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Mining development accelerates into 2011


BROUGHT ON STREAM in June of last year, Morobe Mining joint venture's Hidden Valley gold mine brings to seven the number of mines operating in PNG, with several major projects likely to add to that total in the foreseeable future.

After some delays earlier this year, the Ramu nickel-cobalt project now seems set to start production in the first quarter of 2011, with plant commissioning well underway.

Ramu represents a significant diversification for PNG in terms of the country's historical focus on copper and gold, with production of nickel and cobalt.

Nonetheless, copper and gold remain the major targets for most of the nearly 80 companies that have active exploration licences in PNG, with projects ranging in size from grassroots prospecting to the late-stage evaluation of bulk-tonnage porphyry- and epithermal-hosted resources.

As well as its interest in Ramu with China Metallurgical Group Corp (MCC), Highlands Pacific is in partnership with Xstrata and Ok Tedi Mining at Frieda River, where last year's exploration resulted in a significant increase in resources.

Nor is it just newcomers that are evaluating known resources. With open-pit mining currently scheduled to end in 2013, Ok Tedi Mining is now assessing the feasibility of extending the life of the operation in the Western Highlands to 2020.

If this proves viable, a combination of open-pit and underground mining will continue to produce copper and gold. An additional benefit, the company says, will be the production of substantial tonnages of limestone that can be used as dump-capping material during minesite remediation after closure.

Ok Tedi Mining is also beginning exploration elsewhere in PNG, having signed two farm-in agreements with Frontier Resources. The first covers Frontier's Bulago gold prospect in the Western Highlands, while under the second, Ok Tedi can earn up to 80% in Frontier's three copper prospects on New Britain.

On the corporate front, this year's most significant event was undoubtedly the merger between PNG-based Lihir Gold and Australia's largest gold producer, Newcrest Mining. With its increased presence in PNG, Newcrest listed its shares on the Port Moresby stock exchange in August, becoming the largest company listed on the exchange.

With its Kainantu mine currently on care-and-maintenance, Barrick Gold Corp has been focusing its exploration effort on Porgera.

In the Tabar Islands, Allied Gold has been carrying out a prefeasibility study on gold resources beneath its Simberi open-pit mine, where a processing-capacity expansion is scheduled for the end of 2011. It is also continuing exploration for both copper and gold on the Tabar and Tatau Islands.

On Woodlark Island, Woodlark Mining has begun a feasibility study on its gold project, having completed a scoping study.

Beneath the Bismarck Sea, Nautilus Minerals began its 2010 exploration campaign in October, targeting better knowledge of the resource and geotechnical aspects of its Solwara 1 mine-development site. The company has identified 18 seabed sulphide systems within the Bismarck Sea area, having discovered five new zones in 2009.

At Amazon Bay, MIL Resources has now received an engineering and metallurgical study on its vanadium-rich beach-sands resource. In August, MIL increased its ownership of Titan Metals, the licence-holder at Amazon Bay, from 50% to 100%, thereby gaining access to the other prospects within Titan's exploration portfolio, including the Poi copper-gold prospect - "a major exploration target".

On the Morobe coast, OM Materials Holdings is targeting chromite resources in beach sands at Sachsen and Hessen Bays. Resource Mining Corp recently expanded the drilling program at its Wowo Gap nickel laterite project, while the current focus of Papuan Precious Metals' work is its Doriri Creek platinum-group metals prospect.

PNG has a history of mining that goes back to the late 1800s, often centred on goldfields that are being re-evaluated today. One thing is clear: much of PNG's mineral wealth remains to be discovered and with the present improvements in the regulatory climate they are more attractive than ever.

Magnus Ericsson is senior partner and co-founder of the Swedish-based Raw Materials Group, pioneers in mining data compilation and analysis


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