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B U E E R L O O R F T The Chamber is a proud supporter and member MI PE NES AND of the PNG Extractive Industry Transparency Vol 5 Issue 3 & 4 Initiative Multi-stakeholder Group May - August 2017 Q&A with former Cham- MPs briefed on the PNG Frieda River project ber Executive Director resource industry prepares for develop- Greg Anderson P5 ment P3 P19 Greg Anderson An industry stalwart farewelled

The founding Executive Director of the PNG Chamber of nior Vice President Mr Peter Aitsi and Vice President Mr Mines and Petroleum Mr Greg Anderson was farewelled Richard Kassman, Chamber members, representatives recently in Port Moresby after clocking over 28 years from the different resource companies, his colleagues, with the organisation. friends and family.

Mr Anderson’s retirement from active duty also brings to “His dedication to develop the Chamber into one that a close almost 42 years of dedication and contribution stands tall among other reputable organisations in the towards to the mining and petroleum industry of PNG country must be commended,” Mr Aopi said. since he first arrived in the country in 1975, few months prior to PNG gaining Independence. “Greg ranks highly in this category as someone who has dedicated almost his entire life to the Chamber, the Mr Anderson’s illustrious career began as an Engineer- resource industry and the country he so dearly loved, ing Geologist when he moved to PNG to work with the Papua New Guinea. Greg, I’m sure you have achieved then PNG Geological Survey. More about his career on quite a lot over those years but the Chamber and as a Page 2 matter of fact, the country will always value your tremen- dous contributions, not only within the resource sectors, However it was not until 1989 when the Chamber was but also in areas you are passionate about such as initially created that Mr Anderson, decided to join the or- education, health and community development. PNG’s ganisation and develop it into a well-respected industry world-class resource industry is what it is today because body. of people like you,” he added.

Attending his farewell party were members of the Cham- • Continued on page 2 ber Council including the President Mr Gerea Aopi, Se- • From page 1

Brief bio about Greg Anderson

He has had an illustrious career spanning more than three decades in the mining and petroleum industry. A significant part of his career was devoted to Papua New Guinea.

Before re-locating to PNG in 1975, Greg was employed as an Engineering Geologist with the Bureau of Miner- al Resources, Geology and Geophysics in Canberra, Australia.

He later joined the PNG Geological Survey as Engineer- ing Geologist in 1975, few months before PNG gained Independence.

In 1979, he later became PNG’s Senior Geologist, a role he held until 1983. In this position, he was responsi- ble for the supervision and direction of the Engineering Geology and Hydrogeology in Papua New Guinea. This section in the Geological Survey of PNG was the only organisation in PNG offering geo-technical services throughout PNG for other Government Departments, Provincial Governments, statutory bodies and the pri- vate sector.

Between 1983 and 1985, he served as the Principal Engineering Geologist with the Geological Survey of PNG and then from 1985 to 1989 he was appointed the Chief Government Geologist responsible for the overall administration, management and co-ordination of the Geological Survey Division of the Department of Miner- als and Energy.

In 1989, Greg was appointed to the position of Execu- tive Director of the newly established PNG Chamber of Mines and Petroleum, a position he occupied for over 28 years until his formal retirement in May 26th 2017. During this period, he was responsible for developing the Chamber into a peak industry body which has had a major input into legislation and policy formulation and changes that affects the industry in PNG.

During his years at the Chamber, he has passionately contributed to other areas as well such as in education where he has helped several tertiary institutions like UPNG and Unitech to foster academic growth and stu- dent learning.

He was also instrumental in the fight against HIV/ AIDS when he championed the industry’s response to HIVAIDS by helping to establish the Private Sector HIV/ AIDS Project which is now Business Coalition Against HIV/AIDS or BAHA.

2 Mining and Petroleum Review Q&A with Greg Anderson When you first arrived in PNG those goals? ed significantly because we had a in 1975, did you think you were When the Chamber was created, consistent taxation and regulatory going to be in the country for 42 we wanted to grow and promote the regime which were not changed years? resource industry in PNG. That was even though things were buoyant. It never occurred to me that I was the underlying goal. We also want- PNG kept everything stable and the going to be here for all these years ed to make sure the industry was results spoke for itself. We got two as I originally came to PNG for a healthy by having reputable players mining projects (Ramu Nickel and two-year term. But PNG was fasci- that had good international stan- Hidden Valley) and we delivered the nating, the work I was doing here dards. That has always been my Solwara 1 Project and of course the was exciting and the people were vision and we have achieved that. LNG project. spectacular. All is now history. What were some of the main suc- What are your views about PNG’s What was your experience like cesses you had as CEO of the LNG sector? working in rural areas of the PNG Chamber? PNG has huge potential and I’m before you joined the Chamber in The Chamber has been able to convinced that despite the challeng- 1989? build a wonderful record of confer- es we have at the moment with leg- I have worked in every province ences and publications. We were islation and taxation changes, we in PNG and I’ve seen some really the trailblazers for hosting over- will get further LNG developments beautiful things in this country. It’s seas investment conferences and whether it be an expansion to the said many times but the tourism po- promoting Papua New Guinea. I current PNG LNG project or another tential here is just enormous. There am also very proud of the team that stand-alone project. The record and are some worldclass sceneries in I’ve built at the Chamber. They are the reputation that PNG has estab- PNG which include the Hindenburg multi-skilled and talented and will lished from the PNG LNG project is Wall (Western Province), the Bever be working very well with the new immense. Because the project was Falls (Southern Highlands), and executive director Professor Albert delivered successfully on time and the Huon Terraces along the Fin- Mellam. I know the Chamber will go now producing well above its name- schafen Coast (in Morobe Province) a very long way under the steward- plate capacity of 6.9mtpa, that has which people hardly hear about. ship of Prof. Mellam. put us well and truly on the world stage as a significant LNG player. What were some of the chal- Where would you like to see the It’s going to be tough in future for lenges you faced when you first Chamber in the next 10 to 20 LNG markets but PNG is very well joined the newly-established years? positioned competitively to be on Chamber? The Chamber is a small organi- the forefront of the next round of The organisation was ‘brand new’ sation with a lot of responsibility. LNG projects. so I was able to put in some of my The main thing is to keep it high- own ideas. But it was a challenge ly professional, well-organised, What will you miss most about as we had absolutely nothing. The disciplined and have some stra- the Chamber? (Chamber) office was at 6-Mile tegic goals in place. Maintaining I very much enjoy the friendship and (in Port Moresby at the back of the conferences, the workshops, the excitement of the mining and Granville Motel) and it had just two and the strategic sessions for our petroleum industry. Nothings ever support staff. That time we had less members and the industry are im- consistent. You come to the office than 100 members but over the portant to drive the industry forward. and you think you can plan out your years, the membership has grown Maintaining a close relationship day and say you’ve achieved this significantly and the organisation with the Government and the many and that but then something else has grown big as well. stakeholders that the Chamber comes up or things get changed. It’s has is also important. The large often very difficult to plan our pro- What was the Government’s goals of supporting the projects and grams because things are always reaction to the establishment of maintaining a vibrant exploration moving. And that the excitement the PNG Chamber of Mines and industry underscores the future of and challenge I’ll miss. Petroleum? the industry. Government was very supportive Any favourite things you love because the creation of the Cham- What are your views on the cur- about PNG? ber meant there would now be rent changes to legislations? It’s got to be the people. PNG peo- a common voice for the industry There are disagreements to the ple are very friendly and the country instead of individual companies Mining Act review and that is itself is a very nice place to work in. approaching the Government. something I hope can be sorted out I had many wonderful times myself very soon. I must say I am a little working in the rural areas of PNG What were some of the imme- disappointed because I’ve seen and that will be one of the things I’ll diate goals for the newly-estab- PNG’s achievements from 2003 really miss. lished Chamber when you joined to 2012 when commodity prices and have the Chamber achieved were strong. The country benefit- www.png.OresomeResources.com 3 Greg Anderson’s farewell party in pictures

Chamber President Gerea Aopi presenting Mr Anderson a gift while (right) Mr Anderson and wife Crescentia share a moment.

