the finite nature of its resources. "The only problem with it is that at some stage the resources will run out," he said. However, he emphasized that the country has a unique opportunity to develop and transform its economy in the coming decades.
"So Papua New Guinea, we have no excuse now. We should be developed like Singapore in the next 30 years, I really believe this," Vele said.
Photo: Dairi Vele
According to Dairi Vele, the Chairman of the State Negotiation Team (SNT), the structure of the Wafi Golpu gold and copper mine in Morobe Province will be different as the Special Mining Lease will be given early. This means that the developers will be given 30 months to make a final investment decision (FID). Mr. Vele stated, “We will give them 30 months to get the project (going), which is final investment decision. If they don’t do that within 30 months, then the state will take back the licence.” This is a departure from the previous arrangement where the state gave a license but had little recourse if the project did not materialize.
Mr. Vele also explained that the new deal is different from the previous one where Papua New Guinea was only going to get 20% equity instead of the legally mandated 30%. However, the new deal negotiated by the SNT includes the additional 10% equity being given free to the provincial government. To fund the additional 10%, Kumul will pay for the landowners and the provincial government. Mr. Vele added, “Because we have to borrow the money to pay for it and pay our share in the project, Kumul are going to pay for the landowners and the provincial government.”
In summarizing the significance of the new deal, Mr. Vele said, “If you are given a license and you don’t develop a project, then the state will take it off, so that’s what is different now. Now we have to do all those agreements which allow you to get your lease.” This is a unique arrangement as it is not known to have been done before in a mining project.
Photo: Panguna Mine. Credit: Stefan Armbruster
Bougainville President Ishmael Toroama has warned against people seeking to destabilise the Panguna Legacy Impact Assessment that is ongoing within areas affected by the now defunct Panguna Mine.
President Toroama issued the statement following the move by several parties who are trying to raise a class action suit against Rio Tinto for their role in developing the Panguna Mine and the effects it has had on the environment and the communities around the mine.
The Panguna Legacy Impact Assessment is being funded by Rio Tinto through Tetra Tech Coffey who are conducting the assessment.
It is also the first time Rio Tinto has made any commitment to Bougainville since the cessation of mining operations in Panguna, Central Bougainville.
President Toroama said that the assessment took a lot of hard work and time to get Rio Tinto to at least take responsibility for its actions in developing the Panguna Mine and the effects of it that continues to the present.
“These people are opportunists who saw no reason for a class action suit until the impact assessment was being conducted and the revelation of probable data being collected by Tetra Tech Coffey,” President Toroama said.
“Our Late Revolutionary leader, Francis Ona sought a K10 Billion class action suit against Rio Tinto because his intention was for the company to take responsibility for its actions and for the extent of damage caused by the mine including the civil war that caused the loss of thousands of lives,” President Toroama said.
“Since the untimely passing of Francis Ona no one has sought to revive the class action suit nor conduct a proper study on the extent of damage done by the mine,” Toroama said.
“I will not let people with vested interests tarnish Francis Ona’s legacy and undermine the legitimate government of the people of Bougainville,” President Toroama said.
“These are so called players who only appear on the scene only when it is convenient for them but never present during the heavy lifting,” President Toroama added.
“I urge our leaders, the landowners, our people and all stakeholders to refrain from disrupting the assessment and to let it be completed,” President Toroama said.
“Let me be clear, my government is not protecting any other interest but the Panguna landowners and the people of Bougainville who suffered as a result of the mine,” President Toroama said.
President Toroama said that the work into getting Rio Tinto onto the scene must not be in vain. There has to be results that can guide the government and the company to resolving the problems from the mine.
Prime Minister Hon. James Marape says the State and Papua New Guinea will be the biggest winners in the giant Wafi-Golpu Mine in Morobe with a 55 per cent take in the economic benefits of the project.
PM Marape said this after the landmark signing of the Framework Memorandum of Understanding between the Independent State of Papua New Guinea and Wafi-Golpu Joint Venture (WGJV) participants Newcrest and Harmony Gold (through their respective PNG subsidiaries).
This momentous occasion was attended by Governor-General Sir Bob Dadae, PM Marape, Deputy Prime Minister Hon. John Rosso and senior Ministers, as well as Morobe Governor Hon. Luther Wenge and members of his Provincial Executive Council.
PM Marape said PNG would win by way of:
“Today is a joyous occasion for the people of Papua New Guinea and especially Morobe, as we prepare to celebrate Easter,” PM Marape said.
“A framework has been established whereby Newcrest and Harmony, and the State – on behalf of the Morobe Provincial Government and landowners – will progress Wafi-Golpu Mine development so that it can start at the very earliest.
“This is a major resource, with substantial gold and copper, which will anchor our country for the next 40 years and beyond.
“It took us a while to reach this stage, however good things take time. Sometimes, you have to wait for a while to get the best results, such as today’s agreement.”
PM Marape thanked Vice-Minister for State Negotiations, Hon. Jimmy Maladina, who worked tirelessly with State Negotiations Team (SNT) Chairman Dairi Vele and his team – under Mining Minister Hon. Sir Ano Pala – to make today possible.
