Papua New Guinea scares off another miner
As Papua New Guinea’s sometimes shambolic elections drag on into a third week, already nervous miners with projects in the country would not have been encouraged by news on Friday of another miner falling foul of the country’s authorities.
Aldridge Minerals, a junior gold explorer, announced on Friday that for no apparent reason the company’s exploration licence renewal application – submitted 18 months ago – for its 340 square kilometre Kili Teke tenement had been denied by the Registrar of Tenements in PNG. Aldridge said it would not be appealing the decision and plans to exit the region entirely because the country is too “volatile”.
Aldridge Minerals may have come off lightly compared to embattled seabed miner Nautilus Minerals and its shareholders who have seen the value of their investment halved over the last six weeks.
The Canadian mine developer has been locked in a dispute with the government of the South East Asian nation since the start of June over ownership of a mining project located in its territorial waters in the Bismarck Sea. The underwater mining facility is already 50% built was slated to begin production in the fourth quarter of 2013, but appears to be in limbo for the foreseeable future.
Copper and coal giant Xstrata also appears to have soured on the island nation. Xstrata in June said it was looking for a buyer of its 82% interest in the Frieda River copper project, not saying anything more than the decision is part of an “ongoing review of operations.”
The Swiss miner has spent more than $250 million on the project and is walking away from one of the richest copper-gold deposits on the planet. Frieda River with a resource of about 12 million tons of copper and 18.5 million ounces of gold, puts even Harmony Gold and Newcrest Mining’s massive Wafi Golpu project in PNG to shame.
Other majors operators in the country have not signalled that the country is becoming too difficult to operate in. Apart from Wafi-Golpu, for which a pre-feasibility is expected soon, Newcrest also operates the Lihir mine in PNG. Barrick Gold is also active in the country with its Porgera gold mine, while China Metallurgical Group’s $1.4 billion Ramu nickel mine is set to go into production by the end of the year.
A leading copper producer before both BHP Billiton and Rio Tinto were forced to abandon two massive mines over land and environmental disputes, PNG is one of the poorest countries in the world.
It is the country’s eighth poll since it gained independence from Australia in 1975 and it is expected the balloting will continue until at least the middle of July.
The first results were announced on Saturday that showed the country’s caretaker prime minister regaining his seat. Another 110 parliamentary positions are still up for grabs.