nauru..second chance..phosphate...

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    This was reported last month on Landline.

    Has a video story to go with it.

    Pacific Paydirt

    Reporter: Sean Dorney

    First Published: 02/03/2008

    ANNE KRUGER, PRESENTER: No one has a bigger smile on their face these days than the lucky investors who bought shares in fertiliser companies a few years back and held on to them. With demand clearly exceeding supply, farmers have been hit hard by the skyrocketing cost of this vital rural input. So much so, the Australian Competition and Consumer Commission, the ACCC, is conducting its own inquiry into fertiliser pricing. But it seems some relief may be at hand from a near neighbour.

    Pacific correspondent, Sean Dorney, has been to Nauru, where the island's phosphate mining industry is getting a whole new lease of life.

    SEAN DORNEY, REPORTER: More than a century of phosphate mining has left the interior of Nauru, known as Topside, looking like this: a wasteland. More than 10 years ago in an out of court settlement, Australia began putting money into a trust fund to rehabilitate this devastated landscape. Finally, that rehabilitation is about to begin.


    SEAN DORNEY: It's a controlled blasting not to contaminate the phosphate remaining down below.

    GRAEME RAPLEY: Ok Sean, you can see the blast fracture mark down through there and you can see the hole over there, you see the fracture line coming right through there, that's all we want. We only want to crack them, we don't want to blast them.

    SEAN DORNEY: Lots of pieces.

    GRAEME RAPLEY: Into pieces because we've got to come through and hand clean that so that we don't get any coral stone in the secondary mining when we come...

    SEAN DORNEY: Graeme Rapley is the Nauru Rehabilitation Corporation's engineering manager. The corporation now runs the mining as well as the rehabilitation.

    (To Graeme Rapley) And the secondary phosphate is sort of underneath...

    GRAEME RAPLEY: Secondary phosphate, we're standing on what we would term secondary phosphate now.

    SEAN DORNEY: Right.

    GRAEME RAPLEY: Ok, and we're getting a higher grade, our secondary phosphate. The deeper you go, the higher the grade.

    SEAN DORNEY: Nauru has just marked its 40th anniversary of independence from Australia. The early years of independence have been referred to on Nauru as the "glory days", when the Nauruans became the second wealthiest people per head in the world. But mismanagement, trickery, corruption and waste bankrupted the tiny central Pacific nation. Celebrations like this are a rarity these days.

    (Footage of a choir singing)

    The new president of Nauru, Marcus Stephen, sees a way out of Nauru's financial woes.

    MARCUS STEPHEN, NAURU PRESIDENT: 40 years ago, the tiny island of Nauru became a republic. Throughout those years we have experienced both immense wealth and extreme hardship. Today I am pleased to note that Nauru is slowly recovering from its economic malaise.

    SEAN DORNEY: This rusting structure dates back to the glory years of Nauru's phosphate exports. It hasn't been operating for 30 years. And this newer structure, this newer cantilever looked as though it was heading for obsolescence too. But with secondary mining, there's a future here for phosphate exports and a ship will be here in the next few days to take another load of phosphate to Australia.

    MARCUS STEPHEN: We are very, very lucky. We've been given a second chance, the secondary mining now has started. Started in fact this month.

    FREDERICK PITCHER, NAURU RESOURCES MINISTER: The former phosphate company basically fell apart because they didn't maintain anything and they lost the capacity to be able to export, produce and export phosphate. Governments bled the company dry, didn't leave it any funds to maintain itself or to reinvest in itself. And what we did three years ago was to find interested investors to help us rebuild our plant, and that's where we managed to get the assistance of an Australian company, Incitec Pivot.

    BERNARD WALSH, INCITEC PIVOT LTD: It had been in the works for many, many years. I guess it's fair to say that the project was very difficult and longer than we had imagined. But we did invest over $5-million and at the end of the project, we successfully, partially refurbished the operation there.

    FREDERICK PITCHER: We had no means to pay, repay them initially. The deal with Incitec Pivot was that we would pay them back in phosphate rock.

    SEAN DORNEY: And where is that now? Do you still owe them some phosphate?

    FREDERICK PITCHER: It is basically paid off. We have this next shipping next month. Part of that ... a small portion of that will go towards the debt, and the rest is in cash. So, we are clear almost.

    SEAN DORNEY: But the Incitec Pivot money was not enough, and that's when Nauru turned to the rehabilitation trust fund. In the early 1990s, Nauru sued Australia before the International Court of Justice for the damage done prior to independence. Prime Minister Paul Keating settled out of court, and Australia has been contributing millions of dollars a year to a fund to pay for repairing the land.

    FREDERICK PITCHER: Australia and understandably - and in fact I'm glad that they did do this - they've been very hesitant to release the trust funds to former governments because we needed a plan on how to spend them and how we could use those funds specifically for rehabilitation. Three years ago, we'd convinced Australia, AusAID, to put money into a feasibility, a full feasibility study on secondary mining. The conclusions were very positive, in fact more than any of us expected. And with the recommendations to the Australian Government and to us, to proceed immediately into secondary mining.

