MMJV admits "high" sediment in Watut River

By MALUM NALU

One of the joint venture partners in the just-commissioned Hidden Valley gold mine in Morobe province has admitted that there are “higher-than-expected” sediment levels in the Watut River.

South African company Harmony Gold Mining, through its chief executive officer Graham Briggs, made the announcement in a letter to stakeholders – published on its website (http://www.harmony.co.za/sd/message.asp) – on Tuesday this week.

Harmony CEO Graham Briggs

Briggs admitted that this was causing “serious concern within and outside the company” and a change in the course of a section of the lower Watut River, resulting in die-back of vegetation.

The admission came about as Morobe Mining Joint Ventures, made up of Harmony and Australian partner Newcrest, started paying compensation to affected villagers along the Watut River and as Bulolo MP Sam Basil called on villagers not to accept the payouts.

“The higher-than-expected sediment impacts in the Watut River in PNG have given rise to serious concern within and outside the company,” Briggs said.

“The mine’s environmental impact statement (EIS) predicted sediment loads in the Watut River during construction but, as it has taken longer than expected to reach hard rock at the mine which will be used to construct the interim waste dumps, the construction of stable waste dumps has been delayed resulting in a continued high sediment load in the Watut River.

“Construction of the interim waste dumps has been prioritised, with specific resources allocated to the project to ensure speedy progress.

“This will reduce the sediment load in the river, and allow the current sedimentation to flush out.

“In addition, mining activities which contributed to the increased sediment load have been stopped.

“The MMJV commissioned further impact assessments so that we could better understand the impact of these sediment loads on the river.

“These studies show that the increased sediment load in the Watut River (of which the mine is one source) has resulted in a change in the course of a section of the lower Watut River, and a die-back of vegetation in that area as a result of flooding.

“Although these changes in the river course occur naturally over time, the mine's contribution to the sediment load in the lower Watut River has speeded up this process.

“The MMJV has committed to expanding its monitoring programme to quantify the impacts coming from the mine and other sources, taking remedial action wherever possible, and working with the government to assess fair compensation for those affected.”

Hidden Valley mine was officially commissioned on Sept 29 by Governor General Sir Paulias Matane at a ceremony which also marked its opening.

The new gold project is a joint venture between South African miner Harmony Gold (70%) and Newcrest Mining Ltd (30%), the largest gold miner in Asia-Pacific.

MMJV plans to invest a total of K1.25 billion over a 10-year period, with the outlay to go towards wages and salaries (K800 million), royalty payments (K200m) and revenue for the provincial and national government (K250m).

The Hidden Valley mine is projected to produce an estimated 2.9 million ounces of gold.

JV: Rich Wafi-Golpu mineral deposits

NEWCREST Mining Ltd and Harmony Gold believe that deposits in their joint venture Wafi-Golpu copper and gold project in Morobe could double in size, The National reports.

Newcrest is the new operator of Lihir gold mine on Lihir Island while Harmony has mining interests in South Africa.

The partners had previously told the market that the resource estimate at Wafi-Golpu stood at 16 million ounces of gold and 4.9 million tonnes of copper.

But latest drilling has further extended the deposit.

The partners have now upgraded their ‘’exploration target’’ to a potential 30moz of gold and 8 million tonnes of copper.

Sydney Morning Herald  newspaper last Friday reported that Newcrest managing director Ian Smith told analysts last Thursday that the Wafi-Golpu was shaping up as a major discovery and would form the basis of a ‘’major ongoing long life operation into the future’’.

A pre-feasibility study is planned for next year and Smith said that could lead to a development decision in 2014.

Smith was speaking on the release of Newcrest’s September-quarter production report – its first since acquiring Lihir.

Gold production for the quarter from all operations was 674,219oz.

Newcrest also disclosed in its third quarter ending report that a new operating model it would adopt for the goldmine on Lihir island in New Ireland province would cost an additional US$260 million (K640 million), taking the cost of the mine’s optimisation programme from what Lihir had forecast to about US$1.23 billion (K3.2 billion)

But the additional cost was more than covered by the additional 10 million ounces it would contribute to mine production out to 2040.

Newcrest’s cash costs at A$488 an ounce for the quarter were up from A$342 an ounce in the previous quarter due to the inclusion of Lihir’s higher-cost operations, the impact of lower grades and exchange-rate movements.

The gold production effort was lower than the market expected

Hidden Valley gold mine officially commisioned

MMJV seeks to invest K1.25b over 10 years

MOROBE Mining Joint Venture (MMJV), the operator of the newly commissioned Hidden Valley (HV) gold mine in the Wau-Bulolo district in the Morobe, will invest a total of K1.25 billion over a 10-year period, The National reports.

The outlay will go partly to wages and salaries (K800 million), royalty payments (K200 million) and revenue for the provincial and national government (K250 million).

The Hidden Valley mine is projected to produce an estimated 2.9 million ounces of gold.

The mine was officially commissioned on Wednesday night by Governor General Sir Paulias Matane at a ceremony which also marked its opening.

The new gold project is a joint venture between South African miner Harmony Gold and Newcrest Mining Ltd, the largest gold miner in Asia-Pacific.

Harmony chief executive officer Graham Briggs told JV partners, government ministers, shareholders, landowner representatives and the media that MMJV was committed to further exploration and investment in the country particularly Morobe, which, in earlier times, was the source of most PNG’s gold production.

Briggs said PNG remained highly-prospective in modern mining era while recent exploration increased the prospect of a mining development at Wafi/Golpu also in Morobe.

“The mine has introduced and will continue to introduce innovation, quality mining technology and expertise,” Briggs said.

“A 4.5km overland ore conveyor is the most visible symbol of this innovative technology enabling separate ore bodies to be economically delivered to the processing mill.

“Extensive use of landowners and local business development contracts is already spreading economic benefits to the Wau/Bulolo region and elsewhere in the province,” Briggs said.