DELAYS IN NICKEL PROJECT VERY COSTLY FOR PNG

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Somare says stopping Ramu could impact future investment

PORT MORESBY, Papua New Guinea (PNG Post-Courier, June 9, 2010) - Papua New Guinea will be liable to repay the Chinese Metallurgical Construction Company (MCC) and its partners if the Ramu nickel/cobalt project does not proceed as scheduled.

Prime Minister Sir Michael Somare said yesterday that the Ramu project was important for Papua New Guinea and if it did not move forward, the country’s reputation as an investment destination would be at stake.

He also said that Parliament passed the law on environment to ensure that the project proceeded while the courts dealt with the opposition by non-government organizations on the deep sea tailings.

He said he got advice from all legal experts including the Chief Secretary to Government Manasupe Zurenuoc and Attorney General Ano Pala. The Government even got advice from a Scottish firm that advised that the deep sea tailings would not have any impact on the marine environment.

The Ramu project is being developed at a cost of US$800 million [PGK2 billion] and the major partners include Highlands Pacific Limited and Mineral Resources Development Company Ltd. The Ramu landowners are also partners in the project.

"We had to make changes to get speedy process to carry out the project," Sir Michael said.

"If delayed, it is going to cost us money. We cannot get mining going while this is in court."

He did not reveal how much it would cost the State but he said, "the Government will lose (lot of money)".

And on top of this he said, "Our reputation will also be at stake. So it is in the best interest of the country."

He said there had been no other company that was interested in developing the Ramu project at a time when no investor wanted to enter the country and the Chinese Government offered to do it.

"I went and talked with the Chinese and they freely offered to come in and invest their money in the Ramu project," he said.

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