Long-time friend Robin Moaina and Mr Anderson admiring the cakes while (right) Chamber Senior Vice Pres- ident Peter Aitsi presents Mr Anderson gift.

Former Chamber President and Barrick Niugini’s PNG Country Executive Dr Ila Temu presenting Mr ander- son a gift while (right) former colleague and long time friend Bill Searson looks on as Mr Anderson takes a picture of a cake.

The Chamber staff with Mr Anderson. Right: Mrs Anderson and Chamber’s Projects Manager Leah Waru- pi-Morlin share a light moment on stage as Chamber Vice President Richard Kassman looks on. Pictures by Rocky Roe 4 Mining and Petroleum Review Chamber briefs MPs on the importance of resource industry

Top: Members of Parliament, Parliamentary staff and ExxonMobil staff after the tour of the plant. From left: Chamber Public Relations and Communications Manager Mr Mackhenly Kaiok speaking to Wabag MP Dr Lino Tom at the Chamber booth at the Parliament House; Chamber Vice President Mr Richard Kassman speaking to the MPs at the PNG LNG Plant site; and EMPNG Managing Director, and Chamber Councillor Mr Andrew Barry briefing the MPs about the PNG LNG Project. Pictures courtesy of Loop PNG and ExxonMobil.

The PNG Chamber of Mines and session hosted by the Business the significant contribution of the Petroleum recently conducted a Council of PNG during the week. project to PNG. series of briefing sessions for the new Members of Parliament. Both Mr Aopi and Mr Aitsi spoke The MPs were then taken on a about the economic and social con- tour of the plant where they visited The sessions, which included a visit tributions of the industry as well as the two LNG trains and the plant’s to the PNG LNG plant site outside some of the issues the industry was marine terminal where they saw Port Moresby were part of the Na- facing such as the changes to the firsthand the LNG cargo being load- tional Parliament’s Orientation Pro- Mining Act, the Mineral Resources ed to a vessel. gramme held from August 14-18. Authority Act, and the changes to Taxation. The MPs also had an opportunity to The Chamber was also given an op- speak to some of the Papua New portunity by the National Parliament The Chamber’s briefing sessions Guinean employees during lunch. to showcase its activities as well as culminated with a tour of the PNG promote the resource industry by LNG Plant by the MPs on the 17th Speaking on behalf of the 34 MPs setting up an information booth at of August. that visited the plant site, first-time the Parliament House. MP and Member for Madang, Hon- At the plant site, ExxonMobil PNG ourable Bryan Kramer thanked the Chamber President Mr Gerea Aopi Managing Director Mr Andrew Barry Chamber and ExxonMobil PNG for and Senior Vice President Mr Peter provided an overview of the project giving them an opportunity to visit Aitsi also gave presentations to the while EMPNG National Content the plant. MPs as part of a panel discussion Manager Susil Nelson spoke about www.pngchamberminpet.com.pg 5 Chamber calls on MPs to be mindful policy changes and their impacts

Chamber Senior Vice President Peter Aitsi speaking to the MPs during a briefing session organised by the PNG Business Council as part of the week-long National Parliament Orientation Program. Members of Parliament are being such as education, health, and law “In order for us to do this, we need challenged to be mindful of the im- and order.” to retain PNG’s status as an attrac- pacts any changes to PNG’s fiscal tive investment destination. This and regulatory regime would have He said according to the Depart- can only be done if we have stable on the economy of the country. ment of Treasury, revenue from the and equitable fiscal and regulatory mineral sector alone dropped mark- framework,” Mr Aitsi said. This was some of the remarks edly between 2012 and 2014. made by Senior Vice President of “Wafi Golpu, in its first stage will the PNG Chamber of Mines and “Given our small, open economy, be a 27 year life mine. If Newcrest Petroleum Peter Aitsi during an our nation is prone to being im- Mining and Harmony Gold do their orientation program for the MPs in pacted whenever there is a global jobs well, this mine life can be fur- August. downturn in commodity prices ther extended. This is the challenge or economic shocks. As per the for all of us, you as new Members While providing the MPs an over- information from the Department of Parliament and we as members view of the industry’s economic of Treasury, in 2014 the mineral of the industry on how best we can contributions, Mr Aitsi said it is sector contributed just under 10% work together in order for us to grow essential that MPs understand the of government revenues through this industry.” implications the changes to legal, Salary and Wages Tax, and Com- fiscal and regulatory regime will pany Tax.” “How best can we work together to have on the industry. ensure the benefits of our resources “It is also important to note that are properly managed and are bet- Mr Aitsi made that statement during PNG’s number one source of reve- ter directed to stimulate the broad the PNG Business Council briefing nue is Personal Income Tax, repre- economic growth that is going to be sessions held during the orientation senting around 25% of our annual needed for us to provide a better program hosted by the National total revenue,” he said. future for our children,” he said. Parliament. “PNG is a small and open econo- “As we think about our economy, my that is heavily dependent on its one important point to remember is resource revenues. The challenge that PNG by global standards is a to all of us is how we can grow small and open economy,” he said. our resource industry. We need to support the growth of the industry in “Our economy is heavily depen- order to generate further revenues dent on revenues generated by the that can be channeled to stimulate resource sectors which enables other sectors such as agriculture, the government to meet the cost of tourism and manufacturing which in delivering essential public services turn will help create more jobs.” 6 Mining and Petroleum Review Resource industry - a major contributor to PNG’s economy The economic and social contributions of the mining and petroleum industry to Papua New Guinea are immense.

President of the PNG Chamber of Mines and Petroleum Gerea Aopi made this remark while briefing Members of Parliament during an orientation program organised by the National Parliament.

“PNG’s economy is highly reliant on the resources industry – more so than many other resource jurisdictions,” Mr Aopi said.

“The resource sectors make a significant direct and indirect contribution to the country which benefits all Papua New Value of Exports in 2016 Guineans. The resources sector contributed over 26% of PNG’s GDP and around 84% of the nation’s export revenue valued at K24 billion in 2016.”

He added that in terms of employment, the industry was a leader employing directly over 20,000 people of which many more are employed in sectors associated with the industry including landowner businesses.

“Resource development brings with it key infrastructure and contributes to a wide range of community development pro- grammes in host communities and provinces. This includes health, education, law and order, and agriculture infrastruc- The bridge built by Ramu NiCo mine connecting ture as well as numerous health care and medical outreach Usino and Bundi in Madang Province. programmes, scholarships and student support, agriculture outreach, and law and justice programmes,” he said. Stable fiscal and regulatory policies needed The resource industry will return to strong, the PNG mining and petro- been reflected in declining resource its traditional role as a strong con- leum industry contributed over one taxes and government budgets,” he tributor to PNG’s economic prosper- third of government tax revenue. added. ity once commodity prices increase The industry paid K12,570 million in again. corporate tax, K1,537 million in div- “The resource sectors are facing idends, K1,658 million in royalties a range of revised legislation as However, continued growth and and K542 million in the tax credit well as major taxation changes that development in the sectors will scheme (equivalent to tax paid) have already been implemented. depend on continuation of sup- to the National Government from The final outcome of the review portive government policies and 2005 - 2012. This totaled K16.31 of the Mining Act and the Mineral an attractive stable, internationally billion, an average of over K2 billion Resources Authority Act will be crit- competitive legal, fiscal and regula- a year,” Mr Aopi said. ical to future investment in mineral tory regime. exploration and development. This However, he said currently resource process has already created a great Chamber President Gerea Aopi told sectors globally are being impacted deal of uncertainty in the minerals Members of Parliament in August by the downturn in commodity pric- sector. during the orientation program es and this was having an impact that stable and effective fiscal and on the PNG resource industry. “The remainder of 2017 and 2018 regulatory policies in the past have will be a very difficult period for underwritten the success of the “Major commodity prices have PNG economically and close co- resource sectors in PNG. fallen dramatically and expenditure operation and partnership between on exploration and development government and industry will be “When commodity prices were has significantly reduced. This has more important than ever,” he said.

