 |
Mathew Sawat, in black short and shirt
lead advocator from Kimadi against
sand mining calls on PNG Government
to establish Sand Mining Policy and
Regulatory Framework |
By MATILDA KOMA
Table of Contents
Acknowledgment …………..........................………............... 2
Summary ……….............................………............... 3
Abbreviations ……….............................………............... 4
1.
Introduction ……….............................………............... 5
2.
Background on Sand Mining……............................………............... 5
2.1
Sand Mining …................................………............ 5
2.2
Environmental Concerns…..............………............... 6
2.3
Socio-economic impact of sand
mining .........………........... 6
2.4
Policies and Regulatory
Concerns……………….............. 7
3. Sand Mining in Papua New
Guinea……………..........…………. 7
3.1 Madang ................................................………...…… 7
3.2 Orokolo Bay Sand Mining
…………...........………… 8
3.2.1
Project Development Proposal…….…….…… 8
3.2.2
Project Development Capital………................ 9
3.2.3
Interest Parties in the Orokolo Sand Mining Project..9
3.2.3.1 Mayur Resources Limited -
PNG Pte Ltd......10
3.2.3.2 Chinese Titanium Resource
Holdings Ltd.....10
3.2.3.3
Bentons Rodyk …………………………10
3.2.4
Why CTRHL as Partner……………………… 10
3.2.5
PNG as a strategic location for business ……………11
3.2.5.1 Benefits ………………………………………11
3.2.5.2 Potential Mayur projects
in PNG ………….... 12
3.3 Community reactions to
sand mining in Orokolo Bay…...12
3.4 The Orokolo Bay
…………………………………………14
3.4.1
Community and Social Settings ………………14
3.4.2
Environment & Natural Resources ……………14
3.5 The PNG Government
Position on Orokolo Sand Mining .. 14
4
Analysis …………………………………………………………….15
5
Conclusion …………………………………… 17
6
Recommendation ………………………………………18
7
References …………………………………… 18
Acknowledgment
I would like to take this opportunity to
thank Mr. Wenceslaus Magun, environmentalist and founder and director for Mas Kagin Tapani Association or MAKATA for funding support from MAKATA.
With this support, I was able to do quick
desktop research on the Orokolo Bay Sand Mining Project in the Gulf Province in the hope to guide the
development of a policy framework on sand mining in Papua New Guinea.
 |
We thank Turtle Island Restoration
Network for sponsoring this research |
Summary
Sand mining although new to Papua New
Guinea seems to be forming the frontline mining industry of which many are
taking place illegally, particularly in rural settings. It has been noted that
there are many sand mining activities going on throughout the country but there
is currently no record on how many, limited by being unable to gather
information from relevant government agencies and other entities for further
research as well as needed funding to investigate on-site. It also seems that
Papua New Guinea does not have any policy or legislative frameworks at this
stage to guide sand mining in the country.
The only two sand mining activities that
got the government's attention or got the attention of other major stakeholders
are the (i) the previous shoreline sand mining in Madang’s Sumgilbar Local Level Government, in Sumkar District.
The people of Madang successfully put stop to that activity in solidarity by
pressuring the PNG government and (ii) the proposed Orokolo Sand Mining Project
at the mouth of the Kikori River, in the Gulf of Papua, which is going to be a
large-scale sand mining project if endorsed by the Government of Papua New
Guinea. The Orokolo Bay and mining project is currently under discussion.
This desktop research supported by MAKATA focuses on the Orokolo Bay Sand Mining project, its ownership, the economic benefits, the project development plan, and the environment and social implications. The
research findings indicate the project is positioned in a very fragile marine
ecosystem and culturally sensitive area for PNG and in a strategic business
location for the project developer. The project belonging to Mayur Resources
Limited, an Australian mineral exploration, and energy company, will be part-funded
and operated by Chinese Titanium Resource Holdings Limited, a company
registered as live in Hongkong.
 |
Karkum villagers maintain their call for a Sand
Mining Policy and Regulatory Framework |
Abbreviations
CEPA – Conservation and Environment
Authority
CTRH – Chinese Titanium Resource Holdings
CTRL - Chinese Titanium Resource Holdings
Limited
MD – Managing Director
MIPP - MR Iron PNG Pty
MIPPL –MR Iron PNG Pty Limited
MR- Mayur Resources
MRA – Mineral Resource Authority
MRL – Mayur Resource Limited
NFA – National Fisheries Authority
NGO – Non-Government Organization
OBSMP – Orokolo Bay Sand Mining Project
PNG – Papua New Guinea
 |
Malas women and children join their
youth and men in standing up against
sand mining |
1.
