Wednesday, October 27, 2010

Solwara licence deferred


THE signing and granting of a licence to Nautilus Mineral for the Solwara 1 underwater mining project has been deferred, The National reports.
Minister for Mining John Pundari yesterday attributed the deferral to conflicting advice given to him by the Mineral Resources Authority (MRA).
He said it was not due to a court injunction taken out against the state and MRA by the New Ireland provincial government as reported in The National.
“In light of the new deep sea mining method to be employed by Nautilus and the risk profile associated with the Solwara 1 project, I must ensure the state is not exposed to any unnecessary risks while preserving any benefits that the state may stand to lose in the development of the project,” Pundari said.
“With that in mind, it is my intention to use my powers under the Mining Act 1992 to grant the Solwara 1 mining licence with conditions for compliance by the company in the best interest of the state.
“I was provided with two separate documents containing a number of conditions by MRA.
“One document had 11 conditions while other had 12,” the minister said.
The 12th condition was related to the preservation of state equity in the project.
“In fact, these conditions reflect the position of the state as advocated by the minister for treasury and finance through the deliberation of the state team when assessing the development proposal of the project.
“The condition give the state the right to exercise its option to take up 30% participating interest in the Solwara 1 project up to a period of at least 12 months from the time Nautilus advises that it has successfully completed the trial of the mining equipment,” he said.
Pundari said for some reason, MRA had recommended the document with 11 conditions for approval, leaving out the bit outlining the state’s interest in the project.
MRA and Nautilus had argued that the 12th condition would limit the developer’s ability to raise capital to finance the project.
“I am not convinced by this assertion by MRA and Nautilus,” Pundari said.
“I have directed the state team to reassess this condition and confirm the assertion made by Nautilus and advise me accordingly.
“In the meantime, my position has not changed and I am determined to sign off the Solwara 1 project mining lease with the 12th condition attached,” the minister said.

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