Frieda River
From IntFX
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[edit] Brief Overview
A very large porphyry copper deposit was first discovered at Frieda River in the West Sepik Province in the 1960's. The mineralised system is so big that despite over 30 years of exploration many of the mineralized zones are poorly understood.[1]
[edit] Location
The Frieda River project is located in Sandaun province, northwestern Papua New Guinea, about 90 km north of the Ok Tedi mine and 175 km west of the Porgera mine.[2]
[edit] Ownership
Xstrata Copper exercised an option to obtain a 73.7% interest in the Frieda River project in a joint venture with Highlands Pacific Limited (16.4%) and Japan’s OMRD (9.9%).[3]
[edit] Production per annum
The Ramu project will produce some 31,150 tonnes of nickel and 3,300 tonnes of cobalt per annum when fully operational, with an operating life estimated to be in excess of 20 years.[4]
[edit] Production Start Date
Exploration of high-grade targets will continue in 2006.[5]
[edit] Deposit size
The total porphyry copper resource is estimated to be in excess of 1000 million tonnes at 0.5% copper and 0.3 g/t gold. The high sulphidation Nena resource, which lies adjacent to theporphyry system, has reserves of 52.8 million tonnes grading 2.0% copper and 0.7 g/t gold with an additional oxide gold cap of 12.8 million tonnes grading 1.4 g/t gold and 0.1% copper using a 0.25% copper and 0.6 g/t gold cut-offs.[6]
[edit] Capital Cost
Estimated capital cost of the project was US$1.6 billion.[7]
[edit] Notes
Anticipated availability of low-cost power, generated from natural gas supplied from a regional gas field, contributed to the potential viability of the project. Infrastructure requirements would include the power station; an airstrip; 90 km of roads connecting the mine sites, the process plants, and a wharf on the Sepik River; and residential and community facilities at the mine site.[8]
In total, 1,423 metres of drilling to collect metallurgical samples and 6,135 metres of exploration drilling were completed.[9]
The pre-construction work by MCC Ramu NiCo Ltd (manager and operator) “MCC” continued during the 2007 year with a number of major milestones being completed, including:
- Accommodation and administration infrastructure in place
- 95% of the total earthworks at the processing plant being completed;
- Work commencing on the Basamuk wharf;
- Ramu River road bridge completed (temporary bridge);
- Access road to the mine site opened;
- Major equipment ordered and in some cases under manufacture (autoclaves);
- Construction of the Madang office complex commencing; and
- Majority of the IT platform installed and operational.
The pre-construction committed expenditure to the end of the 2007 year amounted to nearly USD200 million. Committed expenditure for 2008 is estimated to be approximately USD350 million and the project remains on target for the Kurumbukari mine to be commissioned in the first half of 2009 and the Basamuk process plant commissioning in late 2009. The major milestones for the 2008 year include:
- Project financing to be completed and the project to move ‘officially’ into construction;
- Permanent Ramu River road bridge completed;
- Basamuk wharf completed – thus allowing project components and freight to be unloaded right at the project site;
- 60% of the pipeline steel work to be delivered to site with 50% of the pipeline installation completed;
- First of the autoclaves consigned with the on site installation work commenced;
- Civil construction for the mine beneficiation plant completed; and
- Madang office complex
completed.[10]
[edit] = External Analysis =
Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 85% of the population. Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. The government of Prime Minister SOMARE has expended much of its energy remaining in power. He was the first prime minister ever to serve a full five-year term. The government also brought stability to the national budget, largely through expenditure control; however, it relaxed spending constraints in 2006 and 2007 as elections approached. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including a worsening HIV/AIDS epidemic and chronic law and order and land tenure issues. Australia will supply more than $300 million in aid in FY07/08, which accounts for nearly 20% of the national budget.
| GDP (purchasing power parity): | $16.56 billion (2007 est.) |
| GDP (official exchange rate): | $5.914 billion (2007 est.) |
| GDP - real growth rate: | 4% (2007 est.) |
| GDP - per capita (PPP): | $2,900 (2007 est.) |
| GDP -composition by sector: | agriculture: 35.5% |
| industry: 37% | |
| services: 27.5% (2007 est.) | |
| Labor force: | 3.557 million (2007 est.) |
| Inflation rate (consumer prices): | 1.8% (2007 est.) |
| Investment (gross fixed): | 20.4% of GDP (2007 est.) |
| Budget: | revenues: $2.209 billion |
| expenditures: $1.994 billion (2007 est.) | |
| Public debt: | 43.7% of GDP (2007 est.) |
| Agriculture - products: | coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; shell fish, poultry, pork |
| Industries: | copra crushing, palm oil processing, plywood production, wood chip production; mining of gold, silver, and copper; crude oil production, petroleum refining; construction, tourism |
| Industrial production growth rate: | 4.8% (2007 est.) |
| Oil - production: | 50,000 bbl/day (January 2006 est.) |
| Oil- consumption: | 26,000 bbl/day (2005 est.) |
| Oil - exports: | 44,580 bbl/day (2004) |
| Oil - imports: | 24,020 bbl/day (2004) |
| Oil - proved reserves: | 240 million bbl (1 January 2006 est.) |
| Natural gas - production: | 95.91 million cu m (2005 est.) |
| Natural gas - consumption: | 95.91 million cu m (2005 est.) |
| Natural gas - exports: | 0 cu m (2005 est.) |
| Natural gas - imports: | 0 cu m (2005) |
| Natural gas - proved reserves: | 331.3 billion cu m (1 January 2006 est.) |
| Current account balance: | $314 million (2007 est.) |
| Exports: | $4.553 billion f.o.b. (2007 est.) |
| Exports - commodities: | oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns |
| Exports - partners: | Australia 30.2%, Japan 8.2%, China 5.7% (2006) |
| Imports: | $2.269 billion f.o.b. (2007 est.) |
| Imports - commodities: | machinery and transport equipment, manufactured goods, food, fuels, chemicals |
| Imports - partners: | Australia 52%, Singapore 12.6%, China 5.9%, Japan 4.3% (2006) |
| Economic aid - recipient: | $266.1 million (2005) |
| Reserves of foreign exchange and gold: | $1.664 billion (31 December 2007 est.) |
| Debt - external: | $1.814 billion (31 December 2007 est.) |
| Stock of direct foreign investment - at home: | $NA |
| Currency (code): | kina (PGK) |
| Exchange rates: | kina per US dollar - 3.03 (2007), 3.0643 (2006), 3.08 (2005), 3.2225 (2004), 3.5635 (2003) |
.[11]
