Indonesia beefing up disputed Papua border force in bid for minerals

Papua’s disputed border with Papua New Guinea … hunt on for mineral riches. Image: PNG Blogs

By Albert Agua in Waigani

Indonesia is driving towards the Papua New Guinea border because of a recent discovery of huge mineral deposits in the Star Mountain regency just at the back of Tabubil Ok Tedi mine.

“Reportedly, there is gold, copper, coal, and thorium – a safer radioactive chemical than uranium,” says president-director of PT Antam Tato Miraza, who was then Director of Development, reports Pusaka.

“Geological Survey shows its potential is good and promising.”

READ MORE: West Papua Liberation Army behind deadly Nduga attack

The core of the deposit is, however, found in the disputed area of the border between PNG and Indonesia.

The claimed Papua border “shift” – the red zone near Ok Tedi mine. Source: PNG Blogs

Recently, Indonesian troops patrolled to Korkit and surveyed the land just around 40km from Ok Tedi, less than 10km from the border marker in the Korkit village to build another military base.


The citizens from Korkit village who are PNG citizens are moving into the new Indonesian village.

This is just 20km from the mineral deposit area.

Thorium, a weakly radioactive element that can be used as fuel in a nuclear power reactor, has been discovered in the disputed area and this has been the sole driver for Indonesians to force themselves into the disputed territory.

Also the “explorers” are actually the military carrying out the exploration.

The Indonesians have been transporting mining supplies to the area and the locals are prepared to wage war if the exploration continues under heavy military security.

Wutung border improvements
Meanwhile, major improvements in infrastructure and capacity are planned for the PNG-Papua border at Wutung, reports Loop PNG.

The improvements are planned as part of the PNG government’s West Sepik Special Economic Zone (SEZ).

National Planning Minister Richard Maru and delegates of a fact-finding mission to West Sepik visited the border area last week.

Loop PNG also reports that an international bus service and terminal are planned for the Wutung border post.

Albert Agua is an academic at the University of Papua New Guinea.

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MIL OSI – Source: Evening Report Arts and Media

Future of Panguna mine at stake in PNG, Melbourne court hearings

The abandoned Panguna mine site after Rio Tinto closed down the operation. Image: Business Advantage PNG/SMH

By Kevin McQuillan of Business Advantage PNG

Two court hearings next week – one in Port Moresby and the other in Melbourne – will help determine the future of the exploration licence for the Panguna copper mine in Bougainville.

The decision to refuse an extension of Bougainville Copper Limited’s exploration licence and to impose an indefinite moratorium over the Panguna resource, followed a statutory Warden’s meeting in December 2017.

There was “a narrow divide between those supporting the mine to be opened by Bougainville Copper Ltd (BCL) and those that oppose it”, according to Bougainville President John Momis.

BCL has successfully sought leave to apply for a judicial review of the decision to refuse its licence extension, citing legal and procedural concerns.

“While the moratorium has been gazetted, it has no impact on existing exploration licences or applications for extension, lodged prior to the moratorium,” said BCL Company Secretary, Mark Hitchcock.

“BCL remains the holder of the exploration licence (EL1) until the matter is ultimately determined,” he said.


BCL has held the licence since the mine closed in 1989. The company is now owned by the PNG national government (36.4 percent), the Autonomous Bougainville Government (36.4 percent), European shareholders (four percent) and 23.2 percent through the Australian Securities Exchange (ASX).

Rio Tinto gave away its stake in 2016.

Opposing BCL
Those opposing BCL’s involvement are led by Philip Miriori, who claims chairmanship of the Special Mining Lease Osikaiyang Landowners’ Association (SMLOLA).

He has thrown his support behind a bid by Perth-based junior miner, RTG Mining, to gain the exploration licence, setting up a joint venture company, Central Exploration, of which RTG owns 24 percent.

One of RTG’s major shareholders holds another 32 percent, and the SMLOLA retains 44 percent.

Miriori’s chairmanship of the SMLOLA remains in dispute. The 367 authorised customary heads of the 510 blocks of land within the special mining lease area of Panguna say they do not recognise Miriori as the Chairman of the SMLOLA and support the extension of BCL’s exploration licence.

On the same day as the Port Moresby hearing, on May 17, BCL will be in court in Melbourne, seeking disclosure about the relationship between RTG Mining and the SMLOLA.

Miriori and other supporters admit they are being paid by RTG, but Miriori has told the ABC that the payments are legitimate salaries, not inducements.

“That is always a normal part of anything, nothing is free,” he said.

Seeking disclosure
The action seeks disclosure from RTG Mining and Central Exploration about any compensation or benefits paid to the SMLOLA.

One analyst close to the proceedings says any disclosure could determine the possibility of “unlawful interference” with BCL’s exploration licence.

For his part, Momis says his government believes it would be “untenable under current circumstances” for any developer to develop the mine.

“BCL has an extensive database of historical data and project information from the mine operations prior to closure.”

“We have some problems with RTG right now,” Momis told RNZI.

“In fact, they are causing a lot of confusion and division in the community and we are not prepared to go ahead while this situation prevails.”