“What we have signed today is far better that what my predecessor Peter O’Neill signed in 2018,” he said.
“In Kina terms, this deal is K6 billion better then O’Neill’s 2018 agreement – that I tore apart – in which we had lost 10 per cent equity to the companies. This agreement is also K3 billion better than our own government’s position in April 2022.
“I also appreciate the tireless efforts of Deputy Prime Minister Hon. John Rosso, and the strong Morobe leadership led by Governor Hon. Luther Wenge and Bulolo MP Hon. Sam Basil Jr.
“In our efforts to get back more for our people, we have pushed the bar higher in a green field project, and I want to thank all in Cabinet and Government for your understanding.
“We negotiated fair and hard, and I give it to people like Dairi Vele – who under instructions – fired all cylinders for us to get better results.”
PM Marape thanked joint venture partner investors Newcrest and Harmony for their positive responses to State positions.
“We look forward to all parties working together to complete all statutory requirements to complete Mine Development Contract and SML,” he said.
“I want to also assure all our landowners and the LLGs, Districts and Morobe Provincial Government that we will complete the full requirements of law in respect to your consultations and meetings.”
K92 Mining Inc. announces production results for the first quarter (“ Q1 ”) of 2023 at its Kainantu Gold Mine in Papua New Guinea, of 21,488 oz AuEq or 17,593 oz gold, 1,651,297 lbs copper and 29,859 oz silver. Sales during the first quarter were 17,602 oz gold, 1,538,590 lbs copper and 29,164 oz silver.
During the first quarter, the process plant delivered a strong quarterly ore processing rate of 117,903 tonnes or 1,310 tpd, our third highest quarter on record despite experiencing 8 days of combined unplanned maintenance. The unplanned plant maintenance occurred in February due to a mill trunnion bearing failure (2 days downtime) and a limited electrical fire in a cable tray, which damaged a number of cables feeding the wet section of the process plant (6 days downtime) (see February 27, 2023 press release).
After completion of the unplanned maintenance in February, the process plant performed very strongly, setting a new monthly ore processed record of 1,490 tpd in March which is 9% greater than the Stage 2A Expansion design throughput of 1,370 tpd. Additionally, multiple new daily throughput records were achieved during the quarter including 1,726 tonnes processed on February 26, 1,773 tonnes processed on February 28, 1,802 tonnes processed on March 3 and 1,815 tonnes processed on March 11. Importantly these records were achieved prior to the final major upgrade to the Stage 2A Expansion process plant, the flotation expansion to double rougher capacity, which is planned for commissioning in Q2 and is expected to provide a boost to metallurgical recoveries and flexibility to potentially increase throughput further.
Mine performance during the first quarter recorded 117,865 tonnes of ore mined, an 18% increase from Q1 2022, and delivered a total material mined (ore plus waste) of 277,534 tonnes mined, representing an increase of 33% from Q1 2022. During the quarter, operations focused on Kora’s K1 and K2 veins, and Judd’s J1 Vein for a total of 8 levels mined. Mining on Kora was conducted on the 1130, 1150, 1170, 1205, 1265 and 1285 levels, and Judd on the 1285 and 1305 levels.
The operation delivered head grades of 5.21 g/t gold, 0.70% copper and 10.14 g/t silver (6.35 g/t AuEq) in Q1. Metallurgical recoveries averaged 89.1% for gold and 91.3% for copper during the quarter, with recoveries expected to improve upon the commissioning of the flotation expansion planned in Q2 2023. Head grade was notably impacted, during the second half of the quarter, when underground mining encountered an area with more challenging ground conditions than expected, associated with where the K1 and K2 veins almost converge, which impacted our production stoping rates and access to higher grade ore. Generally, in this situation, mill feed would be supplemented by mining from additional mining fronts as we mine through the impacted area more slowly. However, due to development rates being below budget for several quarters during the COVID-19 pandemic, many of the alternative mining areas were not yet developed, therefore supplementing from our low-grade stockpile was required (see March 30, 2023 press release, and see Figure 1).
Operationally, as previously disclosed, we expect Q2 production to be moderately below budget, with the second half of 2023 being our strongest in terms of production and 2023 production being within the bottom half of the guidance range (see March 30, 2023 press release).
The anticipated strength of the second half of 2023 is driven by an expected significant increase to our operational flexibility and stope sequencing. In terms of operational flexibility, it is important to highlight the following positive trends:
John Lewins, K92 Chief Executive Officer and Director, stated, “While the first quarter was more challenging than expected, there were many positives that we can build on for the operation going forward. Firstly, the performance of the process plant was very strong, setting a new monthly ore processed record in March of 1,490 tpd, 9% greater than the Stage 2A Expansion Rate. Multiple new daily records were also set during the quarter, with the latest record now standing at 1,815 ore tonnes processed on March 11 th . Importantly, this strong performance has been achieved prior to the commissioning of the flotation expansion for the Stage 2A Expansion that is planned for Q2 and is expected to provide a boost to metallurgical recoveries and flexibility to potentially increase throughput further. On the underground mine, we see operational flexibility significantly improving over the coming weeks and months, driven by our recent record development advance rates, multiple key pieces of equipment now on site, and, a new mining front at depth in H2 serviced by our twin incline that is significantly oversized for not just the Stage 2A Expansion (500,000 tpa) throughput rate but also Stage 4 (1.7 mtpa). And lastly, we are very excited about our exploration plans for 2023. In Q1, exploration continued to expand the drilled deposit extents at our Kora-Kora South and Judd-Judd South vein system (see February 21, 2023 press release), and porphyry drilling also recently commenced on A1, our top copper-gold porphyry target.”