Introduction
This is a desktop research finding of
Orokolo Bay Sanding Mining Project in Gulf Province of Papua New Guinea.
Industrial sand mining is new in Papua New Guinea and communities and Local
Level Governments (LLG) in areas where sand mining is taking place are
concerned of the associated impacts on the environment and socio-economic benefits
as there seems to be no government oversight on the industry in terms of legal
framework policing the operation of such industry. So the main purpose of this
desktop research is to provide necessary information to guide a position paper
on a policy framework for sand mining in Papua New Guinea.
The report outline includes background information on sand mining – what is it, its value, the economic returns, and its benefits. It also highlights the related environmental and social consequences
and/or impacts as well as policies and regulatory frameworks internationally
and in Papua New Guinea.
Section 3 of the report discusses sand
mining in Papua New Guinea briefly outlining the Madang case and then following
on with the major write-up on the Orokolo Bay project. Areas highlighted for
the Orokolo Bay project (i) Company profiling – which company/ies is/are
involved and why. (ii) the project development proposal (iii) Community
concerns and the (iv) the government’s position on the project.
Section 4 is the author’s own analysis of the collections, section 5 is a conclusion
from the findings, and Section 6 of the report outline some recommendations and then
Section 7 references.
2.0
Background on Sand Mining
2.1
Sand Mining
Sand is a
granular material composed of rock and mineral materials. It is defined by its
size, having to be finer than gravel but coarser than silt to be considered
sand. Sand mining is the process of extracting sand from an open pit, sea
beaches, river banks, deltas or inland dunes.
The main reason for mining sand is to provide sand for concrete, which due to
urbanization boom all over the world, is in high demand. The top four sand exporting countries are USA, Netherlands, Germany
& Belgium and according to the Observatory of Economic Complexity (OEC),
the world’s largest importer of sand is Singapore, which imports 13% of the
world’s sand. After Singapore, the next largest importer of sand are Canada
(11%), Belgium-Luxembourg (9%) and the Netherlands (6.2%) as reported by World
Atlas on ‘Top Importers of Sand’. Sand can be used for
various types of manufacturing, such as concrete used in the construction of
buildings and other structures. Sand can also be used in road construction and
other construction works.
On top of that, sand mining is a very profitable
business at a low cost. Globally, sand mining business is $70 billion industry,
with sand selling up to $90 per cubic yard. (https://en.m.wikipedia.org). It is an easy, lucrative business
venture – and one with a violent underbelly. Being part of a “sand mafia” can
seem attractive because it is a low-risk,
high-profit enterprise that does not require much specialist equipment.
 |
Gildipasi Chairman Lawrence Kaket says 'NO'
to sand mining in the Sumgilbar LLG. |
2.2 Environmental
concerns
Nonetheless,
sand mining also has environmental and socio-economic implications. Large-scale
sand mining not only destabilizes and affects the banks and river beds but also affects the natural
flow of rivers. This causes the risk of
floods. A 2019 overview of sand mining in Kerala-India, showed how illegal
mining of rivers had played its part in aggravating the severe August 2018 floods.
(http://en.gaonconnection.com>th). On 16 August 2018,
severe floods affected the South Indian State of Kerela due to unusually high
rainfall in nearly a century in which over 483 people died, 143 went missing
and an estimated US$56 billion in property was damaged. In 2016 research indicated the
area located on high slopes with massive mining operations going on with no
scientific mining policies in place were of possible risk but the state failed
to take action until after the August 2018 flooding disaster when they took
mandatory precautions including evacuating 35,000 people from disaster prone
areas.
As
a process of land degradation, sand winning destroys the soil profile, damages
soil surface configuration and changes topography of the land. (Mehta et al.,
2007, https://core.ac.uk>download>pdf ). Excessive instream and
sand-and-gravel mining causes the degradation of rivers. By removing too much sand
from rivers, sand mining also leads to the erosion and shrinking of river
banks.
2.3 Social-economic
impacts of sand mining
Sand
mining can impact local communities both positively and negatively. While
positive impacts such as employment and community projects are important, they
do not offset the potential negatives particularly forced migration in search
of land and new homes. http://www.oxfam.org.au>impact).
Advantages of sand mining:- Job creation creates new tax revenues, especially on a local
level; Building a new facility; and Hiring employees to generate more income for
local and provincial governments. (http://winconsinsand.org>economy...)
