Ramu approval biggest achievement: Laimo
Copyright 2000 The National (PNG)
December 12, 2000
By BREMEBIL KUBLE
THE approval of the Ramu Nickel Project has been the greatest achievement of the Government in the last 12 months, Mining Minister Michael Laimo has said.
A paper presented by Mr Laimo at the PNG Mining and Investment Conference in Sydney, Australia, last week described the Ramu project as a large-scale development involving both a mining operation and a downstream processing facility.
Mr Laimo said negotiations leading up to the agreement took longer than anticipated and required the Government to examine some of the fundamental issues affecting the industry as a whole.
He said the main outstanding point of negotiation was a request by developer Highlands Pacific for the inclusion of a fiscal stability clause in the Mining Development Contract.
The Government, after receiving the status of developments in mining on other parts of the world, recognised that such provisions were becoming commonplace in those developing countries which have been successful in promoting mineral investment, he said.
He said as a result, the Government decided to put in place a policy which guarantees stability of fiscal terms for a set period of time for all new major mining and petroleum development projects.
Mr Laimo said project developers can now approach financiers and potential partners with confidence, in the knowledge that the taxation rates applying to the project will not change for at least 10 years.
"The Ramu Nickel Project starts a new era of mining development in PNG. It is the first mine to be approved which is not a copper or gold mine," the Minister said.
He said this was important to PNG, because it will be first opportunity to diversify mining industry and economy away from its heavy exposure to fluctuating gold and copper prices.
The defined resource at Ramu is estimated to be over 1.1 million tonnes of nickel and about 0.1 million tonnes of cobalt.
The prefeasibility study was completed in July 1996 and the Mining Development Contract was signed in October this year.
The project envisages average annual production of 33,000 tonnes of nickel and 2.800 tonnes of cobalt as a cobalt salt over a mine life of 20 years with production expected to begin next year.
The major stakeholders are Highlands Pacific and Orogen.