MAC: Mines and Communities

Papua New Guinea Update

Published by MAC on 2006-04-08

Papua New Guinea Update

8th April 2006

Just as talks are conjectured to be "hotting up" over a resumption of mining on Bougainville, sanity raises its head in the shape of a statement that tourism could be a viable option. However, given the main tasks with pushing these talks forward is part of a World Bank Technical Assistance Program, is there any hope that mining on the island will not be railroaded through, regardless of how much people talk about the issue of engaging local landowners. And talking of railroading through mining, the ambitious project for exhaustive geological surveys, both in the highlands and seas around Papua New Guinea, shows how serious the industry and government are to ensure mining is central to the PNG economy. Finally, to emphasise again why mining can be so problematic in PNG, there is belated coverage of the fact that Placer Dome admitted that eight people had been killed by its own security forces at Porgera.

Bougainville government to decide on mining activities: Kabui

Radio Australia

31st March 2006

Papua New Guinea's autonomous Bougainville government says PNG's central government has no right over mining on island.

President Joseph Kabui says Bougainville's autonomous constitution gives ownership of mineral resources to landowners.

He says the PNG government, as well as mining or exploration companies, should seek his government's approval for mining activities in Bougainville.

President Kabui says it will be a mistake to allow Papua New Guinea or any mining company to dictate mining policies on Bougainville.

Moves to reopen mine

However, PNG Mining Minister Sam Akoitai says Port Moresby has regulatory powers over mining in the country, including the whole of Bougainville.

Mr Akoitai says he has held talks with Rio Tinto, who once owned the Panguna copper mine in southern Bougainville, about the possibility of re-opening the mine.

President Kabui insists the reopening would require unanimous agreement from the people who have endured decades of pain and suffering.

He says landowners demands must be met to avoid a repeat of a secessionist war in the 1990s, when Bougainville rebels took up arms against Rio Tinto and forced the mine's closure.

Bougainville identifies tourism as main sector


4th April 2006

THE Autonomous Bougainville Government has identified tourism as the main sector to drive its economy forward this year.

Assistant Secretary for Economic Services Patrick Koles said now that the Panguna copper mine had ceased production, the government had shifted its attention to tourism.

He said the island of Bougainville was still continuing efforts to find impact projects that will kick-start economic activities in the region.

Mr Koles was speaking at the closing of a day-long tourism workshop in Buka last Friday.

The PNG Tourism Promotion Authority (PNGTPA) had organised the workshop to gauge views and opinions from the various stakeholders to include in a master plan for the industry in the country.

Attending were 55 hotel and guest house owners and others from all over Bougainville.

The facilitators were PNGTPA consultant Ross Hopkins and the authority's policy and planning manager, Gabriel Pakio.

Mr Koles explained that the decision for the island to focus on tourism was made at the Bougainville economic summit held in Buka two years ago.

He said there was huge potential for tourism on Bougainville and it only needs the support and commitment from all stakeholders, including the autonomous government and the village people, to make it work.

Buin and Torokina have provided the main attractions for tourists on Bougainville. Japanese, especially, frequent these areas in numbers annually to visit Gen Yamamoto's crash site in Buin and the battlefield of Torokina.

Meanwhile, ABG Minister for Economic Services Taehu Pais also called on the tourism authority to invite and include Bougainville in its overseas cultural shows.

Review process requires cooperation: Hancock

Jesse Riseborough,

4th April 2006

THE MAN heading the review of the Bougainville Copper Agreement has told he hopes to bring together the four interested parties to facilitate the review process, although he cautioned that it could take years rather than months.

Dr Graeme Hancock, currently contracted to the PNG Government as part a World Bank Technical Assistance Program in PNG, explained that for the process to be effective, and for any workable solution to be obtained, a delicate approach would need to be taken.

Hancock said he hoped to bring the Autonomous Bougainville Government, the Bougainville landowners, Bougainville Copper and the PNG Government, to the table and said he saw his role in the review, which will be jointly funded by Bougainville Copper and the PNG Government, as more of a facilitator rather than a mediator.

