Mining in Papua New Guinea: New Horizons for 2019

Mining in Papua New Guinea Hero Image

Mining in Papua New Guinea: New Horizons for 2019

It’s been an interesting year for the Papua New Guinea mining industry. A leadership shakeup, coupled with looming mining law changes, has given the country a lot to celebrate.

Mining in Papua New Guinea Hero Image

Mining and petroleum is an integral contributor to Papua New Guinea’s (PNG’s) economy.

The region is seriously jam-packed full of resources; copper, gold, nickel, cobalt, LNG and more.
But, despite this resource potential, it’s faced many challenges over the years, including illegal mining and a civil war between 1988 and 1998 sparked by mining tensions.

PNG has also been victim to a number of environmental disasters, including a devastating earthquake in February 2018, which caused disruptions to the country’s biggest mines, Ok Tedi and Porgera.

However, this hasn’t dampened the spirits of producers in the region, with mines bouncing back from troubles, and a wave of new projects on the horizon signalling good times to come.

Papua New Guinea mining benefits

In February, the World Bank released a report forecasting new large-scale resources projects will boost Papua New Guinea’s Gross Domestic Product (GDP) to 5% this year.

The PNG Chamber of Mines and Petroleum said a rebound in the economy was great news, particularly at a time when the country faced challenges with its foreign reserve.

“The World Bank Report demonstrates that the mining and petroleum sector remain absolutely critical for PNG jobs, the economy, and all the social benefits that flow from this,” it stated.

In mid-June, the PNG Chamber of Mines and Petroleum held its 35th Australia Papua New Guinea Business Forum in Port Moresby, which also put a spotlight on the strength of PNG’s mining and petroleum industry.

Chamber president Gerea Aopi said the resources sector is a key economic driver, contributing 26% of PNG’s GDP and 80% of the nation’s export revenue.

“The sector also provides more than 20,000 jobs to Papua New Guineans, whilst 30,000 more are employed in landowner businesses, and other PNG businesses that support the industry,” Mr Aopi said.

“Resource companies invest heavily in establishing, and providing necessary governance and administrative support to landowner companies which serve to ensure long term sustainability.”

Papua New Guinea Chamber of Mines and Petroleum president Gerea Aopi at the June conference.
PNG Chamber of Mines and Petroleum president Gerea Aopi at the June conference. Image: PNG Chamber of Mines and Petroleum.

New PNG mining laws proposed

The conference was held just weeks after long-running PNG prime minister Peter O’Neill resigned, and was replaced by former finance minister James Marape.

New prime minister Mr Marape has pledged to “tweak and turn” laws related to mining to improve economic conditions for PNG citizens living in poverty.

“At the moment, our resource laws are outdated … we will look into maximising gain from what God has given this country from our natural resources,” Mr Marape said in his first address to parliament as prime minister.

However, Mr Marabe said major reform to the laws would not take effect for years, and urged resources companies not to worry.

“While I’m speaking on natural resources, many of our corporate citizens amidst us will feel a little bit doubtful or will feel a little bit intimidated,” he said. “I’m looking at 2025 in which we will migrate to a new legislative framework.”

PNG Chamber of Mines and Petroleum president Mr Aobi applauded the new Government’s desire to amend resource laws.

“We share this desire and will support the development of legislation that encourage investments and provides a better outcome for PNG,” Mr Aobi said.

“We want to work together with Government and all stakeholders to make this happen. The vision shared by many, including our prime minister to grow PNG’s wealth is supported by us. We want to see a stronger Papua New Guinea, a stronger economy, and a bright future for our country.”

Papua New Guinea Map

Operating Mines in Papua New Guinea

With a positive outlook ahead for the PNG mining industry, let’s take a look at the country’s key operating mines and latest developments.

Ok Tedi

State-owned mine Ok Tedi is an open-pit copper, gold and silver mine in the Western province in PNG, and the country’s oldest operating mine. In recent years, the team developed a revised mining strategy that has enabled it to access higher grade ore and extend mine life to 2025.

Porgera

Porgera is an open pit and underground gold project, about 600km north-west of Port Moresby. The project is owned by Barrick Gold (47.5%), Zijin (47.5%) and the Enga provincial government (5%). In June, the joint venture met with new prime minister James Marape about extending the current special mining lease, set to expire in August, for another 20 years.

