PAPUA New Guinea’s Mineral Resources Authority (MRA) believes that the country’s minig sector is on the rebound after recording improving figures in 2016.

The MRA reported recently that total PNG mining revenue for calendar year 2016 has exceeded K9.7 billion, a significant 38% increase on the preceding year.

The Lihir mine led the way with revenue of K3.57 billion and Ok Tedi moved back into 2nd in the rankings (K2.064 billion from only 10 months production, which the MRA said is a notable turnaround in the fortunes of the State –owned mine) and Porgera moved down a place to 3rd (K1.995 billion).

These 3 mines accounted for 78.64% of mineral revenue.

By mineral commodity, gold accounted for 78.46% of this total, with copper 12.84% and nickel 5.52%. Given its significance, the gold price had held relatively steady in 2016, averaging $US1,249.92 an oz (8% more than 2015), until a fall triggered by the election of President Trump in November. The gold price has been moving back towards the average in recent weeks.

Several factors account for this encouraging turnaround in the mineral sector from the low point of 2015:

  • Improving mineral commodity prices, with the exception of copper. However, copper reacted to Trump the opposite to gold, and is currently up more than a third in value since hitting 6 year lows in February 2016;
  • Rising production at key mines, notably Lihir (exceeding 903,000 oz gold) and Ok Tedi (copper up 77%, gold up 54% & silver up 96% on 2015); and
  • Benefits from plant upgrades, greater efficiencies and new management strategies, especially at Lihir, Ok Tedi, Porgera and Simberi mines.

2017 will still hold many challenges, but MRA anticipates that, if a steady state of commodity prices and mine production is maintained to underpin the gains of last year, mineral revenue will break through K10.5 billion this calendar year. While it is anticipated that production will cease temporarily at Hidden Valley mine for some months later this year, this loss of production will be offset by the Kainantu mine returning to production during this Q1. Both Ok Tedi and Ramu mines expect a full year of production, which could see record nickel and cobalt results from the latter.


Alluvial exports placed the sector 7th on the rankings having lost its place to the consistent performance of the Simberi mine. It is hoped that mechanised alluvial operations recently approved will bring better results to the alluvial sector, which dropped slightly in 2016 with export gold and silver revenue of K353,652,652 (down 1.4% on 2015). Alluvial revenue for the years 2008 to 2016 is shown in figure 2.


The next generation of major projects, being Special Mining Lease applications for the Frieda River and Wafi-Golpu projects, are in the approval stages. Investment in the exploration sector is continuing to improve. Tenement applications in 2016 increased by 41.4% on 2015 and returned to a similar level as 2014 – refer to the graph below. At 31 December 2016 there were 595 registered tenements, a 17.35% increase on January 2016, and 246 exploration licences registered (active licences, extension and new applications).


This overall mineral activity during 2016 generated payment of net royalties in the total sum of K158.11 million, paid by each of the relevant mines.