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.
The Parliament of PNG has passed a series of amendments targeting the mining, oil and gas industries, which give the Minister greater flexibility in determining whether to grant or refuse petroleum development licences, according to a briefing note by law firm, Allens.
One of the key elements for the mining industry is that the Mining Minister may impose a 'minimum expected level of return' for the State on a licensee, say Allens authors Rob Merriam, Jacqui Rowell and Sarah Kuma, writing in Insights.
“What the level of return might be, how it would be calculated and how it would be enforced are not prescribed in the O&G Amendments,” they say.
Existing applicants may also be subject to these amendments if the Minister has not yet granted their licence, they add.
The legislation follows the Marape government’s refusal to grant an extension of the Porgera mining licence which expired last August, although JV company Barrick New Guinea Ltd (BNL) had sought a 20-year extension as far back as June 2017.
Barrick’s CEO, Mark Bristow, reaction was that it was “tantamount to nationalisation without due process” and legal action in the PNG Courts is continuing.
This month (July), Barrick has begun layoff staff. According to Barrick, most of the 116 expatriate employees have already been retrenched, while 2650 PNG nationals will have their employment terminated prior to the end of July at a projected cost to the company of K180 million (US$52 million).
“This is already having a big impact on the economy,” Shane McLeod, analyst at the Lowy Institute, told Islands Business.
The Papua New Guinea government’s decision not to extend the mining lease on the economically important Porgera gold mine has shocked the joint venture operator, but the K17 billion (US$4.8 billion) Wafi-Golpu project is likely to be signed off in September.
The current Porgera lease expired last August, but Barrick New Guinea Ltd (BNL) had sought a 20-year extension as far back as June 2017. Barrick’s CEO, Mark Bristow had met with Prime Minister James Marape four times after his election last June to negotiate an extension.
In a shock statement on 24 April, the government said it had carefully considered the issue and decided it was "in the best interests of the State, especially in lieu of the environmental damages claims and resettlement issues", that the lease not be renewed. That weekend, Marape sent in 100 troops to secure the mine site.
Over the 30 years of the mine’s operation, there have been numerous controversies, claims and counter-claims about water pollution, environmental and social problems, questions around local economic returns and violent clashes in the area, according to ANU analysts John Burton and Glenn Banks.
Papua New Guinea has been advised to tweak its macroeconomic policy and throw more weight behind agriculture, as it has the potential to enable more diversified and inclusive development.
The World Bank makes this recommendation in its latest newsletter Pacific Possible. It warns of rising economic uncertainty and fragile growth in PNG and recommends that authorities focus on structural transformation of the economy, especially in the agriculture sector, to help absorb any shocks.
"Around 87 per cent of Papua New Guineans live in rural areas, and 75 per cent of these are engaged in a variety of subsistence and cash income agriculture activities. Staple products are the main source of subsistence, provide food energy and protein, and are a source of food security for rural villagers when income-earning opportunities are limited," the reports states.
"While most rural villagers combine these traditional subsistence and cash income activities, there is a small but increasing number producing value-added products such as high-value coconut products and spices."
Agriculture is one of the priority sectors in the government’s Medium-Term Development Plan for 2018–22 (MTDP III.
"To utilise the potential of agriculture as a source of income and job creation, the authorities should consider a proposed set of policy options and responses for securing sustainable rural livelihoods in food and agriculture," the World Bank says.
The resource-rich nation of over eight million people is home to a number of multi-billion dollar minerals projects and is vulnerable to substantial commodity price shocks, natural disasters and uncertainty in the performance of new and existing minerals projects.
Its agricultural sector includes fresh food and export products like coffee, cocoa, palm oil, and copra and copra oil.