A
disadvantage of sand mining is that it leads to the loss of fertile land and property.
It also destabilizes the ground and causes the failure of bridges, dikes, and
roads. (13 Nov 2018; http://www.worldatlas.com>article)
Quarrying
for sand and gravel may not be as exciting as other businesses but it is still very profitable. Both
materials are in huge demand for construction purposes and supplying large
amounts can give you a large pile of money (http://athomeinthefuture.com>ma).
Prices
of sand range from between $5 to $30
per ton, depending on the type. Natural sand will typically cost less than
specialty sand. Screened sand costs about $15 to $20 per cubic yard and it is
suitable as a base for paving projects like driveways (5 May 2021; http://www.homeadvisor.com>co).
2.4 Policies
and regulatory Concerns
Sand mining is regulated by law in many places but is often done illegally. Globally, it
is a $70 billion industry, with sand selling up to $90 per cubic yard (https://en.m.wikipedia.org). Unregulated sand mining is a
problem in at least 70 countries (https://www.newscientist.com). It is an easy, lucrative
business venture – and one with a violent underbelly. Being part of a “sand
mafia” can seem attractive because it is a low-risk, high-profit enterprise that does not require
much specialist equipment. However, it is also a legal grey area.
There are no coherent international laws forbidding sand mining. Where local
regulations exist, they aren’t always enforced especially in remote areas.
With international conventions mandating the adoption
of state laws and regulations to protect and preserve the marine environment
and biodiversity, and regional conventions offering more guidance, but again
differing licensing and permitting to states, the bulk marine sand mining
legislation is established and. (The International Legal Framework of Marine
Sand Mining and its… http://cmla.org>papers).
 |
Sarang villagers stand united in calling on the
Government to establish a Sand Mining Policy
and Regulatory Framework |
3.0 Sand mining in Papua New Guinea
3.1 Madang
A campaign to stop sand mining along 38 kilometers of
Papua New Guinea’s Madang coast has been successful (RNZ Pacific Papua New
Guinea – amp-rnz-co-nz, 1 March 2021). The actual proposed sand mining tenement area from Murunas to Malas is 51km in length.
A Singaporean company, Niugini Sands, had applied to
mine sand but concerns were raised about impacts on coastal communities and the
environment, which includes nesting grounds for endangered leatherback
turtles.
A court Injunction was sort to try to force the
Mineral Resource Authority to conduct further consultation with communities
within the Sumgilbar LLG, in Sumkar District but was advised by MRA that
the company had withdrawn its application to mine the sands. The company
admitted the environmental sensitivity of the area and said the sand was of low
quality.
Stricter standards are needed for sand mining (https://www.thenational.com.pg – 19 March 2021). PNG’s
Environmentalist Wenceslaus Magun said stricter standards are needed for sand
mining after accepting the decision by Singaporean-based company Niugini Sands Ltd who withdrew its application to mine sand on the coast of Madang.
However, on 11 May 2021, it was reported again on The
National that Mayur Resource Ltd is close to developing the country’s first
iron and industrial sands project in Orokolo Bay, with its mining Lease being
assessed by the MRA. According to the Managing Director Paul Mulder, MRA had
already received the application earlier in 2021 on the company’s K60m project and was assessing it and emphasizing the benefits regardless of not being a
large project. To this date, ….. is unaware of the stage on the policy development
concerns from the relevant agencies in regards to sand mining.
Also noted is that there is another project in the
pipeline at the same location and that is of multiple mechanized sago operations by International Financial Corporation and Total, a French energy firm.
3.2 Orokolo Bay Sand Mining
3.2.1
Location
The proposed Orokolo Sand Mining project is located at
the mouth of the Kikori River in the Ihu District of Gulf Province in Papua New
Guinea. The project’s tenement covers more than 10,000 square kilometers in the
Gulf of Papua and is owned by Mayur Resource Limited, an Australian company.
3.2.2 Project Development Proposal
The Orokolo Bay Project is proposed to be developed in
two stages, Stage 1 is the pilot plant comprising the construction,
commissioning and operation of a pilot-scale bulk sample ‘that is already environmentally permitted’ to produce up to 100,000
tonnes of iron ore sands per annum over a 2-year period, principally for the
purpose of providing test scale shipments of produce to potential off-takers,
with the endeavor they will then sign legal binding long-term offtake
agreements the Full-Scale plant.