Exploration data
Should RTG Mining or any other company win the exploration licence, the next battle will be over the data about the location and extent of resources.

“BCL has an extensive database of historical data and project information from the mine operations prior to closure in 1990,” said Hitchcock. “This data remains the intellectual property of the company.”

Even if that data is not protected by intellectual property law but is only considered confidential information, it will still require cooperation from BCL to access, according to Alexandra George, senior lecturer at the University of New South Wales, who specialises in international intellectual property law.

She said it might be expensive and time-consuming to obtain.

She said that under Australian copyright law, ownership of a database is not straightforward. Whether or not RTG Mining could access the data may depend on the terms of the exploration licence, any special legislation, and on the terms of any contracts or licence agreements that have been entered into.

“If [the data] was not available, having to reinvent the wheel would add significant costs,” said George.

“Perhaps the safest way of assessing value is what the market is prepared to pay.”

Hitchcock said: “We estimate it would take any other company or entity at least two-to-three years to replicate the BCL database through exploration activities and would cost in excess of A$200 million (K400 million).”

Kevin McQuillan writes for Business Advantage PNG.

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MIL OSI – Source: Evening Report Arts and Media

Philippines mining industry faces huge ‘green economy’ crackdown

MIL OSI – Source: Evening Report Arts and Media

Headline: Philippines mining industry faces huge ‘green economy’ crackdown

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By Jeremaiah M. Opiniano in Manila

The Philippines is among the world’s top sources of metallic deposits like nickel. But in this Southeast Asian mining haven, love may have been lost between the Philippine government and the mining industry.

The country’s Department of Environment and Natural Resources (DENR) has ordered the closure of 23 mines and the companies operating them, plus suspending five others. The firms’ closures and suspensions were recommended by experts who conducted mining audits for the DENR between July and August 2016.

The audits were done in response to reports of these mining firms’ compliance or non-compliance with prevailing regulations on responsible mining and maintaining of environmental standards.

Philippines’ Environment Secretary Regina Lopez is in hot water from the mining industry given her closure and suspension orders, all announced in early February.

Policy and legal battles related to the months-old government of President Rodrigo Duterte have triggered a closer watch on the mining issue.

Mining sector protests
The controversy erupted after February 2 with the announcement of the cancellation and suspension orders by Lopez. Six days later, Lopez had signed the cancellation and suspension orders of the 28 affected companies.

The DENR also released results of the mining audit online explaining why the firms’ mining operations were ordered cancelled or suspended.

Protests followed from the mining sector, especially the industry association Chamber of Mines of the Philippines (COMP). The group said an estimated PhP70 billion (NZ$1.9 billion) in gross production value and some P20 billion (NZ$556 million) in taxes would be lost because of these closure orders, and some 67,000 workers may be displaced.

The COMP said the orders were released “without due process,” but Lopez said  on February 10 that DENR “meticulously observed due process.”

Lopez was referring to the work of the multi-sectoral audit teams that looked at the mining projects in the identified areas. Experts from the central and regional offices of the DENR; from the DENR attached agencies like the Mines and Geosciences Bureau (MGB), Environmental Management Bureau (EMB), the Biodiversity Management Bureau (BMB and the Ecosystems Research and Development Bureau (ERDB); experts from the Departments of Health and Agriculture; and representatives from various civil society organisations conducted the audits.

The multi-sectoral audit teams, Lopez explained, used criteria on the requirements of the different mining and environmental laws of the country. The teams also did cross-auditing, with auditors who reviewed the projects come from another Philippine geographical region. Lopez added the teams also staged entry and exit conferences with stakeholders, including the mining companies.

Seven days were given to the companies to respond to the technical results of the audits and the “show cause” orders. Afterwards, and spanning five months, a technical review committee conducted further review on the companies’ replies to the audit teams’ reviews

After the February 2 announcement from Secretary Lopez, COMP sought the help of the economic managers of Duterte’s cabinet, including Finance Secretary Carlos Dominguez who co-chairs with Lopez an inter-agency Mining Industry Coordinating Council (MICC).

On February 9, Secretaries Lopez and Dominguez — as MICC co-chairs— decided to form a multi-stakeholder committee that will review and advise DENR on Philippine mining operations, to include the recent decisions handed out to the 23 closed and five suspended mining firms.

The mining companies had operations in identified mining hotspots of the country, such as Benguet province (north of Manila, in Luzon island), Zambales province (in the western part of Luzon island), Surigao del Sur (in eastern Mindanao island), Dinagat Island (also in eastern Mindanao), and Eastern Samar (in eastern Visayas region).

Zambales province saw four mining companies —BenguetCorp Nickel Mines, Inc., Eramen Minerals, Inc., LNL Archipelago Minerals, and Zambales Diversified Metals Corp — ordered closed due to alleged illegal logging activities, and for conducting mining operation near a river that had led to siltation in the municipality of Sta. Cruz. Nickel is said to be being extracted there close to a watershed.