John Lewins, K92 Chief Executive Officer and Director, stated, “While the first quarter was more challenging than expected, there were many positives that we can build on for the operation going forward.
Firstly, the performance of the process plant was very strong, setting a new monthly ore processed record in March of 1,490 tpd, 9% greater than the Stage 2A Expansion Rate. Multiple new daily records were also set during the quarter, with the latest record now standing at 1,815 ore tonnes processed on March 11 th . Importantly, this strong performance has been achieved prior to the commissioning of the flotation expansion for the Stage 2A Expansion that is planned for Q2 and is expected to provide a boost to metallurgical recoveries and flexibility to potentially increase throughput further.
On the underground mine, we see operational flexibility significantly improving over the coming weeks and months, driven by our recent record development advance rates, multiple key pieces of equipment now on site, and, a new mining front at depth in H2 serviced by our twin incline that is significantly oversized for not just the Stage 2A Expansion (500,000 tpa) throughput rate but also Stage 4 (1.7 mtpa).
And lastly, we are very excited about our exploration plans for 2023. In Q1, exploration continued to expand the drilled deposit extents at our Kora-Kora South and Judd-Judd South vein system (see February 21, 2023 press release), and porphyry drilling also recently commenced on A1, our top copper-gold porphyry target.”
Photo credit: Wafi-Golpu JV
Wafi-Golpu Joint Venture (WGJV) participants, Newcrest and Harmony Gold (through their respective PNG subsidiaries) have today signed a Framework Memorandum of Understanding (MOU) with the Independent State of Papua New Guinea at a signing ceremony which was attended by the Governor General, the Prime Minister and key members of his cabinet, as well as the Governor of the Morobe Province.
The MOU represents a substantial step forward in progressing and signing a Mining Development Contract for Wafi-Golpu and confirms the parties’ intent to proceed with the project, subject to finalising the permitting process and approvals of both the Newcrest and Harmony Boards.
The MOU sets out key terms to be included in the Mining Development Contract, which is a prerequisite for a Special Mining Lease (SML), including:
Peter Steenkamp, Chief Executive Officer of Harmony Gold Mining Company Limited, said, “This MOU is an important step in progressing the permitting of the Tier 1 Wafi-Golpu project, one of the world’s premier, undeveloped copper-gold deposits. I wish to thank Prime Minister Marape and his Government for the constructive manner in which they have worked with the WGJV partners and for the commitment demonstrated in advancing this important and long-awaited project.”
“This MOU is a pivotal milestone towards the development of one of the world’s premier, undeveloped, copper-gold deposits. Importantly, the project will result in fair and equitable benefits for landowners, communities, local level governments, the Morobe Provincial Government and the Independent State of Papua New Guinea, while also delivering strong returns for investors.” said the Interim Chief Executive Officer of Newcrest Mining Limited, Sherry Duhe.
The MOU recognises that development of the Wafi-Golpu Project will be of major significance to the people of Papua New Guinea and encourages its development to contribute both socially and economically to the community. In addition, it also provides a viable and stable foundation for the long-term development of the Project by the WGJV.
Photo: President of the PNG Chamber of Mines and Petroleum Mr Anthony Smaré
Last year, the 16th Papua New Guinea Mining and Petroleum Investment Conference and Exhibition was held from 5th to 7th of December 2022 at Sydney Hilton Hotel. The event was hosted by the Papua New Guinea Chamber of Mines and Petroleum with the theme "PNG Resources: Securing the next wave of responsible investment”.
There were over 1,000 delegates from industries related to global hydrocarbon, minerals, and energy industries. Other participants are government officials, landowners, and those from the international investment sectors. [1]
The conference seeks to highlight investment and development opportunities that PNG can offer.
Honorable James Marape (MP) - PNG Prime Minister, provided the keynote address on Day 1. Other notable speakers include Mr Anthony Smaré - President of the PNG Chamber of Mines and Petroleum, Pat Conroy - Australian International Development Minister, Honorable Ano Pala (MP) - Minister for Mining (PNG Government), and Honorable Kerenga Kua (MP) - Minister for Petroleum (PNG Government).
In Mr Anthony Smaré’s opening address, he mentioned that foreign investments play a significant role in the development of PNG and have a catalysing impact on the PNG’s economic development.
He stated that the country has five major projects coming up including the Papua LNG Project, Wafi-Golpu, Pasca, and the reopening of Porgera and P’nyang.
Prime Minister Hon. James Marape delivering the Keynote Address at the 16th PNG Mining and Petroleum Investment Conference and Exhibition.
In his speech, Prime Minister James Marape encouraged investors on PNG’s potential, and inspired partnerships in development on the ground.
