State repaying US$120mil loan

By DALE LUMA
THE State is now repaying the US$120 million (about K408 million) Solwara 1 loan and liability transferred from Kumul Mineral Holdings Ltd, according to Bank South Pacific Financial Group Ltd (BSP).
BSP chief executive officer Robin Fleming told The National that the loan and liability was transferred to the State directly earlier this year.
“This facility and all loan facilities with the State are being serviced in terms of arrangements on time,” he said.
“Unfortunately due to customer confidentiality I cannot disclose what the repayment terms are, but those repayments are being met.”
According to the Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI), a mining lease for the Solwara project (ML 154) was granted in 2011.
This deep-sea mining venture of Nautilus Minerals planned to mine copper and gold from massive seafloor deposits 1,600-metres below the surface of the Bismarck Sea at the Solwara 1 project site.
The State holds a 15 per cent equity in the project.
The venture faced a range of challenges, and Nautilus Minerals went into liquidation.
In 2019, Nautilus Mineral’s holding was acquired by Deep Sea mining Finance Ltd, a privately owned joint venture between USM Holdings Ltd and MB Holding Company LLC, owned by the Sultanate of Oman, with the intention to restart the project.
Last January the Mineral Resource Authority (MRA) stated that the K408.8 million invested in the project by the State would be written off.
Managing director Jerry Garry said it was a failed investment.
Garry said the State had invested a lot of money in the project and was still paying off the debt.
“That was a risky investment, technology has never been tried and tested,” he said.
“Very difficult project.”