ann should restore sp., page-7

PNGNews.net today:

Compromise for Kodu on the cards

Wednesday, 12 March 2008

A PNG Mining Ministry source close to PNGIndustryNews.net has said the PNG Government is leaning towards a compromise solution to mining near the historic Kokoda Track.

The source said a decision should be made during the April Ministerial Forum between PNG and Australia, mirroring Australian Prime Minister Kevin Rudd's comments during his visit to PNG last week.

Rudd had said officials from both countries would hold further discussions on mining near the track, between now and the ministerial forum in April.

Shares in Frontier slumped 38% on the Australian stock exchange yesterday after Koiari local level government representative Willie Vavi told ABC Radio that PNG Prime Minister Sir Michael Somare had reportedly said there would be no mining along the track.

The reports also led the Koiari people – the traditional landowners of Frontier's Kodu deposit – to reopen Kokoda to tourists, ABC Online reported.

The landowners had closed the track last month in a bid to pressure the PNG Government into renewing Frontier's Exploration Licence 1348, which contains the Kodu deposit.

"We seen the media reports and we have received no confirmation of them from the PNG Government so we do not necessarily believe that … will be their final decision," Frontier managing director Peter McNeil told PNGIndustryNews.net.

"It was my understanding that a compromise position was available and what is said there is not a compromise to anybody.

“We are intending to move forward to try and pressure the Government to renew the EL."

He added there were some other things Frontier planned to approach the PNG Government with, such as removing the Kokoda Track section from the exploration licence, which he said would not be easy to do.

"We are moving forward with that and I will be writing to the minister to express my concern over these media reports and to present to him other possibilities in the way we can move forward."

The company added in a statement that reports that the PNG Minister for Mining had expressed concerns for the Port Moresby water supply in regard to any possible mining development were incorrect, as the Kodu deposit is in a separate water catchment area from the one servicing the PNG capital.

Frontier's plan to develop the Kodu deposit has been controversial as the proposed mine would affect a 600m section of the track. However, the company had claimed that this section is not part of its original route.

This led to an outcry from Australia, which is now seeking to put the track on the World Heritage list.

The decision is weighed against the potential benefits the Kodu landowners stand to gain from the 5% stake Frontier offered to them in any potential development at Kodu.

The landowners had in turn offered 1% to all other Kokoda Track landowners.

Frontier also allocated a further 2% to be administered by the Kokoda Track Authority to preserve, operate and improve the track, and for the creation of an education fund.

Shares in Frontier were down 0.2c this morning to 9.5c.