Bart Philemon slams Electoral Commision for deferral in Lae

By MALUM NALU
Lae MP Bart Philemon today (Tuesday, June 26, 2012) slammed the Electoral Commission for deferring yesterday’s polling to today (Wednesday) because of heavy rain.
He said that the sun was shining immediately after the deferral was made.
Philemon also said that several major companies in Lae allowed their employees one day off for voting yesterday and were unlikely to allow them another day off today.

Bart Philemon...no justification for deferral

“The Electoral Commission and Lae returning officer did not consider the ramifications of the decision they made today and its wider impact,” he said.
“The decision was made prematurely before 8 o’clock this morning to cancel voting due to rain.
“Before 9 o’clock this morning, we had beautiful sunshine
“Most of the companies here in Lae closed down today to allow their employees to vote, the likes of Trukai Rice, Hornibrooks Steel, Coca-Cola and so on.
“These companies can’t allow them time off again tomorrow (Wednesday.
“The irresponsible decision by the Electoral Commission today is going to deny a lot of employees in Lae their democratic right to vote tomorrow.
“I’m very disappointed at this very irresponsible and premature decision by the Electoral Commission in Lae.
“There’s no justifiable reason for the irresponsible decision to be made today to defer voting until tomorrow.”

Illicit border trade flourishes during elections

By MALUM NALU

The multi-million kina illicit trade in PNG using smuggled items from Indonesia, particularly cigarettes, is flourishing during the elections with decreased Customs, police and military presence at Wutung Border Post at West Sepik province.
Lack of personnel at Wutung means that smugglers basically have free reign during the election period, as was witnessed by The National at the border post at the weekend.
With PNG lacking maritime strength to patrol the sea border, there is no control of what comes in through this.
Customs were not checking in goods brought in from Batas Market on the Indonesian side of the border at the weekend.
Yesterday (Sunday), The National witnessed the illicit trade at Vanimo Airport, where several carefully-packed cartons of Indonesian cigarettes consigned for Wewak and Mt Hagen were loaded on to an Air Niugini Q400 flight bound for Wewak, without as much as a question being asked as to their contents.
A private intelligence source monitoring the illicit trade at the border, told The National in Vanimo yesterday that a highly-organised racket involving wealthy Highlands businessmen and local Wutung and West Sepik villagers existed.

Cheap Indonesian cigarettes being sold at a roadside stall in Vanimo at the weekend. These cigarettes proliferate in Vanimo and are now being smuggled in large consignments into the Highlands.-Nationalpic by MALUM NALU

A senior government officer told The National in Vanimo yesterday that the illicit trade was a serious threat to national security as guns, drugs and human trafficking could easily be carried out from Indonesia.
The intelligence source said the cigarettes were transported to Aitape near the border of East and West Sepik provinces, and then moved down to Wewak and then Madang for transport to the Highlands.
“It comes from the Batas Market, across the Wutung Border Post, and then comes out towards Vanimo,” he said.
“What the Highlands businessmen are doing is that they liaise with the local villagers and get them to carry Indonesian cigarettes across from Batas.
“They stockpile these cigarettes in the villages until they reach 20-30 cartons.
“These then come out from Wutung Village via boat or road to Aitape, transported by road to Wewak, then loaded onto ships or dinghies for Madang or Bogia, where they are picked up and transported by road to Mt Hagen, Minj or Banz.
“The concern is that these Indonesia cigarettes are brought in without paying any excise duty to the government, which is missing out on millions.”
The senior government officer said this was a very serious threat to national security which must be addressed immediately.
“All stakeholders including Customs, police and PNG defence Force must work together,” he said.
“I do not know what the Border Development Authority is doing.
“There are no patrol boats manning the maritime border with Indonesia.
“Cutoms officers at the Wutung Border Post are under-resourced and this is a very big concern.
“Apart from cigarettes, anything can be brought into PNG like forearms, drugs, anything.
“It’s a concern for the government and they have to address this at the national level.
“Smuggling is very big.”

Air Niugini resumes Daru flights

By GYNNIE KERO


Papua New Guinea flag carrier Air Niugini resumed commercial flights into Daru, Western province, on Thursday (June 21) for the first time in 12 years, The National reports.
This promises to be a massive boost to business, tourism and other economic activities on the South Fly island.
Despite a light downpour, a big crowd gathered at the airport to welcome the arrival of the first Air Niugini commercial flight, a Dash 8- Q315.

