MCC eyes ‘world best’ practice
Even before production commences late next year, the Ramu nickel-cobalt project in Madang province has already established itself as the largest China-owned project in PNG.
Since the operating company Ramu NiCo Management (MCC) Ltd began site works some two years ago – it will spend about K1 billion this year – the operations have been subject of much adverse public criticism.
Partly this has been due to the learning curve the Chinese operators had to go through in working in another developing country; some strategic mistakes have obviously been made along the way and in part, there have been communication problems.
Despite the occasional barrage of negative publicity, planning and development appear to be proceeding close to schedule.
Because project economics appeared marginal in nature, Highlands Pacific had been unable over several years to find a suitable development partner.
The Chinese only got involved at the invitation of the PNG Government.
As a journalist with a long history of writing about resource projects, I particularly welcomed a recent opportunity to discuss the Ramu project with Madam Luo Shu, who is chairperson and president of the board of MCC-JJJ Mining Development Co Ltd, the owner-operator of the Ramu mine.
Although based in Beijing, the frequent visits to the Ramu operations has enabled Ms Luo to have a detailed knowledge of developments underway.
Not only is she aware of its technical aspects, she pays close attention to socio-economic development as well.
For many years, I had been aware that the Ramu nickel ore had similarities to the troublesome laterites mined and processed in Western Australia in recent years, which utilise some unique processes.
Ms Luo was able to explain that there were subtle but important differences with ore treated at Murrin Murrin and other similar mines in Western Australia because in the case of PNG, a wet laterite is involved.
Ms Luo, who has stayed in touch since she signed the development agreement with PNG authorities in 2005, also made it very clear the company has opted for world best practice in terms of managing the environment.
This is a subject of grave concern to people living along the Madang coast and especially to companies like RD Tuna that are heavily dependent on tuna fishing in nearby waters.
Like the Lihir mine, tailings from the Ramu nickel operations will be disposed in the deep sea Basamuk canyon and expert studies suggest there will be no near surface impacts.
The tailings outfall disposal facility will release material at a depth of 150m below sea level, where it will gradually flow to the deep ocean floor within the Vitiaz Basin.
Basic engineering work for this outfall is being carried out by one of the world’s leading firms in this arena, Canada’s Hay & Co.
More than US$1.2 million has been spent on environmental studies in the past two years. Nothing is being left to chance.
World class engineering consultants that have been hired for these tasks include Hatch Engineering in Canada and Australia and Australia’s Enesar Environmental Engineering.
Other firms involved in providing engineering services include Dynatec (Canada), Brass (US), Pipeline Systems Inc (US) and Monsanto Chemical Engineering (US).
Two companies in China are also involved in technical studies – Shanghai Morimatsu Pressure Vessel, Beijing General Research Institute of Mining & Metallurgy.
The impression from recent one-sided media reports has been that landowners in the Ramu nickel area have been neglected but this appears to be far from the case.
This is part of the reason why development costs have soared by a massive 50% to a current estimate of US$1.3 billion.
The developers are building a direct road from the Kurumbukari mine site, which bypasses local villagers.
To alleviate this situation, it is using landowners to build another road that will give villagers good access to Madang.
There is also good reason to believe that landowner companies are better organised in the Ramu nickel area than at other comparable projects at a similar stage in the country such as Ok Tedi, Porgera and Lihir.
According to Ms Luo, some 16 landowner companies have already been set up and they will gradually take over significant activities related to the mining operation.
Already one of these landowner companies is in a joint venture with the well established and well regarded National Catering Service, which has operations at other mines as well.
Landowner companies have already won catering, security services and small engineering contracts with more to follow.
The Chinese owners appear to also be paying far more attention to training of Papua New Guineans even though it is probably 18 months or more before nickel-cobalt production commences.
Fourteen outstanding students have been recruited from the University of Technology for special training in China, where they will gain some language expertise and work experience at major metal processing operations.
Five training programmes for about 200 people is being conducted at Basamuk, where the processing plant and wharf will be located.
More than K3 million has been spent on establishment of project area clinics, churches, community schools and other facilities.
Rather than a project to be derided and criticised, Ramu nickel could well turn out to be a good, new model for PNG’s mining sector.
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