Stage 2 is
the Full-Scale Plant. Subject to the outcome of the Pilot Plant Bulk Samples
including customer acceptance of the product, obtaining the required permits
and landowner consent for the Full-Scale Operations, as well as the Definitive
Feasibility Study, it is proposed to extend the capacity of the Pilot Plant to
achieve a total production capacity of 800t/h run of mine (ROM) feed rate. In
addition, a processing circuit is to be installed to separately produce
construction sand and crude zircon concentrates in separate forms.
The projected life of the mineral sands project is 15
years and will be a ‘standalone’ operation. The project has its own wharf and
will receive goods, and export goods, off that wharf. According to the Managing
Director, Paul Mulder, there will be no environmental implications because there
will be no chemicals, no grinding and it is not difficult terrain.
3.2.3 Project Development Capital
Mayur Resources Limited has secured up to US$25m in
funding from China Titanium Resources Holding Limited (CTRHL) for a 49% stake in
Mayur’s Subsidiary MR Iron PNG Pty Limited (MIPPL) to develop Orokolo Bay
Industrial Sand Project in PNG (https://www.proactiveinvestors.com.au).
The subsidiary holds Orokolo Bay Project as part of Mayur’s prospective industrial mineral
sands portfolio in Papua New Guinea.
The agreement has been successfully concluded
following a number of discussions, site visits, and detailed due diligence. The
project’s tenement covers more than 10,000 square kilometers in the Gulf of
Papua.
The legal-binding term sheet has been signed and
definitive transaction documents are expected to be completed by the end of
January 2019. CTRH has secured exclusivity and made a legally-binding commitment
to co-fund the Orokolo Bay Pilot Plant and fund the full-scale operation.
3.2.4 Interest Parties in
the Orokolo Sand Mining Project
The main interest parties in the proposed Orokolo Sand
Mining Project are of course Mayur Resource Limited, Chinese Titanium Resource
Holdings Limited, and Dentons Rodyk at the project initiation stage.
3.2.5 Mayur Resources Limited - PNG Pty Ltd
Mayur Resources Limited is an Australian-based
diversified mineral exploration, development, and energy company. The company is listed on the Australian Stock Exchange and has had 20 exploration licenses
granted by Papua New Guinea for exploring and developing mineral and energy
development opportunities in Papua New Guinea and neighboring countries. https://www.reuters.com>companies>mayurresource MRL was founded in 2011,
its parent company is DTJ Co Pty Ltd and its headquarter is based in Australia.
Subsidiaries of MRL are MR Power Generation, PNG Pty Ltd., and Mayur PNG DRI
& Steel Making. PNG Pty Ltd, the subsidiary company of Mayur Resource
Limited takes lead in the Orokolo sand Mining Project.
3.2.6 Chinese Titanium Resource Holdings Limited
Chinese Titanium Resource Holdings Limited is a live
company incorporated on 25 September 2015 (Friday) in Hong Kong as a
private company limited by shares entity. The private company limited by shares
has been operating for 5 years and 345 days since then. CTRHL’s registration
No:# 2290679 as reported by HKG Business (https://hkgbusiness,com).
Apart
from its partnership with Mayur where it plans to build a pilot sand
processing plant in Orokolo Bay in the Gulf of Papua in Papua New Guinea, little
is known about the business of CTRHL. It is understood that the decision of
CTRHL was based on the advice provided by the Dentons Rodyk team, which among
others was the ‘subscription and shareholders’ agreement for the investment.
That is, the deal concerning the provision of US$25 million in funding for up
to a 49% stake in MR Iron Pty Ltd. (https://dentons.rodky.com, 5 April 2019, Singapore)
3.2.7 Dentons Rodyk
Dentons
is the world’s largest law firm, delivering quality and value to clients around
the globe. Dentons is a leader on the
Acritas Global Elite Brand Index, a BTI Client Service Award winner, low-cost, and
recognized by prominent business and legal publications for its innovations in
client service, including founding Nextlaw Labs and Nextlaw Global Referral
Network. Denton’s polycentric approach and world-class challenge talent challenges the
status quo to advance client interest in the communities in which we live. In
April 2016, Dentons and Singapore-based firm Rodyk combined forming Dentons
Rodyk in Singapore (https://www.dentons.com/en).
3.2.8 Why Chinese Titanium
Resource Holdings as a partner
Two main reasons why MRL is drawn to
CTRH are firstly because they have the capital and secondly according to
Mayur’s Managing Director, Paul Mulder, is because of their expertise in the sand
mining business. He adds that having the production expertise of CTRH, with
their proven capability in low-cost mining and quarrying, will assist Mayur in
putting PNG on a fast-tract process to becoming a mineral sand exporter.
