May 15, 2021 Last Updated 6:06 PM, May 14, 2021

Vale mine in New Caledonia

  • May 15, 2021
  • Published in April

After months of political dispute, the Brazilian corporation Vale has finally sold its Goro nickel smelter and other assets in New Caledonia’s Southern Province.

The new owners Prony Resources and Trafigura have accepted a corporate structure that gives majority control to local New Caledonian interests. The deal is guaranteed by loans and tax breaks from the French government and is backed by the commercial and technical support of Tesla, the Californian automotive and renewable energy corporation.

Throughout 2020, there was widespread disagreement over which consortium could bid for the Goro nickel-cobalt smelter and the other assets of Vale Nouvelle-Calédonie (VNC). The company is the local subsidiary of the Brazilian corporation Vale, one of the largest mining companies in the world, with interests in logistics, transport, energy and steel making. After years of work on the project, VNC began nickel smelting in New Caledonia in 2010, late and over-budget, using high-pressure acid-leach technology.

The Goro smelter and Vale’s nickel ore reserves are located in the Kanak customary region of Djubea-Kapumë, which makes up the southernmost portion of Grande Terre. In the two decades since the project was conceived, Vale has engaged in tense struggles with local customary leaders, operating through the Rhéébù Nùù committee (“eye of the land” in the local Drubea language). As Vale collaborated with successive provincial administrations in the south, Rhéébù Nùù campaigned for environmental protection, jobs and opportunities for local subcontractors.

Since it began production, the Goro plant’s hydrometallurgical technology has generated major environmental problems. Vale’s failure to manage these impacts was a long-standing grievance from nearby Kanak villagers. From the beginning of operations, a series of acid spills from the smelter leaked effluent into local creeks and rivers, damaging the freshwater ecosystem that provides resources and livelihoods to local communities. A major leak of acidic effluent from Goro in May 2014 sparked violent clashes with trade unions, neighbouring Kanak tribes and subcontractors, amid calls for the smelter to be closed.

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Fiji's minerals sector is tipped to lead its post-COVID economic recovery, with gold production expected to strengthen later this year and interest in gold prospecting on the rise. 

"The mining sector has been quite resilient throughout this pandemic because of the favourable economic conditions that the sector is operating in. For example, we've received a lot of interest in gold exploration because the gold price is very high," said Acting Director of Mines, Raymond Mohammed earlier this month. 

"For mining companies that are already operating in Fiji, they've been drawing up recruitment schedules and also ramping up production within the mine itself because of this very favourable economic conditions that's presented to these mining operators to be able to further investment in the sector.  So in terms of economic recovery, the Department looks at the sector as very important in this difficult times that the country is faced with."
 
Although Fiji doesn’t rival Papua New Guinea or New Caledonia as a Pacific minerals powerhouse, the country does see potential in hosting mineable resources, such as gold, silver and bauxite.

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The Tuvatu Alkaline Gold Project in Fiji's Western Viti Levu is likely to be the country's next big gold gig, potentially rivalling the size of the neighbouring Vatukoula Gold Mine, the only active gold mine in the country.

Acting Director of Fiji's Mineral Resources Department Raymond Mohammed said Tuvatu's gold prospects are huge.

The project comprises a number of exploration tenements and a mining lease held by Canadian junior miner Lion One Metals, headed by international business mogul and mining magnate Walter Berukoff.    

"At the moment, they have progressed from around one million ounces inferred resource, inferred resource meaning they have to do a lot more work in order to boost the geological confidence in the resource.  So there's still a lot of exploratory work that's being done around the periphery of the mining lease in Tuvatu with the prospecting licenses.  There's potential there, especially around the Navilawa Caldera, so yes, there's projections that Tuvatu could be the next Vatukoula," said Mohammed. 

"The mine is currently in the mine development phase under the new mining lease.  When a mining lease is issued, there are three stages.  The first is the mine development phase, where they build infrastructure to prepare for production, then there's the mine production stage, where they mine and extract the salable material, then there's the mine closure and rehabilitation stage.  So currently for Tuvatu, the first stage is underway, which is mine development," Mohammed added.   

No timeline has been given by Lion One on when exactly it would advance to production stage, but given the progress made so far, it could be any time soon.

