The Frieda River Mine is expected to come into full operation in 2012 and it shall have a lifespan of 23 years. The mine is located near the headwaters of the Sepik River in the border between East and West Sepik provinces. The Mine will be operated by Highlands Pacific Limited, a company incorporated in Papua New Guinea. According to geological reports provided by Highlands Pacific Limited, the ore potential found in the Frieda River area outsizes the neighbouring Ok Tedi Mine with a heavy presence of gold and copper accompanied by a rich concentration of other metals as well. This mineral wealth carries an attractive financial projection that runs into billions of kina. The newspaper articles below carry the reports and some of the issues relating to the Frieda River Mine.
This is the original article which appeared in the business section of The National on 25 April 2008
I wrote a response to this report which appeared in The National on 5 May 2008
Greg Anderson, from the PNG Chamber of Mines and Petroleum, responded to my concerns with a letter that appeared in The National on 30 May 2008
A prominent Papua New Guinea lawyer, John Gawi, who is himself from the Sepik River has written a letter of response to the above letter by Greg Anderson. Mr Gawi demands that environmental plans for the Frieda River Mine must be put in place before the government and the developers rush into the production phase. Mr. Gawi’s letter could be found in The National of 27th June 2008. Concerns about this particular mine is continuing.
At least now the Min people wont feel abandoned. The impending closure of the Ok Tedi mine was causing distress among some in the highland communities because access to infrastructure and supplies would have been dramatically reduced. With Frieda, it will mean that people who work at ok tedi can just work at frieda, rather than being completely disempowered by mine closure.
Although i do think that Highlands should learn something from Ok Tedi – compensate everyone who is impacted, not just the local land claimants.I dont know if they can avoid completely riverine tailings disposal but they can certainly reduce its impacts.
For the record. I am a shareholder in HIG. So I will admit I am biased.
Righto! I have severe misgivings about this project. First look at HIG’s record at Kainantu. First the gold production was hedged at $400.00 an ounce. Also they had hedged for much more gold than they had ever produced at Kainantu. (Annual production) Therefore they were having to buy gold on the spot market, to sell to the financiers at $400.00 an ounce, who were immediately able to on sell it at $800.00 an ounce. So they were making $400.00 an ounce or more without getting out of their chairs. Nice work if you can get it hey!!
Such deals display monumental incompetence, if not total dishonesty. So I leave it up to you to decide ,whether HIG’s management are either fools or knaves. Therefore, any deals where someone was to get a share of the profits, turned to the proverbial. Beware of such deals.
ON THIS PAST RECORD, i WOULD NOT TRUST HIG TO DEVELOP A COLD.
The next thing I have misgivings about is the site. The Frieda River area is very swampy marshy ground. I would think that any tailings dam would be at a severe risk of contaminating groundwater. If they are using the “Cyaniding Process” such tailings are lethal. More so to fish and other marine life than even humans. Cyanide combines with the haemoglobin in your blood more readily than oxygen. Thus your blood will no longer carry oxygen to your brain – pretty instant death to most life forms on earth. Except maybe the mangement of HIG.
Regards……Ralph.
LAND / DEEP-SEA MINING NOT THE WAY FORWARD FOR PNG:
Just a quick question for all your readers out there – what is Sir Michael Somare’s position with regards to the proposed Frieda River Mine?
It is my personal view that as the Paramount Chief of the Sepiks and founding father of the nation, PM Somare has a moral responsibility to the nation and peoples of the mighty Sepik River to preserve its existence. Of all people the PM should know better that the Sepik River is not just any other river – it is a force of life! The river is vital for the very existence of the Sepik people – it directly / indirectly links with their Sepik way of life, culture and tradition.
I beg all you Sepiks out there and the entire nation to prevent any level of mining activity in Frieda.
In the long term the cost to the environment will be immense and irreversible (let us not forget the damage caused by OTML / BHP to the Fly River system). I can not in my wildest imagination comprehend what might happen to the life of ordinary Sepiks who live next to the river or its tributaries, and lets assume if the locals were to be confronted with the gruesome reality of the mighty Sepik River and its associated waterways were to become a conduit for toxic contaminants and sediments flowing downstream from the Frieda River Mine. What sort of conversation would we be having if this was the scenario 20 years from now? Fellow citizens I am very worried & frightened about this prospect. Mining companies operating in PNG have been reckless within just “one generation” – the question we should be asking ourselves is do we want the future generations of PNG to live in a country where the natural environment / ecosystem is irreversibly damaged, stifled and toxically contaminated?