www.png.OresomeResources.com 7 Community Affairs workshop a major success

A community affairs and business ing and Maintaining Stakeholder Resources Development Company development workshop was recent- Relations for Sustainable Projects, General Manager External Affairs ly held in Port Moresby for commu- Communities and Businesses’. and Sustainable Development, Imbi nity affairs practitioners, mining and Tagune; Ok Tedi Mining Ltd’s Ben- petroleum companies, communi- Chamber Executive Director Dr. efits Sharing and Distribution by the ty-based organisations and land- Albert Mellam said during his open- company’s Community Relations owner businesses. ing remarks that the Chamber was Manager Kuam Sanewai; Porgera committed to providing such ave- Joint Venture Law and Justice Ini- The two-day workshop held from nues for the industry to exchange tiative by Ila Geno, an Independent August 15-16 was attended by 145 ideas and learn from each other’s Consultant working on that project; participants which included various best practices. and a panel discussion on the topic Government agencies and depart- of ‘A Proposed Constitution for ments such as the Mineral Resourc- ‘The Chamber is committed to LO Businesses in PNG Resource es Authority (MRA), the Department actively organising and facilitating Projects’. of Petroleum and Energy, Depart- workshops and conferences to ment of Treasury, Department of bring qualified people from the min- The workshop also heard presen- Commerce and Industry, Invest- ing and petroleum industry together tations from some of the successful ment Promotion Authority, and the to share their experiences and dis- landowner businesses and invest- Conservation and Environment cuss new issues and ideas affecting ments such as the Mineral Resourc- Protection Authority. their operations,” Dr. Mellam said. es Star Mountains, Laba Holdings Ltd, and the Ok Tedi Landowner Organised and facilitated by the “We want all of you to know that Royalty Investment Trust. PNG Chamber of Mines and Petro- regardless of the size and nature of leum, the workshop covered topics your operations, our mission is to One of the major outcomes of the on Mining and Petroleum project facilitate such events to bring you workshop was the proposal by the agreements – Implementation and all together.” Chamber for the establishment of Review, Case Studies on Com- the Community Affairs Committee munity Affairs Issues, the Role of Some of the key presentations that which will be made up of community External Observers in Progressing were given during the workshop affairs practitioners and representa- the Role of External Observers or included an Update on the Revised tives from other private and govern- Facilitators in Progressing Com- Mining Project Memorandum of ment agencies and hosted by the munity Issues, Resources Industry Agreements by MRA Managing Chamber. Community Relations Manual, Director Philip Samar; Transition Landowner Investment Trusts, Man- of the Oil Projects to Designated The proposal, which received the aging Landowner Businesses and Gas Projects and Implementation support of the MRA and other com- Associations in a Low Commodity of the Landowner Benefits Sharing panies, will see the establishment of Price Environment, and Community Agreements by DPE Acting Sec- this committee who will develop the Business Development Planning for retary Kepsey Puiye; PNG LNG industry’s positions on community Proposed Projects. Plant Site Benefits Sharing Agree- issues that are affecting projects ment Implementation by Mineral and their beneficiaries. The workshop’s theme was ‘Improv- 8 Mining and Petroleum Review Chamber donates to Hanuabada Fire Relief efforts

PNG Chamber of Mines and Petroleum Executive Director Dr Albert Mellam (second from left) with Chamber staff handing over the donations to some of the families including relief committee coordinator Dadi Toka Jnr (right). The PNG Chamber of Mines and donation which included clothing, Chamber, like other organisations Petroleum donated K5,000 to the cooking utensils and kids toys do- operating out of Port Moresby is Hanuabada Village Fire Appeal to nated by the staff. grateful for that,” Dr Mellam said. assist those families affected re- cover from the fire disaster that has On hand to receive the donations “Houses are important to us all. left more than 200 people homeless was coordinator of the appeal Mr Losing your home to fire is some- when fire destroyed their houses on Dadi Toka Jnr and some of the thing most families wouldn’t want the 19th and 22nd of August. families. happening because it causes a lot of stress and distraught, especially The first fire incident which hap- Speaking during the donation, Dr for children and the elderly. The pened on the afternoon of 19th Mellam said the Chamber hoped Chamber felt compelled to help in August saw 15 houses burnt down the assistance would help those what little we can so that the affect- while the second incident which families rebuild their lives. ed families can quickly rebuild their happened in the early hours of 22nd lives,” he added. August claimed three more houses. “Port Moresby is what it is today because of the generosity of the The Chamber is appealing to other The Chamber staff, led by Exec- people of Hanuabada and the other business houses in Port Moresby to utive Director Dr Albert Mellam Motu Koitabuan villages who gave help the Hanuabada families recov- visited the families and made the their land for the city to be built. The er from the incident.

www.pngchamberminpet.com.pg 9 Mining News Annual gold output hits a record 940,000 ounces at Lihir

The Lihir operation in the New Ireland Province. Lihir gold produced a record improvements achieved through per ounce but lifted this to a re- 940,000 ounces of gold in the Edge initiatives. cord 506,000 ounces produced at year ended 30 June 2017, up from US$810 an ounce. Comparable 900,000 ounces in 2016, with ‘All In “The 8% higher mill throughput was figures for the previous year were Sustaining Costs’ (AISC) rising to achieved with no increase in cost 431,000 ounces and 469,000 US$858 an ounce from US$830 in of sales (exclusive of depreciation), ounces produced at US$890 and 2016. resulting in lower cash operating US$779 an ounce. In June this costs per tonne relative to the prior year, the mine had 2,362 employ- In its annual results for 2016-17, period. ees and 3,188 contractors. Newcrest Ltd said export revenue from Lihir totaled US$1,181 in “Revenue for the current period was The company’s operating and the year to June compared with 14% higher than the prior period, financial review also noted that the US$1,035 the previous year. reflecting increased production PNG Government “has undertaken and an 8% increase in the average a broad review of mining laws and Lihir, which is fully owned by New- realised gold price.” its taxation regime. crest, expects gold production in the current year to total between The report said the higher AISC “In addition to the risk of an in- 880,000 ounces and 980,000 ounc- per ounce reflected the lower head creased tax cost to the Group’s es. grade and an increase in sustaining operations, potential reforms from capital expenditure and production these reviews may include chang- It said Lihir’s record production was stripping. es to the level and manner of local mainly due to an 8% increase in mill equity participation in projects and throughput and a 5% increase in Newcrest is planning to hit a the introduction of additional retro- gold recovery, which was partially throughput rate of 14 million tonnes spective reporting and compliance offset by a 7% decrease in gold annually by December. Studies are requirements which may increase head grade. underway to increase this further operating costs. with an “aspirational target” of 17 It said: “The sustainable mill million tonnes annually. “There is also the risk of changes throughput rate target of 13 million to foreign exchange controls and/ tonnes per annum by the end of Lihir produced 434,000 ounces of or laws or regulations pertaining to December 2016 was achieved in gold in the first half of 2016-17 with the holding of cash offshore and the current period, demonstrating a total production cost of US$913 remittance of profits and capital to the availability, utilisation and rate the parent company.”

