Mine life extension to cost US$850m

Business, Main Stories

The National, Tuesday 04th September 2012

MINE life extension (MLE) at the giant Ok Tedi mine in Western province will cost US$850 million, according to Ok Tedi Mining Ltd managing director and chief executive Nigel Parker.
He also said OTML was engaged in extensive exploration activities, including areas outside Ok Tedi as the company looked to the future.
He revealed this when giving a comprehensive update of OTML activities to a delegation led by Western province Governor Ati Wobiro at the Tabubil Golf Club last Saturday.
Parker said the feasibility study into the possibility of MLE was nearing completion.
He said even before the exit of Toronto (Canada) listed company Inmet Mining Corporation  as an  OTML shareholder in February last year, the company’s board and management embarked on the possibility of an additional 11-year MLE.
“Currently, the feasibility study is in the final stages of completion,” Parker said.
“The Mt Fubilan deposit has the resource to continue.
“The capital cost of MLE is in the range of US$850 million.
“Mining methodology is a combination of open pit continuation and underground mining.”
Parker said issues OTML was confronted with included:
n Stable waste dump for 350-500 million tonnes of waste;
n Tailings to the riverine system;
n Hydro geology of the high rainfall environment;
n Community approvals; and
n State of PNG approval/enabling legislation
“In considering a mine life extension, the OTML board and management faces considerable dilemmas,” he said.
“The proposal must be financially viable and it can be internally funded within the framework of continuing to support the state through direct-indirect taxes and dividends,” Parker said.
“The impact of the MLE on the environment is in the forefront of the feasibility.
“Management is of the view that the construction of a stable waste dump is possible – this view is supported by independent assessments.”
Meanwhile, OTML is involved in extensive exploration activities including in-pit exploration, near-pit exploration, joint venture with Frontier Resources, exploration in New Ireland and buying into Highlands Pacific.
 on OTML’s near pit exploration licenses;
•    Frontier joint venture farms-ins: OTML has taken 8.5% equity in the Australian-listed junior exploration company Frontier Resources Ltd and has entered into five joint venture farm-in agreements with Frontier PNG subsidiaries. Two of these JVs are now in the advanced exploration stage;
•    New Ireland exploration: Two exploration leases have recently been granted. Targets are copper-gold porphyries; and
•    Highlands Pacific: Closer co-operation between OTML and Highlands Pacific is now emerging, with PNGSDP holding 13.04% of the Highlands’ equity.