“PNG has some of the world’s biggest gold, silver and nickel reserves”

Philip Samar

Global: Papua New Guinea’s land and sea areas would appear to have been quite intensively explored for minerals already. Do you have hopes of any major new discoveries in the years ahead?

Philip Samar: Absolutely. In fact, we are discovering that PNG has potential for nickel and cobalt, coal, iron sands, rare earth minerals, titanium, chromite and molybdenum.

Ramu Mine is for the first time in our history diversifying our mineral base by adding 33,000 tonnes of nickel and 3,000 tonnes of cobalt as of January 1, 2013.

We have an exciting portfolio of advanced projects that are scheduled for development within the next five years. The offshore environment, hosting the deep sea exploration projects, has over the last 10 years witnessed an aggressive exploration campaign supported by innovative marine geophysical and geochemical programmes.

PNG’s first offshore mining licence was granted in January 2011 with project commissioning scheduled for 2014. The offshore potential is huge and with our experience of permitting what we believe is the world’s first commercially viable deep sea mining operation (Solwara-1), we are confident that the next big discovery is just around the corner whether it is on land or on the sea-bed.

What regulatory provision is made to limit or restrict any potential damage to the natural environment during mineral exploration and production?

The current Mining Act 1992 requires that proponents of an exploration or mining development licence are to first satisfy the requirements of the Environment Act 2000 prior to any favourable consideration of their lease application and also allows the Mining Advisory Council to ensure adequate protection of the environment.

The Environment Act 2000 requires an environment impact assessment to be completed for all exploration and mining activities and the framework provided for by the Act is used to assess and qualify an exploration licence and mining lease.

The EIA identifies potential impact on the beneficial uses of the environment. The Director of Environment may set conditions to protect these beneficial uses. The conditions may come from set standards as published in regulations or from baseline data collected during the EIA.

The proponent is obliged by the conditions of the environment permit to implement an approved environmental management and monitoring programme (EMMP). The EMMP is a dynamic document and can be modified in light of new information.

How are the interests of the local communities catered for in the course of exploration and production? And is there any statutory provision for the involvement of local investors and other business interests?

The local communities play major roles during the exploration and production stages of a project. They are provided the opportunity up front during exploration, to either accept or reject an exploration programme. The government through the Mineral Resources Authority holds these public forums through the Mining Wardens where such acceptance or otherwise is recorded and is reported back to the Minister for Mining for a decision to either grant or not to grant.

Under existing policy and legislation, the State may acquire an equity interest of up to 30% in any mining development project. Out of this equity, 5 percent is carried free of charge by the State for the local communities including their provincial and local level governments. The distribution of their equity participation is contained in the project Memorandum of Agreement.

Prior to entry onto any land granted under an Exploration License (EL), the exploration company and the local communities are required to agree to a compensation agreement that sets out clearly the rates for payment of the size of land as well as economic tree and cultural sites.

Is the increasing mining activity in Papua New Guinea producing tangible benefits in terms of infrastructure, health and education for the population?

Many of our mining operations are located in some of the most remote and geographically challenging areas in PNG. The communities around these operations are usually the most neglected due to the fact that government is not able to reach these populations.

We currently have eight operating mines. These mines have singlehandedly built the necessary basic infrastructure such as roads, bridges, power, wharves and whole townships. The same goes for health and education where the mining companies have had to put in place the health and education infrastructure with partnership from the government in terms of staffing these facilities. The mining companies without doubt have gone beyond their operations to ensure that these social infrastructures are in place for the benefit of their host communities.

The real challenge will be for both the government and the host communities to sustain these valuable infrastructure and social benefits beyond mine closure.

About the author:

Philip Samar is Acting Managing Director of the Mineral Resources Authority, Papua New Guinea


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