Mining and petroleum in Papua New Guinea face contrasting fortunes, says Chamber head


Next week’s Papua New Guinea Mining and Petroleum Seminars in Port Moresby will highlight the increasing divergence in fortunes of PNG’s mining and petroleum sectors, according to Greg Anderson, Executive Director of the Papua New Guinea Chamber of Mines and Petroleum.

The PNG Chamber of Mines and Petroleum's Greg Anderson,

The PNG Chamber of Mines and Petroleum’s Greg Anderson

While the country’s petroleum and gas sector is moving from strength to strength on the back of the ExxonMobil-led PNG LNG project, mining is in the doldrums.

‘For the past 10 years, we’ve had solid growth in both sectors,’ Anderson tells Business Advantage PNG. ‘Gas is still very positive, whereas mining is facing a lot of questions.’

‘The mining industry is facing difficult times. Globally, prices have fallen, there are productivity declines and financing has dried up for exploration and for producers.’

‘We’ve been trying to take the message to the PNG Government that we’re facing challenging times.’

There is some good news, with PanAust a welcome new player with its interest in the Frieda River project, while Indochine Mining and Numinco Group have increased their commitment to PNG by listing locally this year.

However, existing mines such as Ok Tedi and Lihir have cut jobs, while ‘exploration has come to a stop, except for a few exceptions.’

Story continues after advertisment...

New Mining Act

Against this background, the industry is awaiting a revised Mining Act from the PNG Government, currently in draft form. Anderson remains hopeful the new Act can deliver an environment that encourages mining investment.

‘We’ve been trying to take the message to the PNG Government that we’re facing challenging times. It’s not PNG’s fault; it’s cyclical.’

‘This slump won’t be over for some time—the last one lasted six years. Costs are through the roof and prices could stay down for two or three years.’

Huge achievement

Meanwhile, Anderson says, ‘there are lots of great stories in oil and gas’: not only the imminent completion of the ExxonMobil-led PNG LNG project, which he describes as a ‘huge achievement,’ but also promising work being done by Talisman Energy, Horizon Oil and Heritage Oil.

The industry is also awaiting news from InterOil about which suitor it has chosen to work with over its own gas project.

Bringing it home

As for the seminars, Anderson is expecting many hundreds to attend both the mining and petroleum days— a sign that interest in both sectors remains strong, in spite of the impact of world markets.

‘It’s a lower key version of our biennial mining investment conference in Sydney,’ he says. ‘We aim to bring the same briefings on PNG’s major resources projects to the domestic market.’