Fly Warrior arrives in Western tomorrow

By MALUM NALU

The last of three ships procured by Ok Tedi Development Foundation (OTDF) on behalf of the Ok Tedi river communities, mv Fly Warrior, will be welcomed into Western province at the weekend.

 mv Fly Warrior arrives at Sturt Island along the Fly River tomorrow and further upstream at Obo on Sunday.

Provincial leaders including Governor Ati Wobiro, community leaders, and management of OTDF, Ok Tedi Mining Ltd, and PNG Sustainable Development Program are expected to be at the welcoming at Sturt Island and Obo.

mv Fly Warrior joins its two sister ships,  mv Fly Hope and mv Fly Explorer,  in generating long-term development benefits for the 156 villages that currently benefit from the Ok Tedi Community Mine Continuation Agreement (CMCA).

She was launched from the Sarawak Slipways yard in Malaysia on September 22, 2012.

The mv Fly Warrior before it was launched from the Saraway Slipways in Malaysia.-Picture courtesy of OTDF

The 65m bulk cargo/fuel carrier will be on dry hire to OTML and will be generating a minimum 8% return per annum on a capital investment of US$8 million.

The vessel was designed by Shiptech in Singapore then constructed by Sarawak Slipways and will be operated by V Ships, the world’s largest shipping fleet manager.

 mv Fly Warrior will primarily service OTML’s operational requirements (carrying up to 72 containers and or 1.2 million litres of fuel) out of Port Moresby but has the capacity to call into Australia when required.

Xstrata ups Papua New Guinea mine cost estimate to US$5.6 billion

Reuters

MELBOURNE: Xstrata has raised its capital spending estimate for the undeveloped Frieda River copper mine in Papua New Guinea by $300 million to US$5.6 billion, as costs to develop new mines continue to escalate.
Xstrata Copper delivered a feasibility study to minority partner Highlands Pacific on Friday that indicated the $5.6 billion capital cost estimate, Paul Gow, general manager of the Frieda River project, said in a statement.
Rising costs have forced many miners to review the spending required on greenfield copper projects as they battle over a limited pool of skilled workers and equipment, particularly in remote locations like Papua New Guinea (PNG).
Antofagasta on Friday halted development at its $1.7 billion Chilean copper mine Antucoya as it reviews escalating costs, and Xstrata put back a target to start production at the Tampakan copper-gold mine in the Philippines by three years to 2019 earlier this month.
Xstrata had estimated the Frieda River project to cost $5.3 billion when it released an earlier study two years ago.
The company, with an 81.8 percent stake in Frieda River, sees the mine yielding 304,000 tonnes of copper at an average cost of 71 U.S. cents per pound over the first five years.
Over the entire life of the operation, it sees an average yield of 204,000 tonnes annually at a cost of $1.11 per pound.
Xstrata is expected to review its pipeline of copper projects after its takeover by Glencore International .
The company is following the course of other mega miners, including BHP Billiton and Rio Tinto , in conserving capital amid uncertainty over global growth and falling commodity prices.
Earlier this year, Xstrata flagged its willingness to potentially sell all or part of its stake in Frieda River after conducting a review of its operations worldwide.
It said on Monday it had not made a decision yet on whether to divest or partially divest the project at this stage.
"Xstrata is currently assessing the interest of other investors in the project but declines to comment about potential timetables," a company spokesman said in an email.
Highlands Pacific said discussions were planned next year to determine future ownership of the project.
"During 2013 we will hold discussions with all parties, including the PNG government to determine the project's development path and the desire of the PNG government to take up a direct 30 percent equity stake in the project," it said.
Via its Petromin investment arm, PNG has invested in 17 projects, including a $19 billion liquefied natural gas field under construction by Exxon Mobil .
It is allowed to take up to 30 percent of mining and 22 percent of oil and gas projects, which it must then help fund.
Exxon Mobil in November said it faces a $3.3 billion spike in costs at its gas project in Papua New Guinea.
This year BHP scrapped an $80 billion spending plan, which included delaying indefinitely the expansion of its Olympic Dam copper mine in Australia, where analysts estimated costs had ballooned three-fold to more than $30 billion in just two years.
Shares in Xstrata were trading 1.1 percent higher at 1,062 pence by 1206 GMT, outperforming a flat FTSE 100 index. 

Marengo expects to start production in 2016

By MALUM NALU

 Marengo copper project in Madang province expects to commence production in 2016, according to its latest investor presentation for December 2012.

Map of current major mines in PNG, which will include the Yandera project when it starts production.

According to the presentation, Yandera is a world-scale copper project which features:

• ·         Strategic, long-life porphyry copper asset;

• Outstanding growth potential;

• ·         Enhanced by recent high-grade results;

• ·         US$150 million invested to date;

• ·         Feasibility study nearing completion;

• ·         Targeting financing and approvals in 2013;

• ·         Strategic development partners are in place; and

• ·         First production is targeted for 2016.

Marengo Mining is the project developer while development partners are China Nonferrous Metals’s Foreign Engineering and Construction Co Ltd NFC), and Petromin.

