Ok Tedi villages commended for K19 million investment

By MALUM NALU on Sturt Island

Ok Tedi Development Foundation (OTDF) chief executive officer Ian Middleton has commended the 156 villages that currently benefit from the Ok Tedi Community Mine Continuation Agreement (CMCA) for their decision to invest in the K19 million mv Fly Warrior.

 Fly Warrior along the Fly River on Saturday.-Pictures by MALUM NALU

He said this to hundreds of South Fly villages on Sturt Island, along the banks of the Fly River, on Saturday when delivering the Fly Warrior – bought from their CMCA funds and the third vessel after the arrival of its two sister ships Fly Hope and Fly Explorer last year.

Middleton addresses South Fly villagers including children on Sturt Island.

Apart from the three vessels, the CMCA villagers also have two brand-new Twin Otter aircraft, both of which were delivered towards the end of last year.

Saturday’s was the first of two welcomes for the Fly Warrior, the second being at Obo, further up the Fly River yesterday (Sunday).

South Fly villagers line up the jetty on Sturt Island to board the Fly Warrior.

“I’m happy because you people of South Fly are happy,” Middleton said on Sturt Island.

“I’m happy to deliver this vessel, your vessel.

“I’m very pleased, happy, and humbled at the effort you people have shown in accepting this vessel.

“It shows that you are willing to accept change.

“You can create change and you can bring about prosperity in South Fly.”

South Fly villagers pack the deck of the Fly Warrior on Sturt Island.

Middleton explained that their CMCA funds were held in trust development funds and trust investment funds, with all villages having a say in how these monies were used.”

“That money is to make investments that go beyond mine life,” he said.

“We have to spend the investment funds as soon as possible so that we can make money for you

“All that money (from investments) goes into your development funds.”

Middleton said in the case of Fly Warrior, the 65m bulk carrier would be on dry hire to Ok Tedi Mining Ltd (OTML), and would be generating a minimum 8% return per annum, and 32% residual,  on a capital investment of K19 million.

 Fly Warrior along the Fly River on Saturday.

“We have secured the vessel on behalf of the CMCA people,” he said.

“It will be on lease to OTML for 15 years.

“The same principle applies to the two other vessels and the planes.

“These investments actually work for your development future.”

Latest pictures of Daru, Western province

By MALUM NALU

I flew to Daru last Friday and travelled more than 200 miles up the mighty Fly River by boat for the launch of the new Western province vessel, mv Fly Warrior, at Sturt Island yesterday and at Obo today. 
From there, a long helicopter ride to Kiunga, and then Tabubul.
During my short stopover in Daru, during which I spent some quality time with my tambus before catching a dinghy for the mouth of the Fly, I took these pictures of the forgotten Western province "capital".

Daru Airport

On a wing and a prayer...Missionary Aviation Fellowship Cessna 206 at Daru Airport

Airlines PNG Dash 8 that took us safely to Daru.

Daru airport

Road from Daru Airport

Old public cemetery

Montford Primary School

Street to town

Mango trees

Why chop down these shade trees?

The rundown colonial post office at Daru, Western province, seriously needs to be replaced, as seen last Friday.

Shopping centre

One of the positive developments in Daru...the new K10 million wharf trestle nears completion. It is funded by PNG Sustainable Development Program (PNGSDP), and built by contractor Curtain Brothers.

Canoe off Daru, Western province, last Friday.

One of the positive developments in Daru...the new K10 million wharf trestle nears completion. It is funded by PNG Sustainable Development Program (PNGSDP), and built by contractor Curtain Brothers.

MMJV: Golpu feasibility study to start in July

By MALUM NALU
 

Morobe Mining Joint Ventures (MMJV) anticipates a feasibility study on the giant Golpu copper-gold project in Morobe province gold project to begin in the July quarter of this year, according to general manager-sustainability and external relations David Wissink.

He said this yesterday when asked to comment on what major plans the company has for this year.

“With Wafi- Golpu the focus is on discussions with stakeholders on the Golpu pre-feasibility study (PFS) which was finished last year,” Wissink told The National.

“After these consultations take place and a final nod from the joint venture partners (Newcrest and Harmony), we anticipate the project team being in a position to start the feasibility study in the July quarter of this year.”

Wissink said the plan called for 24 months for the feasibility study for just Golpu copper and gold, as Wafi was a separate ore body (gold cap) which was being studied at present.

Harmony and Newcrest last October announced a significant upgrade to the ore reserve estimate for the Golpu copper-gold deposit, following the completion of a technical PFS. 

Prime Minister Peter O’Neill (second from right)  listens to a geologist explains the reserves for the Wafi-Golpu project during a sire visit last October.-Picture courtesy of MMJV

The PFS supports an updated ore reserve estimate containing 12.4 million ounces of gold and 5.4 million tonnes of copper.

The study also confirms Golpu as a world‐class deposit with an expected mine life of more than 25 years.

Wissink said this year MMJV planned to create value for its shareholders and stakeholders.

Shareholders are Newcrest and Harmony, while stakeholders are landowners, Bulolo local level governments, Bulolo and Huon Gulf districts, and Morobe province. 

“We’ll do that by safely, and in an environmentally-sound manner, improving production and plant throughput at Hidden Valley, progressing Golpu to feasibility stage and continuing our exploration programme focusing on some exciting prospects in Huon Gulf and Bulolo districts.

“Another core part of the MMJV business is community engagement and on this side of the business,  we have extensive consultation programmes happening with the Wafi – Golpu project, an MOA (memorandum of agreement)  review for Hidden Valley at some point in the first half of the year, and of course the continuation of our community and regional development programs including the Watut River footbridge projects, community malaria programme in partnership with the Oil Search Health Foundation, education programmes and agriculture focusing on cocoa, coffee and fresh produce.”

Regarding, MMJV’s other project at Hidden Valley, Wissink said: “Hidden Valley is still ramping up production as it takes time to get all the moving parts of a mine (including people) working as efficiently as possible. 

“The environmental side of the operation is doing fine with the tailings storage facility performing as planned.”

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.