He said, “We are a mineral and petroleum nation. We know how to give incentives, embrace and protect investors, and allow investors to make a fair and profitable return on their investments.”
“The next wave or first waves of responsible investments, or I would rather say ‘responsive investments’, are our big five projects that my government has worked on the last three years where deep in my planning office we label them as “PPPPW”.
Prime Minister Marape also mentioned that PNG is expecting positive future projections for growth and stands to reach a 200-billion-kina economy, but it must include local involvement.
“You take my gas, and you take my people with you, we will support everything you do, it wasn’t a literal statement to taking my people with you, but for the betterment of their life,” he said.
In relation to this, Mr Smare noted that PNG’s resource growth is over K30 million and is expected to grow exponentially.
“As I discussed with PM Marape yesterday, his government is now at a unique juncture in our nation’s history. It is the first time that our country is on the cusp of delivering not one, but four major resource projects of over $30 billion. Papua LNG with its $12 billion capital cost, Pnyang at $10 billion, the reopening of Porgera, and Wafi Golpu Copper-Gold project at $6 billion or potentially higher. Add the Pasca gas project at $2 billion and one can understand why negotiating all these deals at the same time has placed the government negotiation machinery under significant strain.”
Moreover, he pointed out Australia’s continued support as a development partner to PNG but highlighted that future investments projects could also include other global economies like China.
“China is a very important partner of our country. It plays a significant role in our economy currently. It has interests in a number of our mining projects – a quarter of Porgera through Zijin Mining, and the majority interest in the Ramu Nickel-Cobalt mine through MMC. China is a buyer of much of our current minerals output. China is also a significant buyer of our LNG production from the PNG LNG, and it will likely be a major buyer of gas from our new LNG developments – Papua LNG, Pnyang, and Pasca.”
Hon. Pat Conroy, MP, Australian Minister for International Development and the Pacific
Honorable Pat Conroy, Australian Minister for International Development and the Pacific, said that Australia does need to step up participation in the development of PNG.
"All of our investments in Papua New Guinea are squarely aimed at helping Papua New Guinea achieve its economic and development priorities. We’ve provided budget support loans of around $1.2 billion in 2020 and 2021, to help Papua New Guinea repair its budget out of the pandemic. And we are supporting the Papua New Guinean Government’s efforts to make Papua New Guinea a more attractive place for business activity and investment.”
The Minister noted that they are aware of how much the mining and petroleum sectors contribute to Papua New Guinea’s economy. “We are both countries with abundant natural resources. We are both countries with significant mining sectors which have been fundamental to our economic development – supporting growth, exports, and jobs.”
“Many of the Australian mining and petroleum companies represented at this conference have made significant investments in economic and social development, spanning decades of engagement with communities from Western Province to the New Guinea Islands.”
In relation to Australia and its historic relationship with PNG, Mr Smaré acknowledged that Australia remains a vital development partner to PNG, but pointed out that the country no longer holds the position as dominant investor in PNG.
“Much of the Wau-Bulolo gold rush of the 1920s was funded by Australian capital, and Australian funded explorers and mining companies discovered and/or developed much of our most important projects – for example, Conzinc Rio Tinto found and developed Panguna, Australia’s BHP was the majority partner who developed Ok Tedi in the early 1980s, Australia’s Niugini Gold discovered Misima and Lihir, and Rio Tinto was the majority partner in the development of Lihir in the early 1990s.”
He mentioned that Australia remains one PNG’s most important investors, but for the past 15 years, the resources and energy sector has seen major investments from other countries like US, Canada, France, and China through multiple large-to-mega investments.
In closing, Mr Smaré’s addressed a question to the Australian audience. “So, what role will Australia play in PNG’s development going forward?”
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The Papua New Guinea Chamber of Mines and Petroleum also announced that it is considering a name change to PNG Chamber of Resource and Energy (PNG Core) to better reflect the change in the commodities produced by the sector in PNG. This announcement was made by Mr Smaré during the conference.
“The Governing Council of the Chamber has resolved to change its name to the PNG Chamber of Resources and Energy (PNG CORE) to encompass a better representation of the industry that it represents, and the exports that its members will be exporting to the world.”
On the second day of the conference, the speakers discussed project updates from some of PNGs biggest resource companies.
ExxonMobil PNG’s Senior Vice President of Production, Scott Sandlin, gave updates on the progression of the multi-billion Kina PNG LNG project. The project aims to achieve long-term economic development.
For the next 11 years, nationally owned Ok Tedi Mining Limited is expected to generate over K19 billion in benefits for Papua New Guinea. OTMLs General Commercial Manager Cameron Clark said: “The outlook for Ok Tedi is a positive one. The Company has tripled its value in the last 6 years and extended mine life by 7 years. This has been made possible by a combination of technical improvements, cost improvement, accelerated mining rates and internal investment in key strategic projects”
Moreover, Simberi St Barbara has been given the permit for sulphides expansion which adds at least another 10 years of mine life from 2024 - 25 when oxides are depleted. The sulphide expansion is under a strategic review by operator St Barbara Limited. Simberi is pursuing cocoa and fisheries (with partners) as its best opportunities for sustainable development.