"I don't think it can be forced. I think it is something that is going to take a lot of thought and a lot of process as far as its impact on the community is concerned," Hancock said.

"At the moment some of those people [Bougainville landowners] have not even bought into the peace process on Bougainville, so I think there will be some time [spent] encouraging them to take part in the process.

"I really don't see it being quick. But if there is a willingness on everyone's part, then I see no reason why it shouldn't be relatively quick."

The Bougainville Copper Agreement, originally put in place in 1969, was supposed to be reviewed every seven years. Hancock said it was partially reviewed in 1974 but the upcoming review would represent the first formal review since the agreement was put in place.

In terms of the scope of the review, Hancock issued a broad overview of the primary concerns involved, including a possible lifting of the exploration moratorium on Bougainville as well as a review of the compensation agreement that expired shortly after the massive copper-gold mine was closed in 1989.

"If the moratorium was to be lifted, then arrangements need to be put in place so that the people of Bougainville have the determining role in the granting of tenements - at the moment they would not under the Mining Act," he said.

Bougainville Copper currently holds six exploration licences surrounding the Panguna mine and have recently indicated it is looking to resume exploration work on the ground, already selecting primary targets.

"This [the lifting of the exploration moratorium] needs to be very carefully thought through and Bougainville then needs to have the capacity to manage that process, which I don't believe it currently has," Hancock said.

In the company's annual report released last week, chairman Peter Taylor made it clear he expected the moratorium would be lifted as a result of the review process. He said the company had commissioned a report on possible exploration targets within its landholding.

"I hope the talks will resolve a number of outstanding issues resulting from previous mining and the suspension of mining operations. BOC has made it known that it is willing to participate in talks aimed at allowing all parties to concentrate on the future rather than dwelling on the past," Taylor said.

"The board is keeping its options open and does not dismiss the possibility that alone or with partners, it will mount an exploration program on Bougainville if the necessary consents are received."

However, Hancock moved to dispel any suggestion or misconceptions the review would result in a resumption of mining activities at Panguna.

"The review is a review of the Bougainville Copper Agreement, it is not a review of whether there should be mining on Bougainville or not and it is not a review as to whether the mine should re-opened or not."

Hancock explained the review would also investigate outstanding compensation payments under the original agreement and would possibly look to settle some of the historical claims.

He was also critical of comments made by Bougainville President Joseph Kabui in PNG media reports yesterday, in which Kabui reportedly said the relevant Bougainville landowners should be driving the review process in terms of the needs of Bougainvilleans.

"I think they need to be more involved than that, I think that is a bit of a cop-out," Hancock said.

"They need to be in there as a full participant, consistent with what they requested prior to the closure of the mine. The provincial government were asking to be more involved so they need to be involved."

Kabui was quoted by the National yesterday as saying Rio Tinto, which holds a 53% stake in Bougainville Copper, "must talk with the landowners".

Kabui also reportedly issued a warning that a review process that did not engage his Bougainville Government could be disastrous.

"The Bougainville constitution states that minerals belong to the people and Rio Tinto. PNG must appreciate it and not shove down our throats fixed ideas and policies. Failure to involve ABG in any mining talks on mining as one of the principal negotiators can be disastrous."

PNG: Giant geological surveys to provide information for mining venture

Radio Australia, Pacific Beat

3rd April 2006

Papua New Guinea has launched two huge new geological surveys which, it hopes, will provide the information to spark a whole new generation of mining and resource development. Earlier this month, the largest airborne geological survey ever attempted in PNG began in the highlands. At the same time, ships are mapping structures in the Gulf of Papua in over 100,000 square kilometres of ocean.

Presenter/Interviewer: Jemima Garrett Speakers: Warwick Greville, consultant, Fugro Ltd; Terry McConnell, Managing Director, Fugro Airborne Surveys; John Kulala, national program director, EU aid project

GARRETT: A new generation of technology is revolutionising resource exploration.

