Court clearance for next PNG mine

THE Chinese built and funded $US1.5 billion Ramu nickel cobalt mine in Papua New Guinea has legal clearance after PNG’s Supreme Court rejected an environmentally based appeal against a previous court decision.
Court clearance for next PNG mine Court clearance for next PNG mine Court clearance for next PNG mine Court clearance for next PNG mine Court clearance for next PNG mine

The mine was ready for commissioning in late 2009, until lawyers representing residents of the Rai coast got involved over concerns about its deep sea tailings placement system.

While the PNG government is firmly behind the mine and has even factored future revenues from it in the recently handed down 2012 budget, significant legal clearance came from a favourable National Court decision on July 26.

The appeal against this decision, which not only removed the existing injunction over the project's crucial DSTP but also refused to grant a permanent injunction over it, was rejected by the Supreme Court.

"The decision today [Thursday] brings to a close nearly two years of legal delay, claims and manoeuvres by parties to prevent construction, commissioning and operation of the project and in particular the DSTP system which had been approved by the PNG Government when the project was granted its special mining lease," mine partner Highlands Pacific said.

The mine is consequently on track to hit full production by mid-2013, which will be 31,150 tonnes of nickel and 3300t cobalt per annum as a high grade concentrate over a 20-year mine life. The resources could also potentially support mining for a further 15-20 years.

"This is very positive news for the project, the landowners and the country and this should help restore investor confidence in PNG and the Ramu nickel project," Highlands managing director John Gooding said.

"It is very unfortunate that a fully permitted project which used the best international advice and which conducted significant community and landholder consultation was delayed at great cost for so long by the actions of a few.

"It is now time to get on with the commissioning and operation of the project and for the benefits to start flowing through to all stakeholders. We will continue to work closely with the PNG government and the regulators to ensure that the project meets the licensing and permitting requirements."

On Tuesday, Highlands said it expected the Supreme Court decision would be delivered in early 2012. However, it has been harder to forecast the court's schedulet given the extra burdens it has faced over recent constitutional and political matters in the country.

Located 75km west of the provincial capital of Madang, the Ramu wet nickel laterite operation is 85%-owned and operated by China Metallurgical Construction Company.

Other joint venture partners are Highlands (8.56%), state-owned Mineral Resources Ramu (3.94%) and landowner company Mineral Resources Madang (2.5%).

Through its JV with the Chinese operator, ASX -listed Highlands has an option to increase its stake to 11.3% once the project development debt is paid off.

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