BY DONALD HOOK

THE LIHIR ISLAND gold mine in New Ireland is set to benefit from the merger of Lihir Gold Ltd with Newcrest Mining.

Newcrest agreed this week to buy Lihir for an increased offer of $A9.5 billion to create the world’s fourth biggest producer of gold.

Newcrest operates gold and copper mines in Australia, Indonesia, PNG and Fiji, while Lihir has mines in Australia, PNG and the Ivory Coast in West Africa.

It’s expected synergies from the merger will yield about $85 million.

Lihir Chairman, Dr Ross Garnaut, told shareholders at the company’s annual general meeting in Port Moresby that the merger will create an $A25 billion company.

“It will be the leading gold producer in the Asia-Pacific region – one of the top few in the world with a standout portfolio of long life, high margin, tier one gold assets,” Dr Garnaut said.

He said the Lihir Island mine had a great future as the jewel in the crown of what will be the region’s pre-eminent gold company.

“Importantly, I have received commitments that Newcrest will continue Lihir’s approaches to the equitable sharing of the benefits of mining with local communities.

“Like Lihir, Newcrest has a strong track record on responsible environmental management.”

Lihir announced recently that it planned to increase production by about 50 per cent over the next ten years.

Some 4,250 people are employed directly or indirectly by the mine.