Court Ruling Denies Chinese Miner’s Rights to Keep Running Papua New Guinea Gold Mine
What’s new: A court in Papua New Guinea has dismissed the third application by Barrick Niugini Ltd. (BNL), to review the government’s previous decision not to extend the lease of the Porgera gold mine to the joint venture between Chinese Zijin Mining Group Co. Ltd. and Canadian Barrick Gold Corp., according to a statement issued Wednesday by BNL.
Earlier this month, BNL publicly challenged the a rumor that the Porgera mining lease would be given to local state-owned miner Kumul Mineral Holdings Ltd. pointing out that the mine covers certain parts of land that BNL still has a lease for.
What’s the context: The Porgera mine, located in the country’s northern highlands, is one of the world’s 10 largest gold mines. In April, the Papua New Guinea government denied an application from BNL to extend its lease of the Porgera gold mine. After a lengthy dispute, a local court ruled on the legality of the government’s actions with the consequence of BNL’s mining lease ending on Sept. 1.
The mine has a remaining life of 20 years, with high-grade gold reserves of 11.6 million ounces, according to the government. If the mine produces 500,000 ounces of gold a year at a price of $2,000 per ounce, the annual cash flow will be $1 billion, Papua New Guinea Prime Minister James Marape estimated. After taking out operating costs of $360 million, the prime minister projected a net profit of $640 million a year from the mine.
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