Global mining giants announce PNG exit

21/06/2012

<p style="text-align: justify;">In what analysts see as another blow to Papua New Guinea’s plans to strengthen its reputation as one of the world’s copper producing power houses, at least one mining giant has this week announced plans to pull out of the country. And this is the second mining major in a space of just three weeks to do so.<!--more--></p>
<p style="text-align: justify;">Copper was at one time the country’s largest export revenue earner but the output has dwindled over the past ten years, with one of its biggest mine sites now nearly depleted. There has been little headway in starting new mines largely because of policy paralysis in successive PNG governments.</p>
<p style="text-align: justify;">This week Swiss-based Xstrata said it was considering a whole or partial sale of its 81.8 percent interest in the Frieda River copper project in western Sandaun Province after investing $200 million in pre-development work, reports Reuters. Xstrata said it was considering exiting the country as part of a wider review of its worldwide Papua New Guinea strategy.</p>
<p style="text-align: justify;">Just three weeks ago, Canadian mining giant Nautilus Minerals warned that its plans to mine copper in territorial waters off Papua New Guinea might be scrapped unless an ownership dispute with the government could be resolved.</p>
<p style="text-align: justify;">Copper mining projects are a major election issue for political parties in the forthcoming elections and the recent announcements by big players to exit the scene will likely lead to even more bickering among the political parties as they head toward next week’s election.</p>
<p style="text-align: justify;">With the exit of the big players, targets to boost annual copper output by half-a-million tonnes within several years and by even more in later years seem quite impossible to achieve.</p>
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<p style="text-align: justify;">Photo / PT&amp;I</p>