Seven mining firms operating in Dinagat Islands were also ordered closed for a build-up of silt on coastal waters: AAM Philippines Natural Resources Exploration, Krominco, Inc., SinoStell Philippines H.Y. Mining Corp., Wellex Mining Corp., Libjo Mining Corp., and Oriental Vision Mining Corp.

In Surigao del Sur province, a further seven mining firms were ordered closed, also for silt in coastal waters and for mining in watersheds: ADNAMA Mining Resources Corp., Claver Mineral Development Corp., Platinum Development Corp., CTP Construction and Mining Corp., Carrascal Nickel Corp., Marcventures Mining and Development Corp. and Hinatuan Mining Corp.

Companies Mt. Sinai Exploration Mining and Development, EMIR Mineral Resources and Techlron Mineral Resources, with operations located in Eastern Samar, were also ordered closed not only because of the siltation of coastal waters, but because of the destruction of a functional watershed.

Mining audits
Apart from the 23 firms whose operations were ordered cancelled and closed by DENR, five other firms were given suspension orders. These are Berong Nickel Corp., OceanaGold Phils., Lepanto Consolidated Mining Corp., Citinickel Mines and Development Corp. and Strong Built Mining Development Corp.

DENR conducts mining audits on a regular basis. Some of the firms whose licences were cancelled by Lopez were suspended in previous years and were asked to respond to findings of mining audits.

Some of the firms were also listed in the Philippine stock market, as a few others are joint ventures by a Philippine and a foreign company. For example, Zambales Diversified Metals Corp. is a joint venture between Filipino-run D.M. Consunji Inc. (DMCI) Mining Corp. and the Australia-headquartered Rusina Mining Corp.

Another closed firm, Oriental Synergy Mining Corp., was established by Qishu Mining Corp., a subsidiary of Qishu Enterprises with headquarters in Fujian, China.

Suspended company OceanaGold Philippines, for its part, is a subsidiary of OceanGold Corp., a mid-tier multinational gold producer with assets found in the Philippines, United States and New Zealand.

Other mining companies were also sued by local residents through the writ of kalikasan (nature), a legal remedy provided by the country’s constitution for anybody to sue those who allegedly violate environmental laws and cause environmental havoc.

Lopez alleged last Thursday that some mining firms had links to local politicians, allowing the industry to flourish.

High stakes
The Philippines houses the world’s leading supply of nickel, as it was estimated by the MGB that some PhP54.9 billion (NZ$1.53 billion) of nickel products were produced in 2015.

Nickel prices at the London Metal Exchange’s LMEX Index actually rose to a 16-month high last November 2016. But the stainless steel alloy’s performance at the LMEX dropped again since January, and the price of nickel rose to over-US$10,400 per tonne last Feb. 3 given Lopez’s closure order.

There are 40 metallic mines (including 27 nickel mines) and 62 non-metallic mines in the Philippines, not to mention five processing plants, 16 cement plants, and 2397 small quarries and sand and gravel operations. The Philippines’ mining operations are governed by the 1995 Philippine Mining Act, with some 9 million ha. of land identified to have “high mineral potential” says the MGB.

MGB data shows that the Philippines earned some US$2.8 billion (NZ$3.9 billion) in exports of minerals to Japan, Australia, Canada and China. The Philippines’ minerals industry is currently employing an estimated 236,000 workers, with a job in the mining sector said to be providing four indirect jobs. Mining companies had also paid some PhP25.78 million (NZ$717.2 million) in taxes in 2015.

But a report by the country’s National Economic and Development Authority (NEDA) showed that the mining and quarrying industry contributed only less than a percent — 0.7 percent— of the country’s gross domestic product during the period 2000 to 2015. The sector also contributed 5.6 percent of total exports in the same 15-year period, as the mining sector also generated an average of 236,400 jobs from 2011 to 2015.

The Philippines is said to have as many untapped mineral deposits, according to industry experts.

COMP said in a strongly-worded February 7 statement that Lopez “has trained her guns on the legitimate (mining) operations, while turning a blind eye to un-permitted, undocumented, non-tax paying and non-compliant mining operations who are the real violators of the environment.”

‘Pose a danger’
Lopez’s closure and suspension orders, COMP said, “pose a danger to other industries” like logistics, processing companies, manpower and transportation service providers and even the education and health sectors.

“The country needs minerals and environmental policies to be handled with technical competence and sensitivity to the complexities of the issues,” COMP wrote. “We respectfully appeal to… President Duterte to thoroughly review the actions of (Lopez)… and their serious repercussions as a whole as they are without basis and legality.”

The environment secretary, a member of the Lopez family that runs a gamut of Philippine companies found in the media, power generation and distribution and energy sectors, however claimed to have the support of President Duterte.

She also wanted to prove a “green economy” model that, Lopez claims, “can provide more jobs than destructive mining.”

“My issue is not about mining,” Lopez said February 5. “My issue is about social justice.”

The closed and suspended firms have 15 days, possibly before February ends, to respond to the DENR’s cancellation and suspension orders.

Assistant Professor Jeremaiah Opiniano is coordinator of the undergraduate and graduate journalism degree programmes of the University of Santo Tomas (UST) in Manila, Philippines.