Hidden Valley

About 210km northwest of Port Moresby, Hidden Valley is an open pit gold and silver mine in the Morobe province in Papua New Guinea. In 2016, South African miner Harmony Gold became the sole owner of the project, after its JV partner Newcrest sold its 50% interest.

Lihir

Newcrest’s Lihir mine is one of the largest gold mines in PNG, and is located on Aniolam Island, 900km north-west of Port Moresby. The project has an ore reserve of 24 million ounces and mineral resource of 50 million ounces. In June, the company deployed a private LTE network at the project to improve communications onsite.

Kainantu gold project
Kainantu gold project. Image: K92 Mining.

Kainantu

K92 Mining’s Kainantu gold project is in the Eastern Highlands province of PNG. In Q2 2019 the mine produced 18,980oz of gold, 261,800 pounds copper and 6894oz silver, with production 25% above forecasts. Over the coming months, K92 is advancing a plant expansion to double capacity to 400,000 tonnes per annum and increase annual production to an average of 120,000 ounces of gold equivalent.

Simberi

St Barbara’s Simberi gold project is in New Ireland – the easternmost province of PNG. The project comprises various open cut mines, and has a mine life out to 2021. However, there is the prospect of extending mine life should a 1.5 million tonnes per annum (mtpa) sulphide circuit be developed.

Ramu

Ramu NiCo Management (MCC) operates the $US2.1 billion Ramu nickel-cobalt project in Madang. In 2018, the project faced pressures on the sales front, only selling about 75% of nickel production, which its executive team put down to a global economic downturn and price plummet. This year, the company plans to improve efficiencies, boost revenue and be adaptable to the changing market environment.

Edie Creek

Niuminco operates the Edie Creek mine in PNG, and also owns exploration projects, May River and Bolobip. Over the last year, the company has struggled with its finances, but in May, entered into a $500,000 funding agreement to put towards general working purposes.

New Papua New Guinea Mining Projects

Wafi-Golpu

Wafi-Golpu is a world-class copper-gold project, which, if approved, could be the largest and most complex underground mine in PNG. The project is a 50:50 joint venture between Newcrest and Harmony Gold. If developed, it could provide 2500 direct jobs during construction and 850 ongoing operational jobs for an estimated 28-years. The project is advanced, however still needs to obtain a special mining licence before construction can begin.

Frieda River

PanAust’s undeveloped Frieda River project is also highly anticipated. In December 2018, the company announced the Sepik Development project, a new nation-building development pathway for Frieda River, which focuses on the development of shared-use infrastructure that will support a hydroelectric facility and mine operation.

Ekuti Range, Ipi River, Bismarck projects

Canterbury Resources has a suite of copper-gold exploration projects in PNG, including Ekuti Range, Ipi River and Bismarck. The projects are early-stage, however, with Rio Tinto managing and sole funding exploration at Canterbury’s Bismarck project on Manus Island, it’s all looking promising.

Busai deposit. Image: Geopacific.

Woodlark

In November 2018, Geopacific released a Definitive Feasibility Study for its Woodlark gold project in PNG. The project, once developed, is expected to produce 100,000 ounces of gold annually for its first five years. Over the coming months, Geopacific will be advancing finance solutions.

Misima Island

Junior miner Kingston Resources is also pursuing shuttered gold mine Misima Island, which closed in 2004. Since acquiring a 70% interest in the project in 2018, Kingston has identified five key exploration targets for follow-up drilling.

Solwara 1

Canadian company Nautilus Minerals is planning to develop PNG’s first deep sea mine, Solwara 1. The company is planning to extract high-grade Seafloor Massive Sulphide (SMS) deposits of copper, gold, zinc, and silver in 1600 metres of water. The project still needs to obtain approvals.

Central Cement and Lime, Orokolo Bay and Amazon Bay

Mayur Resources has industrial and mineral sands exploration projects in PNG. In July, the company announced it had lodged a submission for its Central Cement and Lime project, with only a few steps ahead before construction can begin.

Simuku

Coppermoly is advancing the Simuku copper molybdenum project in the West New Britain province of PNG. In July, it completed a Ground IP Survey, which spanned 21km of ground. The company has also recently renewed an exploration license at its Nakru project in the region.

