Australian miner Malachite Resources is trying to enter Solomon Islands’ minerals sector by making deals to acquire two companies for its plan to mine nickel in Isabel Province.
The ASX-listed company announced it had finalised plans to acquire Sunshine Minerals, a private company owned by local landowners and foreign investors, and it is in the process of acquiring an 80 per cent stake in Kolosori Nickel.
Both companies own tenements and prospecting licences in Isabel Province.
The deals with Malachite Resources are valued at around $AUD4 million, but are dependent on the Solomon Islands Government approving a mining lease.
Malachite’s CEO Geoff Hillier declined an interview with Pacific Beat as talks are still ongoing.
But according to the company’s website, the plan is to combine the two tenements into one mine, and ore would be shipped overseas to buyers, with the operation to be setup over a two-year period.
Malachite Resources is involved in a joint venture gold mine in Queensland but according to its last annual report, low returns and a dispute have threatened that project.
Isabel Province is well known for its nickel deposits, but fellow Australian miner, Axiom has had a troubled presence there and has been locked in a legal battle with the national government over a rejected export permit.
Axiom hasn’t been able to ship any of its minerals overseas to buyers.
Malachite Resources’ entry comes as the Solomon Islands’ government looks to increase mining activity, as the sector was responsible for just 0.5 per cent of GDP last year, compared to 5 per cent eight years ago.
A government oversight committee has been set up to help companies fast track their mining applications to the Mines and Minerals board.
Three companies have been identified to go through the process and if successful, will lead to a new bauxite mine in Rennell and Bellona Province and nickel mines in Isabel and Choiseul.
But the new arrangement has been criticised by some.
Environmentalist and landowner David Boseto said he’s worried government is using the new process to push ahead in places like Choiseul Province.
“That is the concern, when you do that [fast track] you don’t do due diligence you do shortcuts,” he said.
Mr Boseto said government must ensure it follows the country’s mining laws.
The head of the Mines Ministry Dr Christopher Vehe has insisted that stringent requirements, including environmental and social impact studies, will need to be met before any licenses are granted.