In the PNG Highlands, European Union money is pay for a four-year survey, breathtaking in its size and ambition.

The helicopter-based survey will see pilots flown 212,000 kilometres of survey lines at just 100 metres above the tree tops.

Terry McConnell, Managing Director of Fugro Airborne Surveys, the company managing the project, says the data produced will be far more accurate and detailed than anything produced before.

MCCONNELL: By flying much lower and by flying much tighter line spacing, we're collecting data in a much higher resolution, smaller space between each data point.

So, the ultimate resolution of the maps that we produce are going to be very much more precise and very much more detailed than what has been sensed before.

GARRETT: So, what does that mean for the chances of mining companies looking to these areas that you will have mapped for new opportunities?

MCCONELL: Well, the more detailed the map the less risk they have in going into a new area and trying to determine what's going on geologically.

The more detailed the map the better clues they get in regards to where the ore bodies might be hiding.

So, in any survey that we do around the world, the higher the detail, the better the chances are that the mining companies will be able to detect the ore bodies that might be hiding there.

GARRETT: The Papua New Guinea Government is a shrewd and sophisticated player in the mining and resource world.

Current high commodity prices and revamped mining and tax legislation have created a boom in the industry.

John Kulala, national program director for the EU aid project, wants the new survey work to ensure the boom continues for decades to come.

KULALA: Basically, the survey of the PNG highlands is in that providing pretty competent information to create exploration investments and eventually result in new mine developments.

GARRETT: Now, you've put 25 million Euro of aid money into that. What is PNG hoping to get in return?

KULALA: Basically it's around 60 million Kina. What we hope in the long term after the research and the test review implemented under the World Bank project and the predicted long term increase in commodity prices. This new program will make Papua New Guinea one of the world's most interesting places to explore for ............. and base metals.

GARRETT: So in fact, your looking for a whole new generation of resource projects in Papua New Guinea?

KULALA: Basically, yes.

GARRETT: And just how big could this industry become in Papua New Guinea?

KULALA: Well, hopefully, we can develop new mines as big as Bougainville Copper, Lihir, Porgera and a project of that magnitude.

GARRETT: The survey in the Gulf of Papua is looking for oil and gas in waters off the coast of Gulf, Central and Milne Bay Provinces.

Survey coordinator, Warwick Greville, says the work is at its midpoint and due to be completed at the end of May.

GREVILLE: We are very encouraged by the results we have seen.

This survey will collect the most modern data recorded in the Gulf and, as I say, we're very encouraged by the results that we've seen initially.

GARRETT: The Papua New Guinea Government has announced that it will be taking bids for exploration acreages. Companies will be able to buy your data to see if it's worth bidding. What sort of interest are you expecting?

GREVILLE: We are expecting considerable interest in that the area of much of the area is indeed water and there's been very little exploration or almost no exploration in that area to date.

So, very little is known about this area and we feel it based on work that is previous or recently been done. It is quite perspective, so we're expecting a lot of interest.

GARRETT: This water, as you said, is deep - in fact up to 2.5 kilometres. Doesn't that put companies off?

GREVILLE: The survey actually covers shallow and deep water, but the deep water area would be an area that would be looked at by the larger companies, because drilling in those sort of water depths is expensive.

Canadian Firm Admits to Killings at PNG Gold Mine

Bob Burton, IPS -

18th November 2005

CANBERRA (IPS) - The giant Canadian mining company, Placer Dome, has acknowledged that eight people have been killed since 1996 by its own security forces and police at the giant Porgera gold mine in the mountains of Papua New Guinea (PNG).

Seven of the eight killings occurred since February 2000 and external affairs manager for Placer Dome, Patrick Bindon, told IPS in e-mail interviews from Port Moresby that they were all in self-defence against armed villagers.

However, PNG police have filed murder charges against a security officer employee of the Porgera Joint Venture (PJV), the 75 percent owned subsidiary of Placer Dome, over a February 2002 incident in which two people were killed. While one of the charges has been dismissed, the other is currently before the courts.