10 Mining and Petroleum Review Turning waste into gold

An aerial view of the Cyclone Tower at the Lihir mine, New Ireland Province. Insert: Newcrest Lihir’s Engineer- ing Projects Development department Andrew Moulds with Downer Construction Supervisor Richard Kuaru inspecting work at the top of the Cyclone tower. Pictures courtesy of Newcrest Mining

Newcrest-Lihir has successfully completed the instal- circuit. lation of its Float Tails Leach Phase 2 Project cyclone tower and associated pipework to recover cyanide sol- With the addition of the cyclones, coupled with the com- uble gold from the flotation Grade Gold (FGO) and High missioning of the new kiln, the project is anticipated to Grade Gold (HGO 1&2) flotation tails. provide production benefits worth up to $27 million per year, a payback of approximately eight (8) months. This is the first stage in the project. The installation of the Nutec Bickley kiln is the second phase in the project Newcrest Lihir’s business partner, Downer Construc- and is currently in construction. tion was contracted to build the cyclone tower over the past six months and it is currently being commissioned. Superintendent-Major Projects Greg Bridge said the Downer Construction Structural Mechanical and Piping Cyclones and Neutralisation, Cyanide and Absorption Supervisor Richard Kuaru said constructing the cyclone (NCA1) kiln replacement upgrade projects were costed tower was a positive experience for his team. at a total of US$19 million. “As Papua New Guineans working on the project, the “Previously, gold was lost through the flotation circuit. experience has given us great job satisfaction. We With the addition of the two cyclone clusters we reduce are also gaining more experience in building it from our losses and increase our recover rate, subsequently the ground up right to its completion stage and we are increasing our gold production,” Bridge said. proud of our work in helping Newcrest in its business improvement projects.” Once commissioned, the cyclone will process flotation tails, separating the fine cyanide soluble gold to the This is a significant milestone in enhancing Lihir’s gold cyclone overflow for leach in the Carbon in Leach (CIL)) production and improving gold recovery from the historic circuit and utilizing the excess capacity available in the flotation waste stream.

www.png.OresomeResources.com 11 Record Ramu Nickel output generates cash surplus

Ramu NiCo’s Basamuk Refinery Plant site.

The Ramu nickel mine in Madang Province has pro- 11.3% at no cost once project debt is repaid. duced a record 9,072 tonnes of nickel and 869 tonnes of cobalt in the June quarter as it targets 2017 output of Cobalt prices hit US$60,000/t, Ni US$9,000/t 32,600 tonnes of nickel in concentrate, up from 22,269 tonnes in 2016. Highlands said the Ramu operation benefitted from strong cobalt prices, which increased to US$60,000 per Nickel and cobalt output in the June quarter was well tonne in the June quarter, while nickel prices hovered above plant design capacity, Highlands Pacific said in around US$9,000 per tonne after prices strengthened its June quarterly report. during the quarter.

The report said the project had net cash inflow of US$51 “Average revenue received per tonne of nickel sold in million during the quarter, taking year to date cash in- the June quarter was approximately US$10,340, includ- flow to US$78 million after capital expenditure of US$4 ing cobalt credits and net of selling costs and payable million. charges. Average operating cost per tonne of nickel produced was approximately US$5,660, generating It added: “The quarter saw excellent performances cash operating margins of approximately US$4,680 per across all segments of the operation. Mine production at tonne.” Kurumbukari exceeded budget, leading to higher rates of slurry transfer to the Basamuk process plant. Slurry Highlands said it was hopeful that if nickel and cobalt nickel and cobalt rates were in line with expectations, production and prices were sustained to the end of the averaging 1.1% nickel and 0.11% for cobalt. year it would receive a maiden distribution by the end of the year. Presently, the company’s share of net cash in- “Process plant throughputs reached record levels follow- flow is being used to repay its share of operating losses ing planned maintenance work completed on two HPAL in 2015 and 2016. in the March quarter, with the third HPAL train sched- uled for a 14-day shutdown in the September quarter.” “Highlands, the PNG Government and landowners are The mine is operated by the Metallurgical Corporation of currently in discussion with MCC concerning an exten- China (MCC). sion to the current debt repayment structure,” the report Highlands has an 8.56% interest, which will increase to said.

12 Mining and Petroleum Review More options being assessed for Wafi-Golpu project

Newcrest Ltd has announced plans to update its feasi- ed in the second quarter of 2018. bility study on PNG’s Wafi-Golpu copper-gold project in the first quarter of next year. The joint venture, made up of Newcrest and South Af- rica’s Harmony Gold, was also reassessing block cave Directors said in the company’s latest annual report that levels and increased mining rates as a result of im- work is currently focusing on internally generated power proved knowledge gained from additional drilling carried options and on developing deep sea tailings dispos- out this year. al options to compare with terrestrial tailings storage options. “Timing of first production is dependent on the updated study outcomes and the granting of a Special Mining The deep-sea options study is expected to be complet- Lease,” they said.

PanAust and Highlands Pacific look to arbitrator to resolve differences over Frieda River project through mediation, however the parties have now agreed to seek a final and binding arbitration before a sole arbitra- tor. It is expected the arbitration decision will be received before the end of the year,” it said.

Under the joint venture agreement Highlands is required to commence funding its 20% share of the Frieda River project on completion of a feasibility study. PanAust is awaiting approval for a Special Mining Lease application it has Frieda River employees on Day One of the PanAust acquisition of presented to the Mineral Resource Author- an 80 per cent interest in the Frieda River project. Photo courtesy of ity. PanAust Discussions underway with potential Highlands Pacific has announced the commencement buyers of arbitration proceedings to resolve a dispute with Meanwhile, Highlands has said that it has commenced PanAust over funding of project expenditure at their big a process seeking to maximise the value of its Frie- Frieda River copper-gold project. da River asset and has appointed advisers, Cutfield Freeman and Co to investigate opportunities, including The company’s latest quarterly report said the two a potential sale. companies are in dispute over their funding responsibil- ities under a joint venture agreement, including whether “Interested parties have been engaged in the process Highlands is due to commence the funding of project and options are being assessed, with a view to finalising expenditures. the process by the end of the September quarter. This may or may not lead to a transaction being completed,” “Highlands previously has sought to resolve the dispute Highlands said.

www.pngchamberminpet.com.pg 13 Anglo American becomes project man- ager at Star Mountains after spending US$25 million

Highlands Pacific joint venture with South African giant copper and 0.37 g/t gold from 280m downhole. Anglo American in the Star Mountains has completed its phase one exploration with Anglo American spend- The goal was attained five years after the original ing US$25 million and achieving an inferred contained agreement when Anglo American paid Highlands Pacific resource of three million tonnes of copper. US$10 million to farm into the venture.

Highlands quarterly report said the US$25 million To increase its 51% equity to 80%, Anglo American will spending hurdle has led Anglo American to assume the need to complete a bankable feasibility study by 2030. role of project manager. Under the agreement Anglo American has also agreed to provide Highlands Pacific with US$150 million in proj- Successful intercepts included 596m at 0.61% copper ect funding as a deferred free carry. and 0.85 g/t gold from 24m depth and 68m at 0.97%

Crater Mountain Gold venture seeks new beginnings Crater Gold Mining has announced an entitlement offer The resource was open at depth and in various direc- of 11 shares for every two held by shareholders at an is- tions at its flagship Crater Mountain project. sue price of A1c per share in a bid to raise A$15 million for renewed activity at its Crater Mountain gold project “We aim to resume drilling with two rigs on site and in Eastern Highlands. quickly ramp up to a drilling rate in excess of 10,000 cumulative linear metres per year. Our goal is a trans- The company also expects to sell its Croydon Project in formational increase in gold resources,” he said. Queensland for A$1.2 million. Plans were also being developed to mine the high- Alex Molyneux, who will take over as Crater’s Chairman grade zone at the Nevera Gold Mine for sustainable if the entitlement issue is successful, said in a letter gold production that would partly self-fund exploration to shareholders the company already has a proven activities. inferred resource of more than 800,000 ounces of gold.

