Papua New Guinea has long had a significant mining industry but with some ups and downs along the way. But things are currently very much on the up, with news from both the existing Porgera gold mine, where operations have been suspended since 2020, plus at the new Wafi-Golpu project.
First off, the Government of Papua New Guinea, Barrick Niugini Ltd and New Porgera Ltd on March 30, 2023 signed an agreement to progress with the resumption of operations at the Porgera gold mine. Porgera hosts an orebody with measured and indicated resources of 10 Moz and inferred resources of 3.4 Moz. After initial ramp up and optimisation of the Wangima pit, the mine is forecast to produce an average of 700,000 oz per year, achieving a milestone towards its potential Tier One status.
The New Porgera Progress Agreement (NPPA) confirms that all parties are committed to reopening the mine at the earliest opportunity, in line with the terms of the Porgera Project Commencement Agreement and the New Porgera Ltd Shareholders Agreement both concluded in 2022. The New Porgera project team will now move ahead with the filings for a special mining lease and progressing the other conditions set out in the Commencement Agreement for the reopening of the mine.
The equity in New Porgera is shared 51% by Papua New Guinea (PNG) stakeholders, including local landowners and the Enga provincial government. Economic benefits will be shared 53% by the PNG stakeholders and 47% by Barrick Niugini Ltd, which will operate the mine.
After the signing ceremony, Barrick President and Chief Executive Mark Bristow said there was strong support from all stakeholders to get Porgera reopened as soon as possible. “It’s been a long journey but in the process we have secured the buy-in of all the stakeholders. For Barrick, the reopening of the mine would represent another victory for our host-country partnership model which has been so successful in Tanzania and has now also been adopted for the new Reko Diq copper-gold project in Pakistan,” Bristow said.
He added: “Localisation is an essential part of our partnership philosophy so New Porgera will, whenever possible, source the goods and services it requires from businesses genuinely based and owned in Porgera, the Enga province and Papua New Guinea. Similarly, it will give preference to locals in recruiting employees for the reopening mine.”
Elsewhere, Newcrest and its Wafi-Golpu Joint Venture (WGJV) partner Harmony Gold (through their respective PNG subsidiaries) have on April 6 signed a Framework Memorandum of Understanding (MOU) with the Independent State of Papua New Guinea. The MOU represents a substantial step forward in progressing towards the signing of a Mining Development Contract for Wafi-Golpu and confirms the parties’ intent to proceed with the project, subject to finalising the permitting process and approvals of both the Newcrest and Harmony Gold Boards.
The MOU sets out key terms to be included in the Mining Development Contract, which is a prerequisite for the granting of a Special Mining Lease (SML), including: State equity participation, royalty rate, tax package and term and scope of the SML; key terms for other related agreements to be entered into with the State, including provision for stability to underpin the significant long-term investment required to develop and operate the project; and commitments for the WGJV to invest in infrastructure and social development projects that will deliver long-term benefits to local communities.
It also provides the framework for the parties to progress the permitting of the Wafi-Golpu Project as quickly as practicable in accordance with applicable regulatory processes.
Newcrest Interim Chief Executive Officer, Sherry Duhe, said: “This MOU is a pivotal milestone towards the development of one of the world’s premier undeveloped copper-gold deposits. Importantly, the project will result in fair and equitable benefits for landowners, communities, local level governments, the Morobe Provincial Government and the Independent State of Papua New Guinea, while also delivering strong returns for the developers. The commitment of Prime Minister Marape, his Government and the Morobe Provincial Governor to this MOU gives us the confidence that permitting will progress constructively and in a timely manner to the grant of an SML to the WGJV. We will then move swiftly to update the 2018 Feasibility Study and commence engineering towards development,” said Duhe.
The MOU recognises that development of the Wafi-Golpu Project will be of major significance to the people of Papua New Guinea and encourages its development to contribute both socially and economically to the community. In addition, it provides a viable and stable foundation for the long-term development of the Project by the WGJV.
