Frieda River faces chal­lenges

PanAust is keen to get go­ing on its giant cop­per and gold project.

Paradise - - Strictly Business -

PanAust is keen to start devel­op­ment of the Frieda River cop­per-gold project, but manag­ing direc­tor Fred Hess told the Pa­pua New Guinea Min­ing and Pe­tro­leum In­vest­ment Con­fer­ence in Sydney late last year that there are many ob­sta­cles to over­come be­fore a fi­nal de­ci­sion to go ahead with the mine.

Hess says the na­ture of the re­source at Frieda River in West Sepik Prov­ince is well un­der­stood, not­ing that the project has been known about for al­most 50 years.

“We are now in the phase where we are wait­ing for per­mit ap­proval to take place,” he says. “Re­al­is­ti­cally, with the elec­tions due, and with the size and com­plex­ity of the project, we are ex­pect­ing that may take a while to get through to com­ple­tion.

“Once that process is fin­ished, we then sit down and look at what the en­vi­ron­ment is like for mak­ing an in­vest­ment de­ci­sion and essen­tially there are a num­ber of con­di­tions that will have to be met for us to pro­ceed to that in­vest­ment de­ci­sion.”

Hess de­scribes the project as a sub­stan­tial open-cut min­ing op­er­a­tion dom­i­nated by a very large stor­age fa­cil­ity.

“That fa­cil­ity is de­signed to take the tail­ings from the pro­cess­ing plant and the waste from the mine, and all of that sits be­hind a very large em­bank­ment,” he says.

Hess says the em­bank­ment will take up about 40 per cent of the to­tal cap­i­tal cost of the project.

“It doesn’t pro­duce any cop­per but it is a nec­es­sary re­quire­ment in or­der to pro­duce cop­per. It is dis­tinc­tive in the sense that PNG has tra­di­tion­ally taken cheaper forms of tail­ings and waste-dis­posal routes.

“But, be­cause of the is­sues that we have with Frieda River be­ing up­stream from the Sepik River, this is the so­lu­tion we have come up with, which we think ad­dresses all the en­vi­ron­men­tal is­sues that are so im­por­tant to a project like this suc­ceed­ing.

“The other spe­cial part of this project is that, be­cause of the size of the em­bank­ment, be­cause of the size of the catch­ment it sits in and the amount of wa­ter that falls as rain and gets col­lected in the catch­ment, and be­cause of the height of the em­bank­ment, the op­por­tu­nity to pro­duce hy­dro-elec­tric power also presents it­self.”

Hess says the project is of na­tional sig­nif­i­cance, de­scrib­ing it as a “world-scale de­posit” that is in the top 10 un­de­vel­oped cop­per de­posits in the world.

He says it will cre­ate many jobs for lo­cals, but he warns that there are chal­lenges.

“There are no free lunches. We must be mind­ful of the risks of de­vel­op­ing largescale projects. Frieda River has sub­stan­tial lo­gis­ti­cal chal­lenges. It is in­land; there are no roads.

“For ac­cess to the site for the main lo­gis­tics re­quired, you go up the Sepik River for 600 kilo­me­tres and then you need a road for an­other 100 kilo­me­tres, up to the mine site.”

Hess says that down­stream of the project are about 30,000 peo­ple who are very mind­ful and watch­ful of what is hap­pen­ing up­stream. He says it is “cru­cial not to jeop­ar­dise the liveli­hoods and en­vi­ron­ment for all those peo­ple down­stream”.

Hess says there are no port fa­cil­i­ties ca­pa­ble of sup­port­ing the mine and no elec­tric­ity grid. “There are no roads. We are sig­nif­i­cantly in­fras­truc­ture-chal­lenged in this lo­ca­tion. That chal­lenge rep­re­sents an ad­di­tional cap­i­tal bur­den to the project.

“Over the last four or five years there has been a sig­nif­i­cant de­cline in the price of cop­per and that rep­re­sents a sig­nif­i­cant chal­lenge to mak­ing an in­vest­ment de­ci­sion. Not­with­stand­ing the re­cent jump, it still rep­re­sents a long-term chal­lenge. “■

Fred Hess … says Frieda River is in the “top 10 un­de­vel­oped cop­per de­posits in the world”.

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