PanAust advancing Frieda project

The National Business
PanAust Limited’s subsidiary Frieda River Limited (FRL) is advancing its Frieda River project. The project is said to be one of the largest undeveloped copper and gold deposits in the world and offers PanAust excellent potential to establish a world-class, long-life copper-gold mining operation. FRL director Phil McCormack gave an update of the project to business editor SHIRLEY MAULUDU.

Q: Tell us briefly about the company, PanAust Ltd

An aerial view of the Frieda River project site in West Sepik. — Pictures courtesy of PANAUST

McCormack: PanAust Ltd is an Australian company which has copper and gold operations, with two mines operating in Laos and additional pre-development and exploration opportunities in Laos, Papua New Guinea, Myanmar, and Chile. FRL is a PNG-incorporated company and is the project proponent. PanAust took over FRL from Xstrata in August 2014. It aims to maintain at least a 90 per cent PNG national workforce.
The company’s head office is in Brisbane, Australia. It is a wholly-owned subsidiary of the Guangdong Rising Holding Group Co Ltd, a Chinese company, owned by the People’s government of Guangdong.

Q: Explain the Frieda River Project?

McCormack: The Frieda River project represents a nation-building opportunity for Papua New Guinea and a transformative sustainable development opportunity for the Sepik region. It is a copper-gold project, a major undeveloped greenfield project in West Sepik. The project is located approximately 200 km from Papua New Guinea’s northern coast. Its infrastructure and transport corridors are in the East and West Sepik. The project would help build stronger and more viable communities by establishing necessary public infrastructure, generating skilled employment, and creating business opportunities for local people.
The Frieda River project comprises the:

  • FRIEDA River Copper-Gold Project: The project proposal is based on the extraction of Horse-Ivaal-Trukai- Ekwai-Koki (Hitek) porphyry copper-gold deposit which contains an estimated 12 million tonnes (Mt) of copper and 19 million ounces (Moz) of gold. The Hitek deposit represents one of the world’s largest undeveloped copper resources;
  • FRIEDA River Hydroelectric Project: It will have an installed capacity of 600 megawatts, configured to generate up to 490 megawatts;
  • SEPIK Infrastructure Project: This project will see FRL build shared-use transport and communications infrastructure that will enable social and economic development in one of the least developed parts of Papua New Guinea; and,
  • SEPIK Power Grid Project: The power grid project consists of a 370-km long 275 kV transmission line (Northern transmission line) from the Frieda River hydroelectric project to the Indonesian border via Vanimo. The northern transmission line would be located within the infrastructure corridor and would provide power for the Frieda River copper-gold project (the mine), including the offsite facilities at Green River and Vanimo. The transmission line would follow the existing Vanimo-Jayapura Highway from Vanimo to the Indonesian border.

Q: What is the current status of the project?

McCormack: The project is in the permitting phase. It has applied for a special mining lease and is the subject of an environmental impact assessment. The project is yet to receive the approvals and cannot begin development activities until those approvals are granted. FRL continued to work with the Minerals Resources Authority (MRA) and Conservation and Environmental Protection Authority (Cepa) to progress the permitting and approval requirements related to the updated proposal for development and environment impact statement submitted in December 2018.
Cepa’s independent peer review process for the large dam design was completed early last year and in August, after the Coronavirus (Covid-19) -caused hiatus, Cepa recommenced regulatory stakeholder activities. The Cepa-led statutory community roadshow was implemented in three phases last year. Since then, FRL has pursued the project in full compliance with the required project approvals and stakeholder engagement legislative processes in PNG, as well as its policies, standards, and procedures.

Q: What minerals will the company be mining?

McCormack: The project proposal is based on extraction of Hitek porphyry copper-gold deposit which contains an estimated 12 million tonnes (Mt) of copper and 19 million ounces (Moz) of gold. The Hitek deposit represents one of the world’s largest undeveloped copper resources and is critical to meeting increased global demand fuelled by clean energy transition.

Q: What method of mining will be used in the Frieda River project?

McCormack: The Frieda River project proposal is to mine Hitek porphyry copper-gold deposit using a large-scale open-pit method.
Hitek ore would be processed using proven, conventional comminution and flotation processes to yield a high-quality copper-gold concentrate free of deleterious elements. Concentrate slurry would be piped to Vanimo where it would be dewatered prior to export in ocean freighters. The project’s proposed initial operating life is expected to be 33 years. The large Hitek mineral resource, together with additional known deposits – including the high-grade Nena deposit – are likely to support a mine life extension beyond 45 years.

Q: What are the company’s plans for the project this year?

McCormack: Our ambition is to construct a world-leading mine with minimal carbon emissions, which is enabled by the hydro power dam. The mine, dam and related infrastructure would be designed and built according to best practice international standards. The Frieda River hydroelectric project would be configured to generate up to 490 megawatts of clean power, making it PNG’s largest single renewable power generation facility. The project would perform a critical role by bringing additional copper supply to meet forecast global demand, while remaining environmentally and socially sustainable. This year, FRL will continue to support the permitting process and maintain its stakeholder engagement activities at the local, provincial and national level.

Q: How much has been invested so far in developing the project?

McCormack: More than US$200 million (about K686.13 million) has been invested in advancing the project since 2014.

Q: What is the waste disposal method that the company is planning for the project?

McCormack: FRL’s strategy for limiting impact on the downstream environment for the Sepik development project is to store and contain all potentially acid forming mining waste rock and tailings underwater within the dam reservoir and to complete active treatment of water that comes into contact with mining activities (contact water).
Underwater disposal limits exposure to air, which prevents contained sulphide minerals from becoming detached from the waste (leaching) and minimises downstream riverine pollution. The dam and mine are intrinsically linked.
The mine requires a dam to safely store tailings and waste. With the dam comes opportunity to generate sustainable green power. The dam will continue to operate and provide power and income to the region for many years after the mine is closed and is designed to operate for over 100 years, during which it can provide power to local communities. Underwater placement of waste rock and tailings within a hydroelectric dam on-site was selected for secure storage of sediment, mine waste rock and process tailings. A hydro dam has higher elements of safety as compared with a conventional tailings dam.

Q: Which communities, wards or districts will be directly impacted by the project?

McCormack: Our special mining lease area landowner communities comprise villages from the Miyan and Telefol language groups in Telefomin. A village from the Payamo language group in Ambunti is landowner of the lease for mining purposes for which the proposed Frieda River hydroelectric project would be built. Other impacted communities include landowners, land users and host communities along the infrastructure corridor, Sepik River, within East and West Sepik.

Q: There were concerns, especially in terms of environmental impacts, raised by individuals from the impact provinces. How is the company addressing that?

McCormack: FRL recognises that sustainable business development is essential for our ongoing success.
We strive to ensure that our activities are:

  • ENVIRONMENTALLY sound;
  • TECHNICALLY appropriate;
  • FINANCIALLY profitable; and,
  • SOCIALLY responsible.

These are the guiding principles that determined the design of the project.
Our commitment to sustainability is to ensure that our activities are carried out in a socially and environmentally responsible way, delivering a project that both FRL and the communities that host us, can be proud of.
Maintaining relationships with host communities underpins FRL’s core value of meaningful engagement to address mutual needs and build opportunities.
Part of this commitment is enabling genuine and inclusive community engagement with those impacted by our operations, including listening to and actioning the feedback and the issues raised by our communities.
The company has hosted community leaders forums (CLFs) since 2014 when it acquired its majority shareholding in the project.
The company recognised the importance of CLFs and restarted these with the project area communities when it acquired its majority shareholding in the project.