Frieda River faces challenges
PanAust is keen to get going on its giant copper and gold project.
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”.