Kiwai dancers welcome the inaugural Air Niugini flight to Daru on Thursday.-Nationalpic by GYNNIE KERO

An Air Niugini Q400 did land on Daru on June 1, however, that was a PNG Sustainable Development Program (PNGSDP) charter.
The last Air Niugini flight to Daru was on March 4, 2000, after which it had to stop services because of the unsafe state of the runway.
Air Niugini is able to resume flights because of a K40 million airport upgrade funded 50-50 by PNGSDP and the Fly River provincial government, with construction undertaken by Global Construction and supervised by The National Airports Corporation.
Airlines PNG has had a virtual monopoly of the Daru-Port Moresby route over the last 12 years, with its airfares of K999 one-way among the highest in the country.
Air Niugini’s low est fare on that route is K352.20.
Air Niugini chief executive Wasantha Kumarasiri apologised to the people of Daru and Western province for the inconvenience of the past 12 years, But, he said the airlines could not compromise the safety of its passengers.
He said Air Niugini could not service the township of Daru for many years due to poor airport infrastructure that was not up to standard.
“Flights into Daru were suspended because infrastructure did not meet airport regulations. Air Niugini looks after its customer in the name of safety.”
Flights in and out of Daru are scheduled twice every week, Thursdays and Sundays.

Xstrata to draw back in PNG for South America focus

By BARRY FITZGERALD by: Barry Fitzgerald

From: The Australian
  

XSTRATA'S full development book in South American copper has prompted  the proposed merger partner of Swiss-based Glencore to seek buyers for its 81.82 per cent stake in Papua New Guinea's Frieda River copper-gold project, one of the world's biggest undeveloped deposits of the metals.

The stake could be worth more than $US650 million ($639m).  

News of the sale was let slip by its 18.18 per cent junior partner in  the project, ASX-listed Highlands Pacific, as part of its "cleansing statement" ahead of an expected 15 per cent placement to the PNG
Sustainable Development Program, which holds BHP Billiton's former 52 per cent stake in the environmentally controversial Ok Tedi copper-gold mine.

Xstrata was caught on the hop by Highland's disclosure to the ASX, but  later confirmed that part of its continuous review process was "assessing the interest of other investors in the Frieda River
project".

That confirmation follows industry speculation Xstrata had been  approaching state-owned Chinese groups with a view to gauging their interest in taking up the running at Frieda River, but to no avail.
The sale process has since firmed up with the appointment of Merrill Lynch to advise on a trade sale.

Frieda River ranks as a 13 million tonne copper deposit, with 20  million ounces of gold. 

The partners have been working towards a development that be the  world's 12th-biggest copper producer, with forecast annual average output in the first eight years of 246,000 tonnes of copper and
380,000 ounces of gold.

Despite the possible sale of Frieda River, Xstrata is out to climb the  ranks of global copper producers by increasing annual production by more than 60 per cent to 1.5 million tonnes over three years.

Peruvian projects Antapaccay and Las Bambas underpin the surge.
Xstrata has coasted its copper production surge at $US7 billion.

Xstrata's 81.82 per cent stake in Frieda River is based on completion  of a feasibility study on its development by the end of the year. 

If it sells or joint-ventures the asset before then, Highlands has a pre-emptive right to increase its interest to 28 per cent.

Analysts said a valuation metric of US3c-US4c a pound of (undeveloped)  copper would make Xstrata's share of Frieda River worth about $US650m-$US850m.

If Highlands were to revert to a 28 per cent stake, its holding would  be worth $US250m-$US340m on the same basis.

That has implications for the valuation of Highlands, as its market  capitalisation was $100m before its trading was halted. 

Highlands' expected placement to the PNG Sustainable Development Program is to raise funds to step up exploration at its Star Mountains tenements, 20km from Ok Tedi, which needs extra resources to extend its mine's
life.

Xstrata's sale process for Frieda River does not extend to its joint  venture in the equally big Tampakan copper-gold project in the southern Philippines.

