Mining

the Pacific

AT the end of the financial year, Australian mining companies have been reporting on their activities.

But dominating news was the continuing saga of Bougainville Copper Ltd. The mine re-opened in early September, the company having come under consider able pressure from the Papua New Guinea government; but the worst hap pened when, within hours, dissidents struck at worker transport and two pow er pylons and the company suspended production once again.

Observers in the mining industry con sider that the company made the worst possible move in re-opening the Pangu na mine and then having to succumb to dissident actions so quickly. It is being seen as a major blow to the morale of workers, and the government in Port Moresby which had made such a point of claiming that the island of Bougainvil le was firmly under the control of the security forces.

One senior Australian government official said thoughts of Australian com pany investment in Papua New Guinea kept him awake at nights. There is con siderable concern within Australia about the future stability of the nation across the Torres Strait, jitters which became more pronounced with the riots in Lae.

But the companies which are involved in exploration or extraction of oil and minerals in Papua New Guinea are at least in public maintaining their confi dence of turning that nation into one of the major resource producers in the world.

Niugini Mining Ltd said its long and thorough testing programme at Lihir was now completed. The feasibility study concluded it was technically and econo mically possible to mine and extract gold at Lihir. This study will be submitted to the Papua New Guinea government on November 1 when negotiations for a special mining lease will begin. The com pany says the first stage of construction will take 14 months and gold production will start in the first half of 1992. On neighbouring Tabar Islands high to moderate grades have been indicated on Simberi Island, while high grade quartz has been established on Tatau Island.

Work is also continuing on New Hanov er Island. Niugini’s share in these pros pects varies between 8.4 per cent and 30 per cent.

Ok Tedi Mining Ltd reported a loss for the half year to June 30 of KB.l million, largely the result of an accident with the ore handling system which left it out of

action for more than three months. Sales revenue for the period was K 163 million. Ihe company said that by June 30 all parts of the plant were again working and Ok Tedi expected to process the target of 70,000 tonnes per day of copper ore. Despite the poor production year, Ok Tedi Mining had paid nearly KlO million in royalties and taxes. In late August it was reported that production at Ok Tedi was again interrupted, this time by a landslide which buried a bulldozer and its operator.

The mine, located in mountainous country which experiences extremely high rainfall, has suffered many industrial accidents and labour disputes since work began there 10 years ago.

CRA Ltd, in its June quarterly report to the Australian Stock Exchange, said no further geological test work was carned out at the Hidden Valley gold prospeel, and that “discussions continued on compensation issues with local landown er groups”. News reports out of Port Moresby have been more detailed: they said that Wau landowners were demanding all the spin-off contracts for the Hidden Valley gold mine in lieu of their earlier request for K 4 million compensation for damage done to the environmenl during the prospecting stages.

These spin-offs include construction, en-

gineering, building, trucking, catering,

assaying and other work.

The landowners also want Hidden Valley Gold Ltd to grant them KI million so they can form joint venture companics to compete for contracts. On top of that, the local people are asking for a K 3 million loan from the mine company with a maximum 5 per cent interest rate

and a two year repayment holiday; a let ter of credit or bank guarantee for up to KIO million to enable equipment pur chases; spin-off projects offered on a first-refusal basis; landowners being given preference for mining jobs; the company to take on 30 apprentices from landowner villagers each year; 15 high school scholarships; 15 tertiary scho larships and any taxes due to be borne by the mine company. They also want equity in the mine project paid for by the national government on the same terms extended to landowners involved in the Porgera project, CRA also reported that at Wafi, 65km north of Hidden Valley, exploration con tinned under a joint venture with Elders Resources NZFP Ltd.

At Mt Kara negotiations continued with landowner groups aimed at finalis ing an agreement to mine the colluvial goldfield. Silver, lead and zinc has also been found here by CRA.

Centamin Ltd, which was approached by landowners in the Gulf Province and has a 70 per cent interest in a joint ven ture with them, states that notwith standing the Bougainville situation it will continue to actively pursue its in terests in the Gulf, mainly due to the strong and continued expressions of sup port it has received from the landown ers. The company said it will be seeking clarification on a number of issues relat ing to issuing of mining tenements for gold in Gulf Province from the national minister and the Department of Mines, New Guinea Goldfields Ltd, a subsidi ary of Renison Goldfields Consolidated Ltd, is to close its gold mine at Wau in Morobe Province after losses which have

been described as amounting to “many millions”. The problem is a combination of low gold price, increased mining costs and lower treatment rate caused by the harder rock where the remaining small amount of ore is located. It is planned the mine will close in early 1990.