Mayur MD Paul Mulder said: “In addition to providing development capital
funding, CTRH will also take on working capital and operational risk through
the Orokolo Bay pilot plant phase while agreeing to take funding
responsibility of up to US$25 million to build stage II full-scale plant. Mayur
retains a 51% stake in the potential future economics of the US$106-million net
present value of the Orokolo Bay project as documented in the pre-feasibility
study that was included in Mayur’s project.
So in other words, as understood, CTRH will be in total control of the
pilot as well as the construction phase of the second and final stage of the
project. Mayur takes its slice of the cake 51%) beginning operation of the
final stage of the project to its end.
3.2.9 PNG
as a strategic location for business
Mayur Resources Ltd is committed to nation-building development of
economic growth and nation-building of PNG, creating pathways to local and
national prosperity.
Mayur’s
strategy is to build and develop a diversified portfolio of resources and
energy opportunities in a developing jurisdiction that:
·
Is geographically well-positioned the to take advantage of
opportunities in both PNG and the wider Asian Region
·
Offers protection against the cyclical nature of commodities
through vertical integration
·
Comprises projects that are in the first quartile of the
global coast curve of comparable resource projects.
And PNG lies in that strategic location for resource
development opportunities. As located on the map in Figure: .., there are four
interest projects eyed by MR of which three are in the Southern region and one in Momase region of Papua New Guinea.
Mayur’s strategy recognizes the unique and often
under-recognized potential of Papua New Guinea. The diverse nature of Mayur’s
business is able to leverage the unique aspects of a jurisdiction that is fast
emerging as a developing nation on the doorstep of Asia. It is this exciting
stage of PNG’s development, coupled with its world-class mineral inventory that
has and will continue to underwrite Mayur’s delivery and execution plans across
its portfolio.
3.2.10 Benefits
According to Mayur, PNG benefits from the following.
· Proven mineral potential in one of the most geologically
active and prospective regions of the world;
· A well-established mining sector, home to a number of mining developments;
Supportive
governments and a stable legislative environment and policy mechanisms;
· Favorable mining fiscal regimes and competitive tax on
income;
· A mining and petroleum sector that continues to drive the
growth story enjoyed by one of Asia’s fastest-growing economies;
· Mayur’s vision, missions, and objectives; and
· other relevant information
is outlined on their webpage https://mayurresources.com .
3.2.11 Potential Mayur projects in Papua New Guinea
MRL has other business interest in PNG apart from the
Orokolo Sand Mining, some of which are indicated below.
1. Central Cement & Lime
Project
Large-scale,
high-grade, coastal limestone deposit in PNG with opportunity for vertical
integration 25km North of Port Moresby.
2. Coal in PNG.
Mayur holds a
portfolio of tenements that cover the main coal coal-bearing geology in the Papua
Basin in Southern PNG. Although there has been a long history of coal
prospecting in the Gulf Province, coal mining has never been developed in PNG,
unlike its neighbors' coal-bearing high-grade interests in Indonesia and Australia.
 |
Mr. Wenceslaus Magun presents a copy of the
Objection letter against the proposed
sand mining in Sumgilbar LLG to Attorney General
Dr. Eric Kwa, witnessed by Solicitor-General
Mr. Tauvasa Tanuvasa. |
3.3
Community reactions to
sand mining in Orokolo Bay
In
response to the interest and plan of Mayur Resources to develop a sand mine
processing plant in the Orokolo Bay some reaction of community members were
captured as shown below. Comments were in response to an article ‘mineral sands
and sago’ by David James on 3 May 2021 on the Business Advantage PNG website.
As it seems, the communities are concerned
that this project may be rushed without proper legal processes. They are also
concerned about the impacts of the project on their livelihood with regard to
food security and culture.
3.4 The Orokolo Bay
3.4.1 Community and Social Settings.
It
is noted that Orokolo Bay is known for its archaeological significance not just
to the people of Orokolo Bay and PNG but also to the world at large. It is a huge
subject of its own and is of historical importance to those connections.
Orokolo Bay's archaeological significance draws interest from research
institutions in Australia, the USA, and other countries.
3.4.2 Environment & Natural Resources.
Like
any other places in the Pacific and particularly PNG, Orokolo likes a pristine
and very rich biodiversity area in marine, freshwater, and terrestrial
ecosystems which houses some of PNG’s unique wildlife species. It holds some of
the country's mangroves which need to be researched further. This once again
needs to be explored and properly researched so as to be archived as baseline
information for the environment prior to any disturbance.
