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Papua New Guinea eyes Mining revenue increase

Staff Reporter | 3:35 AM | |
THE K11 billion revenue from large-scale and alluvial mining for this calendar year will increase considerably when new projects such as Frieda and Wafi-Golpu come on stream in Papua New Guinea , it has been revealed.
The revenue was projected by the PNG's Mineral Resource Authority in its monthly reporting period to August this year. It said the revenue projection was based on “continued overall increases in mineral commodity prices, production and ore exports”.
The outcome will represent an increase of 13.4 per cent against 2016 mineral revenues.
The PNG Extractive Industries Transparency Initiative thanked the MRA for updating the public on activities related to the mining sector.
Head of the National Secretariat Lucas Alkan said active participation by the industry and the government would lift the extractive industry work.
“We commend MRA for this update as it conforms to EITI standard and principles,” Alkan said.
“We want to make sure that EITI presence is made known, so whatever adjustment that is required can be made in the true spirit of accountability and transparency.
“As this is already happening, we aim to realise more as we strive to advance the EITI in our resource rich country.
“We hope that the industry players and government entities through the MSG process are responding to what EITI stands for. And we want to nurture that spirit through enhanced collaboration and cooperation.” The Nation

British gas company investing millions of kina in PNG, says official

Staff Reporter | 3:32 AM | |
THE British Oxygen Company has invested more than K135 million as it has confidence in the business environment in the country, says South Pacific managing director John Evans, pictured.
The company set up its factory in Lae’s Mangola Street in 1967.
However, a fire burnt down its offices and warehouse in 2012.
It has now rebuilt its gas and gear facility to provide affordable services to industries in Lae and the country.
Evans said the company had two fundamental principles – safety and people – which strengthened its aspirations to serve the needs of customers in various sectors.
Evans said it was the leading gas and engineering company in Papua New Guinea supplying compressed and bulk gases, chemicals and equipment to customers in the mining, oil and gas, industrial, health, hotels and hospitality businesses, refrigeration and agriculture industries.
“I believe in the economy of the country, the people and our products. And we are confident in our investments for continuous growth into the future,” Evans said.
Evans said rebuilding the facility involved a lot of hard work.
It was commissioned by Pastor John Garu.

Nautilus Minerals Inc explores funding options

Staff Reporter | 8:34 PM | |
Nautilus Minerals Inc is still exploring financing opportunities in order to maintain the development of the Solwara One project and the company’s operations.

According to the firm’s market report released last Tuesday, the Canadian miner stated it requires a significant and additional funding, in order to complete the build and deployment of the seafloor production system (SPT) to be utilised for the project.

“Based on the it’s current cash position and budget, the company needs to obtain new funding of approximately K131.2 million (US$41 million), before the end of 2017 and.

And in particular, at least approximately K48 million (US$15 million) is required before October 31, 2017 to meet the company’s contractual commitments in relation to certain of the equipment forming part of the seafloor production system.

“The company is in active discussions with various parties, including existing shareholders, regarding potential financing transactions and alternatives.

The firm further stated that failure to secure the necessary financing may result in it engaging specialist advisors.

It aims in taking various steps aimed at maximising shareholder value such as undertaking various transactions including, without limitation, asset sales, joint ventures and capital restructurings.

Given that there will be minimal spin-off benefits to landowners as a result of the world’s first deep sea mine, the developer says it will heavily focus on its community service obligation.

The issue of benefits has been one of the main concerns of the leaders of both New Ireland and East New Britain who were in Port Moresby last week to witness the trials being conducted on the Nautilus Minerals Inc’s mining equipment.

For the ENB delegation the issue had been raised by Florence Paisparea who is the forest and environmental coordinator of the ENB provincial administration.

Nautilus Minerals Inc vice president for the Papua New Guinea operations, Adam Wright said unlike the traditional land-based mines, the foot print of the Solwara One project, would be quite small and likewise the benefits.

Wright said employment would be limited as the firm will be employing about 200 people compared to Newcrest Lihir’s 3000.

He said other spin-off business would also be limited as its operations would be out at sea and there would not need services including buses, security and laundry services all associated with the land-based mines.

