Tuesday, May 19, 2009

Ramu NiCo Project is vital for PNG’s economy

By Mathew Yakai in China

Ramu NiCo Project is vital for PNG’s economy

THE multi billion dollars Ramu Nickel-Cobalt Project in Ramu, Papua New Guinea (PNG) is just as vital as the most publicized PNG liquefied natural gas (LNG) project and other mining investments.

But what transpired on Friday May 8 resulting in three Chinese nationals sustaining injuries and currently hospitalized due to critical condition attracts the attention of this commentary.

There are several reasons why this commentary is concerned.

First, the Project in Madang province, PNG aims to make its first sales next year as the construction phase is expected to be completed, according to the Ramu NiCo 2006 – 2008 Sustainability Report released recently.

The Report states that the project is expected to treat 3.2 million tones of ore per year and produce in metal equivalent terms 31, 000 tones of nickel and 3, 200 tones of cobalt annually.

Ramu NiCo Management (MCC) Ltd (RNML), the company managing the Project said, “Sustainability and business success are mutually reinforcing and we are committed to ensuring sustainability issues continue to be well managed during project construction and when the project becomes operational.”

Construction of infrastructure is expected to be completed this year, including equipment at the mine and refinery sites; the slurry pipeline; Madang support facilities; commissioning on all plants and equipment before the mine operation starts.

The Madang project is composed of three parts – the Kurumbukari mine site where the minerals are extracted, initially treated and transformed into slurry; the Basamuk processing plant where the minerals are processed and exported; and a 135km slurry pipeline that transports slurry from the mine to the processing plant.

What concerns this commentary is that the May 8 incident which was caused by few minorities that resulted in three Chinese nationals seriously injured, with other 30 Chinese national sustaining minor injuries, expensive damage done to properties, including accommodation blocks and plant equipment and at least 30 vehicles damaged can hinder the Project.

When the project is delayed, it then brings in the second concern – it could hamper the economic impact, an expected increase in 8 to 10 percent of PNG’s gross domestic product (GDP).

The Project is expected to create more than K10 million in spin-off business opportunities and nearly 1,300 jobs created for PNG citizens during this construction phase of the project.

The third concern is that the delay in the Project will stop the estimated amount of more than K8.3 million to be spent on improving services in the local area during the operation phase and further stop 1, 500 jobs that would be created for the nationals.

PNG must realize that US$1.37 billion had been invested into the project, deemed as the biggest for China in the South Pacific and the mine has a mine life of 20 years.

The National Government and Madang Provincial Government with the cooperation of the land owners must see this investment as an opportunity and help to ensure no further problems.

RNML took over this project from the previous developers, namely Highlands Pacific Limited (HPL) and since 2006, the project phase has progressed smoothly.

Despite the global financial crunch and last years testing time which caused the global mining companies around the world to shut down projects and deferred new operations, RNML is committed to PNG and Ramu Project.

President Madam Luo Shu gave this assurance in the first Sustainability Report.

This is a good sign from the investor and problems like the May 8 should be solved in an amicable manner and future problems be avoided.

RNML is also mindful towards the landowners and staff obligations as stated in its Report and aims at meeting its business targets alongside its sustainability goals.

In terms of environment, the company is committed to environmental sustainability at the project site, and also striving for a safe work environment for its staff, contractors and the community.

The Project is also committed to extensive engagement with the local community through understanding their needs that will help the company to ensure that they meet their needs and responsibly contribute to the sustainable growth of the local community.

The company is also committed to building a culture of mutual respect and trust with its employees, and creates a working environment that puts people first.

Above all, the company is committed towards transparency and believes in a regular report on the project to all stakeholders, including PNG citizens.

This commentary believes that what transpired on May 8 was an unfortunate situation.

News reports reveal that landowners regret on what had happened and assured RNML to continue with the project construction and eventual project operation.

Meanwhile, RNML promised to carry on with the project, but asks the National Government to fulfill its commitments as per the MoA towards the landowners.

The very minor outstanding issues should not affect the already multi million dollar investment on the ground now.

Prime Minister Sir Michael Somare recently toured the region and the world, including China, Japan, Indonesia, Australia, and the Philippines with an attempt to attract more investments.

On that same note, the National Executive Council (NEC) forever accuses the opposition by boasting of PNG’s current economic boom.

The NEC and the good Prime Minister must sit down and try to overcome the problem faced in this important Ramu Project if they want to boast more on PNG’s economic growth.

This is because, PNG’s economic boom is partly contributed by Ramu Project

We have learnt from the Bougainville Crises that eventually crippled PNG’s economy. Today, we read and hear lots of land owner issues pertaining from the existing mining investments.

The people of Ramu and particularly those who have willingly given their land for this project did it because the National Government has ignored them since independence to provide basic goods and services.

Today, just being through the construction phase, the landowner’s lives have improved. The National government should be proud of Ramu NiCo Project for what’s been done.

This commentary is not fully aware of the May 8 incident. But what is important here is that the same is not repeated when current problem is solved for once and all in a friendly and amicable manner.

As such, the following are suggested: First, PNG government authorities and Madang provincial government authorities must actively take part in solving this problem.

Full force of law can be used, but better still is the “Melanesian Way”. Our Chinese brothers do have the same culture of out of court settlement.

Second, Land owners must take ownership in solving this problem. The Ramu Nickel Project must be seen as one of their projects and they should be engaged and take pride.

Third, PNG authority and Ramu NiCo Project Community Relations must carry out regular awareness on the pros and cons of the project so that people are aware of the necessity of Ramu Project.

Fourth, PNG government must meet its obligation towards the project. I am not sure what has been stated in the MoA’s but if the PNG government has any obligation then it must consider the dateline. The failure can frustrate the landowners.

