Australian Company A Step Closer To Solomons Nickel Mine

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Axiom awaits final appeal by Japanese giant Sumitomo

By PNG correspondent Liam Cochrane

MELBOURNE, Australia (Radio Australia, Dec 3, 2014) – Small Australian firm Axiom is nearing a final victory over Japan's Sumitomo over rights to mine nickel in Solomon Islands.

Taho Village sits on the southern shore of Santa Isobel, an idyllic picture postcard vision of South Pacific paradise.

A short helicopter flight north of Solomon Islands capital, Honiara, on nearby Guadalcanal, Taho in recent years has become the battleground in a war fought between Japanese trading giant Sumitomo and tiny Australian group Axiom Mining.

The prize is a huge magnetite nickel deposit and, against all odds, Axiom has prevailed after a resounding win in the courts in October following four years of legal skirmishes.

It is a win that has the locals cheering.

When Axiom chief executive Ryan Mount and a group of investment bankers flew in a fortnight ago, the entire village turned out to greet them.

In this deeply religious community, the David and Goliath imagery of the stoush has resonated with the locals as the priest conducts a blessing - a spiritual cleansing - of the site while the village prepares a traditional feast of sweet potato, lobster and outsized mud crab.

A buoyant Ryan Mount is itching to get underway with the project which sits on uninhabited land nearby. So close to the surface is the deposit, little will grow on the land.

"One of the reasons we can bring this to market so quickly ... is because this deposit lies closely to the surface," he explained.

"The deposit also sits right on the shoreline and that shore encompasses a deep water harbour. Those three aspects combined mean that we can move this to market very quickly."

Not everyone is overjoyed about the development, but opponents are unwilling to appear on camera.

They worry about soil run-off during the heavy tropical rains and question whether locals really understand the impact of removing the top layer of their land given the fragile ecosystem.

Axiom, however, prides itself on its relationship with the local communities. It has gifted a 20 per cent stake in the company to the two main landowner groups.

Mount, a former Sydney stockbroker who took control of Axiom after the Sumitomo legal action looked likely to send it to the wall, has a deep personal connection to the island nation and will live there permanently once development begins. It is a commitment that has been welcomed by locals.

"The opportunities for them are not just in equity," he said.

"We're obviously going to be employing a lot of the locals. We have a policy of employing the local landowner groups and villagers before we go abroad to the market."

There are good reasons for getting local landowners on side. A short drive from the nation's capital, Honiara, sits the Gold Ridge mine which has had a chequered history.

Until recently, this operation accounted for 20 per cent of the country's GDP. Now it lies dormant.

In April, the Melbourne-based St Barbara evacuated its expatriate workers without notice, on the premise that the island's worst floods in living memory created a security threat.

Locals, however, believe the mine was in no danger, given its elevation, and point to the plunging gold price as the real reason.

With the wet season approaching, locals fear the tailings dam may spill over, threatening to contaminate local waters with arsenic and cyanide.

Dick Douglas from the Gold Ridge Community and Landowners Council said the community is scouting around for interested parties to take over from St Barbara.

"If there is an interested Chinese company or any other companies would like to have an interest in the operation at Gold Ridge, then we can have an open door to discuss and have dialogues with any investors," he said.

The Gold Ridge situation, and the long dormant Panguna copper mine on nearby Bougainville, have created a blue print for Axiom on how not to conduct business.

First tested in the 1950s, Axiom secured the lease four years ago. It currently is engaged in baseline studies before beginning development and hopes to be shipping ore in 12 months.

Sumitomo had planned to build a processing facility on the site, an undertaking Axiom has shunned, preferring the earlier cash flow to the more capital intensive option of on-site processing.

It may be celebration time at Taho Village, but Axiom and its local partners have one final legal hurdle.

"Sumitomo have lodged an appeal in the Court of Appeal, which is the highest court in this land," Mount explained.

"We will deal with that when that comes about and we expect that to come about in February next year. But we're pushing on with this project and we're very confident of defending our rights in the Court of Appeal."

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