Papua New Guinea seizes Barrick-Zijin gold mine

Mine produced 284,000 ounces of gold in 2019, generates around 10% of the country’s total exports. (Reuters pic)

SYDNEY: Operations have halted at a Barrick Gold-run mine in Papua New Guinea that generates around 10% of the country’s total exports, after the government refused to extend the 20-year-old lease.

The Canadian firm, which jointly runs the Porgera mine with China’s Zijin Mining Group, said operations had halted “temporarily” after the government’s announcement on Friday that it would move towards more local ownership.

The case will be closely watched by other mining firms operating in the country, as well as energy companies whose deals with the government have failed to bring expected revenue to local authorities.

On Monday officials said military and police were being deployed to secure the facility in a rugged highland region beset by tribal and other violence.

The mine produced 284,000 ounces of gold in 2019, and is believed to hold as much as 3.6 million ounces.

Barrick, which had asked for a 20-year lease extension, said the decision was “tantamount to nationalisation without due process”.

The firm promised to “pursue all legal avenues to challenge” the decision and “recover any damages”.

In a statement over the weekend, Prime Minister James Marape defended the move.

“The lease expired and our decision is within law,” he said, calling for a transitional arrangement.