14 Mining and Petroleum Review Nautilus submits draft environmental plans to CEPA and beefs up its CSR programmes

Namatanai Nursing Officer Richard Watt during a consultation with a family in Kono village – Ward 15. Pic- ture courtesy of Nautilus

Nautilus Minerals has submitted its draft Environmental under a Public Private Partnership (PPP) agreement on Monitoring and Management Plans (EMMPs) to PNG’s health services. Conservation and Environmental Protection Authority (CEPA). The patrol consisted of two doctors holding clinics in every village in selected coastal wards in order to According to the company’s June Quarter’s Manage- generate data on community health. The patrol was an ment Discussion and Analysis, the EMMPs outline outstanding success with 6,900 local residents consult- specific environmental management and mitigation ing the doctor’s, with almost 60% of patients receiving measures that will be implemented for the operational treatment for a range of medical conditions. The data phase of the Solwara 1 project. collected will now be used plan further outreach pro- grams under the PPP. It also stated that CEPA will appoint a consultant to undertake an independent review of the EMMPs prior to Nautilus also said it has completed the first phase of their finalisation and approval for implementation. an infrastructure improvement program which will see bridges built in place of wet crossings on the main road Meanwhile the company also stated its expenses for its on the west coast of New Ireland. Corporate Social Responsibility programmes in the sec- ond quarter increased to US$500,000 from US$300,000 A new bridge for the Pubonom wet crossing was offi- in 2016. cially opened by New Ireland Governor Sir Julius Chan earlier this year. “The increased expenditure relates to the completion of a medical patrol for communities in the coastal area The ultimate aim of the program is to provide access to of benefit on the west coast of New Ireland during the health facilities, to facilitate the delivery of government reporting period,” the company said. services and to encourage business development in the region. This was the first outreach program to be undertaken in conjunction with the New Ireland Provincial Government www.png.OresomeResources.com 15 Ok Tedi completes investment in Mine Life Extension and announces higher 2016 profit The big Ok Tedi mine in Western Ok Tedi with the State retaining the customers in Japan, South Korea, Province has completed its net in- balance. the Philippines, Germany and India vestment phase for mine life exten- as well as spot shipments to other sion with reduced operating costs “While not formalised during 2016 customers. helping to restore its reputation as this is expected to occur in 2017 “a low cost global copper producer”. and we look forward to welcoming a Better grades, more profit director representing the community The average copper grade last The 2016 annual report of Ok Tedi entities,” he said. year increased to 0.58% copper Mining Ltd said the mine, which compared with 0.46% in 2015 and operates as a State-Owned Enter- Remedial work reduced costs 0.54% in 2014 with the gold grade prise, had a net profit after tax of The annual report said a cost re- also improving to 0.73 grams per K384 million in 2016. duction program and remedial work tonne compared with 0.64 g/t in undertaken during the suspension 2015 and 0.68 g/t in 2014. It paid out K150 million in dividends of operations has enabled the com- for the year, in addition to royalty pany to regain its position as a low The 2016 after tax profit of K384 and compensation totalling K94 cost global copper producer. million offset a loss of K347 million million. in 2015 and exceeded the K340 OTML Managing Director Peter million profit generated in 2014. Profitability was restored even Graham said replacement of the though copper prices had fallen outer shell of a Semi-Autonomous Cash generation of K338 million 21% since 2014. The mine only op- Grinder, after more than 35 years enabled debt repayment of K195 erated for ten months last year after of continuous service, and refur- million at the end of 2015 with net the El Nino-induced drought saw bishment of the Ok Menga hydro debt eliminated in October 2016 the mine and plant suspend oper- power station took place during the and a cash balance of K179 million ations for ten months from August suspension of operations. achieved at the end of 2016. 2015 to February 2016. He said gross monthly operating OTML’s gross operating cost in OTML Chairman Sir Moi Avei said it costs had fallen 12% in 2014, 20% 2016 was K1,250 million (US$395 was pleasing that the mine operat- in 2015 and 18% in 2016. million). This represented an aver- ed profitably despite the fall in cop- age of K117 million (US$37 million) per prices even though an addition- Operations began with one pro- per month of operation, excluding al K499 million had been invested cessing train brought online on 1 the K66 million (US$21 million) of during the year in the final phase of March 2016 and the second train dry weather costs incurred in Janu- the mine continuation program. commencing operations on March ary and February 2016. 31. OTML produced 321,000 Sir Moi said the Fly River Provincial tonnes of copper concentrate for “This was 18% lower than 2014 in Government and the Communi- 80,000 tonnes of copper in addition Kina terms, despite the strength- ty Mine Continuation Agreement to 218,000 ounces of by-product ening of the US dollar. In US dollar (CMCA) communities agreed last gold. terms, the gross operating cost in year that the two entities would 2016 was 33% lower than in 2014,” collectively hold a 33% interest in The concentrate was exported to the report said.

16 Mining and Petroleum Review Petroleum Environmental impacts at Ok Tedi to come under greater public scrutiny

Reuben Lapin, OTML’s Manager for Bige Operations and Kenneth Foster, Bige Rehabilitation officer inspect- ing Bige revegetation. Ok Tedi Mining Ltd and the National to be positive. Dredging at Bige and monitoring programs aim to Government this year will formalise represents more than 10% to the minimise impacts whilst continuing a new Environmental Permit that Company’s annual operating cost mining and processing operations.” will require increased monitoring and involves the removal of a large The report said that since 1997-98 and reporting on environmental portion of the sediment flowing about 10 million cubic metres of impacts and success of mitigation down the Ok Tedi River. sand has been dredged from the strategies. riverbed. “The dredged material is stored in Announcing this in its 2016 annual engineered stockpiles adjacent to Geochemical sampling has identi- report, OTML noted that Ok Tedi the river. The potential for acid rock fied that non-acid forming materials was the only large copper mine drainage is mitigated by the addition tend to deposit at the southern end globally that separates sulphides of acid-neutralising limestone to the of the dredge slot, while heavier py- from tailings prior to the discharge materials going into the river from rite material deposits at the northern of tailings. the mine and processing plant, and end, enabling selective dredging the operation of a secondary flota- and placement of the sand on the OTML Chairman Sir Moi Avei said tion plant which was constructed in stockpiles. Ok Tedi’s environmental programs 2008 at a cost of PGK 1.2 billion. continue to focus on managing “The stockpile embankments range mine waste and tailings that impact “This plant removes acid-forming from about 12 metres (m) to 22 nearby creeks, eventually flowing pyrite materials from the tailings, m high with outer overall slopes into the Ok Tedi and then the Fly with the pyrite material being trans- including swales to reduce surface River. ported by pipeline to Bige, where it water runoff velocity. Revegetation is stored in engineered structures trials on the slopes and top have The report said: “Over the past 20 under water with a non-acid forming demonstrated that a good primary years, a range of initiatives have cover system. and secondary vegetation cover been implemented to mitigate these can be established,” it said. effects and the results continue “The environmental management

www.pngchamberminpet.com.pg 17 Western Province health service rated 4th in the PNG thanks to OTML’s help

A villager is carried on a stretcher by health officers involved in the North Fly Health Services Program.

