MAC: Mines and Communities

Ramu fails to lift interim injunction on tailings disposal

Published by MAC on 2010-07-24
Source: The PNG National

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Ramu NiCo fails to lift interim injunction on DSTP

By Julia Daia Bore

The PNG National

19 July 2010

RAMU NiCo, developers of the giant Ramu nickel project in Madang, have failed in the Supreme Court to quash an interim injunction to proceed with the construction of a deep sea tailings placement (DSTP) system and get the mine off the ground.

A three-judge Supreme Court last Friday dismissed the appeal by Ramu NiCo and its state partners against the lower court's granting of the interim injunction which had effectively stopped work on the last stage of the construction at Basamuk Bay.

The ruling means that a trial date will be set, probably next month, for the substantive matter to be argued in court.

Four landowner leaders - Eddie Tarsie, Farina Siga, Peter Sel and Sama Melambo - and the Pommern Incorporated Land Group had sought the interim orders in the National Court in Madang in March and April that the DSTP system off-shore of the Basamuk and Astrolabe bays would be detrimental to all landowners along the Madang coastal areas and their entire livelihood.

They also claimed that it was not the best practice of environmental management activity. Justices Catherine Davani, Derek Hartshorn and Don Sawong ruled that while they noted the submissions made by Ramu NiCo and its partners, they were also mindful that if the DSTP was allowed to proceed, "the potential environment harm far outweighs the lifting of the injunction".

"The balance of convenience lies in maintaining the status quo at least until after the trial of the substantive matter," they ruled, adding that "it is better to take a precautionary approach than to proceed in haste".

Ramu NiCo and its partners had, in essence, submitted in their appeal that it was lawful for them to proceed with the construction of the DSTP system as agreed to in their joint venture agreement and also based on the mining development contract signed between the parties concerned, including the PNG government and MCC to start mining nickel in the Kurumbukari area of the Bismarck Ranges before the end of this year.

The partners had argued in court that the landowner leaders, in their ILG in this proceeding, only represented their own interests and not that of the bulk of the Basamuk Bay people.

Ramu NiCo unhappy with court ruling

The PNG National

20 July 2010

RAMU NiCo, developers of the K3.3 billion Ramu nickel project in the Bismarck Ranges of Madang, said yesterday that they were disappointed with the Supreme Court's decision last Friday not to lift the interim injunction and allow the company to install and operate the deep sea tailings placement (DSTP) facility at Basamuk Bay.

"We are now keenly waiting on advice from our lawyers on the full meaning of the decision and its likely effect on the continued development and operation of the Ramu nickel project," it said in a statement from Madang.

"This project was approved in 2000 and, subsequently at different stages of development, Ramu NiCo obtained the permits required from the PNG government."

Ramu NiCo said the project had been under construction for more than two years and was now nearing completion, but Basamuk landowners' court action only started some four months ago.

It said that during this time, it had used about K3.3 billion out of a total budget of K3.8 billion.

However, the company was confident that with a full trial on the issues in the National Court of Madang, the matter would be resolved satisfactorily.

Ramu NiCo estimated that for every day that operation of the project was held up by virtue of these court orders, the developer and its partners, Highlands Pacific Ltd and MRDC, would lose up to K7 million.

"No company can sustain losses of this magnitude for extended periods and, now, we will find it exceedingly difficult to raise funds to invest in PNG until Ramu NiCo's rights to develop this project are confirmed.

"We suspect that this will become more than just our concern once the implications of these issues confronting us are fully assessed by the international investment community and their responses, in turn, are felt in PNG.

"The extended delays will create enormous disruption to DSTP construction and, therefore, the commissioning and operation schedule."

The company said this would be further complicated by the coming rainy season.

"The impact on the overall plant viability could be far-reaching."

It said that once it had been briefed by its lawyers, Ramu NiCo would discuss its present situation with project stakeholders, including the other owners, the government and key landowner and provincial government representatives, and it would make another full statement on these developments in due course.

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