3.4.3 The PNG Government's position on Orokolo Bay Sand Mining
The findings of this review indicate that the PNG government
although under pressure to fast-track the operation of this OBSMP sooner,
seemed to have slowed down on deadline commitments with the investor soon after
the Madang sand mining case where MRA was forced to withdraw its mining application
due to pressure from the NGOs and the local government for operating an
environmentally and socially disastrous project in their province without and
policy framework attached to it. It was from this event that the government admitted
there are no policies yet for sand mining development projects in Papua New Guinea.
In another instance, it has been noted that the Mayur
claims an Environmental Permit has already been granted for the Orokolo Bay
Sand Mining Pilot Project and were confident to Desktop research does not show much
information on environmental, social or other investigation of the project area
so it is not clear on what bases the permit was issued. This however, has to be
confirmed with Conservation and Environment Protection Authority.
Nonetheless, it is inevitable that the project will be
one of PNG’s first and largest with high economic turnover and will inevitably
be operational. However, because this review did not include having an
ordinance with relevant government entities, little is known about the current
undertakings of the government entities such as CEPA, MRA, and NFA.
 |
Former Chief Justice Sir Arnold Amet and
Mr. Wenceslaus Magun points out
that there is no sand mining policy and law in
PNG on EMTV's 'In Focus' program |
4.0 Analysis
So from this quick desk-top review, it seems Orokolo
Sand Mining will eventuate regardless. MRL has done and is doing everything it
could to have the project operating soon. The subsidiary company MR Iron PNG
Pty Limited (MIPPL) of Mayur Resource Limited is now been resourced by CTRHL to
mine sand in Orokolo Bay based on legal advice provided by Dentons Rodyk, a
Singaporean renowned law firm. It is
important to note that it has been indicated in some articles that little is
known about the business of CTRHL which contradicts Mayur’s Managing Director
Paul Mulder’s statement that CTRHL has the production expertise. Mulder
believes that with proven capability in low-cost fast-track mining and quarrying, CTRHL
will assist Mayur in putting PNG on a ‘fast-track process’ to becoming a mineral sand exporter. Also, note that the financial
arrangement decision for engaging CTRHL was based on the advice provided by the Dentons Rodyk team.
The project lies in a strategic location for investors
or business opportunities as emphasized the MRL Managing Director. It is
geographically well-positioned to take advantage of opportunities in both PNG
and the wider Asian region, it offers protection against the cyclical nature of
commodities through vertical integration and comprises projects that are in the
first quartile of the global coast curve of comparable resource projects. So in
other words, it is strategically located for any profit-making venture. So with
that, an additional opportunity to directly
operate with an international connection from the project site is the best way out
for any business venture. This, therefore, requires proper scrutiny and regulatory
measures to ensure transparency is maintained and there is sovereign control
over the entire operation of the project.
On the other hand, it seems there is currently no
policy or regulatory framework specifically guiding sand mining operations in PNG. That has been the main reason why
the Madang sand mining operations ceased in March 2021, following a successful
campaign by NGOs in Madang led by Environmentalist Wenceslaus Magun of MAKATA.
Although, logically the devising of a policy framework and the development of
one will need a fair bit of time in that all stakeholder inputs are necessary,
it seems the project is currently being rushed as reported in the ‘The National’
newspaper on 11 May 2021. It seems Mayur is determined to have the project in
operation sooner and so as it seems, the PNG government could be pressured to
fast-track a policy that may not capture important concerns of sand mining in
PNG.
Literature indicates that sand
mining is an easy, lucrative business venture – and one with a violent
underbelly. Being part of a “sand mafia” can seem attractive because it is a
low-risk, high-profit enterprise that does not require much specialist
equipment. However, it is also a legal grey area. There are no coherent
international laws forbidding sand mining. Where local regulations exist, they aren’t
always enforced especially in remote areas.
The Orokolo Bay Sand Mining Project is going to be
huge in terms of production volume and income generation. After the pilot
project at 100,000 tonnes/year for 2 years, which in my opinion is to generate
income for the actual operation will produce 7 million tonnes per year
calculated at 800 tonnes per hour. If income was generated at the rate of US$20
per tonne (the norm is $5-30 per ton) that would be US$2 million per year for the
pilot project and US$140,000,000.00 per year for full production. Being a low-cost operation project, it is inevitably going to be a very profitable project.