Despite increasing controversy amongst the local community over the killings, in mid-October, PJV initiated legal action against the PNG Department of Mining, demanding that police take action against what the company calls ''illegal'' miners.

As a result of subsequent discussions, a squad of 50 members of the PNG Mobile Police is to be sent to Porgera to prevent small-scale miners from entering the company's mining lease area.

Zama Coursen-Neff, a senior researcher for the New York-based Human Rights Watch, who has investigated allegations of human rights abuses by PNG police, fears that the use of the police could exacerbate the conflict rather than resolve it. ''In survey results, people said they felt more scared of the mobile police squads than of the ordinary criminals,'' she said.

''The mobile police squads,'' she told IPS, ''include some of the worst human rights abusers in PNG.''

Nor does Coursen-Neff take much comfort from the statement in Placer Dome's October quarterly report to the Vancouver stock exchange that ''any police activities will be conducted in accordance with agreed human rights standards and under the observation of an independent third party.''

''There is certainly no reason for thinking that there would be a dramatic change in (police) behaviour when they were providing security at the mine,'' she said.

The continued operation of the mine is crucial for Placer Dome. In 2004, the Porgera mine contributed 307 million US dollars of the company's 1.8 billion dollar revenue.

Over the last year, the PJV has struggled to prevent hundreds of people from scavenging gold-bearing rock from the open mine pit. While some are local landowners, many have been attracted to the Porgera Valley from poorer surrounding regions.

In an April 2005 presentation to its joint venture partner, the South Africa-based DRD Gold, PJV management stated that the number of people entering the lease area had dropped drastically. The joint venture sought to reassure DRD that this ''reflects increased security manpower and reduced dumping to waste and stockpiles,'' the slides stated.

However, the number of people recorded as entering the mine pit itself jumped from less that a hundred per week in December 2004 to over 400 in April this year.

While PJV expressed optimism in July that that it had strategies in place ''to limit these events'', by October management's mood was glum. ''The mine has implemented a number of measures aimed at reducing the level of incursions with limited success,'' it reported.

Nor do the problems appear to have impressed DRD Gold, which announced in mid-November that it has agreed, subject to shareholder approval, to sell its 20 percent stake in the project to the Sydney-based Emperor Mines.

The controversy over the deaths at the mine first surfaced in mid-March 2005 when the chairman of the Porgera Landowners' Association, Mark Ekapa, wrote to Prime Minister Michael Somare urging a commission of inquiry into what he claimed were the deaths of approximately 20 people at the mine. After landowners' concerns were raised by the member of parliament for Wabag, Sam Abal, the PJV publicly backed an inquiry.

However, Somare announced that he intended to establish a committee, which would include PJV itself, to look at both the security problems at the mine and the deaths. Months later, the committee has still not been formed.

In September, another landowner group, Akali Tange Association, claimed that 22 people had been killed, over 100 injured and ''more than 2000 arbitrarily detained.'' It is seeking 340 million dollars in compensation from the joint venture.

Stanley Kaka, a former president of Porgera Workers Union and who is now involved with the association, told IPS that the company and government ''are playing at the delay game that is why we are really upset.''

While Bindon acknowledges PJV security forces and police have been responsible for some deaths, he attributed others to small scale miners falling down steep mining pit walls or being hit by rockfalls and landslides.

Coursen-Neff backs calls by local landowner groups for an investigation into the deaths. ''Certainly companies and individuals should expect law and order but that doesn't justify summary executions by the police or gross human rights violations,'' he said.

''If police and security forces are shooting people there has to be a credible investigation and, where officers are found to have used excessive force, they have to be held accountable through internal disciplinary procedures and in a court of law,'' Coursen-Neff added.

Aside from seeking court orders to compel PNG police to send in a squad, PJV is pinning its faith in the construction of an additional 10 km section of high-security fence around the key areas on the mining lease.

Adding to the controversy over the mine is the ongoing programme requiring the relocation of hundreds of families away from the mining area. ''This is causing a lot of tension,'' said a respected local person speaking on condition of anonymity.

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