Placer Pacific Ltd said heavy rain has

disrupted mining operations at the Mis

ima mine and a lack of suitable rock for rod surfacing has also been a problem. It is planned to spend K 7.5 million by the end of this year on upgrading the ore delivery system. The production forecast for the second half of 1989 is 160,000 ounces of gold and 1.1 million ounces of silver. At Porgera, the company reports that recent work includes upgrading the

Enga Highway, transporting heavy

equipment from Lae and upgrading tele phone systems. The Porgera mine is scheduled to produce 800,000 ounces of gold a year over the first six years, with the first gold being poured late next year.

Equatorial Gold NL is still seeking a farm-in partner to take part in further exploration of its prospect at Bulago in Southern Highlands Province. Its Kokoro prospect in Gulf Province is cur rently inactive but the company plans a programme of ground magnetic sur

veying, soil sampling and trenching later

this year. No work was carried out at Cape Lambert in East Sepik Province, An Australian construction company, Curtain Brothers, has entered a joint ven ture with the Enga Corporation for the excavation of the Porgera mine site, as well as building an airstrip, a town at the minesite, limestone pit and roads.

New Zealand Oil & Gas Ltd reports that seismic work and evaluation con tinues at PPL6B, PPL69 and PPLII2 in which it has various interests. Austin OIL NL, which has a stake in PPL6O and PPL 109 (both in the Papuan Fold Belt), said the licence commitment that an ex

ploration well be spudded in by last July 1 was not achieved and negotiations con tinued. The company states that it was of priority that Austin Oil maintained its interests in this licence.

Command Petroleum NL (whose deal with Kundu Petroleum Ltd was reported last issue) undertook its first seismic work in Papua New Guinea during the June quarter with work on the PPL76 licence area.

Mobil Oil Corporation has returned to Papua New Guinea after a seven-year absence. The company has entered into an agreement with Pacaro Niugini NL whereby Mobil will earn a 50 per cent interest in PPL 93 by drilling two ex ploration wells, with an option to earn another 25 per cent by drilling two more wells. The prospect is adjacent to recent discoveries including that at Hides and in the same trend as the lagifu and Hedinia fields which are 80km to the southeast. Although Mobil has not held any exploration interest in Papua New Guinea since 1982, it first began explor ing there for hydrocarbons in 1938.

Meanwhile, more oil has been found in PPLIOO, in which Chevron, BP, Ampol, BHP Petroleum and Oil Search Ltd share. The companies now believe the field may contain as much oil as the

lagifu deposits 16km south-east.

Fiji

Gold exploration is under way in Fiji undertaken by Beta Ltd, a company owned by Associated Gold Fields NL (47 per cent) and the New Zealand firm Gold Resources Ltd (53 per cent). At

Kadavu Island geological mapping,

geochemical sampling and magnetic sur

veys were completed in the June quarter.

These indicated that the Solodamu Reef extended 550 metres further than pre

viously thought. A drilling programme is

being planned. Field work is continuing on the Tunaloa project. The company said the Waimanu area needed further evaluation; at Mariko on Vanua Levu two quartz veins displaying epithermal characteristics (presence of gold) were located; work continues at Cebu Creek and Tai Koroviko, while the company is seeking a renewal of its licence at Rakiraki.

Pacific Islands Gold NL has attracted six joint venture partners to explore its tenement areas in Fiji. In its June quarterly report, the company said it undertook no field work on its Dakuni ba, Nasasa-Vunisei, Koroisa on Nairai prospects. But the 1989 field program me was under way at Naduri-Dreketi, follow-up prospecting done at Lautoka and assessment is under way at Colo-i- Suva. Recent reports say that mining could begin on some of the areas next year. D

Saipan gets parcel service UNITED Parcel Service has opened an office in Saipan, offering a door-to-door service for letters and parcels. The com pany initially offered a service only to the United States, but was planning to expand this to link Saipan with all the 175 countries in which UPS operates.

The new set-up will have as its major competitor the courier firm DHL.

