Mar 1, 2010
Mining tracks ahead in PNG
PAPUA NEW GUINEA is continuing to be at the forefront of exciting developments in the mining and resources industries, building a strong framework for future growth within the nation.
Kina Securities CEO Syd Yates said despite the slower recovery in the US and European economies, key sectors of the global economy are moving in full swing to ensure supply chains for resources are available.
"Record results delivered by global mining companies working in PNG have continued to send a timely message to the world that there are strong development and exploration opportunities within the Nation. With the global economy continuing to show signs of a recovery, this message becomes all the more important.
"However, there unfortunately continues to be negative issues raised in the local and international media concerning site and location disruptions, which again reflect poorly on the prospects of the nation," Mr Yates said in the company's Kina Communiqué'
Last week Papua New Guinea ranked poorly as a place to invest in mining by the New York-based mining consultancy company Beare Dolbear.
Beare Dolbear's "2010 Where NOT to Invest" report ranked PNG in 21st place out of 25 major mining countries.
It ranked PNG in the bottom group of countries according to the way it handles social issues such as poverty, in the second bottom group on mine permitting delays, and near the bottom on corruption.
Global gold producer Lihir Gold Limited recently announced it had delivered a record underlying profit of US$290 million for the year ending 31 December 2009. This reflected a significant increase of 57 per cent when compared to the previous year's activities.
The company indicated the strong result was primarily due to the group achieving the major milestone of producing and selling more than one million ounces of gold in a year, combined with reduced unit costs and strong gold prices.
Lihir Gold chief executive officer Phil Baker said that a record performance from the Lihir Island operation in PNG and a full year's contribution from the Bonikro and Mt Rawdon assets acquired in mid-2008 had also enabled the solid underlying profit result.
However, the company also reported $413 million in impairment charges and operational losses associated with its Ballarat operation, leading to an overall loss of $234 million.
Despite this, Mr. Baker said the company had achieved a number of strong results throughout the year.
"The excellent production outcome of 1.12 million ounces for the year, together with rising gold prices, translated into record revenues for the company. For the first time in LGL's history, total revenues surpassed US$1 billion," Mr. Baker said.
"The record performance at Lihir Island has confirmed the significant progress we've made in our drive for operational excellence and cost competitiveness," he said.
Clearly the global hunger for resources continues to excite exploration and new development opportunities throughout PNG. This has been reflected by ongoing developments of the LNG pipeline and other key projects throughout the Nation.
Earlier this year international mining organisation Nautilus Minerals announced that it had officially received the final Environmental Permit for the development of its Solwara 1 Project for the next 25 years, expiring 2035.
This historic announcement takes PNG yet another step closer to successfully hosting the world's first undersea copper and gold mining operation. The milestone also symbolises the start of an exciting new era for the global mining industry, which is now benefiting from the development of innovative techniques designed to collect valuable minerals from depths of more than 1,500 metres under the sea.
Throughout the past decade, the Nation's mining and natural resources sector has developed into a genuine cornerstone of the domestic economy.
Importantly the industry is continuing to provide strong opportunities for growth and development which will become all the more important as the global economic recovery continues to take effect.
A strong and diverse mining industry is integral to a prosperous national economy, with the sector creating many productive investment opportunities across PNG and generating numerous flow-on employment options for locals.
PNG's mining sector is now being recognised internationally as a diverse and well-managed sector and the positive benefits of this will continue to emerge for years to come.