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Press Review: Mining in the South Pacific Vol. 5, No. 1, January

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Press Review: Mining in the South Pacific Vol. 5, No. 1, January Press review: Mining in the South Pacific Vol. 5, No. 1, January – February 2013, 92 pages Compilation: Dr. Roland Seib, Hobrechtstr. 28, 64285 Darmstadt, Germany http://www.roland-seib.de/mining.html Copyright: The material is copyrighted by the media and authors quoted. Abbreviations in common use: BCL: Bougainville Copper Limited LNG: Liquid Natural Gas PIR: Pacific Islands Report PNG: Papua New Guinea Websites: Pacific Islands Report: http://pidp.org/pireport/index.htm PNG Post-Courier: http://www.postcourier.com.pg PNG The National. http://www.thenational.com.pg ------------------------------------------------------------------------------------ Ramu Nico seeks qualified, experienced staff Post-Courier 28.2.2013 By Matthew Yakai THE first nickel and cobalt project in PNG based in Madang, the Ramu NiCo Project, strives to re- cruit and retain experienced and qualified mine engineers and other trades from within and abroad given the nature of the Project.During the First Quarter Ramu NiCo Project Quarterly Meeting held in Madang yesterday, Human Resources Deputy General Manager John Rosser told participants that experts are sought from countries including Canada, Australia and New Zealand, including PNG to ensure the Project is operated and managed by qualified people. Mr. Rosser indicated that the recruitment drive is permitted by the Project MOA which gives first preference to local project area people, followed by people from Madang, and rest of the country before seeking experts ab- road. Mr. Rosser indicated that by the end of December last year, a total of 626 nationals were working with Ramu NiCo from both sites, KBK Mine and Basamuk Refinery including Madang and Port Moresby offices compared to other expatriates. He also reiterated that the recruitment and training 2 drive is ongoing as expected, but the future recruitment and training will depend very much on the project success and its sustainability, as the Project commenced operation recently. “Without this Project, we will fail. Project ramp-up is continuing with most equipment working well per the de- sign capacity but there are challenges faced and rectification work is required with huge financial cost,” he said. However, Ramu NiCo Management aims to complete the Project ramp-up soon with full capacity production in late 2014 or early 2015, a healthy trend compared with other similar late- rite nickel mine companies in the world. Community Affairs General Manager, Martin Paining also presented the Project update covering the Kurumbukari Mine, the 135 km Pipeline and Basamuk Refinery, including the SEDP (Social Economic Development Programs) under the MOA. Mr. Paining said the Project may face huge challenges in the next two years if the production capacity does not reach its expected capacity and urged the landowners and other stakeholders to understand the situation. “It is normal for a new mi- ning Project in the first year. We must understand that if there is no Project, MOA expectations will miss out,” The Meeting is required under the Project MOA to give landowners an update on the Project. It was attended by all the four LOA Chairmen with their executives, Ramu NiCo manage- ment, state team and other stakeholders. US giant using SOPAC and illegal Fiji regime to access seabed minerals in internatio- nal waters PNG Mine Watch, 28.2.2013 The illegal government in Fiji is being squeezed by the American corporate giant, Lockheed Martin, to sponsor its search for seabed minerals in international waters. To that end, Lockheed is pushing the Fiji regime to fast track legislation and is being assisted in this endeavor by the Deep Sea Mine- rals Project (run by SOPAC, part of the Secretariat of the Pacific Community) and its British lawyer, Hannah Lily. Fiji’s cabinet is expected to approve a new Decree on seabed mineral ma- nagement by March the 5th. Consultation on the draft Decree has been fast tracked with relevant stakeholders given less than 3 days to make submissions whilst US giants Lockheed were consulted well in advance. The new law is required before Lockheed will enter into a formal joint-venture with the Fiji regime. Lockheed will then apply in April to the International Seabed Authority for a new exploration licence. The new law, which SOPAC, has assisted in drafting, makes vague statements about applying a precautionary approach and best environment practices and requiring Environment Impact Assess- ments but without specifying where or how Fiji is suddenly to get the expertise to manage and en- force these. Lockheed has already been granted approval by the International Seabed Authority to explore for polymetallic nodules in one area in partnership with the UK government. It now wants to join Fiji as its official national partner for further exploration licences – but first Fiji needs to ha- ve