Energy firm looks to aid impoverished, but resource-rich Papua New Guinea.
Papua New Guinea is an impoverished country rich in natural resources.
Last year, it signed a deal with Exxon Mobil for a $15bn liquefied natural gas project.
Other resources projects in PNG have been criticised for not helping local communities.
But Exxon’s local partner, Oil Search, says it is striking a balance – even providing services to the local community that the national government has failed to deliver.
Al Jazeera’s Laura Kyle reports.
The National – Tuesday, December 21, 2010
DESPITE the gas project and other oil-related activities, Papua New Guinea remains a mining country, of which 60% of annual export revenue comes from the mining sector, according to Bank of PNG third quarter bulletin.
The country boasts nine mines, where seven are currently in production, namely, Ok Tedi, Porgera, Lihir, Simberi, Tolukuma, Sinivit and Harmony Gold.
Ramu NiCo Ltd is under its final phase of construction while Kainantu mine is under care and maintenance.
Ok Tedi produces copper, with gold and silver as secondary products, while the others produce gold, with silver as their secondary product.
Nautilus Inc Ltd has applied for a mining licence for its Solwara 1 project, to mine seafloor massive sulphides (SMS) deposits from the sea bed of the Bismarck Sea.
The SMS deposits are highly mineralised with gold, copper, silver, manganese, zinc and nickel.
Some samples assayed register values as high as 15% copper, 15 grams of gold per tonne and 20% zinc.
By comparison, these values triple those of land base prospects.
Nautilus has 14 other Solwara projects under exploration to assess the resources present in these prospects.
Other exploration projects are advancing to stages where they could be expected to progress into full mine operations around 2014-2016.
They are Frieda, Yandera and Wafi-Golpu.
These are significantly large projects that will be producing copper as primary products and gold as secondary products, plus other by-products molybdenum and rhenium which are specific to Yandera.
The increasing number of both land and sea-based exploration projects is an indication of the investors confidence in PNG as a prospective destination.
The Frazer Institute in its 2008-2009 survey of 175 mining nations in the world rated PNG as the number one country as the most prospective country with good government policies without land restrictions and social issues.
It takes years of exploration to develop mines.
Therefore, current exploration programmes would give rise to mines after 10-20 years or more.
Some of the current advance projects, such as Frieda, were explored for more than 40 years.
There was a spur of applications for EL this year with the release of the newly acquired geophysics (aeromagnetic and radiometric) and geochemistry data.
The EU mining sector support programme project made it possible for PNG to acquire these new data.
To finance news from Papua New Guinea, where Newcrest Mining has edged a kina lower after being stable at 100 kina for most of the last two months since its acquisition of Lihir Gold Limited.
Newcrest is the world’s fourth largest gold company by market capitalisation and the largest company listed on the Port Moresby Stock Exchange, so even a small move will affect the market significantly.
Syd Yates, the CEO of Kina Securities, talks finance with Geraldine Coutts.