fin review article 3/2/04
China steals a long march on PNG mining rivals Rowan Callick, Asia-Pacific editor 2004/02/03
China's insatiable demand for steel inputs has thrown an $855million lifeline to Papua New Guinea's crucial mining industry.
PNG Prime Minister Michael Somare will fly to Beijing to witness the signing next Tuesday of the heads of agreement for the government-owned China Metallurgical Construction Corporation to buy about 70per cent of the long-delayed Ramu nickel project.
This would at last provide the funds to build the mine, in mountains just south of Madang. The ore would be slurried 140kilometres down a pipeline to a coastal refinery with deep-water access.
The project is now 68.5per cent owned by Brisbane-based Highlands Pacific (which declined to comment yesterday) and 31.5per cent by PNG-government-owned Mineral Resources Development Corp. It appears likely that they will each end up with 15per cent.
The deal would lock PNG - which under former prime minister Bill Skate had teetered towards recognising Taiwan - into a close alliance with China, sending a strong message to the Pacific region where Taiwan, with four supporting states, is constantly seeking more friends.
It would also reinforce the appeal of PNG to greenfields explorers, with a number - led by Canadian junior miners - already back on the ground after a bleak period of inactivity. And it would help Sir Michael in his bid to stave off a no-confidence vote when parliament sits again in June.
Greg Anderson, executive director of the PNG Chamber of Mines and Petroleum, said yesterday: "This is really exciting news. We've still got a long way to go before we're back to where we were a dozen years ago, but the industry has bottomed out and it's on its way back." He attributed this partly to taxation reforms for which the industry had long lobbied.
Cheers.
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