The Bastardization of the Frieda Project by Pan Aust Ltd- US$50million Settlement Over Due -Since Nov-2015-Up Date on the Frieda Project – February 2016
On the 30th of August 2013 a deed of settlement was entered into between Pan Aust Ltd and Xstrata-Glencore Mining for the sale of EL 56 covering the Nena -Frieda Deposit. On the signing of the Deed , US$25m exchanged hands between the two with US$50m now Due and outstanding since November 2015.. The payment of the additional US$50m rides on the back of Pan Aust obtaining approval from the PNG Government to proceed with its Bastardized Version of the original Mine Development Concept first proposed by Xstrata Mining to the PNG Government in 2012. In 2012 Xstrata Mining Ltd proposed to develop the world class Frieda Mine with a Capital Expenditure Budget of US$5.4 Billion which consist of the plan to develop a fully integrated open cut copper mine with a potential life of 40 years with a 68 MW Hydro Power Plant costing US$800m . It also Proposed a Tailings Dam to mitigate against the contamination of the Fragile Sepik River Eco System and was considering the option of building a 300km Road link from the mine to the coast at Aitape jointly with the State for the export of Copper as opposed to the strongly contested option of barging copper down the Sepik River System.
Since taking over the Frieda Exploration License, Pan Aus Ltd has been selling a revised Bastardized version of this Mine Development Plan by sponsoring a campaign to take short cuts in the development of the Frieda Mine by reducing Capital Expenditure from US$5. 4 Billion to US$1.2 Billion with a plan concentrated on taking the Gold first out of the Mine to finance the rest of the mine Development cost. For Power Pan Aust Ltd Proposed a Diesel Generation set which will be barged up the Sepik River on a pontoon and anchored on the Frieda river to supply Power to the mine. Over the last year Pan Aust has also carried out a concerted campaign to get villages on the Banks of the Sepik River to accept their proposal to barge copper concentrate down the Sepik River System despite the total rejection of this plan by the entire Sepik Community. To date I have yet to read any environmental impact statement by Pan Aust on Frieda and in Particular its comments on Mine Tailings or its plans on the construction of a mines tailing Dam.
Building of Mines in PNG is more then just profits for shareholders. It is about opening up new opportunities and access to services by communities which but for the mine will remain unconnected to the rest of the country. It is about long term contribution in revenue streams to Provincial and Local Government Budgets . It is about building long term infrastructure that will survive long after the life of the mine. It is why the building of a road link from Frieda to Aitape must be the central piece of infrastructure that the Sepik Community and its leaders must insist from the mine developer. Frieda must add value to the two Sepik Provinces not take value and self respect out of us by buying out our leaders and compromising the integrity of the project.
My plea to Governor Amkat Mai and Governor Somare is to leave our Gold and copper in the Ground if the cost of taking it out would only cost hardship and misery to our People and the environment and by all indication Pan Aust ltd as the Potential Developer of the Frieda Mine is not the type of company and Developer with the resources to Develop a word class mine.
PNA Price at posting:
$1.84 Sentiment: None Disclosure: Not Held
