PNG: Biodiesel in Milne Bay Province from Oil palm or Coconut?

Source: Excerpts from CHANGING LIVES, April 4, 2007, Alotau
Environment Ltd , Box 552, Alotau, Milne Bay Province, Papua New Guinea. PJ

Oil Palm Woodlark Island & Orangie Bay

We now see that there has been some consideration for extending oil palm
around Orangie Bay

(see extract from the Kalinoe letter to Vitroplant below).

Orangie Bay has old coconut plantations and secondary growth.

Isn't the idea of breaking up the Cargill monopoly on the mainland sensible?

Bring in some competition, so at least there can be the semblance of
market-pricing for out-growers fresh-fruit?

So, why not?

Well one answer, to the "why not?", is, why oil palm expansion at all?

If Milne Bay has to do bio-diesel, why not coconut oil?

Milne Bay exports about 1,200 tonnes of copra a year. But it is said to
have a copra capacity of around 20,00o to 30,000 tonnes from existing
plantings.

Coconut is almost exclusively in villager and smallholder hands. The
planting are there, no need to cut down forests, purely a need to
rehabilitate.

Further, if push comes to shove, in a bad El Nino dry, villagers can eat
coconut as they did in 1997. On the other hand, oil palm is unsustainable.

Generally, oil palm expansion has to be done by getting villagers to cut
down forests in various disguises of VOP and out-grower lease-lease back
etc.

The danger with the idea of oil palm on Woodlark, is that it may never
progress past salvage-logging. In the late 90s, the Malaysian company
Damansera, at Aitape, Sandaun Province, clear-felled 5000ha, extracted
the logs, and then went belly-up.

The oil palm project collapsed after the clear-fell logging was completed.

If oil palm was established on the government land at Woodlark Island, a
nucleus estate, would pre-suppose the importation of labour, from, so we
are told, Kiriwina.

The environmental and social difficulties are large.

Alotau palm oil bio diesel news

Letter Government Secretary Josua Kalinoe CSM OBE, to Dr. Marek
Lumbomski, of Vitroplant Ltd, dated 3rd July 2006:

" I thank you for sending me a copy of your letter dated 16th June 2006
to the Governor for Milne Bay Province in relation to the business
proposal for the development of Oil Palm Plantation inOrangie Bayand
Woodlark Islandin Milne Bay Province.... your request for tax holiday
and customs duty exemption for all importation related to the plantation
establishment maintenance and palm oil processing is acknowledged.......
TA (Timber Authority for agricultural clearance), Agricultural Lease and
Environmental Plans ...will be required...

1. Public Notice of Acceptance of an application for Environment
Permit, under the Environment Act 2000, Thursday 22 March 2007 in Post
Courier and National newspapers. Under the Environment Act all big
projects have to have an environmental plan and be displayed for 28 days
for public viewing.

2. The public can make submissions to DEC.

3. Submissions close 9th of April 2007

4. Copies of Application meant to be on public display at
Administrators office, and Vitroplant office (OPIC). The copy at the
Administrators office was not available to the public as at 27th March 2007.

5. Electronic copies were available from the Provincial Environment
officer Mr. Micheal Veula, Provincial Planning Office

6. Company Search: Vitroplant Ltd 1-53770 incorporated 11 May 2005,
registered office section 21, Allotment 49 Maravu Street Unit 1, Boroko
NCD (apartment flat near Boroko Catholic Church).

7. Nominal and paid-up capital K100,000.

8. Share holders and directors

William Lee 1103 Block A Phileo, Damansara2, Detaling Jaya 46350
Malaysia, 65,000 ordinary shares,

Marek Lubomski 91 Berrigans Road, Mudgeereba, Queensland 4213, 35,000
ordinary shares

Vitroplant Ltd address in Alotau: C/- the OPIC office, Section 43 Lot 4
Alotau

Environmental Permit Application Bio-Diesel Processing Plant, Vitroplant
Ltd., extracts:

level 2B activity sub category 9.5 Environment (Pescribed Activities )
Regulations 2002;

to produce more than 50,000 tonnes of bio-diesel fuel a year about 65
million litres of diesel fuel

for an investment of well-over K5 million.

"The company will ensure thorough collection of all hazardous and toxic
wastes solid wastes from the plant and dispose them in Alotau town's
main landfill site."

Industrial solid waste from the factory like spent bleaching earth will
be taken back to the supplier in Malaysia or Indonesia.

Capital Costs of bio diesel processor:

production building K800,000

manufacturing equipment K2 million

tank farm K1.6 m

office K100,000

employees quarters K100,000

cost of construction K300,000

others K100,000

Total K5 million

"This cost projection excludes estimated cost for some equipment,
machine and actual operation... "

Project is funded by personal capital of the shareholders of the
Vitro-plant Ltd"

"Vitro-plant Ltd is basically set-up by, and partially owned, and as an
extension of an Australian based high-technology company of the same
name that specialise in tissue culture clonal propagation.... high yield
of commercial species forestry trees and high yield early harvest edible
oil production trees and palms"

"Backing this Company both financially and technologically in its
business development, is another Australian counterpart (a public quoted
company on the Australian Stock Exchange)"

"Currently the associated company is undertaking construction of the
400,000 tonnes per year bio-diesel manufacture facilities in Indonesia"

Milne Bay Estates has agreed to supply its CPO for further processing by
Vitro-plant.

Vitro-Plant is also negotiating for arable land within the province to
develop large scale oil-palm estate and oil mill.

PNG Ports Corporation Ltd is holding State elase over the Portion
(project site at section 43 lot 4) who has agreed to sublease the land
to Vitro-plant for 25 years with a 5 years option

Chemistry involves conversion of an oil or fat into fatty acid methyl
ester (bio diesel) by a trans-esterification reaction using methanol and
a basic catalyst such as sodium or potassium hydroxide

There are no harmful chemical emissions from the process, as the exhaust
gases beig principally methanol vapour is fully recovered and re-used in
the process.

section 43 lot 4 Alotau sub-leased by Vitroplant Ltd, for K 24,860
annual rent paid in advance from January 2007, to PNG Ports Ltd.

plans show 4x 160,000 litre tanks for methanol storage (640,000 litres
of methanol/racing car fuel) to be built at s43, lot 4 Alotau.
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