THE Frieda Mine project is Papua New Guinea’s largest reported copper, gold and silver resource. The value of the copper alone, not counting , gold and silver, is about $US75 billion and an investment of $6 billion is required to realise this.
This is the resource that Pan Aust Ltd said it will pay $125 million to own. It has put down $25 million as deposit and will pay another $50 million by the end of 2015 after it has taken control of the mine. The balance will follow later.
On Monday of last week, Pan Aust announced to the Australian Stock Exchange that the condition precedent of the September 2013 deed of sale with Glencore had been satisfied allowing the sale to proceed. The condition referred to was approval from the PNG government.
I have spoken to the Prime Minister, the Minister for State Enterprises, the Minister for Mines and the Treasury Minister about the announcement by Pan Aust and, as far as I can ascertain, the Cabinet has not sanctioned the sale of the Frieda deposit to Pan Aust.
On the contrary, the government of PNG is seriously looking and purchasing the shares in Frieda from Glencore and, as a partner in the project, it has the first right of refusal. No offer has been made to the PNG government by Glencore Xstrata to purchase its share.
As a result, I believe Pan Aust Ltd and Glencore Xstrata have acted outside the requirement of the laws of PNG and that the State should immediately institute legal action to stop the sale from proceeding and for the State to offer the same amount of money on the same terms to Glencore Xstrata and take back control of Frieda.
This will ensure that the Frieda resource is not sold too cheaply and that the State can exercise its option to hold maximum equity in the project and develop it for the good of all our people thereby maximising the return from the exploitation of our resources.
I am concerned that Pan Aust and Highlands Pacific seem to be exploiting a period when agencies of the government are fighting each other in the courts to mount a commercial coup to take control of a major resource.
It is very important that heads of government departments have their finger on the pulse to ensure that foreign interests do not acquire our resources during this period of instability.