NFC is the principal contractor under fixed price engineering procurement and construction (EPC) contract covering the total project construction cost, will facilitate financing of at least 70% of capital cost – financing to be provided by Chinese banks, will off-take for a portion of the copper and molybdenum concentrate to be produced, and may participate in future Marengo equity listings.

Petromin is wholly owned by the Papua New Guinea government, the investment and cooperation agreement establishes the framework for it to acquire a 30% contributory interest in the Yandera project, and will fund its pro-rate participation in the Yandera project after reimbursing Marengo Mining’s costs to date.

Yandera, located 95km south-west of Madang, is one of the largest undeveloped copper projects in the Asia-Pacific.

It has a 1,730 sq km tenement and application package in emerging mining province, with less than 5% of structural corridor drilled to date.

According to an update resource estimate in April 2012, Yandera has a significant conversion of tonnes to the measured category, increasing confidence in the targeted minimum 20-year mine life plan.

So far over 174,000m of drilling has been carried out in 550 diamond drill holes.

Currently, three rigs are on site for in-fill drilling and exploration programmes.

PNG optimistic of deal with Fiji

By GERALDINE PANAPASA

Fiji Times

 

THE Papua New Guinea government believes Vodafone Fiji's impressive performance in the Fiji market can guide bemobile to success.

This follows the recent announcement by PNG Prime Minister Peter O'Neill that Vodafone Fiji and the Fiji National Provident Fund had been invited to take up equity in the PNG-based mobile company.

"Vodafone Fiji and its partner FNPF have confirmed they are doing so.

“A due diligence exercise is underway right now," said media adviser to the PNG Prime Minister, Daniel Korimbao.

"Once this is completed, IPBC (Independent Public Business Corporation of Papua New Guinea) will announce the details.

"We have not been given any indication on the timing of this.

“It is confirmed as the PM announced that the PNG government will retain controlling interest in bemobile, and will recapitalise the company."

 Korimbao said Vodafone Fiji had been invited to manage the company.

He said a consortium bought into bemobile in 2008.

"The consortium consists of Hong Kong-based General Enterprises Management (GEMS) with 20%, US-based Triology International Partners (20%), NASFUND of PNG (5%) and Nambawan Super of PNG (5%)," Korimbao said.

"They put up K150million (approximately F$129.4million) for 50%, Telikom PNG Limited, owned by the PNG government, held the other 50%.

"They promised a roll-out programme and set certain milestones they said they would achieve.

"But the company simply failed to take back ground in the market share from Digicel which only entered the PNG market in 2007."

 Meanwhile, Korimbao said Digicel dominated the PNG mobile phone market controlling 85% of the market with its products.

Taiwan prosecutors drop charges in Papua New Guinea diplomacy scandal

Want China Times

Chiou I-jen attends a court session in Taipei, Feb. 2. (Photo/Chen Chih-yuan)

The Taipei District Prosecutors Office last Tuesday decided not to press charges against two former senior officials for their roles in the high-profile Papua New Guinea diplomacy scandal.
The prosecutors said there was not enough evidence to press charges against former National Security Council secretary-general Chiou I-jen and former foreign minister James Huang in the scandal.
They said that Ching Chi-ju, former vice chairman of the Taipei-based BES Engineering and his associate, Wu Shih-tsai, allegedly told Chiou and Huang that they could help broker the establishment of diplomatic relations with Papua New Guinea, if the government remitted US$29.8 million to a joint bank account set up by them.
The ministry, in a bid to promote diplomatic relations with Papua New Guinea, remitted the money to the joint bank account. But it turned out to be a fraud, and the two made off with all the money in the account.
Chiou and Huang allegedly were also involved in dividing up the money.
But prosecutors said their investigation showed that Huang had taken a cautious attitude in reviewing the establishment of diplomatic relations with the island country in southwestern Pacific, and if he had wanted to line his pocket, he didn't have to go the distance in remitting money to Singapore.
In addition, Chiou only introduced Ching to Huang, and he was not involved in the process of establishing diplomatic ties.
Also, prosecutors have not found any evidence that the money in the account in Singapore was channeled into the banking accounts of Chiou and Huang or their family members.

The changing face of Lae

There is little control of the current business boom in Lae, writes MALUM NALU



THE changes taking place now in Lae, Morobe province, are quite phenomenal, as I found out when I was back home from December 13-16 to attend the 2012 Ahi Festival.

Lae's new landmark taking shape along 2nd Street.-All pictures by MALUM NALU

Lae is slowly, but steadily, getting back its "garden city of Papua New Guinea" tag, its infamous potholes are disappearing, and business is booming.
Crime and social problems, however, infest this garden of good and evil.

Concrete roads of 7th Street.

The amount of money pouring into Lae as a direct result of major projects such as the PNG LNG project, Hidden Valley mine, Wafi-Golpu mine, Ramu Agri Industries, Lae Port Tidal Basin, new fish canneries at Malahang, and several others in Morobe, Madang and the five Highlands provinces means that the city is in for a bonanza.
The Lae Port is near saturation point, with major stevedoring company, Riback, now using the old Lae Airport as its container yard.

