PNG Mining Minister praises mines for economic contributions
Mineral products in Papua New Guinea have earned an average of K13 billion annually over the last five years, and K9.3 billion so far in 2023. Mining Minister Sir Ano Pala gave an industry update at the Papua New Guinea Resources and Energy Investment Conference in Sydney, Australia, on Tuesday.
Export Revenue
The total annual export revenue peaked at K15.7 billion in 2020 and decreased to K13.1 billion thereafter due to the closure of the Porgera gold mine.
The value of export revenue from the mining sector is comparable to hydrocarbons since the first export of liquefied natural gas (LNG) in 2014.
Notably, the extractive industry continues to account for 90 per cent of PNG’s total yearly export revenue.
Mineral Production
Over the last five years, the average annual metal production has been 1.7 million ounces gold; 2.4 million ounces of silver as dori bar; 84,500 tonnes of copper as concentrates; 33,500 tonnes of nickel and 3,000 tonnes cobalt as mixed nickel-cobalt hydroxides; and 123,000 tonnes of chromite concentrate.
PNG Mining Minister praises mines for economic contributions [Photo Pacific Mining Watch]
Employment
In 2021, the mines employed more than 19,000 workers and rose to over 22,000 in 2022.
More than 10 per cent are female employees. A further increase is expected with the reopening of Porgera and construction of Wafi-Golpu (in Morobe) and Frieda River (in East Sepik).
These exclude artisanal small scale gold miners, which may exceed 80,000, and who contribute an annual average export revenue of K500 million.
Copper Production Outlook
PNG expects strong total annual copper production, which may average between 500,000 tonnes to a maximum of 700,000 tonnes per annum, for a period of more than 30 years, after Wafi-Golpu and Frieda River projects are commissioned as operating mines.
These projects will take five to seven years to construction and hopefully by 2030 they should be operating mines in addition to Ok Tedi (in Western), and possibly Kainantu (in Eastern Highlands).
Indeed, PNG will become a significant copper producer, a critical metal in global industry, possibly for over a 30-year period.
Gold Production
Gold production from PNG has dropped from over 2 million ounces to about 1.3 million ounces per annum since the closure of the Porgera mine.
PNG’s total annual gold production may average around 2.5 million ounces with the reopening of Porgera mine and Stage 4 expansion of K92 mine (Kainantu, EHP), by the year 2026.
The largest gold producer is Lihir mine which is projected to close by the mid-2050s.
However, K92, Wafi-Golpu and Frieda River may substitute for any declining production.
Nickel and Cobalt
Nickel and cobalt production outputs may double or triple to 90,000 tonnes and 9,000 tonnes per annum, respectively, if developer Ramu MCC’s proposal to double its production output, and the Mambare or Oro Nickel project is brought into production.
Potential Closure of Major Mines – Depletion of Mineral Resources
At the same time, it is worth noting the potential end of mine life for existing major mines in PNG; gold mines by about mid 2050s and copper mines by mid 2060s.
In summary, Hidden Valley may close in 2027 followed by Simberi in 2030; Ok Tedi, Porgera and Ramu possibly close in the 2040s and Lihir in the mid-2050s. Frieda River and Wafi-Golpu may close around 2065.
Mineral Exploration
I fully appreciate and commend the efforts of private sector mining and exploration for sustaining many years of highly risky investments in mineral prospecting and exploration.
I have also recognised a notable decline in the exploration expenditures since 2015 and this continued after the onset of the Coronavirus (Covid-19) pandemic in 2019.
As of October 2023, the total exploration tenements on the Mineral Resources Authority (MRA) register stands at 200 exploration licenses, however, exploration expenditure continues to dwindle.
The Government strategies to address the depleting mineral resource inventories and decline in exploration activities include two major intervention programmes:
a) Investment in research for new mineral deposits; and,
b) Investment in diversification into growing the renewal economic sector.
New Policies
(a) Downstream Processing of Minerals: In general alignment with the Government’s call to encourage downstream processing of raw materials, we will be embarking on policies that aim to encourage or enforce the downstream processing of minerals. With the forecasted high copper and nickel-cobalt production, we believe, establishment of copper and nickel-cobalt refineries in-country may be justifiable.
(b) Encouraging research, exploration and development of offshore mineral resources.
We are of the firm view that, when onshore mineral resources are depleted, the next destination will be offshore. As such, we must be prepared to encourage ventures that deploy smart technologies that protect and minimise environmental impacts, whilst harvesting potential resources from the ocean, or below the ocean.
Let me assure you that under my watch, I will ensure any new policy or legislation that affects the wider stakeholders in the mining fraternity, are subjected to prior awareness and consultations.
PNG is still the best mining destination
PNG undoubtedly remains one of the best mining addresses on the globe due to its favourable geological settings, highly prolific for minerals, exemplified by best discoveries, worldclass mines and deposits, and the ability to host major global mining players.
Key players as development partners in the Mining Sector
The presence of major players is a testament to the confidence of doing business in PNG. To name a few, Newmont, MCC, Barrick, Zijin, Harmony and Rio Tinto.
We are also proud to host many successful junior players operating in the mining and exploration industry.
Notable junior miners worth mentioning are the K92 Mining Inc, which won the prestigious, Prospectors & Developers Association of Canada (“PDAC”) 2021 Thayer Lindsley Award for the best discovery in the world, from its Kora North deposit at its Kainantu Gold Mine.
For brevity, may I highlight some of the commitments by the major players in recent times.
1. Newmont
The Government welcomes the Newmont Corporation and commend Newmont’s president and chief executive Officer Tom Palmer for his strong commitments to:
Building strong and mutually beneficial partnerships with the government and people of PNG; and,
To generate lasting shared value and meaningful economic development through the world-class Lihir gold mine and Wafi-Golpu gold and copper project.
After the successful acquisition of Newcrest on Nov 6, Newmont had already undertaken the following:
Commenced trading on the PNGX market on Oct 27, and became the first company to list on PNGX with Depository Interests;
Established dedicated business unit in PNG. Appointed Alwyn Pretorius, who has assumed the role of managing director and is Port Moresby-based; and,
Strong commitments to building Wafi-Golpu Project and maintaining Tier 1 Assets at Lihir gold mine.
2. Barrick
We are also pleased with the deal concluded for the new Porgera mine with Barrick. They will continue to remain in PNG with Zijin Mining Group as our partner and operator of the new Porgera mine.
Barrick Gold and Zijin have a combined market capitalisation of over US$80 billion (about K298 billion).
3. China Metallurgical Group Corporation
MCC continues to operate and invest in the world class Ramu nickel cobalt mine in Madang.
MCC merged into China Minmetals, becoming its wholly owned subsidiary. In 2021, China Minmetals Corp was ranked the second top mining company by revenue of US$131.8 billion (about K491 billion) in China.
4. Harmony Gold Mining Company Ltd
We are also proud to have the partnership of Harmony of South Africa, which had demonstrated commitment and resilience in operating a challenging but profitable mine, Hidden Valley.
Their strong commitment as a partner in Wafi-Golpu is another illustration of the confidence in the PNG mining jurisdiction.
Read more mining news >> Pacific Mining Watch
Statement/TheNational
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