Jul 22, 2013

 Minister Chan
Govt looks at Xstrata project takeover 

MINING Minister Byron Chan has told parliament "the government is looking at taking over" the $5.6 billion (K11 billion) Frieda River copper-gold project, which is 81.82 per cent owned by GlencoreXstrata. 

Mr Chan -- the son of former prime minister Sir Julius, who is also a parliamentarian -- said the mine "is on the market", and that the government had the "expertise, knowledge and experience with finance and partners" to develop it.

The project, in a remote area between the East and West Sepik provinces, is forecast to produce 204,000 tonnes of copper and 305,000 ounces of gold a year over an initial 20-year mine life -- making it one of the largest such deposits in the Asia-Pacific region.

The core feasibility study was finished late last year, but further research is required before construction and production plans can be completed.

"The project has not been prioritised by the company because of current developments in the world market," Mr Chan said.

Glencore's chief executive, Ivan Glasenberg, said this year that the company was "afraid of greenfields" that were risky and had capital overruns.

The PNG government has a legislated right to buy a stake of up to 30 per cent in all mines and has moved recently towards effective control of the large copper-gold mine at Ok Tedi, about 100km from Frieda, which employs a seasoned management team and workforce.

A Glencore spokeswoman said yesterday: "We are assessing the interest of other investors in the Frieda River project, but there has been no decision at this stage to divest any part."

John Gooding, managing director of Highlands Pacific, which owns the other 18.18 per cent of Frieda, with a pre-emptive clause, told The Australian yesterday: "This is a really proactive government in PNG that has been getting fairly frustrated with the delay in this project, about which we've been pretty disappointed as well.

"We see the government's interest as a positive. We believe in the project, and we work well with the government."

While PNG's economic growth spurt is being driven chiefly by ExxonMobil's construction of the country's first liquefied natural gas plant, its longer-term sustainability as a global resource centre hinges heavily on the development of the next generation of mines.

The delays at Frieda have compounded concerns already triggered by the troubles of Newcrest, half of whose assets lie in PNG. Mr O'Neill said rec
ently: "When a company as big as Newcrest faces serious problems, we have to be concerned at the possible impact on our resource sector and our economy generally."

Source: The Australian

Pacific products showcased in Europe

A range of products from the Pacific which were showcased at the Pacific Breakfast event.
A range of products from the Pacific was showcased at a Pacific Breakfast event on 9 July 2013, in the margins of the Fourth Global Review of Aid for Trade in Geneva, Switzerland.

The event effectively brought the taste of the Pacific to Europe by serving freshly ground Tanna coffee from Vanuatu, and a range of jams, chutneys and herbal teas and infusions from Friends Fiji.

An initiative of the Pacific Islands Trade and Investment (PT&I) network in Europe, the exploratory Pacific Breakfast event was successful in attracting around 100 people.  Among the attendees were the Director General of the World Trade Organisation, Mr Pascal Lamy; the Deputy Prime Minister of Samoa, Hon. Fonotoe Pierre Lauofo; Minister for Trade from Papua New Guinea, Hon. Richard Maru; and Ambassadors and international delegates attending the Aid for Trade events in Geneva.

Solomon Islands Ambassador Moses Mose, WTO Deputy Director General Valentine Sendanyoye Rugwabiza and Papua New Guinea Trade Minister Honorable Richard Maru at the Pacific Breakfast.
In introducing the event to the Guests, the Director of the Economic Governance Programme at the Pacific Islands Forum Secretariat, Mr Shiu Raj highlighted the uniqueness of the Pacific products. "Many of the high value niche products from the Pacific have a story that links to our cultures and traditions. These products are increasingly produced through ethical and sustainable practices and a number of Pacific products are being used by international chains and celebrities," Mr Raj said.

The Pacific Showcase event profiled a selected range of Pacific product offerings that could enter into the European markets.  Guests were provided an overview of Pacific exports including boutique coffees from Papua New Guinea, Tonga and Vanuatu; chilli sauce from Samoa; canned tuna from Solomon Islands; and luxury personal care items including soaps and body oils from Fiji and Tonga. Other Pacific products such as vanilla, noni juice, cultural artefacts, jewellery and handicrafts were also on display at the event.

 "The response by the participants at the Pacific Showcase illustrates the interest that European consumers may have in Pacific products. Export opportunities for boutique, fair trade and niche organic products are real. Buyers and suppliers are encouraged to contact the PT&I desk in Geneva, which promotes and markets Pacific products in Europe," Mr Raj said.

Long viewed as a niche market, the value of the European organic market has grown consistently over the last decade.  Data presented at BioFach 2013, the World's leading Trade Fair for Organic Food, indicated that in 2011 the European market for organics was estimated to have had a value of 21.5 billion euros.  In the same year, Germany alone had an estimated turnover of 6.6 billion euros.  Significantly, in the larger European countries, it is estimated that approximately 25% of this demand is met by imported products.
The Pacific Islands Trade and Invest in Europe promotes Pacific exports and assists in developing critical marketing channels and value chain linkages to enable Pacific Island exporters to establish their products in European markets. The PT&I also assists in enhancing access to technical support and establishing partnerships with agencies that can deliver practical assistance to address the challenges and impediments to increased trade with Europe.

