Nautilus confident PNG will pay up stake

Business, Normal

The National, Tuesday October 15th, 2013

 NAUTILUS Minerals is confident that the Papua New Guinea government will pay the US$118 million (K285 million) by next Wednesday, chief executive Mike Johnston told Radio Australia.

Earlier this month, arbitrator and  former chief justice of the high court of Australia Murray Gleeson ordered the state to pay for its 30% stake in the joint venture and to pay its share of costs to date. 

PNG had argued that Nautilus had not kept its obligations allowing it to terminate its role in the venture.

Johnston said the arbitrator’s decision was legally binding and he had spoken to treasury to meet the state’s obligation to pay by Oct 23.

The dispute, he claimed, had resulted in delays in terms of the Solwara 1 project and increased project cost.

Johnston said the timeframe to get the project off the ground relied on the building of a vessel and the critical path for delivery of the project still goes through the vessel.

He explained that the vessel construction could take anywhere from 24 to 36 months, depending on the yard and the type of vessel that is required. 

Nautilus said it was ready to ramp up its deep-sea copper and gold exploration project.

The company said the deep-sea copper and gold exploration project would assist the country develop the small-to-medium-sized enterprises (SMEs). 

“There is opportunity for Papua New Guinea to participate throughout the project, throughout the value chain … if Papua New Guinea takes up the areas of business associated with this project, it  can capture 60-70 % of the value chain for an investment of 30% of the actual capital,” Johnston said..

Despite the fall in metal prices, Johnston said the project would not be affected greatly as it is a largely a copper mine. 

“Copper price is still very, very good, which was US$3.20 (K7.73) last Friday,” Johnston said.