the necessary laws to allow seabed mining in place. The proposed legislation covers the various aspects and issues arising out of experimental seabed mining operations, including establishing a regulatory authority within Fiji, and introducing a licensing regime, provisions on the protection of the marine environment, and delineating Fiji’s and the company’s duties and responsibilities. Hannah Lily, employed as a legal adviser by SOPAC, seems to have been advising on the drafting process directly on behalf of Lockheed (LH). Here are some of her comments on a draft version of the new law: • “LH would not accept the jurisdiction of the courts of Fiji, in case of dispute. The sub- contract would specify that the parties would be subject to UK law and courts. LH therefore suggest section 14 be deleted to avoid confusion. However UNCLOS Art 235 requires that: “States shall ensure that recourse is available in accordance with their legal systems for prompt and adequate compensation or other relief in respect of damage caused by pollution 3 of the marine environment by natural or juridical persons under their jurisdiction”. the IT- LOS Advisory Opinion summarises this as ‘requiring the sponsoring State to establish pro- cedures, and, if necessary, substantive rules governing claims for damages before its domes- tic courts’. Whether the proposed Fiji / LH model can navigate this requirement and LH’s requirement for UK arbitration remains a point to be explored” • “LH consider it unfair both to be charged the admin fee and to require the Company to cover its application costs. They suggest it should be one or the other, not both. “LH would expect a standalone non-disclosure agreement to cover Fiji’s handling of their commercial data” • “Query whether there is a reason Fiji would like this notice period to be so lengthy? LH would prefer this to be shorter, or if that is not possible to clarify that they would not be pe- nalised for failure to conduct activities during that 6-month notice period” • “LH request to delete, otherwise Fiji could unilaterally revoke the licence after 2 years’ in- action, which creates too great an uncertainty for the company” • “LH request that these specific figures are removed from the Decree and replaced with a provision permitting the Government to negotiate financial terms in a Sponsorship Agree- ment. NB The suggested fees are too high for LH. The UK rates (GBP 10k for application, 15k for first year, 25k after 6 years , 25k on each extension), which use an actual cost recovery mechanism would be more feasibl for LH - perhaps with some small room for negotiation, given that this is a developing country” • “LH would require that the contract stipulates the UK as the prevailing law and dispute reso- lution mechanism” The International Sea Bed Authority (ISBA) which regulates the leasing of seabed deposits have not yet developed a mining code to regulate the exploitation of minerals in international waters. NGOs have raised serious concerns about the experimental nature of the industry as well as its relevance as a development option for island nations. In addition NGOs have raised concerns about the need to protect the marine environment, prevention of pollution from seabed activities and whether states such as Fiji have the ability to monitor the environment impact. Oil Search Limited seek to expand explorations Post-Courier 28.2.2013 By Paeope Ovasuru Oil Search Limited (OSL) is now focused on expanding its gas expansion activities after recording a significant profit last year. With new partners coming on board and exploration and appraisal dril- ling activities in the Highlands, Gulf of Papua, Kurdistan and Tunisia, OSL is set for more progress in delivering its key growth strategies this year. According to managing director Peter Botten, dril- ling at P’nyang South in the Southern Highlands Province was successful in adding material reser- ves. “Studies by the P’nyang Joint Venture on what is an optimal development concept for the field are now taking place. We believe that the P’nyang resource is sufficient to allow gas expansion ac- tivities,” he said. In the Gulf of Papua, OSL is preparing for a multi-well exploration program which is due to start in March. “The drilling program comprising two firm wells will be the first re- al test of the many leads and prospects identified by the 2011 and 2012 seismic surveys. We believe that given exploration success, the Gulf drilling region could potentially have enough gas to support the development of a future standalone LNG project,” said Mr Botten. He further stated that as part of the company’s strategy to build a material oil business, drilling acti- vities commenced in Kurdistan in 2012 and will continue this year with activities in Tunisia. “Early results at the Taza well in Kurdistan have proved encouraging with the discovery of oil in the Jeribe Formation. Testing to date has been impacted by difficult drilling conditions with only relatively low production rates achieved so far.
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