This research has also noted that sand mining occurs
in other parts of the world and USA and Australia are amongst the top countries
that export sand and Singapore is the world’s largest importer of sand.
International conventions mandate the adoption of state laws and regulations to
protect the environment and regional conventions offer more guidelines.
However, in many areas throughout the world, illegal sand mining has caused
severe flooding and hence damages to the environment and society in the vicinity.
Flooding is not only an environmental catastrophe but is also hurts and burdens
society and the economy on a larger scale. The Karela flooding incident in
India are clear examples of the consequence of flooding associated with mining.
The environmental implications, however, will be
inevitably huge as the project is located in high biodiversity area, the Kikori
Basin, that houses some so the world's marine resources. The project tenement
covers 10,000 square kilometers in the Gulf of Papua and the removal of 800
tonnes per hour is an enormously large quantity and a disaster to any living
organism in and within the peripherals of this very pristine and environmentally sensitive
location. Although no chemicals will be used in the production process and the
project is not located on a slope as pointed out by MRL, sand mining seems a
messy project because of the enormous amount of sand that will be taken out of the
bay. The destruction of the habitat of living organism including the fishery
resource that generates for income of the country may be at stake. Sand mining
projects around the world have pointed out that implications are severe. It is
important therefore that proper investigations are conducted to safeguard the
not only long-term fishery resource base of PNG and the natural environment but
a of the local communities and their livelihood (now and in the future) in
the vicinity of the mine.
At this stage, even though an environmental plan permit has been
given for the pilot project to proceed, it is not clear how much community
consultation and environmental investigations have been conducted prior to
leading to the permitting decision. In
addition, various government regulatory measures may also have to be taken into
consideration for this project. The successful campaign in Madang by locals to
stop sand mining has now highlighted the policy gap which the MRA, Conservation
and Environment Protection Authority (CEPA), the National Fisheries Authority (NFA), and other responsible government agencies admitted occurred and that policies
guiding sand mining projects are yet to be put into place. Without public
consultation, proper environmental investigation, and no regulatory instrument/s,
it would be a dangerous act to allow for any operations.
 |
Mirap says 'NO' to sand mining |
5.0 Conclusion1. The Australian mineral
exploration company, Mayur Resource Limited, is inexperienced and does not have the capital to conduct the sand mining business in Orokolo Bay. However, because
sand mining is a very profitable business activity and the Orokolo basin has
the resource and economic potential and is appropriately located for business
with a favorable political climate in PNG, Mayur in pursuit to get the project
into operation quickly, is engaging a Chinese company, China Titanium Resource
Holding Limited.
2. CTRHL, however, although may
have the financial capacity and recommended to MRL by a reputable law firm
based in Singapore, and highly praised by MRL for its expertise, it still has
yet to be fully researched in depth to reaffirm its credibility in mining sand
in a very environmentally and culturally sensitive area of the Orokolo Bay.
From this research, we have not identified any other sand mining business CTRHL
has been involved in apart from the Orokolo Bay Industrial sand project.
All international
transactions and connections will be direct from the project site once in
operation. This means a big industrial township with wharves, airport and
immigration and passport and visa processing facilities. This may invite
unexpected social issues due to migration of workers not only from PNG but also
overseas apart from pressing ethnic tensions, population increase, and hence increased
law and order concerns.
The project is large and
will inevitably implicate environmental concerns, particularly on the marine environment
and ecosystem of the waters of the Gulf of Papua and hence the consequence
decline in the fisheries economy of PNG. Even with little documented baseline
information on the Orokolo Bay environment and its ecosystem at the moment from
this search coupled with not having an audience with the responsible government
agencies especially the NFA and other major stakeholders, it seems the
environment and marine resources in the gulf of Papua may be under major threat
once the project in operation.
Government entities are
irresponsibly abusing the power entrusted to them and such acts could lead to
major events that may be difficult to solve easily or cause harm to entities,
properties, communities, and individuals associated with the project in the
future. Issuing of mining and environmental licenses for instance, without guiding
policies and/or proper investigations respectively, are liabilities to
responsible government authorities.
 |
Warden officer listening attentively
to resource owners' grievances
at Kangur hamlet, Sumgilbar LLG. |
6.0 Recommendations
1. For Papua New Guinea to
have in place a sand mining policy that encompasses also social, political, environmental, and economic issues as highlighted in this search. This policy development process
should involve all levels of government (National, Provincial and local levels),
civil society organizations, responsible for the various interests
(Environmental, Human Smuggling, Gender-Based Violence, Human Rights, etc), and
the communities in the project area and the surrounding communities.