How FES can help Papua New Guinea miners

If you’ve got this far, we’re sure you can agree there’s a lot happening in the PNG mining space at the moment.

We’ve got an exciting announcement of our own too.

This year, we’ll be launching our self-bunded fuel tanks into PNG, servicing all industries in the country, through our division:

Self Bunded Tanks in Papua New Guinea

Power reliability is key, and at FES Tanks we can help with all your diesel fuel storage needs.

Our self-bunded tanks come in a variety of sizes ranging from 1,000l to 110,000l, meaning there’s a fuel storage option to suit all project sizes.

If you’re involved in the PNG mining industry, drop a comment below, we’d love to connect.

The fuel farm revolution – the future of mining fuel storage

self bunded fuel farm on isolated mining site

The fuel farm revolution – the future of mining fuel storage

Emerging technologies are changing the way mining companies operate with automation and standardisation boosting safety and productivity.

QUT robotics researchers have already developed technology that will equip underground mining vehicles to navigate autonomously through dust, camera blur and bad lighting and will allow vehicle-mounted cameras to track the location of vehicles in underground tunnels within metres.

The Internet of Things – technology that networks devices, equipment and appliances through the internet – is connecting fleets, equipment and people using radio frequency identification devices and sensor technologies.

Now, innovators have turned their attention to one of the biggest challenges for remote mine sites – access to reliable power through efficient fuel storage.

self bunded tank farm in isolated mining area of Queensland, Australia

The rise of the fuel farm and self-bunded fuel storage tanks

For many miners, developing large-scale fuel farms on site is one way to ensure a secure supply of diesel to power operations.

Western Australia alone now has about 200 fuel farms, with about half of those in the mining sector.

An innovation that has paved the way for the rise of this storage options is the development of self-bunded tanks with integrated spill containment.

FES Managing Director Craig Cygler, a specialist in remote fuel refuelling solutions, says using self-bunded tanks has made the construction and relocation of bulk fuel storage to meet mining needs a simpler and safer process.

“With self-bunded tanks you avoid the need for construction work to build bunds around tank farms, and the associated valve maintenance and drainage issues to ensure contaminated rainwater doesn’t escape into the water table. 

“In self-bunded tanks the dual wall protects the environment against leaks, protects you against fuel loss and saves on excavation and construction work.

“Another great benefit with our modern tanks is that they are fully modular systems, which makes site design simple. Everything, including connecting pipework, walkways and ladders, can now be prefabricated and put together on the site within 1-3 weeks, depending on the size of the farm.

“This is a huge advance – using old methods the process would have taken twice as long.

“It also means that after three or four years when the operational needs change, the farm can be easily pulled apart and relocated to another site.”

Why fuel farms?

While renewable energy and the electric mine might be on the horizon in the future, experts say diesel is likely to remain a primary power source for the foreseeable future.

With that in mind, tackling overheads by reducing fuel haulage costs and locating storage close to work sites means fuel tank farms that can be quickly built in remote locations is a logical move.

What’s more, the farms are compatible with new automated refuelling technologies that are already being trialled by major players including Rio Tinto.

Robotic refuelling that removes the need for manual intervention is not only expected to make the refuelling process safer, but boosts the potential for fuel farms by making it even easier to build them closer to operations.

Fuel farm planning – getting the basics right

Craig Cygler says the first consideration for miners planning remote fuel storage farms is consumption – getting the capacity right can reduce the frequency of fuel deliveries, which means significant cost savings in remote locations.

“The first consideration is what type of machinery will you be filling and how many vehicles, and that will give you an idea of the storage capacity you need and the required flow rate,” he says.

“For example if you’re only looking at 10 vehicles you might only need two to three tanks.

“Most fuel farms might have 5-10 100,000 litre tanks, giving them 500,000 to 1 million litres of fuel storage.

“The dispensing equipment needs to deliver about 800 litres per minute, because it’s filling 3000-litre tanks and high-flow equipment means faster refuelling and cost and productivity savings. There’ll also need to be separate refuelling points for the lighter vehicles.”

