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PNG wants bigger share of giant Porgera gold mine

* Barrick, Zijin could lose some of Porgera stake – minister

* PNG considers plan to retain at least 30% of exported gold (Recasts, adds detail on Porgera negotiations)

By Jonathan Barrett and Mell Chun

SYDNEY, Aug 19 (Reuters) – Papua New Guinea plans to take a larger share of the Porgera gold mine as part of lease-renewal talks, diluting the ownership of joint venture partners Barrick Gold Corp and Zijin Mining Group, the country’s commerce minister told Reuters on Monday.

Porgera, located in PNG’s northern highlands region, is expected to produce 240,000 to 260,000 ounces of gold this year. Barrick and Zijin each own 47.5% of the mine, with the remaining 5% held by landowner group, Mineral Resources Enga.

PNG’s Minister for Commerce and Industry, Wera Mori, said a portion of Barrick and Zijin’s stakes would be given to the national and provincial governments and to landowners.

“We would like to see the mine to continue, but this time to be structured in such a way with a lot more national interest in it,” Mori told Reuters in an interview in Sydney.

The final figure to be held by Barrick and Zijin would be determined during negotiations, he said.

“It will decrease correspondingly, like if the state picks up say 30% or 40%,” said Mori.

Barrick and Zijin were not immediately available for comment.

The Porgera lease recently expired, although the operators are allowed to keep producing during lease-renewal negotiations.

The planned changes are part of a push by PNG to transform its economy under a new government leadership.

PNG was the world’s 14th largest gold producer in 2018, according to the World Gold Council.

Mori told an investor forum in Sydney on Monday morning that the resources-rich nation was developing policies to keep more of the commodities it produces in the country to improve its economy.

“We are in the process of developing the framework to retain at least 30% of our gold that we export every year,” Mori told an investment forum in Sydney.

Mori said that PNG would also consider pegging its currency, the kina, to gold, rather than the U.S. dollar.

PNG’s central bank currently fixes its currency to a narrow U.S. dollar band, propping up the kina’s value while creating a shortage of dollars available in the Pacific nation.

James Marape, the former finance minister who became PNG’s new leader in May after winning a vote in parliament, has put some of the world’s biggest resources companies on notice over a perceived lack of wealth flowing from their projects back to communities.

This includes sending a team to renegotiate its Papua LNG agreement with French oil major Total SA.

(Reporting by Jonathan Barrett and Mell Chun in SYDNEY; additional reporting by Melanie Burton; editing by Richard Pullin)


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