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Papua New Guinea Government fails to pay Nautilus

Staff Reporter | 6:34 AM | ||
Alison Middleton| PNGIndustrialNews.Net

PAPUA New Guinea has failed to complete the purchase of its 30% interest in Nautilus Minerals’ Solwara 1 project, the company has confirmed.

PNG had been ordered to pay $118 million to the deepsea explorer by October 23.

Nautilus estimates the total amount payable by the PNG government at completion to be approximately $US118 million ($A122.8 million) including interest.
It follows the company’s recent arbitration case win against the state of PNG, which is a 30% stakeholder of the project but fell behind in making payments, according to the explorer.
The PNG government has now been ordered to comply with its obligations under the agreement and complete the purchase of the 30% interest in the project, which is located in the Bismarck Sea, New Ireland Province.
“The company is in discussions with senior officials of the state and it remains Nautilus' preference to resolve these matters amicably with the state,” Nautilus said in a statement.
Earlier this month Nautilus announced plans to order a vessel that will separate ore from seawater for the seafloor copper-gold mine.
The Toronto-based company plans to place an order for the vessel in the first quarter of next year and has obtained quotes ranging from $180 million to $260 million for the ship.
Nautilus will use the ship for the Solwara-1 project, where it will remove water from ore pumped up from the ocean floor and transfer the mineral to a transport ship.
The project will target an initial mining rate of 1.2-1.3 million tonnes per annum of dry ore to produce about 80,000tpa of copper and 150,000 ounces per annum of gold.
Prime Minister Peter O’Neill said the government was seeking legal advice on the arbitration tribunal’s decision on Nautilus and the time limits placed on it regarding payment of its equity, the Post Courier reported.
“Since the decision was handed down, we have been reviewing it and have sought legal advice,” O’Neill added.
“The state is looking at its options and we have commenced discussions with Nautilus for an amicable solution to this.
“There are other issues connected with this project that were raised, in the local community and in parliament, which the government was dealing with before this arbitration decision landed on us.
“There are a whole range of issues we are dealing with, so we need to be careful about placing time limits on these issues.
“We respect the decision of the tribunal and we are dealing with it in the best possible way.