The next decade could be a ‘golden’ one for the mining sector, believes Roger Gunson, Executive Manager, Regulatory Operations at the Mineral Resources Authority. But he has called for changes to Papua New Guinea’s government policy to better protect mining tenements.

The Yandera mine is a copper exploration project. Credit: Marengo Mining.

Gunson told the Papua New Guinea Mining and Petroleum Conference in Port Moresby last week that there is a ‘worrying new trend’ in relationships with landowners.

‘I am now getting letters, and the Minister is getting letters, giving us seven days to do something,’ he said.

Gunson said landowners, once they have created an incorporated entity, are routinely asserting ‘a lot of misplaced rights’. He said there is also a lot of ‘forum shopping’ as potential litigants look for the best jurisdictions to get a result.

He said there may be a need for legislation similar to the Protection of Transport Infrastructure Act ‘which recognises tenements as assets of national interest’.

‘This is the greatest challenge for the government over the next few years.’

Gunson said what is required is a policy ‘that does not hobble investment in the sector. If the settings are right, he believed ‘the decade from 2020 is going to be a very golden one’.

‘The estimate for 2018 is K13.5 billion.’

He also noted the foreign exchange ‘crisis is having an effect on the exploration sector’.

Revenues

Gunson cited Mineral Resources Authority (MRA) estimates of revenues from the mining sector. As of October 2017, K11 billion had been generated. He said the estimate for 2018 is K13.5 billion.

He said this year 69 per cent of the revenues have come from gold, 18.7 per cent from copper, 7.5 per cent from nickel, 3.7 per cent from cobalt and 1.1 per cent from silver.

‘There is growing interest in new metals.’

‘The key problem in PNG is that reliance on gold,’ he commented.

The MRA’s Roger Gunson

Exploration activity

Gunson said tenement activity has been dropping, but the fall in exploration licence applications has ‘plateaued out’. The MRA, he said, has been active in cleaning out tenements that are not active.

There is growing interest in new metals. ‘Cobalt is hot at the moment, but lithium is going through the roof.’

Gunson said the Ramu Nickel mine is a ‘good benchmark’ for nickel and cobalt, but he noted that the Wowo Gap and Mambara nickel projects have ‘far bigger resources’.

Approvals

Gunson said he is expecting a Frieda River proposal to be approved by the third quarter of next year and for similar progress on the Wafi-Golpu mine after ‘further feasibility work’.

‘Mining may be the brightest star which continues to underpin the economy.’

Other areas of interest are bauxite mining on Manus Island and the Yandera copper exploration project.

Johnson Tuke, the Minister for Mining, told last week’s mining conference that there is increasing diversification of the mineral sector in PNG. He pointed to magnesium, chromite and limestone as areas of interest.

‘Mining may be the brightest star which continues to underpin the economy, as it has done since independence,’ he said.

Tuke said a review of the MRA is ‘now before parliament’.