There are more suggestions but given the sensitivity of this problem, I will reserve until such time.

But let me say this. I have lived in China for almost two years now. And during these times, I live, eat, play, chat and do any thing with the Chinese people.

The Chinese are so proud of their nationality. They are so proud of Great China. They can do anything to help develop their country.

My home stay with most Chinese families reminds me of my parents. They treat me as their children. They provide me the best bed, and prepare me the best meals.

When I have difficulty during my shopping or travel, the next person is willing to help with the little English he/she knows.

The daily papers and TV stations in China today report that established Chinese people abroad like in United States, Britain, Australia, and France are returning to help develop their mother land.

Even the Chinese Government is providing better job opportunities with good salary to attract overseas Chinese researchers, scientists and entrepreneurs.

During the 30’s. 40’s and up to 60’s Chinese were poor. They traveled as far as United States to work in gold mines. They worked so hard to build railways and develop United States, yet the United States government during those times did not provide them better opportunities.

Some traveled to PNG and worked as slaves on the cocoa and copra plantations. They were mistreated by the Australian and British plantation owners.

Those days, they were slaves. Today, China is in PNG as a genuine investor. If they have any message to tell the world, I am convinced that China wants to prove to those former Western powers that they can not treat the developing countries in this century like what they did before.

China is doing the same in Africa, in South America, in Asia and wants to do the same – to show that Beijing can invest in another developing country to give back to the local economy, as opposed to those traditional great power ambition of extracting the entire resources and leaving the locals bare.

PNG-Sino bilateral relationship has been very good since 1976. Prime Minister Somare confirmed that during his last trip to Beijing this year.

While in Beijing, Sir Somare acknowledged the importance to Ramu Project.

Sir Michael must play an important part NOW in solving this problem by directly involved through engaging the relevant government institutions.

RNML Project is a genuine investment changing the lives of people who deserve a better living standard. Let’s help this Project fulfill its ambition.


Anonymous said...

Dear Editor,
Could you publish this letter to put Ramu Nickel Cobalt project in perspective? Yakai's commentary is from lack of full information.
I am also copying this to Yakai for his information as well.
Thank you.
James Wanjik

Truth is Ramu a rogue project

THE STORY, “Ramu NiCo Project is vital for economy”, by Mathew Yakai, a student in China, is far from the truth. Truth is Ramu mine is a rogue project. These are the truths;

1. The new owners were working on revising feasibility study;

2. There is no information on the outcome of that study;

3. The MCC is the licensee but its contractor is not bound by PNG law on mining health and safety;

4. Pushing on with construction MCC operates outside of PNG law;

5. Mining engineering and safety is non-existent or it is unregulated;

6. It is for this reason that MCC supported the illegal operation of the Mineral Resources Authority (MRA);

7. The MRA is weakening landowners position by allowing Police to intervene on industrial incident at the Ramu mine; and

8. MCC is igniting landowner agitation by calling on MRA to lead MoA review without legal mandate.

Helping Madang Provincial Administration to see these problems I thought our people would be helped.

Troubles recurring at Ramu shows our people are helpless and powerless. The ready and willing use of Police at Ramu mine shows the weakness of MCC. It has no regulator to check its worth.

It wanted this outcome when MCC supported illegal operation of the MRA. This makes Ramu a rogue project.

James Wanjik

Former Secretary for Mining

17 May 2009



Gene Drekeke Iyovo. said...

Best article.
Keep speaking positive

Anonymous said...


I read your article on your blog. James Wanjik, who seems to be a former secretary of mining must have some issues with the current govt or people who are involved in this project. Was he dumped as a mining secretary? If so, that could be the reason why because I've seen alot of comments in the papers blasting any issue regarding mining. His comments are on your blog.

Mand olde,


Anonymous said...

Keep up the good work with your commentary.
Do feel free to bounce off any views with me.
Kind regards,

Anonymous said...


Thanks for the request. I am not sure whether this would be of help.

First and foremost, we should not confuse project with people and a nation. PNG people are having access to lot of information around them and will draw their own conclusions on issues before them.

For Ramu project, I would say it has to follow rules and regulations and only a duly mandated regulator can impartially and fairly regulate mines like Ramu. I hold a view for very good reason at law that we have lost the plot by pushing MRA to operate in breach of law. It will hurt Ramu project and others and in the long run PNG will pay for this grave mistake. On MCC at Ramu I assisted initially and at crucial moments to see the project through. But it has to be done legally and properly as mining is a regulated business and its influence is national and international.

Here also we should not use people's misery to overly promote a project that is not operating in accordance with applicable law. I know the project area well as I was one of the few nationals in the public service who had faith in the Ramu project being developed so as to assist in some way alleviate the lack of opportunities our people of Usino Bundi and Rai Coast Districts had. Hope this would help.

China and Chinese are of course ancient and thriving nation and people. It is in a different category of developing nations. I spent 5 weeks in Tianjin on Offshore Mining Course and that knowlege helped me, together with other professionals, to assist our govt drive offshore minerals policy draft, marine scientific research work, and just recently submitted claim on extended continental shelf, among others. Of course, you and others will contribute much to our country upon completion of your studies.

Yes, I travelled some of China's highways and trains and even climbed the Great Wall and am aware of what China can offer PNG. In light of negativities in our major towns initially instigated by a certain NGO group against Asians in general and Chinese in particular I think the best thing to do at least from where you are sitting is to help our people to see other positives/benefits, other than Ramu mine, China can offer. I do not support what is happening as lot of innocent people and their businesses are affected. You have the means which is the commentary column in Sunday Chronicle to help create positive image of China for PNG people to appreciate and hopefully accept that indeed China is a nation that can make a difference in PNG for PNG and in the process benefit China as well.

Kind regards,


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