    SEAN DORNEY: What's the quality going to be of this secondary phosphate?

    FREDERICK PITCHER: Cadmium has been our biggest problem in the past. That's why we lost some of our markets in Australia and New Zealand. Our cadmium is the highest in the world. These are heavy metals that aren't accepted by many countries nowadays. We've found 60 per cent reduction below six metres.

    GRAEME RAPLEY: Over the years that this has been sitting on the seabed that it's all been made up from dead fish life and that. Cadmium has always risen to the top, so when it actually, the big earthquake happened and Nauru popped up out of the ocean, the cadmium was in the top five metres. We've stripped all that top five metres off with the primary mining. We're into material now that's got very, very low cadmium content.

    BERNARD WALSH: Early indications are that the quality of the phosphate rock in secondary mining is good in that the cadmium levels will be lower than what was experienced in the primary reserves. Indications are that we would be able to use more of the Nauru rock in our blend to manufacture single super phosphate for Australian farmers, and that's a good thing.

    SEAN DORNEY: The Nauru phosphate is landed at Incitec Pivot's plant at Geelong.

    INCITEC PIVOT SPOKESMAN: The Nauru rock comes to us, and then we have to grind it down to a find talcum powder to be able to make into our super. This is the final single super product that we make from the Nauru rock.

    GRAEME RAPLEY: We're planning on exporting around 500,000 tonne a year from here on in, which will see Nauru exporting phosphate for at least another 15 years to come.

    SEAN DORNEY: And the plan is for the rehabilitation to go in step with secondary mining.

    GRAEME RAPLEY: In three months' time the area that we're starting on is actually designated for reforestation, so there will be small trees and things like that being planted there. A lot of the other areas are earmarked for market gardening, areas for water reservoirs, and things like that.

    SEAN DORNEY: So, how long ago would this sort of stuff been mined out?

    GRAEME RAPLEY: This was mined about 20 years ago. The area that we're looking at in the black was mined ... yeah, it was around about 20, maybe 22 years ago, maximum. We've got about a million tonnes of phosphate left for primary mining, which will take us about a year to get that out.

    SEAN DORNEY: So the rehab will start, what, on areas mined a long, long time ago?

    GRAEME RAPLEY: The rehab yeah, the rehab work up just not far away from here is where we're starting out our trial. But that was mined probably something around about 40 years ago. The reason why we're picking that area is it's easily accessible for the public to get in and watch us do the rehab, so that they can get a really good feeling about what we're trying to achieve here, yeah.

    SEAN DORNEY: Oh well, let's go and...

    GRAEME RAPLEY: We'll go and have a look at the other operations.

    SEAN DORNEY: The broken pinnacles are taken to a crushing plant which could be turning out material for a brand new export industry.

    GRAEME RAPLEY: At the moment, we're making three different products out of this crushing plant.

    SEAN DORNEY: This one here, would that ...?

    GRAEME RAPLEY: That's about 40mls, that's what we need for rehab work.

    SEAN DORNEY: Right.

    GRAEME RAPLEY: Ok, so we probably wouldn't have any demand for export on that. It's this product here, this 20ml down to five which is a good concrete aggregate that we're looking at export.

    SEAN DORNEY: The Americans are really rebuilding Guam as a big army base...

    GRAEME RAPLEY: Yeah, a big naval army base, yeah.

    SEAN DORNEY: Yeah, so this stuff would go -

    GRAEME RAPLEY: If we can get on for that, it would be very good for that, and it would be very good for Nauru. It's got a ... probably got an export potential for this crushing plant of around about three to four million dollars a year for Nauru. So, you know, don't write Nauru off. We've got a lot of potential and a lot of export earning dollars to come in yet.

    BERNARD WALSH: The importance of Nauru rock to us is that we do have a high quality rock to make single super phosphate out and we capitalise on a lower freight cost as compared to other parts in the world, because the demand for single super phosphate going forward doesn't look like diminishing. Australian farmers need it for the pasture market and we hope to continue to supply it for a long time.

    DR KIEREN KEKE, NAURU FINANCE MINISTER: It's a second chance for us. Without that, Nauru's future would certainly be a lot less attractive than it may be. The trick for us is to learn from the mistakes of the past and not repeat them.

    SEAN DORNEY: So Nauru has learnt its lesson from the disaster that befell it?

    MARCUS STEPHEN: I think we've learnt more than just a lesson. It's more than a lesson, it's really the effect that it had on the Nauruan people itself where we went months without salaries and it was a really terrible time for the Nauruan people, and that's something that we must avoid in the future.

    SEAN DORNEY: The youth of Nauru have not enjoyed the wealth that their parents once had, but if the current government can stay on track and those bitter lessons of the past have been learnt, these youths may have something to clap about.

    Cheers markco2
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