K1.7 Billion Spent On Contracts, Local Procurement: Ramu NiCo
Landowners from Ramu Nickel/Cobalt project impacted areas in Madang Province have received more than K463.4 million worth of business contracts from Ramu NiCo Management (MCC) Ltd in the past 11 years, according to its 2019 Business Development Update Report.
The developer of the nickel/cobalt project in PNG said out of the K463.4 million, a K63.5 million contract was awarded for the transportation of chromite from KBK mine to the Lae port from 2016 to June 2019 and a K40.6 million contract was awarded for fuel transportation since 2007.
A total of K1.1 billion alone was spent on local procurements of goods and services since 2007.
“From the total of more than K1.7 billion, K1.1 billion was spent on local procurement since 2007 until June 2019, landowner security firm Raibus Security Services Ltd received more than K10.4 million worth of contract and another landowner company, NCS – Raibus received more than K244.6 million worth of contract for providing meals for mine workers,”.
“Other landowner unifying umbrella companies including Kurumbukari Ltd for Kurumbukari landowners, Maigari Ltd for Inland Pipeline landowners, Wass Matau Ltd for Coastal Pipeline landowners, Basamuk Enterprises for Basamuk landowners, Raibus Engineering and other area contractors received around K56. 7 million worth of contract from 2007 to June 2019,”.
“In fuel transportation since 2007 till June 2019, we spent well over K40.6 million,” Ramu NiCo Management said. Ramu NiCo Management said sub-contractors outside the Project impact areas are engaged and paid millions of Kina for providing goods and services that the Project landowners do not have the capacity to provide.
“We established these landowner companies and started them off with seed capitals and trainings to operate and manage their businesses.
So far they have done very well and with the necessary guidance, we hope to see them grow and invest in other business opportunities outside Ramu NiCo Project,” the company said.
“One of the major business opportunities is the transportation of chromite from Kurumbukari Mine to Lae port for shipment overseas.
“Although the chromium price is low at K430 per tonne with excessive transportation cost, both land and sea at K400 per tonne, the company wishes to maintain the contract to provide business opportunities to the landowners.
Lae Port is chosen due to the availability of shipping services. This contract values about K63.5 million from 2016 to June 2019,” the company said.
“The landowner company, Ramu Transport Services Ltd (RTSL) is subcontracted and working closely with Mapai and other transport companies in meeting our monthly chromite transportation demand, “IPI is also assisting the landowner company, KBK Ltd to transport fuel from Lae to Kurumbukari Mine now but hope that in the future KBK Ltd can fully take ownership of the fuel transportation and grow the landowner company.”
The company management said thousands of landowners and non-landowners benefit from the Project from both direct and indirect business and employment opportunities provided by Ramu NiCo.
“Our contractors and landowner companies employ a total of 930 nationals. Then you are looking at vegetable suppliers from the Highlands region, hire car owners, labour hires, PMV operators to name the few.
The benefits filter down to every individual and their families,” Ramu NiCo management said. The Ramu NiCo business development plans aim to optimize landowner’s participation in spin-off businesses generated by the Ramu Nickel Project.
This is to stimulate capacity of landowner companies to operate sustainable business ventures outside of Ramu nickel project and create market for local suppliers of agriculture, fisheries and tourism products or their businesses.
“We also aim to ensure equitable distribution of benefits from landowners businesses to their shareholders, facilitate K2 million infrastructure project under the Social Economic Development Plan (SEDP) and provide Community Assistance Scheme through education subsidy, health subsidy and micro-credit scheme.”