Security is another key consideration – Cygler says while fully automated and robotic refuelling is probably still 5-10 years away for most sites, advanced fuel management systems have significantly streamlined the refuelling process and dramatically reduced losses.

Having access to real-time data and analytics allows for predictive maintenance processes that reduce vehicle down-time.

“AVI refuelling, or automated vehicle identification systems, identify each vehicle and monitor fuel usage. They can compile detailed data that includes who is operating the vehicle and changes in fuel consumption,” he says.

“Fuel management systems provide an important basis for fuel management and are also an effective way to reduce theft and wastage.”

The future of mining fuel storage

It seems likely increased automation will be the way of the future for mining refuelling.

QUT Professor Michael Milford says automated refuelling technologies trialled in agriculture could have mining applications.

“Refuelling is obviously potentially quite hazardous,” he says, “so that’s an area which is under active research in terms of automating it.

“The big appeal of robots is in dull, dirty and dangerous conditions, and mine sites often fulfil two or three of those criteria simultaneously.”

To find out more about fuel tank farm planning and installation, talk to the experts at FES Tanks on 1300 651 391 or email us.

 

Autonomous Truck Refuelling: The Robot Revolution

Autonomous Truck Refuelling - hero image

Autonomous Truck Refuelling: The Robot Revolution

TAKE a flight up to any mine across the country and its clear the industry has seen a massive shift in technology over the last five to 10 years.

Autonomous Truck Refuelling - hero image

Automation has disrupted the way the majors and juniors are doing business and having an impact on their bottom line, not to mention significantly improving safety.

In the WA Pilbara alone, three-storey high trucks are driving themselves around across Rio Tinto, FMG, and BHP’s iron ore mines, drills are now autonomous and the trains hauling the ore from pit to port are beginning to operate without a driver– instead run by a team in a remote operations centre more than 1000km away. (crazy, right?).

Rio Tinto was one of the first players to enter the automation game. Now, driverless vehicles are becoming synonymous with the mining industry. And while it may take a while for the cash-strapped juniors to get there, from what we hear it’s just a matter of time.

So what’s the next step for automation, beyond driverless trucks?

You may have heard of the buzz word Industry 4.0 (also known as the fourth industrial revolution) incorporating cyber-physical systems and the Internet of Things into mines. There’s also an emerging trend in robotics that will drive further efficiencies across operations, namely autonomous truck refuelling technology.

Truth is, there are still a number of challenges that exist with current refuelling methods. First up, the current process involves a handful of risks to staff who are working around the truck’s wheel base (where there can be potential fuel spillages). Manual fuel stations are also generally located a long distance from the mining pit, meaning there can be up to an hour a day in lost production time—bad news for miners that are working around the clock to meet their production guidance.

It is clear autonomous truck refuelling is the next natural step in the automation chain to add even more value to an operation.

Autonomous truck refuelling: How it works

In a nutshell, autonomous truck refuelling technology involves a robotic arm that removes the manual aspect of hooking up a truck to a diesel tank to refuel. The good news is that the technology is already readily available.

There are a small group of innovators, both here and abroad, that have pioneered solutions for existing autonomous haulage systems.

Australian-based Scott Automation + Robotics is one example. The technology company has developed Robofuel; an automated refuelling system that can be paired with an ABB or KUKA robots and self bunded fuel storage tanks to remove the manual aspect of refuelling. Robofuel uses an innovative vision sensing and detection system to locate the position and orientation of the truck’s fuel tank.

“This information is used to couple the fuel nozzle with the tank. Fuel spillages are minimised through the controlled coupling and pumping, mitigating the risk of environmental contamination,” Scott Automation + Robotic said.

robofuel-robotic refuelling arm
Robofuel is suited to all commercial fuel nozzles and receivers with no additional equipment required on the vehicle. Image: Scott Automation.

Robofuel has been proven to increase productive hours and the efficiency of trucks, all while reducing on-site costs. And, if you’re not already convinced, in 2016 the technology was nominated as a finalist in the Australian Mining Prospect Awards in the Innovative Mining Solution category alongside heavyweights such as Caterpillar, Komatsu, and Enerpac.

Check out the below demonstration of the truck refuelling technology in action. Impressive stuff!