 Wright said it had already begun implementing this project especially in the coastal areas along the West Coast of New Ireland in the coastal areas of benefits (CAB) ahead of production.

Wright told the leaders from ENB the firm would be delivering its first project-a community health post on Wotum Island by the year’s end.

He said apart from health, education, infrastructure development, and business development would be other focus areas.

“What we want to do is help generate businesses that will still be going once we are gone. We are looking at areas of cocoa and copra and trying to help people rehabilitate plantations and get those industries running.

Royalty was stated as another benefit, which Wright said would be paid when the company begins production.

He said from discussions held, the intention is to have that distributed down to the local level government level.

Wright said there is already a draft agreement, which once finalised would be signed off.

He added that this is the agreement that will address all these issues.


SOURCE: POST COURIER

Stop Deep Sea Bed Mining in Papua New Guinea's Bismarck Sea

Staff Reporter | 1:13 AM |
Bismarck Sea by Canadian (Toronto) listed company "Nautilus" using U.K. built seabed abrasive mining machines.
These Abrasive UK Built Machines have just arrived at Port Moresby. They will Indiscriminately scrape off the deep sea bottom near vents in the Greed for Gold in the Bismarck Sea of Papua New Guinea (small Pacific island country north of Australia and East of Indonesia)
The two main shareholders are:
MB Holding Company LLC - 27% (owned by Omani billionaire Mohammed Al Barwani) and
Metaloinvest Holding - 15% (owned by Russian billionaire and oligarch, Alister Usmanov)
- Two other shareholders are Anglo American based in the UK and Lowes, a hotel chain in the US

Solwara One Sea Floor Mining, a game changer

Staff Reporter | 2:18 PM |
With production set to commence in early 2019, the much debated Solwara One seafloor mining project is set to pave the way for what has already been described as the advent of a new era in the global mining industry.
“Solwara One will be the first deep sea mine in the world and Papua New Guinea has taken a bold step forward into what will be a new industry.

Papua New Guinea has chosen to be at the forefront of this new industry and that is something that I think that everyone here can be proud of. This deep sea mining will be the future of mining,” said Nautilus Minerals Inc. vice president, Adam Wright.
However, pioneering the game changing technology that hopes to revolutionise the mining industry has come with a hefty price tag. The initial capital investment made by Nautilus Minerals Inc. has been valued at roughly US$580 million (K1.8billion).

Operating in a low, to zero visibility environment and water pressure up to 280 bars, Solwara One has come with its fair share of challenges, but after 10 years of research and experimentation, Nautilus Minerals has the utmost confidence that the project will be a success.
Nautilus Minerals Inc. has already invested in three, 320 ton machines that will be responsible for the mining and collection of minerals from the seafloor which are already completed and are in country.
Also completed is the pump and riser which have been fabricated in US in Houston while the Production Support Vessel which is being constructed in a dockyard in China is nearing completion.
The mine site itself, is situated 1.6km below sea level, in the middle of the St George channel between East New Britain and New Ireland provinces.

According to Mr Wright, Solwara One will lead the way, for similar project not just in country but around the globe.
“Before the 1960s oil was only found on land and there were only terrestrial operations mining oil, but slowly during the 1960’s oil was starting to be found offshore and people began mining offshore in the Gulf of Mexico. After about 10-20 years, a third of all the oil in the world was being mined offshore,” Mr Wright said.
“We think the same thing will now happen with mining. This will be the first mine that’s offshore and in years to come, perhaps 20 years from now, there will be many mines offshore.

Polye: PNG Government's sale of Oil Search shares step in the right direction

Staff Reporter | 9:13 PM |
Former Opposition Leader Don Polye has commended the government for the sale of its 10 percent stake in Oil Search saying its a step in the right direction.

“The 1.3 billion UBS loan taken in 2014 to acquire 149 million shares in Oil Search was a bad decision in the first place.  Although the shares were acquired at AUD $8.20 a piece, there was no business justification available then in 2014 to buy the 10% shares to support such an astronomical loss to the country.  The oil prices were falling and business climate developed by the PNG LNG construction phase was declining.  Nonetheless what happened, happened”, Mr Polye said.