In contrast to media reports and nities. increasingly from other districts and public perception, an annual health provinces. performance review by the Nation- “The hospital is also used by DWU al Department of Health in 2015 as a rural health teaching hospital In 2013, a similar program, the showed that health services in for medical undergraduates. In Community Mine Continuation Western Province is ranked 4th out 2016, OTML funded the operation Agreement Middle and South Fly of the 22 provinces and well above of the hospital at a cost of K12 Health Program (CMSFHP), com- the national average. million with the FRPG contributing menced with K43 million funding K2.6 million. In 2016, only 25% of from the CMCA portion of the The OTML annual report for 2016 the patients treated at the Tabubil WPPDTF. said company sponsored programs hospital were OTML employees.” provided significant resources to In 2016, both the NHFSDP and enable people in the province to In addition, OTML has funded the CMSFHP were integrated into a access quality health services. North Fly Health Services Program single program in order to create (NFHSDP) since 2009 and support- greater efficiency, maximise service It said: “The Company works ed development and operations of delivery and reduce overhead closely in partnership with health the Tabubil Urban Clinic and Kiunga costs. service providers including the hospital. Western Province Provincial Health The programs, implemented by Abt Department, various church-based The clinic undertakes regular health Associates, are aligned with the providers, NGOs and private health patrols, radio health consultations PNG National Health Plan 2011- providers. and completed 25 outreach clinics 2020. to remote communities in 2016. “The Tabubil hospital is an accredit- Since the implementation of the ed five-star facility and is managed The NFHSDP program supports the program, there have been signifi- by Diwai Pharmaceutical Limited, Kiunga hospital, which has been cant improvements in all 16 health a commercial subsidiary of Divine recently upgraded through a works indicators across the Western Word University (DWU). The hos- program and considerable dona- Province. pital provides services to the North tions to a four-star facility servicing Fly District and Telefomin commu- communities across North Fly but 18 Mining and Petroleum Review Frieda River prepares for development PanAust Managing Director Dr Fred effective stakeholder Hess says substantial progress was engagement, targeted made last year towards attainment community develop- of its Final Investment Decision for ment programs and the multi-billion kina Frieda River capacity-building copper-gold project in Sandaun initiatives, commen- province. surate with the level of development. The PanAust last year spent US$34.3 Frieda River Project million (K109 million) at Frieda has been identified as River, inclusive of completion of the potential catalyst its feasibility study and submission for the development last December of its Environmental of nation-building in- Impact Statement to PNG’s Conser- frastructure in a least Community consultation in Amaromin village vation and Environment Protection developed part of PNG. which lies near the Frieda River Copper-Gold Authority (CEPA). As such, it offers the po- Project. Picture courtesy of PanAust tential to transform the The company’s 2016 Business well-being of many people. We look Community development, health Review said these costs included forward to working with our stake- and education initiatives completion of a feasibility study and holders in PNG and internationally During the year PanAust contrib- permitting costs, drilling, exploration to realise our vision for the Frieda uted US$108,000 to community access track works, corporate sup- River Project.” development programs with an port and site-based activities. additional US$277,000 spent on the Awareness programs are well use of helicopters to deliver these According to the EIS, the project attended programs to Frieda River communi- will generate substantial benefits PanAust has conducted two Sepik ties that are inaccessible by road. including the creation of 3,720 jobs River Awareness Programs in 2015 at the peak of construction and ap- and 2016 and is currently conduct- It said: “These programs focused on proximately 2,000 direct jobs during ing its third program. improved health and education ser- the planned 17 years of operation. vices and capacity building. Health It estimated the annual income About 55 meetings involving about assistance was delivered in collabo- stream at around US$500 million 80 villages have been held along a ration with Telefomin District Health with a total tax, royalty and produc- 700km stretch of the river. The two and the PNG Baptist Church Health tion levy to the PNG Government previous campaigns were attend- Services, and focused on the seven and landowners of over US$3.5 ed by about 14,000 people and mine landowning communities. billion. aimed at increasing understanding between the project and riverine “Programs included the provision Dr Hess said progress last year communities. of National Supplementary Im- included completion in May of the munisation Activities, the delivery feasibility study, followed in June The EIS acknowledged the im- of Community Outpatient Clinics, by submission of a Special Mining portance of the Frieda and Sepik attending to medical emergencies Lease application. Rivers for fishing, hunting, drinking, and evacuations and referrals of cooking, laundry and bathing and patients to regional health facilities. Consensus reached for na- concluded that “the project will tion-building venture not reduce the water quality of the “Support was also provided to In- He said: “Chief Mining Warden’s Sepik River”. terplast to carry out the first surgical hearings were completed in Novem- assessments of villagers with condi- ber and the Environmental Impact PanAust is committed to ensur- tions potentially rectifiable by plastic Statement (EIS) for the Project was ing there is no riverine disposal of and reconstructive surgery. lodged in December. The Project waste rock or tailings, which will be has achieved consensus sup- contained in a specially constructed “Education assistance was deliv- port from all relevant landowning Integrated Storage Facility. ered in cooperation with Telefomin communities as it has progressed District Education and the boards through each approval stage com- The EIS proposes 19 monitoring of various local schools. Activi- pleted to date. and management plans to address ties included school improvement potential environmental risks during programs, provision of materials for “Our intention is to maintain this construction, operations and clo- maintaining and upgrading infra- ongoing support of host communi- sure,” the company said. structure, logistics support to teach- ties, including those along the Sepik ers and their families, and school River, through transparent and fee assistance for students.”

www.png.OresomeResources.com 19

Petroleum News Twinza eyes K1.7 billion offshore oil development at Pasca

The COSL Seeker jack-up drilling rig which was at the Port Moresby Harbour in September and later moved to the Pasca A drilling site in the Gulf of Papua. A public unlisted Australian com- It is said to contain a highly produc- rels of condensate and 20 million pany, Twinza Oil, is expected to tive oil and gas reservoir. barrels of LPG over a field life of 20 drill an appraisal well at its Pasca A years. prospect in line with plans to build According to an Environmental PNG’s first offshore oil and gas Impact Statement submitted to Twinza’s EIS said “in addition to facility at an estimated cost of up to PNG’s Conservation and Environ- the purely economic benefits to the K1.7 billion (US$550 million). ment Protection Authority (CEPA), national and regional economies the company plans to extract wet from the sale of hydrocarbon prod- With early approval of a petroleum gas that can be processed to con- ucts, direct and indirect taxation and development licence Twinza ex- densate, liquefied petroleum gas royalties the project will also bring pects to bring Pasca A into produc- (LPG) and dehydrated gas that will other additional benefits to PNG.” tion in June 2018. An application for be reinjected into the reservoir for a PDL was lodged with the Depart- future use. This included provision of LPG into ment of Petroleum and Energy in the domestic market to replace June 2015. Twinza envisages the use of a pro- other liquid fuels such as kerosene, duction platform and two Floating diesel and gasoline as well as po- Pasca A, discovered 47 years ago, Storage and Offtake Vessels (FP- sitioning PNG as a regional energy 265km west of Port Moresby and SOs) for handling of the condensate exporter. 85km from Ivo River Delta along and LPG. the Gulf coastline, is at a relatively shallow water depth of 93m. It expects to produce 19 million bar- www.pngchamberminpet.com.pg 21 Oil Search to spend US$200-300 million a year on PNG exploration

Muruk 1 well in the NW Highlands of PNG. Image courtesy of Oil Search Ltd

The granting of new exploration mic programs over Muruk and adja- Botten told the recent AGM the licences and three successful cent targets scheduled for the fourth prospects in the north west were farm-ins has convinced Oil Search quarter of this year. Site preparation quite exciting with a potential to it is now capable of supporting a for a Muruk appraisal well is ex- hold “multiple tcf” that could provide multi-year, high quality exploration pected to commence late this year opportunities in future to determine program with an annual apprais- with drilling in 2018, subject to joint how many LNG trains can be built al budget of US$200 million to venture approval. beyond the two now being planned. US$300 million. Muruk is located between the Hides “So Muruk and its follow-up will be The company’s recently released and Juha gas fields and is 21km a key part of 2017 programs and 2016 report said that subject to oil from the nearest PNG LNG Project beyond,” he said. prices Oil Search was planning to infrastructure. It could be easily drill three to four exploration wells tied-in to existing LNG infrastruc- Mr Botten said the P’nyang and annually. ture. The Muruk well has upgraded Elk-Antelope field in PRL 15 now several prospects that are on-trend contained 10 tcf of proven gas In the June quarter Oil Search fur- between Hides and P’nyang and which was adequate for con- ther announced that it has farmed has been found to extend into PDL struction of two more trains with a into five onshore exploration licenc- 9. resource-size that was larger than es held by ExxonMobil affiliates, the committed reserves at the PNG where Oil Search will operate a Analysis of samples from the well LNG foundation project. seismic program. show gas that of similar quality to Juha, with a condensate yield clos- He said PNG was well placed to It said the Muruk well in PPL 402 er to Hides. capture market opportunities that is an exciting discovery that has would open up in the coming de- validated the company’s exploration “The Muruk discovery,” it said, “has cade, including a range of coun- strategy. Muruk was identified in significantly reduced the uncertainty tries in Asia that were planning to a seismic survey in 2015 and first of a number of leads and prospects commence imports of LNG. These drilled in November 2016. on-trend that have similar attributes included Pakistan, Vietnam and to Muruk, including the Karoma Cambodia. The drilling program at Muruk 1 prospect in PPL 402. was concluded in the June quarter The company last year abandoned with production testing confirming Gas discovery potential of 4-6tcf the unsuccessful Strickland 1 and 2 a good quality reservoir with high occurs near Muruk wells and more recently the Ante- deliverability, consistent with Toro “These prospects will be matured lope 7 well into the Antelope Deep reservoirs in the Central Fold Belt, further during 2017. We estimate target showed it had limited res- according to the company’s June that the gross unrisked mean ervoir potential and unlikely to be quarterly report. resource potential of these related hydrocarbon bearing. prospects is in the range of 4-6 tcf, It said a comprehensive appraisal with drilling targets to be confirmed program is being planned with seis- by seismic in 2017.” 22 Mining and Petroleum Review Oil Search announces plans for small-scale gas projects While Oil Search continues to focus on the next phase of its mega-project LNG expansion, the company has simultaneously commenced work on small scale LNG projects that could supply natural gas to domestic as well as overseas customers.

