Zijin Mining and Barrick Gold near agreement with PNG govt to reopen the Porgera Gold Mine
Published: Apr 06, 2021 11:32 PM
Photo: VCG

Photo: VCG

The Chinese company Zijin Mining Group Ltd announced on Tuesday that, together with its Canadian partner, Barrick Gold, it is having a constructive discussion with the government of Papua New Guinea (PNG) on a framework agreement for the reopening of the Porgera Gold Mine. The mining operation has been suspended for a year due to license renewal issues over a dispute with the local government.

"Our company noticed the statement released by Papua New Guinea Prime Minister, James Marape, which announced an imminent agreement to reopen the Porgera Gold Mine. Barrick Gold also announced the development on the negotiation," Zijin said on its Weibo account on Tuesday.

Zijin and Barrick Gold each hold 50 percent of Barrick Niugini Limited (BNL), the majority operator of the mine and the joint venture holds 95 percent of the Porgera mining operation in Enga province. 

Zijin noted that, according to the framework agreement under discussion, BNL would continue as the operator, and ownership of the mine will be held by BNL and the Papua New Guinean government. The agreement will increase the government's share on the mine and provide a fair allocation of economic benefits. 

"We hope that we will reach a long term partnership agreement with the Papua New Guinean government and other stakeholders and resume production as soon as possible," Zijin said.

The production of the Porgera Mine has been suspended and has been on maintenance since April 2020, after the government refused to renew BNL's mining license. 

However, in October prime minister Marape said that BNL was to remain the operator of the Porgera Mine following talks with Barrick Gold CEO, Mark Bristow, Reuters reported.

Porgera is one of the world's top 10 gold mines and the second largest mine in PNG, with an annual gold output of about 15 to 16 tons. According to Zijin's 2019 financial report, Porgera championed its top 10 gold mines in terms of production, accounting for 22 percent of the company's total gold production. 

According to a report by Xingye Securities, Porgera contributes about 10 percent of PNG's exports and provides 3,300 job opportunities for the locals.