International company Rotec has also developed a Robotic Fuelling System (RFS) of a similar scale. Its system connects in 75 seconds, has a 300 gallons per minute fuel rate, and can disconnect in an impressive 30 seconds, and is made up of a horizontally placed delta robot with three driving mechanisms mounted on a sub frame that moves six arms.

Productivity gains, reduced risk

According to McKinsey & Company the deployment of data analytics, robotics and other technologies will unlock between $290 billion and $390 billion in annual savings for producers in 2035.

Autonomous truck refuelling technology will be one of the key contributors to these cost savings, and is now being trialled and tested across mine sites globally.

The Benefits of Autonomous truck refuelling

  • Increased productivity and cost savings with refuelling stations located closer to mining activities, enabling trucks to complete one additional cycle per shift.
  • Ability to refuel without local operators coming in contact with live autonomous vehicles.
  • Safer working environment.
  • Minimised spillages and exposure to hazardous liquids.
  • Greater refuelling speeds of up to 300GPM.
  • Flexibility: stations can easily be relocated and hooked up with fuel farms or mobile tankers.
  • Reliability through climate control and ingress protection systems.
  • Easy to operate and monitor for drivers, and fully automated for autonomous trucks.

Just ask the team at Gina Rinehart’s $10 billion Roy Hill mine in the Pilbara. The mine has been testing an in-pit robotic refuelling device at the project since 2016.

“The truck drives up to the device and a robot opens the door of the sea container,” Roy Hill chief executive Barry Fitzgerald told The Australian Financial Review.

“It then undoes the fuel cap, connects the fuel hose and fills the truck. We see some timing benefits in the sense it can fuel trucks at about a third of the time, also occupational health and safety issues in not handling the hoses, and it gives us greater flexibility to move it around the pit.

“My view about autonomy and robotics is that it is a fact of the way of the future.”

Integrating autonomous truck refuelling with your existing system

You’re now familiar with the benefits, but how do you introduce a new system like this into your existing operation?

It’s really quite a simple process. One of these bad boys can be bolted into an existing flexible fuel storage system, like our self-bunded tanks. In fact we have been supplying self bunded tanks to the mining sector for years.

Autonomous Truck Refuelling set-up
Image: Scott Automation.

With more than 100 years combined experience in the diesel fuel game, we are excited by the opportunities in the autonomous truck refuelling space and can’t wait to work with more mines to meet their fuel storage needs, and partnering with METS companies developing this new technology.

Join the conversation: What’s your thoughts on autonomous truck refuelling? Have you or do you know of a company already using this?

Oil Storage for Commercial Businesses

oil-storage. oil drum spilling out oil

Commercial Oil Storage. Don’t slip up!

If you’re in any industry that runs a lot of vehicles or heavy machinery, no doubt you are keen to get the best value out of your fleet – and who isn’t? – there’s a fair chance you’ll at some stage consider designing or equipping a new vehicle maintenance facility for your business.

oil-storage. oil drum spilling out oil

A properly run maintenance depot can help your fleet operate at maximum efficiency with minimum downtime.

Getting your oil and lubricant storage right is one of the critical considerations – we’ve listed some of the key points to note for your transport facility.

The Good Oil – Avoid oil storage slip-ups

Keeping the oil you use in top condition is critical to your operations. Not only that, but getting oil storage wrong can be an expensive mistake.

For many transport operations, the best option is to design an oil storage room for storing bulk oil tanks, intermediate bulk containers (IBCs) and drums.

It’s worth consulting an expert when planning this part of your operation. You’ll need to check the storage regulations in your state to determine whether you need bunded tanks, which are generally considered industry best practice.

Some operators consider constructing a bunded oil room as the most cost-effective option, but these days there are plenty of cost-effective self-bunded tank options in a variety of capacities that will give you the advantages of versatility and portability without the expensive capital works costs. What’s more, tanks like those in the FES Tanks range offer extra advantages like easy access for cleaning and testing the quality of your oil and fuel.

Self-bunded tanks vs IBCs

Did you know it is contrary to Australian Standards (AS1940) to store oils for dispensing in intermediate bulk containers (IBCs) unless you have high turnovers and can provide evidence that the container is being changed every 2-3 weeks?

The reason is that IBCs degrade due to UV exposure, making them non-compliant with the Australian Standards and not necessarily the optimum storage option for your products.

