FIJIS MINING SECTOR

Challenges and Opportunities

George Niumataiwalu
Vice Chair, Mining & Quarrying Council

Fiji Employers Federation

Reality: Mining is a high risk industry

Why Fijis Full Mining Potential has not been realised sooner?
Long Gestation Period Volatile Commodities markets Deficient regulatory framework Highly technical and complex variables involved Tainted by past practices Lack of political will

Why Now?
Commodities markets at all time highs Mining and exploration companies are willing to invest aggressively again Shortage of physical metal supply due to lack of producing mines, particularly gold Medium to long term metal forecasts, particularly for gold and copper, look very optimistic

Gold Price Trends, 2000-2010

Source: www.kitco.com

Copper price trends, 2000-2010

Source: www.kitco.com

Location of Key Possible & Existing Mining Projects

Map source: www.fijislandscapes.com

Nawailevu, Bauxite

Mt. Kasi, Au Vatukoula, Au-Ag

Tuvatu, Au Faddys, Au
Wainivesi Zn -Au

Namosi, Cu-Au

Fiji Mine Production Possibilities Schedule

Projects, excl. Iron Sands, Manganese, others Namosi Mt. Kasi Vatukoula Wainivesi Possible Yr of Mine Life, Production years Gross Revenue at Current Prices, FJD million 30-40 $1,021 7-10 10+ 10+ $120 $240 $94

2014/15 2013/14 Existing 2010

Nawailevu Tuvatu Faddys

2010 5+ 2013 10+ 2014 7-10 Total at Full Production

$40 $48 $120 $1,794

Mining Sector Expansion: Implications for Total GDP

Projected Mining Sector Contribution to Total GDP, $ millions
Nam osi P roject, $ m illions Mining Secto r Expansion less Nam osi, $ m illions GDP a t current prices (IMF), FJD m illions

9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

Mining Sector At 16+% GDP

Mining Sector At <1% GDP

2010

2011

2012

2013

2014

2015

FIJI ECONOMY NEEDS A BOOST THAT ONLY THE MINING SECTOR HAS THE POTENTIAL TO DELIVER OVER THE LONG TERM! NO OTHER SECTOR CAN DELIVER AN INCREASE IN TOTAL GDP BY AT LEAST 16%+ IN THE NEXT 5-10 YEARS, IF EVER

Namosi Project: the Key

Only the Namosi project can catapult Fiji to a different tier in developing countries; project cost is >$2.0 Billion, and annual revenues of >$1.0 Billion per annum for 30-40 years!! Newcrest is an ideal company, growing to become even larger! With market cap of approx. USD$30 Billion Size of Namosi project will challenge all stakeholders!

Challenges for the Sector

Get the Policy and regulatory environment right! Learn from PNG! Landowner issues are important, but should be placed within an appropriate policy and regulatory framework that is fair and transparent. Get projects to Feasibility Study stage soonest! Focus on outcomes, but be aware of trade-offs Govt has to work with companies and stakeholders to realise this potential - partnership approach! Strategic opportunity exists - time to act!

Landowner issuescritical in Melanesia for ALL stakeholders!

Source: www.nicholsoncartoons.com.au

Opportunities for the Sector

Kick start sustained economic growth for the long term Economic multiplier possibly > 3x Creation of supporting industries and commerce Deepening of the Fijian Economy due to sectoral synergies Possibility of Mining Contribution to national power requirements, eg geothermal energy Further development of regional social and physical infrastructure

Concluding remarks
Mining sectoral expansion and growth is critical to Fijis long term economic future Mining sectoral growth though must be managed responsibly by all stakeholders Just as there are many challenges facing the mining sector in Fiji, there are also many opportunities for sustained wealth creation

The only way to discover the limits of the possible is to go beyond them into the impossible. - Arthur C Clarke When written in Chinese the word "crisis" is composed of two characters - one represents danger and the other represents opportunity. ~ John F. Kennedy, address, 12 April 1959

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