Another setback for Ramu start

PARTNERS in the Ramu Nickel project in Papua New Guinea will have to wait to continue construction work on the project’s deepsea tailings facility, after the PNG Supreme Court refused to lift an interim injunction on the facility this week.
Another setback for Ramu start Another setback for Ramu start Another setback for Ramu start Another setback for Ramu start Another setback for Ramu start

The decision may delay the start of production at the project, according to project partner Highlands Pacific, which owns 8.56% of Ramu and the option to move up to 20.55%. The project is being developed by Ramu NiCo, a 61%-owned subsidiary of China Metallurgical Construction Corporation (MCC) as project manager, with other Chinese partners including Jinchuan group, Jilin Jien Nickel Industry Co and Jiguan Iron and Steel (Group) Co.

Ramu is expected to produce 31,150 tonnes of nickel and 3300t of cobalt per annum in a high-grade concentrate over a 20-year mine life, but resources have potential to increase this by a further 20-30 years.

Progressive commissioning started late in the December quarter last year and production had been expected to start in June, with a staged ramp-up through the December quarter.

But that plan changed in March when a group of individuals who claim to have an interest in customary land in and around Basamuk Bay, the site of the proposed tailings facility, won an interim injunction preventing further work on the deapsea tailings facility from the National Court of Madang.

Ramu NiCo challenged that injunction, on the basis the claim was not supported by the legally recognised landowners at the minesite, on the inland and coastal pipeline route, or at the process plant site.

But Highland Pacific told the Australian Securities Exchange on Friday that Ramu NiCo had failed to win the support of the PNG Supreme Court to overturn the lower court injunction, and an environmental regulation passed by the PNG Government in June, affirming the validity of the Ramu project's environmental permit, appears not to have been gazetted yet.

Highlands Pacific said the project partners will now have to wait for a substantive hearing on the matter to come before the Supreme Court in mid-August to get a ruling on whether work can again begin on the tailings facility.

That hearing, due to begin on August 18, will hear submissions from the project partners and the Mineral Resources Authority of PNG, the Department of Environmental Conservation, and the Independent State of PNG.

While it isn't clear how long that hearing will take, Ramu NiCo can't afford for the legal action to drag out, as the lack of the deapsea tailings facility may have a significant impact on the project if it isn't finished by the end of the year.

In April Highlands managing director John Gooding told the legal action would become critical to the project timetable if it is not resolved by the end of the year, as deepsea tailings was the only viable solution for Ramu, given the high rainfall and steep terrain in that part of the world.

He said at the time being forced to move to another tailing option would "probably break the project", which has already cost the partners more than $A1.5 billion to date.

Work on the rest of the project is continuing according to plan.

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