Alluvial Mining in Papua New Guinea

alluvial watut

Alluvial mining on the Watut river

Eric Schering

A great many Papua New Guineans are searching for ways to earn K300 per fortnight – approximately minimum wage.  The problem is very few jobs are available, especially in the private sector.  Many are scratching out a living as subsistence farmers, which doesn’t provide anywhere near the minimum wage.

With a far-too-high unemployment rate of 70%, income-producing jobs are few and far between.  Papua New Guineans are desperate for opportunities to work for a living wage so they can get past a life expectancy of 58 years.

Alluvial mining is one such opportunity.  Currently between 40,000 and 80,000 Papua New Guineans are putting in long hours under the tropical sun sloshing gravel around in gold pans to put bread on the table.  Some get two grams per day, some five, some more.  It’s good money at the current rate of K70 – K80 per gram.  Even two grams harvested per day will generate K1500 per fortnite.

The price of gold bottomed out at $US1050 per ounce in January of this year and is currently selling at approximately $1360/oz.  By the year 2020 (probably much sooner) gold will reach $2000/oz, 50% higher than present levels, which will yield greater value for the self-employed gold worker.   

The Mining Act of 1992 opened the door wide for Papua New Guineans, allowing them to engage in panning for gold without a license or permit.  All that’s required is getting off one’s duff, a gold pan, and a gallon or two of perspiration.   

Father John Momis is not a happy camper these days.  He’s angry that Rio Tinto decided to equally give the Autonomous Bouganville Government and the PNG government the remaining shares of Rio Tinto PNG.  He is unrealistically demanding that Rio Tinto engage in a costly cleanup project and then allocate significant funds to re-start Panguna mine.  The harsh realities of becoming (or aspiring to become) an independent nation include recognizing that major mining companies are not NGOs coming alongside a nation to help it develop.  They’re out to make a profit.  They are willing to invest time, energy and resources, but only if they are reasonably certain they will get a return on their outlay.    

alluvial miners at work

Alluvial miners at work on Bougainville

On the positive side, Father Momis can be grateful for the explosion of alluvial miners throughout the length and breadth of his island.  In fact, far too many boys and girls are skipping classes and instead helping out dad and mom in the streams and rivers panning for gold.  School officials in Bougainville complain that enrollment figures have dropped significantly because of school children assisting their parents in the modern day gold rush in ABG.

In the Bulolo district of Morobe Province thousands of alluvial miners are using mercury to isolate the gold they pan.  The PNG government needs to get on top of this quickly because mercury is a very toxic substance.  Far too many alluvial miners use their bare hands to handle the mercy.  They are unaware that use of mercury can lead to damage of the brain, kidneys or lungs and even death.  The PNG government needs to ban the sale and usage of mercury, the sooner the better.

In various parts of the country the Mineral Resource Authority is pro-actively conducting workshops to inform alluvial miners about the how-to’s of effective gold panning as well as the dangers of mercury usage.  Such workshops are well-received and appreciated by locals.  The ABG and the PNG government need to think creatively on how to strengthen the alluvial mining industry in PNG.  The K400 million from the alluvial industry is nothing to sneeze at.

Among nations of the world, PNG’s economy ranks around 150.  However, among gold producers, PNG is number 13.  Gold provides a sizeable chunk of PNG’s government revenues, for many years exceeding 50% of the budget.

Alluvial mining is a key factor for sustainable development in PNG.  Gold panning is much easier on the environment than the large scale mining done by the multi-national mining companies.   

Guangdong and PanAust are planning to develop a huge copper and gold mine on the Frieda River.  It’s about time.  For 40 years the Frieda mine has changed hands from one gold exploration company to another, with no one willing to take the financial risk and do the hard work of constructing the mine.

I’ve learned from a source on the ground in Ambunti that these two companies are planning to build a huge containment facility to contain the tailings.  I hope that’s the case.  Meanwhile, under the shadow of the Hunstein mountains in the Frieda area, many locals in villages such as Okisai and Blackwater and Hotmin continue to pan for gold.      

The Minister for Mining Byron Chan has stated that alluvial mining will double in the five years leading up to 2019.  He’s probably right.  He states:  “The alluvial resource is extensive, under-explored and nation-wide.”   It’s a wide open door!

1 Comment

Filed under Financial returns, Papua New Guinea

One response to “Alluvial Mining in Papua New Guinea

  1. Pingback: Alluvial Mining in Papua New Guinea – Jakeman's 10-20

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