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Papua New Guinea Mining Mission Review

From May 1 – 5, Austmine’s COO Robert Trzebski led a delegation of 11 Australian METS companies to PNG to meet with local miners, suppliers and government officials, as well as visiting Harmony Gold’s Hidden Valley operations and St Barbara’s Simberi project. Among the delegation were representatives from Alastri, Astec Australia, Downer, Hedweld, Honeywell Process Solutions, Hy-Performance Fluid Power, IXL Metal Castings, LCR Group, Safescape, Tomra and Yokogawa. 

The Austmine delegation boarding a plane to Hidden Valley

PNG is currently going through an extended period of low economic activity. Any early recovery from this will largely depend on a prolonged upturn in commodity prices or decisions to proceed with any of the large PNG mining or gas projects. Mining projects currently in the pipeline include Newcrest’s Wafi-Golpu, PanAust’s Frieda River and Nautilus Minerals Solwara 1. Gas projects on the horizon include Papua LNG’s development of the Elk and Antelope gas fields, as well as the Muruk and P’nyang gas fields. 

All existing mines in PNG have been doing everything possible to reduce their costs and improve their bottom lines while most of the global mineral prices remain subdued. This presents a range of opportunities for Australian METS suppliers, especially those who offer more complex products, services and technology. Producing projects have all had a major focus on productivity improvements, optimisation and cost reduction, so offerings that support these goals will receive a good hearing in PNG.

Two of the major development projects, Freida River and Wafi-Golpu, will require massive technical and infrastructure support should they continue to progress towards construction. This includes power, water management and tailings, storage facilities, pipelines and barges. 

St Barbara's Simberi mine site

Restrictions on access to foreign currency for PNG importers continues to be one of the main issues. This has created a Foreign Exchange backlog which is hindering business operations.

Although Artisanal Small-scale Mining (ASM) is not permitted in many parts of the world, it is a legally recognized sector for the Government of PNG and contributes a significant amount to GDP. ASM includes minimum investments of $US0 to $US1,000,000 in the utilization of rudimentary sluicing and panning techniques, right through to fully mechanized mining operations.

Non-organized ASM uses very basic methods, digging up the ore and washing out in streams over AstroTurf-like material to catch the gold. Here, they mostly use technical fuel-powered, petrol or diesel-powered water pumps to hose down the ore body. More organized, entrepreneurial ASM operators form registered companies, associations or joint-ventures to commercially produce gold using more advanced, yet relatively low technological mechanized methods. “Mechanizing” refers to the use of machines such as, pumps, dredgers, excavators etc. in alluvial mining.

ASM in PNG opens long-term opportunities for local and international METS companies to participate in the process of ‘mechanizing’ the operations of gold and sliver production, and to elevate the sector to a long-term sustainable and competitive industry that can survive the fluctuations of the global commodity markets. Mechanizing the AMS sector is likely to increase PNG’s level of attractiveness to international investors and present an alternate source of gold and silver supply.

Development priorities of the ASM sector:

  • Mechanized operations – appropriate technology
  • Gold buying & Export
  • Introduction of mobile apps
  • Improving regulatory oversight on SSM sector
  • JV partnerships with Landowners – Mining project Landowners have established business contracts (manpower supply, logistics/transport, catering, security, mine maintenance, etc). They seek foreign investment partners.

Austmine will yet again be coordinating a PNG Mining Mission in 2018. To express your interest in this mission and receive further updates, please contact Robert.trzebski@austmine.com.au


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