Riback Stevedores' container yard at the old airport.

New buildings are going up everywhere, the recently-concreted roads are chock-a-block with brand-new vehicles, and there is an air of optimism in just about everyone I talked to.
Lae Chamber of Commerce and Industry, however, believes that there is little control of the current business boom in Lae at the moment.
Chamber president Alan McLay said this when I asked him to comment on the boom in business in Lae brought about by all the economic developments.

Coronation Drive, Top Town.

"The so called 'business boom' in Lae is progressing at the moment to meet the demands," he said.
"The LNG project has certainly meant more transport and logistics type operations and we have seen major developments of these industries along the Nadzab corridor in recent years.
"The government's inability to provide adequate land for development in Lae has meant that companies have directly negotiated land with local communities and individuals in this area, to meet the demands.

Coronation Drive, Top Town.

"Our concern is that this recent development has proceeded unplanned, which brings forth a whole range of issues."
McLay said these issues included:
•All of this development has taken place beyond the current city boundaries, which means that it is under the jurisdiction of the rural local level governments (LLGs), which do not provide sanitation and garbage, and other services to businesses;

Riback Stevedores' container yard at the old airport.

Huon Road.

•The unplanned development means that there is no allocation of land for schools, recreation parks, etc; and
•There is no protection for the landowner for unscrupulous dealings, and con artists who will rob them and their families of their future inheritance.
"The LCCI believes that there must be an urban development plan for the Lae Urban area," he said.
The LCCI also expressed concern at the" near dictatorial control" of the Lae Roads development by contractors.

7th Street.

It also wants to see the Lae Urban Local Level Government (LULLG) honor its agreement to maintain roads in the city.
McLay said the control of roads by contractors was leading to a whole range of detrimental issues, including:

Potholes along Malaita Street.

•Unannounced and unnecessary lengthy closure of roads for reconstruction which has lead to congestion;
•Unnecessary cutting of trees for ease of construction which affects not only the beauty of the city but also relief from the hot sun;
•Pedestrian crossings in wrong and dangerous locations;
•Road marking in wrong and inappropriate paint which is difficult to see and quickly wears off; and
•Lack of erection of appropriate and easy-to-see street signs.
"The LCCI would like the LULLG to make an effort to honor its agreement to maintain the roads in the city, especially the industrial roads that were graciously rehabilitated by AusAID over a decade ago and the residential road," McLay said.

7th Street.

"It would be wonderful to have the old 'pothole gangs' back on the roads, attacking the potholes before they develop into major impediments to the traffic," he said.
"We note that the first recommendation of the report on the Lae City Roads Rehabilitation Project (LCRRP) was for the establishment of a provincial management unit (PMU).

Drive down the hill from Top Town.

7th Street.

"We would like to see the PMU established, which would consist of local stakeholders, to manage the Lae roads project, to give the roadworks that vital Local and professional input, that is sadly missing from the project at the moment. "
McLay said the chamber was pleased to see work recommencing on Lae roads after the projected was halted for investigation last year.
"We are pleased to see the work re-commencing on the Lae Roads under the Lae Roads Rehabilitation Project that was halted after the investigation last year," he said.
"We are happy to see a further K100 million allocated in the 2013 budget, which should see the completion of the major trunk roads in the city.
" The benefits of a good roads system to business is enormous : punctuality of staff and less dust related diseases  equals  less absenteeism; speedier vehicle movement  equals less delivery time; less vehicle maintenance and replacements; less crime due to slowed down vehicles, etc."
Crime and social problems, however, infest this garden of good and evil, and during my four days there, there was a series of armed hold-ups around town and a major ethnic conflict at the notorious Bumbu Settlement between Sepiks and Morobeans.

Bumbu River along Butibam Road.

The escalating law and order problem in Lae, especially ethnic clashes in urban settlements, irks McLay.
"The overflowing settlements and the resulting clashes is a major concern, which is taking so much time and effort by the under -strength and underequipped police, who have found they are left wanting when addressing the normal crimes in the city," he said.

"The squatter problem has been allowed to develop unchecked by the previous politicians and administration and now it has become a major issue.
"The police alone cannot handle this problem as they are not trained to handle social problems - the politicians and administration must find a way to relieve tensions in the settlements.
"The police must be equipped better to combat crime, which is having an enormous upsurge at the moment.

Coronation Drive, Top Town.

"We understand the Morobe Governor has promised a good relief package to the police.
"Now the police headquarters must look at increasing the numbers of police and build up their equipment.
"Good business relies on a low crime rate, which is currently at an unacceptable high."
McLay suggested:
•Morobe Governor Kelly Naru and Lae MP Loujaya Toni must look at political solutions to decrease the ethnic tensions and the crime and
•Local authorities must relax fees and license regulations, to make the process simple and effective, so that business can operate in a less-bureaucratic system.
We hope and pray for a prosperous and peaceful Lae in 2013 and beyond.

Coronation Drive.