With regards to proposed Deep-sea Mining in our NGI Seas – it is my understanding that there is no country in world (including PNG) that has the necessary scientific and legal framework to properly address, administer and regulate commercial undersea exploration and mining. So why has the PNG Government sold out? I wonder if elected MPs in Parliament have any sense of responsibility to society, the natural marine ecosystem, and importantly the future generation. Who in the Government’s cabinet had the guts to say yes to the developer to allow the Seas of PNG become the first “guinea pig” for commercial deep-sea exploration and mining?
For the mining company and its investors, undersea mining offers high concentrations of ore at relatively low production costs. The demand for metals is growing rapidly and although the world economy is not upbeat at present, metal prices will steadily increase as a result of growing demand in India and China, and also because of depletion of metal-rich terrestrial mines. Let us not forget that as a publicly listed company in one of the top stock exchanges of the world, this mining company is responsible to its shareholders first and foremost, i.e. to increase the overall value of its capitalisation and share price.
This isn’t about the simple Papua New Guinean landowners whose very survival depends on the Seas (or River and Land). This is essentially about western Capitalism, an economic system (considered to be a flawed system by some leading economics commentators in recent times following the current world financial crisis) which in one of its forms functions as a means of gaining the rewards of your investment at the expense of those poorer 3rd world nations and its peoples, who normally lack the “know-how” to effectively participate as beneficiaries at the top end of the international economic “food chain” (for want of a better phrase).
Please allow me to paint this picture for your readers – typical investor sits in his cosy luxury pad somewhere in Toronto, New York, London or Tokyo and observe the returns to his investment flowing into his nominated bank account via his laptop whilst the poor PNG native’s livelihood is changed forever by the irreversible damage done to his Sea. Mining company disappears after mine closure. No one is held accountable for damage to the environment because the government of the day in principle had a legally binding “contract” with the Canadian mining company. The future generation of natives will then be left to “pick up the pieces” (as they say).
It is envisaged that Deep-sea Mining (discharge of cuttings and sediments) could smother and contaminate the fragile flora and fauna habitat that existed on the sea floor for millions of years. Furthermore, mining the seabed could disrupt the natural replacement of sand and as a consequence worsen erosion along the picturesque coastline of NGI (and MOMASE). Such damage to the coastline will be permanent and damage to marine ecosystem could possibly affect the Seas in which natives depend on for food. The very survival of the natives is likely to be at risk as fish and other marine food sources disappear or migrate.
Does PNG need any more mines? The answer is a loud “NO”.
AGRICULTURE INDUSTRY:
As an advocate of agriculture – I would encourage the PNG Government to have a “rethink” of the Agriculture Industry. The Government should look at revamping this “once upon a time primary source of national income for the country” (apart from Australian Aid, by the way) – there is a requirement for a more robust and progressive Agriculture Sector in PNG.
A strong and efficient agricultural sector would enable PNG to feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries. The agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of the multifunctional nature of agriculture. I am slightly puzzled as to why the PNG Government and its so called well learned policy advisors are not looking into this as an alternative, if not the main source of income for the nation.
As the world population continues to grow geometrically, great pressure is being placed on arable land, water, and adequate supply of FOOD while maintaining the integrity of our ecosystem. At present there is insufficient food and inadequate distribution of food worldwide. A recent study by the UN has stated that in China alone about 80 million people are malnourished and hungry – right there – is the opportunity for Papua New Guinea.
Politicians & their advisors within the corridors of power in Waigani need to start “thinking big”. Who says it is impossible for PNG to feed 80 million Chinese? What we do need in Waigani is people who are upwardly mobile, intelligent and articulate – people who can say NO to the status quo! And people who are willing to look at other more environmentally safer means of creating wealth for our nation.
PNG does not need mines to be a prosperous nation (mines do more damage than good). There are so many examples of developed/semi developed nations whose economy was and is still driven by a strong agriculture industry.
Rob
England