Hon. Kerenga Kua - Minister for Petroleum
Petroleum Minister Kerenga Kua stated that PNG’s petroleum sector is “in a robust state” with 94 active licenses. He believes that having 58 prospecting licenses and 10 PDLs as well is a good starting point for PNG towards a prosperous future.
During his speech, Mining Minister Hon. Sir Ano Pala mentioned that the Mineral Resources Authority (MRA) is processing and monitoring over K45 million worth of new capital investments in mining projects, and about K10 billion worth of investments in sustaining capital expenditure on existing mines. [2]
Minister Hon Ano Pala speaking at the conference.
He noted, “I’m very pleased to announce that some very important mining projects had already been permitted whilst others are currently going through the permitting process. These projects are worth a total of K13 billion of potential new capital investment. Projects going through the permitting process are the K5.3 billion Wafi Golpu Copper project, comprising K 2.5 billion sustaining capital expenditure, and the K7.2 billion Freda River copper and gold project." [2]
The projects that have been permitted are the Woodlark Gold Project and K3.331 billion Central Lime Cement Project. Additionally, Ramu Nickel Cobalt mine will be undertaking a K1.5 billion expansion program.
Hon. Ano Pala also mentioned that the government had granted the approvals for the conversion from oxide to sulphide ore processing for the Simberi project. The government also granted the extension of the Mining Lease for the Hidden Valley Project. The application for extension of the Special Mining Lease for Ok Tedi Mine and K92 Mining Lease have recently been processed.
He said, “We are confident of permitting Wafi and Freda River projects upon completion of negotiations in the coming weeks. Wafi is going well. The gaps in the negotiations are narrowing now, and we are confident that in the coming weeks, we will make the announcement. These mega projects will off course take 5-7 of years of construction and we hope to see this mining projects operationalized well before 2030.”
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Photo credits:
PNG Chamber of Mines and Petroluem - https://pngchamberminpet.com.pg/media-centre/news-releases
Mineral Resources Authority - https://mra.gov.pg/2022/12/07/16th-png-png-chamber-of-mines-petroleum/
Reference:
[1] PNG Chamber of Mines and Petroluem - Media Release -
https://www.pngchamberminpet.com.pg/index.php/media-centre/news-release-view/2022-16th-png-mining-and-petroleum-investment-conference-and-exhibition-programme
[2] Mineral Resources Authority (7 Dec. 2022). "16th Papua New Guinea Mining and Petroleum Investment Conference and Exhibition". Media Release.
Retrieved from - https://mra.gov.pg/2022/12/07/16th-png-png-chamber-of-mines-petroleum/
Photo: Barrick Executives, PNG National Executive Council and the Governor General Sir Bob Dadae (center) at the Goverment House following the NPPA signing.
Barrick Gold Corporation – The government of Papua New Guinea, Barrick Niugini Limited and New Porgera Limited today signed an agreement to progress with the resumption of operations at the Porgera gold mine, which have been suspended since 2020.
Porgera hosts an orebody with measured and indicated resources of 10 million ounces and inferred resources of 3.4 million ounces. After initial ramp up and optimisation of the Wangima pit, the mine is forecast to produce an average of 700,000 ounces per year, achieving a milestone towards its potential Tier One status.
The New Porgera Progress Agreement (NPPA), signed today, confirms that all parties are committed to reopening the mine at the earliest opportunity, in line with the terms of the Porgera Project Commencement Agreement and the New Porgera Limited Shareholders Agreement both concluded in 2022. The New Porgera project team will now move ahead with the filings for a special mining lease and progressing the other conditions set out in the Commencement Agreement for the reopening of the mine.
The equity in New Porgera is shared 51% by Papua New Guinea (PNG) stakeholders, including local landowners and the Enga provincial government. Economic benefits will be shared 53% by the PNG stakeholders and 47% by Barrick Niugini Limited, which will operate the mine.
After the signing ceremony, Barrick president and chief executive Mark Bristow said there was strong support from all stakeholders to get Porgera reopened as soon as possible.
“It’s been a long journey but in the process we have secured the buy-in of all the stakeholders. For Barrick, the reopening of the mine would represent another victory for our host-country partnership model which has been so successful in Tanzania and has now also been adopted for the new Reko Diq coppergold project in Pakistan,” Bristow said.
“Localization is an essential part of our partnership philosophy so New Porgera will, whenever possible, source the goods and services it requires from businesses genuinely based and owned in Porgera, the Enga province and Papua New Guinea. Similarly, it will give preference to locals in recruiting employees for the reopening mine.”
Photo credit: Deep Sea Mining Finance Ltd
The Government of Papua New Guinea plans to re-open discussions with Deep Sea Mining Finance Ltd (DSMF) regarding the potential for mining minerals in the Bismarck Sea off the west coast of Namatanai, New Ireland. DSMF had previously acquired Nautilus Minerals, which had shown interest in deep sea mining in the mid-2000s through the Solwara 1 project. DSMF is a privately owned group with the aim of becoming the world's first company to mine the sea floor of massive sulphide deposits, starting with its high-grade copper-gold Solwara 1 project.
