Businesses in Morobe Province and Papua New Guinea will benefit immensely from the proposed Wafi-Golpu gold and copper mine, according to business leaders in Lae.
KK Kingston’s Michael Kingston
The latest feasibility study for Papua New Guinea’s proposed Wafi-Golpu copper and gold project confirms ‘a robust investment case—one which supports proceeding with the project,’ say Newcrest Mining and Harmony Gold.
An updated report released last week says the Wafi-Golpu project contains 11 million ounces of gold and 4.8 million tonnes of copper. The companies are now working on a pre-mine agreement with the PNG Government. Production is expected to commence in 2020–21.
‘Major boon’
The Chief Executive Officer of Lae manufacturer K K Kingston, Michael Kingston, says the mine would be a major boon for Morobe Province and PNG.
‘It will result in substantial additional private sector investment, employment opportunities and public sector investment in the form of infrastructure upgrades,’ he told Business Advantage PNG.
‘Direct benefits would include businesses supplying goods and services directly to the mine developer and its contracts.’
The JV partners say some of the major infrastructure requirements are: access roads, a processing plant, a tailings storage facility and an export pipeline for the concentrate.
It will also need de-watering and loading facilities at the Lae Tidal Basin, an accommodation camp and a power transmission line.
‘Business will benefit in a raft of ways,’ says Kingston.
‘The obvious beneficiaries will be the transport and logistic companies-shipping, trucking, freight and freight forwarders etc. But others are caterers, electrical, plumbing, welding companies and so on.’
‘Direct benefits would include businesses supplying goods and services directly to the mine developer and its contracts.
‘Indirect benefits would include increased demand for goods and services in the province as a result of increased employment and increased disposable income.’
Skills shortage warning
LCCI President, Alan McLay. Credit: The Loop
President of the Lae chamber of Commerce, Alan McLay, told Business Advantage PNG that the ‘obvious beneficiaries will be transport and logistic companies—shipping, trucking, freight and freight forwarders, but others are caterers, electrical, plumbing, welding companies and so on.
‘There will be a lift in general business in Lae with so many extra staff and workers at the mine, who obviously will buy goods and supplies from Lae,’ he says.
McLay predicts the project will result in a shortage of skilled local workers, despite the creation of the Lae Centre of Excellency in Technical Education project, which began offering a Certificate III Pilot Metal Fabrication course in 2015.
‘Although the COE project will continue with its aim of improving the standard of skilled trades graduates, it still has a long way to go,’ he says. ‘But it will eventually build up the skills that are so necessary for the country.
‘As with the [ExxonMobil-led] PNG LNG gas project, this resource development will put pressure on PNG’s shortage of skilled tradesmen, and there is bound to be a shortfall leading to expensive overseas recruits.’
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Certainly certain things need to be done up front to mobilize and prepare the landowners well before the project starts up. Im happy that the Morobe Provincial government is working with and supporting the landowners to see how other mines have done. The exposure trip to Ok Tedi led by Morobe Prov government from the 5th Feb to 11th Feb is a step in the right direction. This approach by Deputy PA – Masayan Moat from Economic services is commendable. I managed to talk to them in a workshop organised by MRA, Department of Mineral Policy and Dr Beno Boeha to shed them some ideas to think about this project, that it should be done properly.
Lessons have been learnt from the LNG gas project so its all hands on deck for skills development. We cannot continue to bring in experts from abroad and undermine our local experts unless there is a real need to do so.
Agree.
We now have technical students ready for the project too.
The price of gold has increased slightly from US$1,050 per ounce to around US$1,250 per ounce. This is a positive sign that perhaps the low commodity prices, including gold may have bottomed out and recovery is to be expected. Certainly 2020 onwards would be an excellent target to commence production of gold, copper and other commodities.
The Wafi Golpu project will have a significant impact on Morobe Province and the whole country. Hopefully we will learn from past mistakes and ensure that benefits are shared by all.
As long as there are no kickbacks to local politicians, PNGIans rather than Asian imports are employed wherever possible, that there is a mandatory training program for PNGIans, that taxation and audit controls are really really tight to prevent dodgy transfer pricing and “no taxable profit in PNG”. Given the likelihood of all that, in the light of PNG’s track record over the last thirty years, , I’d also like a cure for cancer by the end of next week.