PNG fishing probe

ALLEGATIONS of transfer pricing are behind a recommendation that Papua New Guinea set up a commission of in quiry into the fishing and prawn indus tries. The parliamentary Public Accounts Committee claims international com

panies are using transfer pricing

which involves adjustment to prices be tween various arms of a company to avoid taxation or royalties to take large sums of money out of the country.

The committee has paid particular atten tion to the deal between the Gulf provin cial government and its Japanese selling

agent, Isapea Japan Corporation.

The Japanese company made a sale total of K 4.3 million in 1987 but de clared a profit of only K 120,000, accord ing to the secretary of the Public Accounts Committee. The Gulf govern ment has said it had received no di vidend from the fishing venture since 1980.

Solomons get feed mill A NEW feed mill has been opened in West Honiara to supply Solomon Islands farmers with animal feed meals, includ ing fish, soybean, grain, copra and pre mix meals. The Livestock Development Authority says the new mill will help the country raise better poultry and pigs.

The mill will initially produce four ton nes of meal a day.

Fiji lending strengthens

FIJI’S surplus liquidity which followed the two military coups now seems to be diminishing as the rate of bank lending increases. Observers are getting the new trend as a sign that Fiji’s economy is moving back to normal. Lending in July reached 73.3 per cent (of the loans/de posit ratio) compared with 59 per cent after the second army intervention. At the beginning of this year the commer cial banks held FsBo million in interest free deposits with the Reserve Bank of Fiji; the Reserve had to enter the money market to soak up some of the excess

liquidity. Trading bank lending is now

increasing rapidly.

Trade Winds

New quarantine move ISLAND people taking fruit to New Zea land will soon need to have it inspected in their home country as well as at Auck land Airport. The New Zealand govern ment is introducing new quarantine reg ulations to stop fruitfly infection being carried into the country from the South Pacific region. Island people will have

any fruit inspected by quarantine offi

cials a few days before departure for New Zealand; the fruit will then be sea led and inspected again at Auckland. An official of the Ministry of Agriculture and Fisheries said the measures were necessary because of the large amount of fruits sent to Pacific people in New Zea land.

Funds query MONEY supplied to the Solomon Is

lands by the European Community had

sometimes been misspent or not accounted for, according to the Solomon Islands Auditor-General. A report states that between 1983 and 1988 the Solo mon Islands received 515465 million to help stabilise prices of export commod ities. About $l3 million of that had been used to pay off Government debts in other areas and there had been lapses in accounting. Prime Minister Solomon Mamaloni said the report was now being studied and he had not yet decided what action to take.

Samoans eye garments WESTERN Samoan businessmen attended a workshop in August aimed at expanding the country’s garment indus try. Sponsored by the United Nations

Development Program, the workshop

looked at the industry in its entirety from inception to export. The govern ment’s Economic Department said it was hoped the workshop would help lift the quality of produce for export.

Fiji Travelodges change hands

THE Travelodge hotels in Suva and Nadi have been bought by the Australian company, Essington Ltd, owners of the Sheraton Fiji resort. Essington also has plans for a 200-room luxury hotel on Vomo Island, off Lautoka.

Solomons coconut mill WORK has begun on the Solomon Is lands’ first coconut mill. It is being built at Yandina on Banika Island where there is already a deep-water wharf used by copra ships. Banika is one of the Rus sell Island group in Central Province which is heavily covered with coconut plantations. The mill is being con structed by a joint venture company, the partners being Lever Solomons Ltd (part of the plantation owning Lever group) and the national government. The new plant will produce 6000 tonnes of oil for export and 3500 tonnes of meal for animal use from next January. Mean while, Lever will continue its replanting

and plantation expansion programme.

Call for Fiji oil change MOBIL Oil and Shell have called for a

deregulated oil market in Fiji following

the government’s announcement it will support a new local oil company with 75 per cent Fijian ownership, the company to use oil imported from Indonesia.

Shell and Mobil are claiming that con sumers would benefit from lower prices if a free market system was used, and that a price surveillance authority would be enough to ensure that prices did not become unreasonable.

PNG delays fish deal PAPUA New Guinea’s government has decided it needs more time to consider a fishing agreement with the Soviet Union.

It had seemed in late August that the deal was finalised, and a signing cere mony in Port Moresby had been arranged but then called off at the last moment. The agreement may now have to wait until a Papua New Guinea delegation visits Moscow in a few months’ time.