In his address at the recent Oil Search annual general meeting, Managing Director Peter Botten said the com- pany was currently studying the development prospects “for some of our smaller gas fields that won’t be part of the large LNG project.

“We believe there’s a regional base for customers who want gas, who want to substitute diesel-fired generation with gas-fired generation, and small-scale LNG (0.5 million to 1.5 million tonne).”

Mr Botten said such markets could be found in diverse markets such as Alotau and Madang or in a number of islands in the Pacific, along with large resource projects “that may need energy in a cost-effective way.”

In line with this approach Oil Search plans to conduct Map showing potential markets for a smaller scale further drilling in smaller fields such as Barikewa in PRL LNG development for in-country and regional end 9 (Oil Search 45.1%) and Kimu in PRL 8 (OSH 60.7%) users. Image courtesy of Oil Search Ltd in the latter half of this year. praisal well at Kimu is a follow up to a seismic program Oil Search said recently it has identified about 1-2 trillion conducted last year. cubic feet of contingent resource potential in the Gulf and Forelands region, which also includes the shallow Oil Search said small-scale LNG represented “a large water discovery at Uramu in PRL 10. A well is planned focus” for the company and had the potential to be “a 2km north of the Uramu discovery well next year. nice little earner and a good program to bring cheaper, cost-effective power to a range of communities across Barikewa was discovered in 1957 but the appraisal the Pacific.” well 25 years later in 1982 was dry. Oil Search will drill Barikewa 3 in the second half of this year, while the ap- Horizon-Repsol JV finalise Western Province LNG plan Horizon Oil and its multinational Spanish JV partner, the total resource. Repsol owns an additional 41%. All Repsol, has engaged pre-FEED contractors to finalise the relevant gas fields are operated either by Repsol or assessments of upstream processing, pipelines and Horizon. floating liquefied natural gas (FLNG) in Western Prov- ince by the end of this year. He said the primary focus of the development scheme was on LNG and condensate sales, including gas sales Horizon Oil Chief Executive Brett Emmett told the on the domestic PNG market at multiple outlets in addi- Southeast Asia Australia Offshore and Onshore Con- tional to sales of liquefied petroleum gas (LPG). ference in Singapore on August 17 these studies would pave the way for design work and front-end engineering Benefits will flow to landowners, local communities, and design to take place over the next two years with a Western Province and the State, he said. final investment decision in 2019. Horizon believes the LNG sales could target rapidly The partners are assessing a 1.5 million tonne a year growing markets in neighbouring Indonesia, countries floating LNG facility to be built on Daru Island in West- on the South China Sea Rim (Malaysia, Philippines, ern Province. The project will involve construction of Singapore, Thailand and Vietnam) as well as China and 520km of gas and condensate pipelines to connect India. western forelands fields that contain 2-2.5 trillion cubic feet of gas and 60-70 million barrels of condensate. “These markets are likely to be undersupplied in the ear- ly 2020s,” Emmett said, adding that preliminary project Emmett said Horizon has equity interests in all fields economics appear attractive. in the proposed gas aggregation, equivalent to 28% of www.png.OresomeResources.com 23 PNG LNG project achieves record monthly output in June 2017

The PNG LNG Project continues to show its upside potential with a new record monthly production figure However, the average realised oil and condensate price of 8.65 million tonnes a year recorded in June this year fell by 8% to US$50.99 a barrel in the June quarter. following the compressor upgrades. New customers keen on extra LNG purchases Due to scheduled maintenance in May the project oper- The ability of the project to constantly operate well ated at an annualised rate of 8.1 million tonnes a year in above nameplate capacity has encouraged project the second quarter, 3% less than in the first quarter this operator ExxonMobil to seek customers for additional year. long-term LNG sales contracts.

Although revenue for Oil Search slid 3% to US$332.5 In its June quarterly report, Oil Search said “strong million in the March quarter, total sales revenue man- interest has been shown from potential customers for aged to increase by 16% to US$676.2 million in the half the additional volumes being marketed by ExxonMobil year to June, the company reported. on behalf of the PNG LNG Project. Should contracts be secured for the full 1.3 million tonnes a year being Because of maintenance shutdowns and timing of ship- offered, this would take total contracted volumes to 7.9 ments, second quarter production was down 4% from million tonnes annually.” 7.57 million barrels oil equivalent in the March quarter to 7.24 million barrels of oil equivalent in June quarter, The Hides F1 well was completed and brought online taking total first half production to 14.81 mmboe (Million during the June quarter with good progress made to Barrels of Oil Equivalent). This was 1% lower than the tie-in the Angore A1 and A2 wells to the existing LNG comparable 2016 half year figure of 14.89 mmboe. processing facilities. This is scheduled to be completed by mid-2019. Oil Search said its average realised LNG and gas price was US$7.93 per million Btu, 7% higher than the March quarter. 24 Mining and Petroleum Review Oil Search Foundation Public Health Officer, Anna Jack serving a mother and daughter at Kafa. www.png.OresomeResources.com 19 What’s Making Headlines in Projects Harmony Hidden Valley launches Tutudesk

Harmony Gold’s Hidden Valley gold mine launched its ‘Tutudesk’ initiative at Kaisenik Primary School in Wau and Hompiri Elementary School in Morobe Province on August 22.

The launching saw 1,000 portable Tutudesks distributed to 28 elementary schools in Wau, Bulolo and the Bian- gai and Watut tribes that are landowners to the Hidden Valley mine.

These desks were made in South Africa and are named after Nobel Peace Prize recipient and retired Anglican Bishop Desmond Tutu.

Chairman of Kaisenik Primary School, Samuel Krim- bu, thanked Harmony Hidden Valley for the tutudesks stating that it was a step forward to enhancing a child’s Riverside Elementary 2 school children trying out the education. tutudesks. “Elementary is where children start to learn. The key spoke briefly about the Hidden Valley operations and is the foundation where children must learn and the the community projects they did previously in health and initiative goes a long way to assisting their education,” education. he said. “Let’s work together for the future of the mine and also Chairman of Hompiri Elementary School, Thomas No- the future of the communities,” he said. huwan, said elementary schools have been struggling. Mr Davies said Hidden Valley mine had the potential to “Who is going to come in and save us? We have to save create a lot of benefits for the landowners, Bulolo Dis- ourselves. There are times when companies come to trict, Morobe Province and the whole of PNG. our aid, if they have funds available. What Harmony has done shows they appreciate us, appreciate our children. Tutudesks offers children their very own workstation They don’t do it to please themselves,” he said. creating immediate, high impact and positive change under any learning condition. Made from a robust child-friendly polymers, Tutudesks are designed to last Harmony Hidden Valley General Manager, Gary Davies, the duration of a learner’s school career.

