Xinhua News Agency | 2016-03-02
Papua New Guinea (PNG)’s Ok Tedi copper mine has restarted following an operations restructure after it was put in care and maintenance mode when transport links were cut due to the El Nino induced drought, local media reported Wednesday.
The current El Nino cycle has disrupted production across a wide range of commodity producers last year after water levels for milling operations across the Pacific Rim.
However, the restart on Tuesday following statutory safety approvals from Papua New Guinea’s Mineral Resource Authority (MRA) will likely further depress copper prices already reeling from a prolonged downturn and a surge in supply, forcing high cost producers out of the market.
“The temporary closure has given management an excellent opportunity to restructure the whole operation, as well as do some major maintenance programs,” the PNG Chamber of Mines and Petroleum said in a statement to local newspaper The Post Courier on Wednesday.
“With a much leaner and meaner structure, the Chamber believes that he mine can be profitable by the end of the year, even at current copper/gold prices.”
Ok Tedi, which declared force majeure on its sales contracts on Aug. 17 due to the drought said it expected to loose 65,000 tonnes of copper in concentrate when it announced the suspension.
The restart of Ok Tedi is a bright spot for the local economy as depressed commodity prices from global oversupply and mining shut downs from the El Nino induced drought have seen government revenues fall and growth abruptly slow, creating an air of fiscal crisis.
Operations at the Porgera gold mine have also been suspended due to low water levels in the mine’s reservoir, used in processing raw ore, from the prolonged drought conditions. Enditem
PNG’s Ok Tedi Mine Reopens After 7-Month Suspension
Copper, gold mine is major contributor to economy [but has destroyed the Fly river and devastated the lives of many in Western Province]
Rosalyn Albaniel | Post Courier | 2 March 2016
Mine operations at OK Tedi in Western Province, Papua New Guinea’s largest mine, has resumed following statutory approval from the Mineral Resources Authority.
The PNG Chamber of Mines and Petroleum said commencement of operations was welcome news. It said that being a major contributor to the PNG economy, its resumption was good news not just for Western Province but the country at large. “The decision by the mine’s board and management to suspend operations last year when the El Nino drought commenced was a decisive move and was exactly the right thing to do, based on the 1997 experience.
“The temporary closure has given management an excellent opportunity to restructure the whole operation, as well as do some major maintenance programs.
“With a much leaner and meaner structure, the Chamber believes that the mine can be profitable by the end of the year, even at current copper/gold prices,” the chamber said. Ok Tedi’s commencement yesterday ended the seven-month suspension of operations due to the dry weather conditions which had affected its hydro-electricity power and transport of critical supply and copper concentrate on the Fly River.
MRA managing director Phillip Samar said that MRA was pleased at the outcome of the statutory inspections that had been done to verify safety management systems at the mine, the mill and the river port sites, including Kiunga.
“We commend OTML for ensuring that its safety management systems are in place to meet the MRAs Safety Inspections rigorous requirements.
“As the operator of the mine, OTML is now directly responsible for ensuring the continued maintenance of the mines safety management system going forward,” Mr Samar said.
Ok Tedi Mining Limited’s managing director and chief executive officer Peter Graham yesterday welcomed back on site its 800 workers as operations progressively start, adding the numbers would ramp up to full complement by mid-March.