The presence of a PT&I desk in Europe has been made possible through the funding provided by the European Union, under the Pacific Integration Technical Assistance Project (PITAP), which is a component of the Strengthening Pacific Economic Integration through Trade (SPEITT) programme.

Source: PIF

PNG chamber supports regional business

AUSTRALIAN Prime Minister Kevin Rudd's recent visit has established his government's keen interest to develop the broad base for the PNG economy.

Joined by his new trade and immigration ministers, Mr Rudd praised PNG's links with Indonesia and pointed to strong support for a regional approach to trade matters.

Radio Australia's Pacific Beat program presenter Geraldine Coutts speaks to David Conn head of the Chamber of Commerce in Port Moresby.

CONN: Obviously I think these visits, albeit a flash visit, are a good affirmation of the relationship. Yeah, it was a couple of snippets in there, it's a quick visit, generally, yeah I think the reaction to it was good.
COUTTS: But what specifically were you talking about the LNG project, the projects that are already in mind or is there sort of smaller projects that you're talking about?
CONN: I think that's, that's something that Prime Minister Rudd threw fairly clearly into his Trade Minister, Richard Marles, area and said look Richard, there's work for you to do. Clearly, there's a lot of continuation LNG, but I think Australia realises the maturing of that relationship between the countries, the broad base of the PNG economy has what this government's very keen to develop and Australia I think would be quite challenged to be able to assist Papua New Guinea in that SME sector, that's so vitally needed.
 COUTTS: Now, while Richard Marles is new to the portfolio, he's not a stranger to the region - so was he able to bring much to the table? Was there much substance of deals that you could do in the future?
CONN: I mean I think it was basically when Richard was obviously very popular in certain quarters. I don't know who he spoke to. He certainly didn't speak to us, one of the biggest Chambers in the country I guess. So that's something we need to look forward to. But I mean in terms of trade negotiations, what can you achieve in a one-day flash visit.
COUTTS: All right. So will there be more visits like this one in the future? Is it necessary?
CONN: Oh, it's definitely necessary. I think PNG expects it, being our closest neighbour and I think the Australian government would make an error by not making these regular visits and for goodness sake, why not? I mean, Cairns, it's an hour to fly across. It's something we can, because of the relationship, every couple of months to the far north of Australia and there's a lot of links already between the far north of Australia and PNG. I think it's important Rudd said look, the people of Australia decide to re-elect me, I'll be back and I'm sure he will be and it'll be very early on its agenda.
COUTTS: All right. Now, PNG , of course, has got regional links through the MSG and Indonesia. Is Australia looking to get in on that as well?
CONN: Yeah, and I think that for me personally was probably one of the most sailent points that Prime Minister Rudd made. He said look, we can work on an economic triangle with Australia, Indonesia and Papua New Guinea and, of course, PNG has just had one of the biggest trade delegations ever sent overseas, the first in 27 years to Indonesia. So that's the sort of thing that rang our bells - we were very interested in that, because obviously, with an economy like Indonesia, sitting to the west of us, we'd have to say it's probably an even cheaper economy for PNG to access. That sort of comment was very welcome I think and ties in very much with PNG's not necessarily 'look north policy' but also to look to all areas to help improve, improve its economy and import less cost basically.

Chinese presence ... Five years ago Basamuk was an isolated area where no developments took place. Today it is buzzing with activities because of the construction of the Refinery Plant for Ramu NiCo Management (MCC) Ltd. Spin-off businesses had sprung up, and people in the locality who in the past found it hard to buy things from town now have cash because they have found work in the refinery. A small market is also a sight of spin-off. Pictured are Ramu NiCo Chinese employees returning from 'Rain Tree' market which locals go there to sell their produce to the workers. The Chinese mostly go for fruits, peanuts and vegetables such as cabbages, pawpaw, ripe banana and kulau to take to their rooms at the new accommodation area built at Basamuk. Picture and Story by JAMES KILA

Hidden success: source

THE long-struggling Hidden Valley gold and silver mine in Morobe province has turned a corner, says an industry source.

The Hamata mill at the Hidden Valley mine in the Morobe province in PNG. Image courtesy of Harmony Gold.
The newest mine in PNG, owned 50:50 by Newcrest Mining and Harmony Gold, is yet to hit its nameplate capacity of 250,000 ounces per annum gold since production started in September 2010.

With March quarter operating costs of $A1790 an ounce, the mine was already burning cash before gold prices started to tumble in April. 

South Africa-based Harmony consequently flagged a write-down in June. 
"At this early stage it appears likely that there will be a write-down of a portion of the carrying value of Hidden Valley in Papua New Guinea, due to its recent poor performance, and the reduction in the US dollar gold and silver prices," Harmony warned. 

However, there are signs that the joint venture's investments into the mine this year are starting to pay off. 
According to a source, news is spreading of a significant success at Hidden Valley, with production levels reaching 80% of planned capacity. 

This has "greatly reduced" costs, with the source claiming the improvement largely came from fixing problems with the mine's ball mill. 

Newcrest did not confirm this news to PNGIndustryNews.net, but a spokesman indicated that its June quarterly report next week might shed more light.