Ramu mine worth billions
The value of Ramu Ni-Co project quoted in The National newspaper is misleading. It also holds the largest Sino-Australian nickel and cobalt project worth $US1.7 billion (K4.6 billion)” from the article entitled “PNG on a verge of a Boom”.
For brevity, Ramu laterite deposit contains 1.44 million tons of nickel and 0.143 million tons of cobalt within a reserve of 143mt at 1.01 per cent Ni and 0.1 per cent Co. At today’s buoyant prices of $US9/lb for nickel and $US20/lb for cobalt, the in-situ value of contained nickel and cobalt in the Ramu project stands at about $US28 billion and $US6 billion.
So the actual value of Ramu nickel cobalt project is $US34 billion or K92 billion at today’s prices. This excludes exploration dollars already spent on the project. This mine will produce in excess of 31,000 tonnes of Ni and 3300 tons Co annually for a period of 20 years (with the potential for up to 30 years). The worth of metals produced annually may exceed $US750 million subject to fluctuating metal prices and production capacity. This is somewhat equivalent to well over K2 billion per annum at today’s exchange rate and metal price.
Sadly, 85 per cent of the ownership of the Ramu mineral resource was sold to MCC, the Chinese state owned enterprise for a mere 5 per cent ($US1.7 billion) of the total value of this mega resource. So the $US1.7 billion is the construction and initial operating costs.So how much is left for PNG or Papua New Guineans? Barely 10 per cent (because HPL is a public listed company) in the bones as usual through the following entities: -
* 8.56 per cent Highlands Pacific Limited
* 3.94 per cent MRDC
* 2.5per cent landowners
To set the record straight, the present value of Ramu mine is worth about $US34 billion (K92 billion) and not $US1.7 billion (K4.6 billion) at today’s price but unfortunately very little if not none will be reflected in long-term tangible development of Papua New Guinea. Indeed it is another example of broad daylight rape and exploitation of Papua New Guinea. PNG government and its entities must act radically and swiftly in changing the current trends in order to maximise realisation of the natural resources for Papua New Guinea. Sadly, PNG government is continuously selling multi-billion-dollar resources cheaply, for next to peanuts because it seems to lack comprehension and in-depth analytical skills compounded by greed and ignorance.
Kaul Gena, Ph.D
Western Australian School of Mines