Mining Minister Sir Ano Pala said, "We expect discussions again with the company." Governor Sir Julius Chan also met with a team from DSMF in the province this week. The team was led by its CEO Chris Jordinson, including technical service manager Glen Jones, offshore exploration project manager Anthony Manocchio, and Nautilus Minerals country manager Paul Lahari.
Jordinson indicated that the company had met with Mining Minister Sir Ano Pala and the Mineral Resources Authority the previous week in Port Moresby. The dialogue between the company and the New Ireland government is crucial as they are responsible for the local impacted communities of the proposed Solwara 1 project off West Coast New Ireland. The NIPG has suggested that DSMF conduct proper awareness with the locals on the proposed project, including engaging an independent scientist to evaluate possible environmental impacts and give confidence to the local people that the project will not affect their livelihood.
In the words of the Governor, "The DSMF team was here to touch base and explain what they intend to do and how they will go about it. We suggested to them that they conduct proper awareness with the locals, engage an independent scientist to evaluate possible environmental impacts and give confidence to the local people that the project will not in any way affect their livelihood."
Photo credit: The Pick
Lole Mining Limited, the new developer of the Tolukuma Gold Mine in Central Province, has recently developed an initial public offering (IPO) to be listed on the Australian Stock Exchange. Mineral Resource Authority managing director, Jerry Garry, told the Post Courier, "The company will be raising their capital from the stock market upon registration with the Australian Securities (ASX)."
Mr. Garry went on to explain that Lole Mining was granted an extension mining license (ML104) for 10 years in January of last year, following a liquidation order from the National Court in February 2018. Since then, the liquidator has been attempting to sell the assets of the mine, including the mining lease (ML104 and 105 surroundings), and while there were several interested parties, none of the agreements were successful.
"In April 2018, all those assets, including the ML 104 and 105 exploration licences, were transferred to the Pini Accounts and Advisors as the liquidators. As part of the agreement under the asset sale agreement, Lole Mine paid half a million (K500,000) and later K1.5 million in January 2022," he said.
After assessing all the proposals, Mr. Garry said, "The technical assessment team and the council believe that Lole Mining was the most sensible, logical, and cost-effective proposal to reopen the Tolukuma Gold Mine, having them fulfill the first two transfers to the liquidators to offset the creditors or the debts."
"The final payment was K20 million and that K20 million was paid by Lole Mining to the liquidator in October last year to allow for all the assets to be transferred to the company," Mr. Garry added.
The development of an IPO by Lole Mining marks a significant step in the company's growth strategy and will provide an opportunity for investors to participate in the development of the Tolukuma Gold Mine. Mr. Garry said, "With the successful completion of the IPO, Lole Mining will be well-positioned to drive the growth of the mining industry in Papua New Guinea."
Photo: William Duma in Parliament
The Wafi-Golpu Gold Mine project in Bulolo district of Morobe Province is expected to become a key economic driver for the Ramu 2 Hydro project, which will span the Eastern Highlands and Morobe provinces. During a recent parliamentary session, State Enterprise Minister William Duma gave this assurance in response to questions from Kainantu MP William Hagahuno:
"They (Kumul Consolidated Holdings Limited) on behalf of the PNG Power and Ramu 2 Hydro project developer) will then be negotiating with the Wafi-Golpu Mine so that they sign an off-grid agreement so that they underpin the economics of this project," he said.
"PNG Power is owned by this country and it is important that both sides of this house (Parliament) support this project."
Duma emphasised the importance of both sides of parliament supporting the project, as PNG Power is owned by the country. He noted that:
"It is a project where the Eastern Highlands provincial government and the landowners have allowed PNG Power to supply power from Yonki Hydro, but were not able to get any benefit from the government over the years.
"This time around, the government has recognised the contribution made by the people of Eastern Highlands and has made a decision to allow free equity to be given to the people and the provincial government for shareholding up to 20% for that project and another 20% to the people of Morobe who host the Wafi-Golpu gold mine."
Duma assured that the state guarantee would be signed soon, following which the project developer and KCHL will approach the Eastern Highlands and Morobe provincial governments and the landowners to sign the benefit sharing agreements. The project will follow a build, transfer, and own agreement, which will allow the developer to spend £520 million to recover investments and then transfer ownership to PNG Power, which will own 60%. The remaining balance will be owned by the Eastern Highlands and Morobe provincial governments and the landowners.
He said:
"It is a build, transfer and own agreement that will enable the developer to spend about £520 million to recover investment and then transfer ownership to PNG Power which will own only 60% and the Eastern Highlands and Morobe provincial governments and the landowners will own the balance."
This project is set to be the first jointly-owned project between the government and people under the build, transfer program.
The Tolukuma Mine in Central Province is set to reopen its mining operations after years of closure. However, local communities affected by the mine's previous operations are still concerned about environmental issues that may arise. The local MP for Kairuku, Peter Isoaimo, welcomed the news of the mine's reopening but expressed his constituents' concerns about the mine's waste disposal practices. According to him:
"The St Joseph Angabanga river ring has sedimentation build-up in the riverbed, which causes havoc as soon as the rain starts pouring in the mountains of Goilala district. We have deformed babies and mysterious deaths. All these relate to destruction caused by the mine in the last 25-30 years of the mine’s life."
