Island miners wait

trade winds

Island miners wait for their chance

If things go very badly in one segment of the Republic of South Africa (RSA) it will be good news for parts of the mining industry in Papua New Guinea and New Caledonia.

Although gold is clearly the major “play” in islands mining, there may be some action in chromium as well...if the inter nal situation in South Africa collapses.

The United States uses about 400,000-500,000 tons of chro mium a year; it has no mines of its own, and currently about two-thirds of its imports either come from, or through, RSA.

Not only is the US dependent on South Africa for chrome used as an alloy in making stainless steel it worries about the other major sources of supply, those non-US allies, Russia and Albania, who are the largest suppliers after South Africa.

Several scenarios are being discussed about the supply of chromium, and its price. While it is regarded as unlikely that the South Africans would in reply to American economic sanctions cut off exports of chromium to the US, other possibilities are on the horizon.

One would be that the (large ly black) mine work force would strike, but black miner’s strikes have been unsuccessful in the past; the other, grimmer notion is that if there is widespread violent unrest in South Africa, particularly if it reached the level of guerrilla warfare, the underground chrome mines would be vulnerable to attack.

All of this is in the backs of the minds of the people running the active chromium mine in New Caledonia, and those working on a possible major open pit chromium mine in the Ramu River area of Papua New Guinea.

The New Caledonia chro mium activity at the Tiebaghi Mine is owned by Cromical, SA, which in turn relates to Canada’s Inco Metals.

In 1984, the last year for which official figures are avail able, the ore production mea sured 84,152 metric tons, according to the US Bureau of Mines. With chrome ore worth $42-45 (US) a ton on average, the island’s output was worth nearly $4,000,000 (US).

Chrome ore is usually concen trated to chromite before it is shipped; it is later further re fined to ferro chromium before being used in industry.

Should supplies be tight, prices would rise and New Caledonia would have broader opportunities to sell its ore.

Meanwhile, a major source of chrome has been identified by Nord Resources, the California firm active in the Ramu River area of PNG. According to Edgar Cruft, Nord’s chairman

and chief executive officer, the firm is now exploring the possibility of a chrome-only mining operation there.

“Previously we had been thinking of doing a nickel-and chrome ore mine in Ramu River, but given the continuing low price of nickel, and the huge capital start-up costs for that metal, we are now doing feasibility studies on a chrome only operation” he told me.

Nord has a mining exploration concession in the area from the PNG Government.

Starting up a chrome opera tion at Ramu River would in volve an investment of some thing like $30,000,000 (US), Cruft said, a lot of money, but considerably under the half bil lion US dollars needed to start up a nickel mine. Most of the $30,000,000 would be spent on infrastructure, including the cost of roads, or other transport systems, to get the chrome ore from its source, some 80 miles inland, to the coast. “And we

might have to invest in some port facilities as well,” Cruft added.

The price of chrome ore would have to rise about 30 per cent to make Ramu viable Cruft said, “but we are plugging ahead with our feasibility stu dies, and the reserves are there, maybe as much as ten million tons of chromite.”

Nord, whose stock has tripled in value on the New York Stock Exchange in the last twelve months (from a low of $8 a share to about $24) will be focusing much of its attention on gold in the years to come; it is particularly interested in its holdings in the Tabar Islands, off New Ireland where it is working with Neigini Mining and Kennecott Copper.

“Gold in the islands... that’s the most exciting play in the world today. It’s the largest new find of gold in a long time,” he said enthusiastically. David S. North in Washington.