"During 2020 the company completed civil works for the surface infrastructure and the new portal site for the main decline to access the recently discovered deep extents of the Tuvatu gold deposit. As of December 2020 the company has selected a shortlist of contractors for managing the construction of the process plant and surface infrastructure, and a second group to manage mining operations and procurement of equipment," Lion One disclosed in a market announcement it made at the end of last year. 

Assessments made by the company so far on resources it has on the ground underscore Tuvatu's huge prospects.  

"On behalf of management and the Board of Directors I'd like to recognize and thank our resilient Lion One Fiji team for their incredible efforts and performance over the last year. We're in a strong financial position to accelerate deep drilling at our discovery below Tuvatu and pursue new discoveries at Banana Creek, and confirm our thesis that the Navilawa Caldera hosts large alkaline gold systems of a scale rarely owned by a junior gold company," said CEO and Chairman Walter Berukoff.

"Lion One believes the Navilawa Caldera hosts a very large 'alkaline gold system'. This variety of gold system is not prolific in number globally but are among the largest producers of gold in the world, with notable examples in the South Pacific including the Porgera and Lihir gold mines in Papua New Guinea, and Vatukoula in Fiji, 40km from Tuvatu," Berukoff added. 

Upon securing the adjacent ground to Tuvatu in 2019, Lion One said it became the first company in modern times to consolidate and carry out systematic exploration over the entire 7km diameter Navilawa Caldera.

"The Project area now consists of four contiguous exploration licenses covering almost 200km². The 385 hectare Tuvatu mining lease is located near its epicentre and hosts the high grade, permitted for production, Tuvatu gold resource," it said.

MRD is expecting Fiji's gold production and exports to ramp up after April this year. 

The Chair of Dome Gold Mines has told shareholders that additional drilling work and analysis at its Sigatoka site in Fiji has provided the “silver lining” in a difficult year.

“The iron sand deposit at Sigatoka is very large, with sufficient material on present indications to support mining for many years and generate a stable and substantial cash flow in the process,” Garry Lowder told shareholders at their AGM earlier this month.

“At Sigatoka, the Kulukulu South area contains a substantial deposit of iron sand with heavy mineral grades much higher than the average across the remainder of the deposit. And it includes a relatively small but significant resource of very high grade material, containing 48% heavy minerals, which is elevated above sea level and would be readily accessible for initial mining,” he said.

Iron sand with high heavy mineral content which can be extracted and used for the production of iron and steel.

Dome is calling the discovery a “game changer” but the announcement is likely to concern opponents to the operations. They include incoming SODELPA leader, Viliame Gavoka, who  unsucessfully sought to table a petition for parliamentary debate earlier this year, claiming the project could displace riverbank communities and deprive landowners of their ancestral fishing resources. SODELPA is Fiji's largest opposition party.

At that time, Lowder claimed the project would actually have environmental benefits, including mitiating the chronic flooding of the Sigatoka river.

Meanwhile Lowder has told shareholders that Dome's Namoli-Wainivau property remains a valuable asset “as it offers us the prospect of discovering a large copper-gold deposit, of porphyry type, that could attract keen interest from the world’s largest copper miners. Indeed, some have already expressed interest in the project.”

He says while its Ono island gold project had a disappointing first round of drilling, he believes “that this project will have its day when the industry gets back to some kind of normality.”

Global miner Rio Tinto says it is ready to discuss cleaning up the site of the giant gold and copper site which it abandoned in 2016, four months after destroying a 46,000 year-old Aboriginal site in Western Australia.

Bougainville landowners have filed environmental and human rights complaints against Rio Tinto with the Australian Treasury Department, which has the power to investigate complaints made against Australian companies operating overseas.

Landowners are hoping to secure tens-of-millions of dollars for rehabilitation of the Panguna mine site, abandoned after the mine was shut by a civil war in 1989, which it helped spark, and which resulted in the deaths of an estimated 20,000 Bougainvilleans.

Rio’s about-face – having walked away from Bougainville in 2016 saying the mine was no longer its responsibility – follows its deliberate destruction of ancient Aboriginal rock shelters in May this year.

Read more in our November issue.

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