Mr Isoaimo called on the Mining and Conservation and Environment Protection Agency to prioritise the livelihood of the people and address the environmental issues before allowing the mine to resume operations. He also warned that failure to do so could result in a genocide, as has happened in other parts of the world. He said:
"With the reopening now, I’d like to bring to the attention of the Mining and Conservation and Environment Protection Agency that we need to look at the livelihood of the people. Otherwise, we will cause a genocide like every other place in the world."
Mr Isoaimo also asked the Mining Minister to confirm whether the mining licence was issued to the new mining operator, Lole Mining, despite the unresolved environmental concerns. In response, the Mining Minister, Sir Ano Pala, confirmed the existence of the licence and clarified the status of the operator. He assured the people of Kairuku that responsible authorities would do everything possible to minimise the impact of waste from the mine. Sir Ano said:
"We are aware of the issues of concern and will look at every way possible to minimise the impact of waste."
Photo credit: EMTV
Kumul Minerals Holdings Ltd (KMHL) has made a significant contribution to the State, paying K105 million in dividends. The payment was handed over to State Enterprises Minister William Duma by KMHL Chairman Dr Ila Temu. Speaking about the dividend payment, Dr Temu said, "Kumul Minerals hold 67 per cent in Ok Tedi, through the Government transfer that occurred a couple of years ago...Although KMHL acquired the 67 per cent some years back, it is the first time that the dividend is actually flowing through Kumul Minerals and then back to the State. We retained some of the dividends for our operations and our investment opportunities."
The dividend payment is related to the 2022-year dividend declared by Ok Tedi Mining, which totalled K368 million. Dr Temu further explained that "the amount that we are presenting now to the State through the trustee delegate and minister is K105 million...under the Government approved dividend policy, the State and Kumul share equally any benefit that is declared in any year."
State Enterprises Minister William Duma thanked KMHL for its contribution, noting that the money would be put to good use. He highlighted the challenge faced by the State in funding projects related to law and order, health, and education, particularly in light of the increasing population and a budget deficit of K4 billion this year. He said, "We will put this money to good use. The need to fund projects particularly in the areas of law and order, health, education, are increasing every year, with an increasing population. The challenge is on those companies that are in the income generating sector, particularly those owned by the State, to do what they can do and deliver dividends."
Photo: Looking back: Happy memories with the locals at Yandera, Madang Province in 2014. From 2006 until 2014, the Yandera Project was owned and managed by the Australian company, Marengo Mining Limited, with Mr Les Emery as their CEO. (Photo credits: Mr Les Emery)
The Yandera Project in Madang Province, PNG, is considered to be one of the world's largest undeveloped copper-gold-molybdenum projects. Currently, it is owned by Freeport Resources Inc., a copper-centric company based in Vancouver, British Columbia, Canada.
However, the local landowners have expressed their concerns about the current status of the Yandera Project.
What the does future hold for Yandera Project? The following may help in understanding its current status and in predicting its future.
On 9th January 2023, Freeport Resources Inc. announced a proposed stock issue with an objective to raise up to C$3 million for working capital.
On 3rd February 2023 Freeport announced that it had closed the first tranche by raising C$1.47 million.[1]
The project was formerly held by the Sentient Private Equity Fund, through Marengo Mining Limited (later re-named Era Resources Inc).
The Yandera Project is held under Exploration Licence 1335, which is awaiting approval of a renewal application.
Looking back from 2006 until 2014, the Yandera Project was owned and operated by Marengo Mining, with Mr Les Emery as their President & CEO. The locals and landowners felt more at ease with this company under Mr Emery’s leadership. Thus, the transition after 2014 was something they felt was unfavorable for the community as it generated many issues.
Photo: Part of the local workforce with Mr Les Emery, CEO of Marengo Mining Limited, which managed the Yandera Project from 2006 until 2014. (Photo credits: Mr Les Emery)
In relation to Freeport’s recent announcement on their proposed issue of stock with the objective to raise up to C$3 million, Mr Emery shared his sentiments on the matter. He stated, “Even if they do raise the full amount, speaking from my years of experience at Yandera with Marengo, these funds will go nowhere near getting the project to the next stage.”
“It is also interesting to read in the release that they have stated that COVID-19 issues and political concerns have delayed the renewal of EL 1335. However, I believe that the failure of Freeport to fund any activity at Yandera, since they acquired ownership of Era Resources, is the main reason for the renewal application not yet being approved.”
Furthermore, he stated, “As I have said on many occasions, I believe that the Minister should be refusing the application for the renewal of EL 1335, to allow a new company to enter the Yandera Project.”
“It is time for the Landowners to again raise their voices in opposition to allowing Freeport / Era to remain at Yandera.”
Just last year a group of landowners released a media statement to set out their grievances. Their media statements were directly addressed to the Office of the Prime Minister of PNG, the Mining Minister, and others.
They stated that Yandera Project was discovered by BHP in the 1970s. However, landowners said that, “Nothing further was done until the Australian company Marengo, headed by CEO Mr Les Emery, entered the project in 2006.”