For the Orokolo Industrial
sands project, major government entities that should participate in the policy
formulation should include MRA, CEPA, NFA, IRC, Customs, NMSA, Foreign Affairs, and
Trade and Immigration, National Planning and Monitoring, Treasury, Police, Defence, Community Development, Health, and
Tourism Authority as well as others.
Relevant and responsible
government entities conduct proper investigations and gather as much baseline
information as possible prior to commissioning of the project particularly,
CEPA, NFA, National Museum, Border Authority, and so forth. The information
should also be used as a guide to developing the policy.
That all government
entities should provide no requirement for public access to office and
information of their interest to avoid negativity and biased reporting. This
avoids conflict of interest and provides a good working relationship for the
better of all.
For MAKATA to provide
support letter to access government departments to obtain relevant information
for their advocacy on environment and social impacts of large scale development
projects.
7.0 Reference
1. https://en.m.wikpedia.org
2. https://www.newscientist.com>: NewScientist- ‘Meet the Mafia’s
making buckets of cash from Illegal sand’, 14 February 2018
3. https://cmla.org>papers; Professor William
Tetley- Award Submission- The International Legal Framework of Marine Sand
Mining and its….
4. https://en.gaonconnection.com>th:
Shivani
Gupta:- The Bloody World of India’s Illegal Sand Mining: At least 193 killed
since Jan-2019, 23 Nov 2020, India
5. https://www.oxfam.org.au>impact. Oxfam Australia:-
‘Impacts of mining’, Australia
6. https://winconsinsand.org>economy. Winconsin Industrial
Sand Association:- ‘Economic impact’, USA
7. https://www.indiatoday.in: Jeemon Jacob: India today Magazine
Insight-‘Kerala’s man-made disaster’
5 September 2019.
8. https://www.worldatlas.com>: Oishimaya Sen Nag:-
‘What are the Negative Effects of Sand Mining?’, 13 Nov 2018;
9. https://athomeinthefuture.com>ma:- Eric
Murrell Making Money With Sand and Gravel: Starting a Quarry Business, 25 March
2020
10 https://www.homeadvisor.com>co,
5 May
2021;
11 https://www.national.com.pg – Stricter standards
needed for sand mining, The National, 19 March 2021, PNG.
12 https://www.national.com.pg:
Mayur starting project soon – The
National, 11 May 2021, PNG
13 https://www.proactiveinvestors.com.au:- Article title:- Mayur
Resources Ltd secure up to US$25million to develop Orokolo Bay Industrial Sand
Project in PNG, 7 January 2019, Australia
14 https://hkgbusiness,com:
China
Titanium Resources Holdings Limited,
15 https://dentons.rodky.com/en: Dentons Rodyk advises China Titanium Resources
on its US$25 millions funding in the Orokolo Bay Industrial Sands Project, 5 April
2019, Singapore,
16 https://mayurresources.com:
Industrial Mineral Sands
Project-Mayur Resources, 2020, PNG.
17 https://businessadvantagepng.com: David James; Mineral
Sands and Sago: Mayur Resource grows portfolio in Papua New Guinea, Business
Advantage PNG, 3 March 2021, PNG
18 https://www.rnz-co-nz>sand: Jonny Blades, Sand
mining company pulls out of PNG, RNZI News, 1 March 2021, New Zealand.
19. https://core.ac.uk>download>pdf Mehta et al., 2007 Kenneth
Peprah: ‘Sand mining and land degradation: Perspective of Indigenous Winner
of Wa’, Journal of Environment & Earth Science Vol 3 No.14 2013, University
of Development Studies, Ghana,
20 https://www.reuters.com>companies>mayurresource: Metal Industry, About
Mayur Resources Limited, September 2021, Brisbane, Australia.
21. https://www.national.com.pg:
The
National: ‘Mayur’s move insulting: Juffa’, 21 August 2020, PNG
22 https://ramumine.wordpress.com: Paul Moore: ‘Mayur
Resources brings in Chinese – Mayur gets Chinese funding for development of
Orokolo iron and zircon sand mining in PNG’, International Mining, 7 January
2019, PNG.
23 https://ww.researchgate.net Map showing the location
of Orokolo Bay and Popo: Chris Erwin, Quan Hua, Robert Skelly & Henry Arifeae;
‘The chronology of Popo, an ancestral village site in Orokolo Bay, Gulf
Province, Papua New Guinea’