“Today the country is experiencing recession and certain strategic measures need to be undertaken and one of which is of course the sale of these 9.8 per cent Oil Search shares.”

Polye said this decision will free up the economy of liabilities the K3 billion loan incurred.

PNG's Western gas the sweet spot for LNG growth

Staff Reporter | 9:11 PM | |
Papua New Guinea's Western province gas fields have been identified as the sweet spots for emerging LNG growth in the South East Asian economies.

Horizon Oil CEO Brent Emmett, when speaking to senior oil and gas industry executives at the recent RIU Good Oil Conference in Perth recently, said PNG is a pro development jurisdiction with an excellent track record of delivering major projects.
Mr Emmett said it is also located in close proximity to the growing LNG markets of South East Asia which makes it an attractive place to invest in.

He was updating the industry on Horizon Oil’s proposed Western LNG project, which seeks to aggregate a number of Western Province gas fields to develop 2.0 to 2.5 trillion cubic feet of gas and 60 to 70 million barrels of condensate.
The aim is to export the gas and condensate via pipeline and an offshore LNG facility which will have a capacity of around 1.5 million tonnes per annum.
Crucially, the resources slated to participate in Western LNG are held by only six participants, with almost 70 per cent concentrated in the hands of just two parties – Horizon Oil of Australia, and the Spanish major Repsol.

“This consolidation of ownership is important as it will make the process of development planning and aggregation simpler than if you were working with a widely dispersed ownership group” said Emmett.
He believes the LNG market is becoming rapidly aware of the potential of smaller LNG developments.
“We’re not really seeking out the traditional large scale LNG customers and we’re not competing with the large scale LNG producers.
“We see strong demand growth for LNG in emerging South East Asian economies, particularly in relation to dispersed power generation, and this is largely being driven by new entrants who want greater flexibility of supply.
“We regard PNG as something of a sweet spot from which to meet those needs.”
“Western LNG is targeting start up in the early 2020s when it is anticipated that the South East Asian markets will be undersupplied with LNG.
While focusing on export markets, “a key component of our development criteria is making sure that our development plan maximises the potential for domestic PNG market access for gas and LPG” said Emmett.
The design concept provides multiple gases off take points for local industrial consumers and power generation.
According to Emmett, preliminary economics are attractive and Western LNG, if successful, will be expected to generate around US$1 billion a year for 20 years or more.
“We’re in pre-Front End Engineering and Design now and anticipate proceeding into Front End Engineering and Design next year with a Final Investment Decision scheduled for 2019,” Mr Emmett said.

PNG Mining Minister Tuke optimistic about Mining Act review

Staff Reporter | 9:09 PM |
Mining Minister Johnson Tuke says he is optimistic about the outcome of the Mining Act review.

Mr Tuke told the Papua New Guinea Chamber of Mines and Petroleum this during his ministerial meeting yesterday.
He told the Chamber officials that despite his proposal to review the Mining Act which has created a lot of anxiety within the industry, he is optimistic of an outcome that would be accepted by affected parties.

He said as per the review of the Mining Act, his ministry and the National Government were working in line with government priorities to address it.
He said Prime Minister Peter O’Neill will meet with the Secretary for Department of Mining Harry Kore for a briefing on the review of the Mining Act this week and that the Mineral Resources Authority (MRA) and the Department of Mining will also conduct a power-point presentation next week for all industry stakeholders.
His meeting with the chamber was to enhance the ministry’s relationship with the industry at which the minister said he is more than happy to hear what the chamber has to say regarding the mining industry in Papua New Guinea.

“All economic ministries have been given a 100-day ultimatum to perform by the National Government and therefore I would like to work closely with you, the Department of Mining, Mineral Resources Authority and all extractive industry companies in order to realise the government’s agenda.
“My plan is to visit all mining projects in Papua New Guinea as minister responsible and I would like to meet with company officials and discuss matters of importance,” said the Minister.
He also announced that during his term in the ministry he will take on board the Wafi-Golpu and Frieda River mining projects and ensure that these important mines are operational.