“From 2006, Marengo undertook exploration and other studies on the Yandera Project. This involved the drilling of some 622 diamond drill holes, bulk sampling, metallurgical test work, etc. Total expenditure up to 2014 was around 700 million Kina.”
The Project was moving forward until Mr Emery, his Board and Project Team were removed in 2014. This decision was forced by Sentient, the major shareholder at that time.
“Soon after the termination of Les Emery in April 2014, Sentient moved to change Marengo's name to Era Resources Inc. and compulsorily acquired all remaining shares in the Company, and in turn the Yandera Project.”
Budget reductions followed, and by 2020, local employment at Yandera was nil.
Here is another issue.
Landowners have reported that Freeport management have never contacted them to explain the transition of ownership nor the company’s plans for the Yandera Project since it acquired Era in 2021.
“It is suspected that they are trying to leverage the copper resource at Yandera to improve their share price and nothing more.” [2}
Yandera Resource Owner Concerns
From the landowners’ media release regarding the licence renewal, they stated, “The reason of the delay is understood to be because of the lack of work undertaken at Yandera over recent years.”
Here are some of the concerns of the people of Yandera:
The people of Yandera described the site having world-class copper-molybdenum-gold deposit, on par with Frieda and Wafi-Golpu projects.
“The measured copper resources at Yandera stand at 959 million tonnes with a current value of USD$35 billion plus or PNGK120 billion. We want to be involved in equitable terms and partial ownership of a mine.” The Landowners said.
Acknowledgement:
Thank you to Mr Les Emery for the guidance and resources for this article.
[1] Freeport Resources Inc. (9 Jan. 2023). "Freeport Announces Private Placement". Freeport Resources Inc. news release.
Retrieved from -
https://www.freeportresources.com/news-release-1/freeport-announces-private-placement?fbclid=IwAR1DKAShCeGJYxY57PSw4yNKca9SartxA_tEytQ3gW5m6kVMYg1_gGDt9zI
[2] Gambu, Kila. Egewo, Arnold. Buka, Alois (2022). “Yandera Copper-Gold-Molybdenum Project, Bundi, Madang Province”. Media Advertisement.
Photo: Kedi Ilimbit
The Ok Tedi Mining Limited Board of Directors has appointed Kedi Ilimbit as the Acting CEO of the Company at its meeting on Wednesday 08th March.
The appointment is in accordance with Mr Ilimbit’ s current position as the Deputy CEO and General Manager Community & Operations Support.
The OTML Board acknowledges Mark Thompson who has performed this role since 01st December 2022.
OTML Board Chairman, Jeffrey Innes said, “We thank Mark for ensuring continuity and stability during this period and appreciate the focus of all OTML and Business Partner personnel during this transition period to safely deliver on their commitments and to ensure the continuing success of Ok Tedi and its stakeholders.”
Mr Thompson will resume his position of General Manager, Major Projects.
Meanwhile, the Company’s search to fill the vacant position of Managing Director and CEO continues with a selection anticipated in the second quarter of this year.
The landowners of the Wafi-Golpu mine have issued a 14-day ultimatum to the government to respond to their grievances regarding the Infrastructure Development Grant (IDG) for this year, in which the state has allocated K100 million to the impact areas in the vicinity of the mine.
The landowners, who arrived from Lae, have been in Port Moresby for over two weeks and are requesting that the state release the full component of their money to their landowner associations instead of giving it to the Morobe provincial government.
Speaking to the media on Thursday (2nd March) in Port Moresby, the aggrieved Wafi-Golpu landowners said the ultimatum was issued because previous IDG allocations since 2020 have not been put to its intended purposes of developing the project impacted areas.
The landowners’ representative, Mr John Nema, said the Wafi-Golpu IDG was used by the Provincial government for other districts’ development and the rightful landowners themselves have not benefited from these funds.
"We as the principal landowners of this multibillion kina mine that will support this country have not been given our IDG," he said.
"Our people are suffering, they are missing out on the government’s services. This project is going to develop this nation, it's going to pump big money into the governments system and will boost our economy, so who are the landowners going to get support from? Our government should be helping us, the landowners. We need this IDG now!" Mr Nema said.
Nema further stated: "We don't want the money from the IDG to go to the provincial government. As of Tuesday (28th February), we have given the government 14 days notice. This notice has been signed by all principal landowner associations of the Wafi Golpu mine, and the letter has been addressed to the Finance and planning Minister and copied to the Prime Minister, his Deputy, the Morobe Governor, our local MPs and the Mineral Resources Authority (MRA)".
"We are giving them a time period of 14 days to give us a positive response before we head back to Lae. All our local villagers are supportive and behind us in this matter and they have urged us to see that the government gives us the allocated funds from the IDG," he said.
"If there is no proper response from the government and it's respective agencies, then it is going to be a different scenario and situation when we go back to our villages," Nema warned.
He called on the government to ensure that they get a share of the K100 million to improve services lacking in their respective areas.
Meanwhile, Bulolo MP Sam Basil Junior has indicated that he has received a copy of the notice stating the ultimatum, and he is willing to assist the landowners where he can in his capacity as their local member.
"I am willing to help the landowners in handing the petition over to the government of the day to address and look into," Basil Junior said.
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