Marshalls garbage warning THE Marshall Islands have been urged by the environment group, Greenpeace, to reject the US$l4O million deal with Admiralty Pacific Inc to allow the United States company to dump 15.5 million tonnes of waste and garbage in the coun try. President Amata Kabua has already

given preliminary approval to the

scheme, both to earn money and to raise land levels on the low-lying islands.

Greenpeace argues the rubbish will poison ground water and harm inshore marine life. The environmental body says Western Samoa, Papua New Guinea, Solomon Islands, Tonga, Vanuatu and Kiribati have all rejected similar prop osals.

Rubber potential

PAPUA New Guinea’s rubber produc tion could increase if growers adopted new methods, said the Secretary-General of the Association of Natural Rubber Producing Countries (ANRPC), Dr Abdul Madjid, on a recent visit to Port Moresby. He said the industry’s main im

pediment to higher production was the

high labour costs, and that Papua New Guinea needed to adopt diversification and plant other crops along with young rubber trees. This way people could be kept busy while waiting for the rubber trees to be ready for tapping. Dr Madjid

suggested pineapples and cocoa as good

supplementary crops.

Bancorp hits new high BANCORP Hawaii Inc, the holding company for Bank of Hawaii and its other subsidiaries, has become Hawaii’s first banking company to reach US$7.l billion in assets. Net profit for the first six months to June 30 reached a record U 5537.7 million, up 27.2 per cent on the same period last year. The interim re port attributed the good first half to strong performances by the Hawaiian Trust Company Ltd and finance opera tions in Hawaii and Guam. Its mainland subsidiary, First National Bank of Arizo na, was profitable for the first time.

The Bank of Hawaii operates in Guam, American Samoa, Saipan, Palau and the Federated States of Micronesia.

It is affiliated with the Bank of Tonga, Banque de Nouvelle Caledonie, Banque de Tahiti and Pacific Commercial Bank in Western Samoa.

New Vanuatu hotel group ARGUS International Hotels has taken over the Inter-Continental Hotel in Port Vila, renaming it the Radisson Royal Palms Resort. Argus is the Australian licensee for Radisson Hotels Internation al. The company said the move into Vanuatu was in line with its long-term plans to operate more than 20 hotels in the Pacific rim area by the early 19905.

The hotel is five minutes’ drive from Port Vila and is located on a lagoon front property.

Solomons turn to tourism AUSTRALIAN and Japanese tourists are to be targetted in an effort by the Solomon Islands to boost their tourism income. A new 10-year visitor plan is being formulated in Honiara. The main aim will be to slash the country’s US$l4O million foreign debt at a time when its

major commodity exports fish, palm

oil, copra and timber are in decline in terms of world prices.

The country attracted 18,000 visitors last year, mainly from Australia. The permanent secretary of the Ministry of Tourism and Aviation, Daniel Ho’ota, said the Solomon Islands was looking to earn US$BO million a year from tourism.

And a Solomon Airlines spokesman said the company planned to replace its ageing domestic fleet as well as develop agreements with Qantas, Air Pacific, Air Niugini and Air Vanuatu.

Turtle protection plan

WESTERN Samoa is alarmed at the de cline in turtle numbers and has launched a campaign to prevent their becoming an endangered species. The nation’s Fisher ies Division says the turtles are under heavy exploitation, and are also being

killed after eating plastic bags which

have been thrown into the sea. There are only two major nesting grounds left in Western Samoa.

Asian investment fears TONGA’S Chamber of Commerce is worried that Asian investors will come to dominate businesses in which local peo

ple are now involved, including retailing,

handicraft, small-scale textile manufac turing and agriculture. The chamber has called on the government to exercise more care in approving Asian invest ment proposals, and that foreigners would be best suited to projects Tongans were not involved in, such as building large tourist hotels.

Tuna catch fall-off FIJI’S Ministry of Primary Industries has reported a drop in this year’s catch of albacore tuna, the country’s third largest export commodity. A ministry spokes man said the cause could be bad weather earlier this year or gill net fishing by Japanese and Taiwanese boats.

The Fiji concerns are being mirrored in the Philippines. The 10 major canner ies in that country are operating at about 75 per cent capacity and one regional magazine recently headlined a fisheries story: “Where have all the tuna gone?”