Xstrata owns 62.5 per cent and ASX-listed Indophil 37.5 per cent.  

The partners are waiting on the Philippines government to deliver its  long-awaited mining policy, expected by next week, and the removal of a provincial open-cut mining ban

Xstrata puts Frieda River copper stake on the block

FROM REUTERS

Global miner Xstrata Plc has put up for sale a stake in the Frieda River copper project in Papua New Guinea, potentially worth more than US$2 billion, as part of a review of its development projects worldwide.

Like other major miners under pressure to conserve capital amid uncertainty over global growth, rising costs and falling commodity prices, world no.4 copper producer Xstrata has flagged it may slow down project spending.

Xstrata has not yet decided whether to sell all or part of its 81.8% stake in Frieda River, an Xstrata spokeswoman said.

"As part of this process we are assessing the interest of other investors in the Frieda River Project in Papua New Guinea," the spokeswoman told Reuters in an email.

Merrill Lynch is advising Xstrata on the potential sale.

A critical concern for any buyer would be the cost of the Frieda River project, last estimated at US$5.3 billion.

That cost could fall if it secures natural gas for its power supply, a key factor in a delayed feasibility study that Xstrata has committed to deliver to its partner, Australian-listed Highlands Pacific, in December.

Chinese companies, possibly including Metallurgical Corp of China (MCC), could be interested in Xstrata's stake, analysts at broker Euroz have said.

MCC is Highlands Pacific's partner on the Ramu nickel project in PNG.

Three analysts on average value Highlands Pacific's 18.2% stake in Frieda River at A$477 million (US$486 million), which would imply Xstrata's 81.8% stake may be worth about US$2.15 billion.

Xstrata has said it wants to become the world's top copper producer, unseating Chile's Codelco, BHP Billiton and Rio Tinto over the next three years.

Charlie Sartain, Xstrata's copper division head, said last month a US$7 billion capital expenditure programme was under way to beef up copper mining, mainly in South America and Australia.

Since then, a decline in copper prices that began in January has accelerated, with the London 3-month contract fetchingUS $7,545 a tonne, orUS$3.42 a pound, down from levels above US$8,650 a tonne at the start of the year.

 Xstrata already has projects under construction designed to boost its copper output by more than 60% to 1.5 million tonnes a year over the next three years, including its Antapaccay project in Peru, due to start producing in the second half of this year.

The company's attempt to sell the Frieda River stake suggests it may prefer to back the Tampakan copper and gold project in the Philippines, which it is looking to develop with Indophil Resources.

Frieda River has an estimated resource of 12 million tonnes of copper and 18.5 million ounces of gold, and could produce 246,000 tonnes of copper a year, according to a pre-feasibility study in 2010.

  

Highlands Pacific said today (Thursday) it hoped to seal an agreement in the next two days to sell a cornerstone stake in the company to PNG Sustainable Development Program Ltd (PNGSDP), a large investment company with strong ties in Papua New Guinea, which could assist in future development.

PNGSDP is the majority shareholder in Ok Tedi Mining Ltd, operator of the Ok Tedi copper mine, once owned by BHP Billiton.
Highlands Pacific shares were on a trading halt pending the outcome of talks with its potential PNG backer.
Indophil's shares rose 4.5% to A$0.35, bucking a 1.5% slide in the metals and mining index .AXMM. ($1=0.9815 Australian dollars)

PNG Sustainable Development Program considers investment in Highlands Pacific

Highlands Pacific Limited today (Thursday June 21) announced that it is in the advanced stages of negotiations on a capital raising with PNG Sustainable Development Program Ltd (PNGSDP), which is considering taking up a cornerstone investment in the company.  

While it is anticipated that a final agreement between Highlands and PNGSDP will be completed within the next two days, an agreement has not been executed at this time and there can be no guarantee that an agreement will be executed within two days or at all.

Managing director of Highlands Pacific John Gooding said today: “While there are still some points to be finalised a relationship with PNGSDP, a company with net assets of over US$1.43 billion, has the potential to deliver significant benefits to Highlands, giving it the financial and technical backing of a very large investment company that has strong ties in Papua New Guinea and is the majority shareholder of Ok Tedi Mining Ltd (OTML), in Western province, PNG. 

