Harmony: Deal could change

Business

SOUTH African miner Harmony Gold has acknowledged the risk that political changes in Papua New Guinea could create a situation where a memorandum of understanding (MoU) regarding its Wafi-Golpu copper/gold mining project in Lae would have to be changed.
As reported by Africa’s digital publication (Miningmx), Harmony’s investor relations manager Lauren Fourie on matter of PNG politics reportedly said: “At this stage we are waiting to see what happens.
“The election of a new prime minister could potentially impact the MoU we signed with the government last December.”
On May 30, PNG unveiled its new prime minister, James Marape, a former finance minister, who then said he intended to “tweak and turn” laws governing how natural resources were extracted from the Pacific nation.
“At the moment, our resource laws are outdated,” Marape was quoted by Reuters in his first address to Parliament as Prime Minister.
“We will look into maximising gain from what God has given this country from our natural resources.
“I have every right to tweak and turn resource laws for my country, then it will empower my citizens as well.
“I truly want this country to be the richest black Christian nation on the planet.”
The thrust of the discontent in PNG regarding the exploitation of natural resources is a gas-drilling project involving French group, Total, and Chevron.
Granting of a special mining permit for Wafi-Golpu had been a long-standing feature of getting the project on the road.
Fourie said up until recent events various joint venture work streams were tackling requirements of the permit which range from environmental authorisations through to the stake the PNG state will eventually hold. The Wafi-Golpu copper-gold mine could cost Harmony Gold US$2.82 billion (K9.3bil)) in initial capital expenditure to build to commercial levels of production as per a 2018 feasibility study.
Of this, Harmony will shoulder about 50 per cent with Newcrest Mining Ltd, an Australian firm, carrying the balance.
Average annual gold production was put at some 266,000 ounces.
Marape became prime minister after receiving 101 votes to eight in parliament, a day after former Prime Minister Peter O’Neill resigned having lost the support of the house after almost eight years in power, said Reuters. Political instability is not unusual in Papua New Guinea, but Marape’s resignation from cabinet in April tapped into growing concern over governance and resource benefits not reaching the people, it said.
Harmony operates the Hidden Valley mine in the Morobe after taking the operation out of mothballs and buying Newcrest’s share in the business.
It produced 100,000 oz at an 11 per cent margin in the six months ended December, and was on track to achieve 200,000 oz for the full financial year, said Harmony in February. – Miningmx.com

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