MRA annual report: PNG to continue its dependence on foreign mining

Porgera mine pit

Porgera mine pit

PNG Today

Despite the slump in the world mineral commodity prices and its negative impact on investment climate, a good number of existing mining and advanced exploration projects, progressed their work programs, while a number of project acquisitions were undertaken between investors last year.

The Managing Director of the Mineral Resources Authority (MRA) Philip Samar reported in the entity’s 2015 annual report to the government, that although times were tough on the investment and commodity market fronts, projects like Simberi saw a turn-around in its production levels reaching an output of 107, 553 ounces of gold and 21,387 ounces of silver last year. This will be an increase of over 100% from previous years. It is expected that the company will maintain its production at this level due to the recent upgrades to its processing plant.

Both the Kainantu mine and Tolukuma mine are moving towards reopening under new owners K92 Holdings Ltd and Aisdokona Mining Resources respectively. Both mines are scheduled to recommence commercial production within the next 2 years.

The only new mine to commence production last year was Crater Mountain with an anticipated initial low production of 10,000 ounces of which they reported production of 59 ounces of gold in the first 4 months.

Ramu continues to ramp-up production of nickel and cobalt having reached 90% capacity after its first export shipment in 2012.

Porgera and Lihir, despite the drought, safety and landowner setbacks throughout 2015, are both increasing production.

Barrick Gold concluded its strategic partnership with Chinese (Government owned) partner, Zijin Mining and has also commenced exporting pyrite.

Nautilus is progressing with development of its key infrastructure. It held several design workshops to support the design and build contract for the pivotal mining vessel during 2015. The company is expected to conduct its wet testing of the seafloor mining tools in the Oman during 2016 with integration of the sea floor equipment into the vessel during during 2017 in preparation for commercial mining in 2018.

PanAust has confirmed their takeover by their majority Chinese (Government owned) shareholder, which is considered positive for future funding. The company has confirmed its commitment to lodge a Special Mining Lease (SML) application for the Frieda River project in the first half of 2016.

Newcrest and Harmony have settled on a two stage approach to commence development of the Wafi/Golpu deposit and expectations are that an SML application may be lodged during Q3 2016.

In terms of exploration expenditure for the year, a total of K323,453,373 million was reported by compliant exploration tenement holders (as recorded in our Flexicadastre electronic tenement management system). Of this exploration expenditure K266 million was spent by the top 10 advanced explorers. The total expenditure is in comparison to K360 million reported as spent in 2014.

Other promising prospects are:

  1. Ok Tedi’s nearby Townsville prospect potentially adding to the throughput at Ok Tedi if developed.
  2. Highlands Pacific’s (with its new partner Anglo-American) Star Mountains prospect which is indicating encouraging exploration results.
  3. Harmony’s Kili Teke prospect, with indications of ongoing and future commitment to significant exploration spending.

Some defined resources are in retention phases notably substantial nickel discoveries in Oro Province and heavy mineral sands in Morobe Province, while coal and other sand based mineral opportunities are also appearing positive.


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Filed under Exploration, Financial returns, Papua New Guinea

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