"These connections could be crucial for Highlands as it proceeds with any development at the Star Mountains exploration project and also for the future development of the Frieda River project.” 

“In relation to our projects Ramu is progressing well with ore commissioning and ramp‐up continuing, drilling is continuing at the Star Mountains exploration and work on the feasibility study at Frieda River continues. 

"Recently Xstrata Copper has advised that it has commenced a market evaluation of a number of the projects in its portfolio, including Frieda River. 

"This is consistent with their announcement at the May annual general meeting where they stated ‘Xstrata management will optimise the value of the mining portfolio’ and is consistent with the approach of all major mining companies at present.

" Xstrata Copper have also confirmed they are committed to completing the Frieda River Feasibility Study by (or before) December this year.”

About PNG Sustainable Development Program Ltd

PNGSDP was established in 2002, when BHP Billiton divested its 52% shareholding in OTML. PNGSDP has the task to support and promote sustainable development through projects and initiatives to benefit the people of PNG, especially the people of Western province. PNGSDP is also a substantial financial institution with the function of investment of its Long Term Fund and Development Fund so that it can support a high level of development expenditure in Western Province and PNG in general.

PNGSDP is a company registered in Singapore and “limited by guarantee”, which means that it has no share capital, debentures, share options or unissued shares. The total net assets of PNGSDP in 2011 amounted to US$1.43 billion.

About Ok Tedi Mine

OTML operates the Ok Tedi mine which is located in the Star Mountains region of the Western province. The mine started operations in 1984, and has become the single largest business contributor to the economies of the Western province and PNG.

The Ok Tedi mine is a major producer of copper concentrate for the world smelting market in Germany, India, Japan, Korea and the Philippines. The mine exports copper as the main product but it also extracts gold and silver.

Endless potential for beef venture

By MALUM NALU

PAPUA New Guinea has endless potential for beef production, according to the manager of Leron Plains Cattle Ranch, the biggest in the country, The National reports.
 The ranch is owned by Ramu Agri Industries Ltd, which is part of the New Britain Palm Oil Ltd (NBPOL) Group.
It has more than 20,000 head at Leron Plains in the Markham Valley of Morobe province, which are then taken to the feedlot at Gusap in Ramu Valley of Madang province, to be fattened and slaughtered.
Leron manager Bruce Guaran told The National during a visit of the ranch last Thursday that PNG’s beef industry had great potential and should be supported.

Cattle at Leron Plains Cattle Ranch last Thursday. They are raised here and then moved to Gusap to be further fattened and slaughtered.-Nationalpic by MALUM NALU

“It (PNG beef industry) has got endless potential,” he said.
“You need protein in the country.
“It’s Papua New Guinean, not imported.
“It’s fantastic quality for the price.
“It’s a good product.
“New Britain Palm Oil Ltd is investing in the property for the future.
“If the company had not been interested, it would not have invested.”
Guaran said cattle were raised on about 9,000ha of land there before being taken to Gusap.
Apart from grass, they are also fed sorghum grown on site at Leron.
He said calves were raised for six months before being weaned (separated from their source of milk), fed until they weighed about 300kg.
They are then moved to Gusap,  fattened in the feedlot until they weigh 400kg before they are taken to the abattoir to be slaughtered.
“It can be 18 months to two years and they are slaughtered,” Guaran said.
“This (Leron Plains) is the biggest cattle ranch for the company and also the biggest in PNG.
“At present, we have about 30 fulltime staff and 45 casual staff.
“This open grassland plain is great for cattle.
“It’s great cattle country.
“It’s good cropping country too.”
According to NBPOL’s 2011 annual report, the group remained the largest producer of beef in PNG, however, “beef production will continue to play only a minor role in the overall investment strategy of the group”.
“This does not mean that the beef operations will not receive investment, or that beef production cannot be significantly improved to provide a valuable resource to supplement the earning capacity of the group, especially in areas where cattle and oil palms can be intercropped, or in areas where oil palms are unsuited as a sole commercial crop,” it said.
“The group’s herd size showed show growth with 20,000 cattle managed in two separate locations (RAIL 16,500 head and West New Britain 3,500 head).
“The group herd produced some 1, 284,000kg of beef for the PNG market, generating revenue of K14.9 million."