Hartex Engineering general manager Varuna Krishnaratna says insurance companies may also refuse to pay out for damage due to fires or oil spills from IBCs being incorrectly used as oil tanks.

The upshot is that if you opt for IBCs you might pay less initially, but the costs could be considerably more in the long-term in regular container replacement, compliance paperwork and containment.

Small volume bloc oil tanks are a safe, economical and convenient way to avoid the headaches if you need to store and dispense smaller quantities of oils or lubricants, and importantly these small cube tanks are fully compliant with Australian standards.

FES Bloc tanks are built from high grade steel with durable fittings. They are all fininshed with a heavy-duty 300 micron paint finish and are self-bunded with a secondary internal container. These tanks also come with forklift pockets and lifting eyes at each corner, while their cube styling gives maximum volume (more space efficient than drums) with a small footprint.

To find out more give the experts at FES Tanks a call on 1300-651-391 or get in touch via our web form.

Top 5 Advantages of Fuel Tank Hire & Leasing

Why You should Consider Fuel Tank Hire & Leasing

In any expanding project or times of business growth, outlay and capital can be two major hurdles that often need to be overcome while meeting increased demands and need for infrastructure.

fuel storage tanks - hire or buy

Whether its covering the cost of implementing these systems or buying new equipment, investment is often required. Hiring and leasing can provide a great alternative to traditional purchasing that allows you to adjust to these changes in demand while minimizing purchasing and maintenance costs.

Why hire fuel storage?

Hiring and leasing is a flexible option for fuel storage that allows you to reduce your outlay to a monthly payment. In fact the cost of the fuel tank hire can be factored into your ongoing fuel purchases so it can be indexed to a fixed price per litre.

Whether it’s a short-term solution to cover some immediate fuel storage demand, such as a tank failure, or a long-term way of supplementing existing infrastructure to handle issues like seasonal variance and peak-demand.

Hiring and leasing fuel storage is a way of ramping up your fuel supply when its necessary and adding additional equipment as needed.

You can always purchase when you have a clearer picture of your needs. We run through our top 5 benefits of hiring below.

Minimal Initial Outlay

Hire and lease agreements are a great way of providing the means to cover immediate demand needs without a high amount of initial investment or cash-flow. Also, our fuel management and storage systems can be upgraded and the size of your leased equipment changed as your business does.

This flexibility can be very useful for businesses that want to test the waters before making a purchasing decision as it allows you to test or trial a system, and see how it performs on-site.

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Easy Set-Up & Maintenance

Providing all the benefits of a self-bunded system, that is a tank within a tank, these systems have a minimal on-site footprint and require no major external construction for safety compliance. You can read about the benefits of self-bunded tank design here.

All tanks come with a certified maintenance document to ensure fully operational for immediate use on site.

Our tanks also provide many features for easy maintenance, such as dual-manways for inspection and cleaning, a protective anti-corrosion coating and are fully certified for compliance with all Australian safety standards and regulations.

Relocatable & Convenient

Set up of our self-bunded tanks is as easy as dropping them on-site.

Whether the project is accessed by land, sea or air – hire tanks can be a great way of providing immediate access to fuel in remote areas, off-site projects and any situation where a long-term fuel storage solution may not be financially viable.

Add-ons for Fuel Management & Security

FES Tanks have a full range of dispensing equipment that can give your hired fuel tank all the capabilities of a refuelling station, and our fuel management systems mean you can even monitor and measure metrics like fuel consumption to help with accounting and budgeting.

Dispensing equipment allows your fuel storage to act as a refuelling station – your fleet vehicles and equipment can be refuelled directly from your hired storage tank.

Worried about fuel theft and security of your hire tank? We can also provide security solutions for your hired tank, such as user-account access, that make fuel theft virtually impossible.

Free Consultancy

FES Tanks consultants have years of experience in both fuel supply and distribution – and it’s all available to our customers free of charge.

Regardless of whether the decision is made to rent or buy – we ensure that you get the right system for your needs, and are happy to provide quotes free of charge.

Not only do our staff help you stay on top of all the technical stuff, like current regulations and compliance issues for your equipment, but we can also help you figure out a combination of lease and purchasing that fits your needs perfectly.