Surgical procedures for 772 Sandaun villagers

Interplast support for Frieda River communities PanAust and District capital Telefomin. has collaborated with Interplast in Laos since 2012. The team carried out surgical assessments of villagers The program provides life-changing surgical treatment who presented with conditions relating to plastic and to people who would otherwise not be able to afford reconstructive surgery, met with community leaders and access to such services. compiled patient data. A follow-up surgical campaign will be implemented in 2017. Since the collaboration commenced, 1,631 people have received consultations, of whom 772 have undergone Interplast have been working in PNG since 1985, de- surgery. Excellent feedback has been received from the livering surgical and training programs in Port Moresby people and communities who have benefited from the and across the districts in partnership with local hospi- program. tals, government and universities.

In 2016, PanAust extended this collaboration to support Interplast Chief Executive Officer Prue Ingram spoke of Interplast through a round of surgical assessments of Interplast’s partnership with PanAust. villagers in communities close to PanAust’s Frieda River Copper-Gold Project. “Working with PanAust in PNG has enabled Interplast to reach communities it has not previously worked in, and The week-long visit took the Interplast team, along with is further extending the reach and impact of its training PanAust Community Affairs personnel, to the villages of medical professionals across the country,” Prue said.’ of Paupe, Wabia, Ok Isai, Oum 3, Iniok, Sokamin, Fiak 26 Mining and Petroleum Review Improving representation of women in management at Ok Tedi Mining has traditionally been a male dominated industry but this is changing.

Ok Tedi Mining Limited recently an- nounced the appointment of three female employees to managerial roles – Hillary Turnamur as Man- ager Kiunga Operations, Beverley Pasen as Manager, Information and Communications Technology, and Chantel Christensen as Manager Contracts and Compliance. Beverley Pasen Chantel Christensen Hillary Turnamur Managing Director and CEO, Peter ership and the capacity to take on and training for female employees Graham said “It is particularly pleas- expanded roles; we congratulate and identify ways to improve our ing to see our female employees them.” success in attracting and retaining progressing into managerial roles female employees. based on merit which reflects Ok Mr Graham added that Ok Tedi has Tedi’s commitment to being an recently established an Ok Tedi “We hope to see the representation equal opportunity employer.” Women’s Network to identify devel- of women in management and in opment pathways and remove im- non-traditional mining roles contin- “These three new managers have pediments to progression for female ue to increase” added Graham. each demonstrated strong lead- employees, encourage mentorship Oil Search aid reaches remote Western communities Children attending two very remote elementary and primary schools in the upper reach of the Fly River were excited to receive reading books and stationery, thanks to Oil Search who are in the area as part of the P’nyang exploration and seismic activities.

The Kaiyangabip and Swetigin com- munities lie in a very remote part of Western Province, with very limited access to services. Kaiyangabip is perched on a hill just above the banks of the Fly River and is acces- sible by outboard motor but has no George Rami - Oil Search Community Affairs Development and Infor- road access to Kiunga and Tabubil. mation Management System Support Officer (left) and Simon Pulupa – Oil Search Community Affairs Supervisor for Exploration and Drilling Recognising the dire need for delivering donations in Kaiyangabip by helicopter, much to the delight stationery and reading books, Oil of the locals. Search’s Stakeholder Engagement team organised for 35 boxes of teachers. It is a day’s walk to the for this donation from Oil Search. reading books and stationery. The nearest PMV stop at Sisimakam, These items will allow the teachers company donated all stationery where we catch a PMV to Kiunga to teach well and for the students to along with teachers’ reference ma- or Tabubil. Because our school learn well”. terials while the books were donat- is new and not registered, we do ed by Buk bilong Pikinini. not receive subsidies from the Apart from the stationery and teach- government. This makes it very ers’ reference materials, two bags Bob Yaki, Kaiyangabip Communi- difficult for us to purchase curricu- of clothing for women and infants ty School Head teacher said: “To lum materials, teaching resources, were also donated by the employ- run a school in a remote place like reading books and stationery. I ees of Oil Search. Kaiyangabip is very challenging for really appreciate and am thankful www.png.OresomeResources.com 27 Frieda River school About Us: The PNG Chamber of Mines and Petroleum is a non-profit, peak in- improvement programs dustry association that represents A School Improvement Program Primary Schools operating for a full the interests of the mining and pe- has been implemented in the host academic year for the first time. troleum industry and associated communities around the Frieda Riv- industries in Papua New Guinea. er Project to address the low levels In 2016, PanAust paid the educa- of education. tional fees for school students from the project communities to attend The Chamber has a membership Due to the remoteness of these the Frieda River Primary, Fiak of about 220 companies. This in- communities, it has historically Primary, Telefomin Secondary and cludes most of the mining and pe- been difficult to attain a full year of Ambunti Secondary Schools. troleum companies active in PNG education as teachers were unable who comprise the Full Members. to reach the communities within the Students in tertiary level of ed- Associate and Service Members required times. ucation were also provided with make up the balance of the mem- financial support and transport bership and these are support To address this issue, PanAust assistance. PanAust also provided companies with business connec- provides transport assistance to building materials for maintenance tions to the mining and petroleum teachers, as well as each School work at both the Frieda River Pri- sectors in PNG. Board. In 2016, this resulted in both mary and Fiak Primary Schools. the Frieda River Primary and Fiak About the publication:

PNGEITI welcomes MRDC The Mining and Petroleum Review participation in EITI process is a bi-monthly e-newsletter that aims to inform Chamber members, The PNG Extractive Industries Mr Alkan when noting the important the private and public sectors in- Transparency Initiative (PNG role MRDC played in managing cluding the Government, interest- EITI) National Secretariat recently revenues for landowner and pro- ed groups and the general public welcomed the Mineral Resource vincial government for resource about developments happening Development Company (MRDC) for projects said the public should to be within the PNG resources industry. joining the PNG EITI Multi Stake- made aware of the processes and holder Group (MSG). channels that are involved in the General enquiries: disbursement of resource benefit The MSG is the primary body managed. The Chamber commissions and responsible to oversee and coor- publishes a wide range of reports dinate the successful and effec- “One way MRDC can become on the mining and petroleum in- tive implementation of the global transparent on how much it re- dustry in the country. A number of EITI standards in PNG. The body ceives and manages is through these reports can be downloaded provides and establishes a frame- MRDC’s active participation in the for free from the Chamber website work to promote collaboration and EITI process as reporting agent as while others can be purchased by consensus. well as a MSG member” Alkan said. completing an order form which

is available on the website. Forms MRDC acts as a trustee share- “We see that the MSG is becom- holder for beneficiary landowners ing robust in its discussion and can be returned to info@pngc- and provincial governments as per activities towards coming up with hamberminpet.com.pg or can be provisions under the Oil & Gas Act best options on improving the EITI dropped off at Level 1, The Lodge, and the Mining Act reporting process and this can Brampton Street, Port Moresby. make way for greater transparency “MRDC joined the MSG in 2016, in the revenue management in the Media enquiries and contributions: following recommendations in the country,” Mr Alkan said. For enquiries regarding articles in PNG EITI Report 2013. As a result of increased engagement in the The Extractive Industries Transpar- this newsletter or contributions, EITI process, MRDC provided data ency Initiative (EITI) is an interna- please contact Mackhenly Kaiok for the PNG EITI Report 2014. tional standard for openness around on email MKaiok@pngchamber- Given the importance and value of the management of revenues from minpet.com.pg or you can call the assets they hold for the people mineral and petroleum resources. +675 321 2988. of PNG, we congratulate them for Governments disclose how much taking this step towards greater they receive from the extractive Websites: transparency,” PNG EITI Head of companies in their countries and Secretariat Lucas Alkan said. companies disclose how much they PNGCHAMBERMINPET.COM.PG pay to government. PNG.ORESOMERESOURCES.COM

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