Copper and Gold in Papua New Guinea

Most gold miners who prospected for gold in the 19th century had worked the Australian fields. There was a rush, initially from northern Queensland, to the Lousiade Archipelago, and then to the mainland, in the northeast of British New Guinea and later still to the Lakekamu River in the south. By 1900 gold constituted over 50 percent of the exports of British New Guinea. Mining of copper, which began in 1910 at Sapphire Creek, in the Astrolabe Range near Port Moresby, was disrupted by World War I but resumed in the 1920s.

Gold was found in the Bulolo River, on the edge of the Eastern Highlands, in the 1920s and a rich strike was made at Edie Creek, near Wau, in 1926. Because of the mountainous nature of the terrain it was necessary to fly in equipment from Salamaua on the coast. In 1933 gold was the Australian Mandated Territory’s most valuable export.

Copper was discovered in Bougainville, North Solomons District, in 1964, and a vast open cut mine was developed by Bougainville Copper Limited in 1967. Copper and gold mining began at Ok Tedi in 1984. Alluvial gold was found at Mt Kare in 1988. In 1992 gold was being extensively mined at Porgera and on Misima Island. In October 1993 an agreement was signed to exploit the rich Lihir gold deposit. In November 1993 Highlands Gold (65 percent owned by Mount Isa Mines Pty Ltd) discovered gold in the Frieda River area. Some known deposits, such as gold and copper at Wafi and gold at Hidden Valley, have not yet been exploited.

Copper and gold have been the most important exports since the late 1970s. In 1992 PNG was the world’s fourth largest exporter of copper concentrate. Copper and gold exports were valued at over K1000 million and accounted for 60 percent of GDP. Mining is dominated by foreign-owned companies. The national government has reserved the right to take a 30 percent share in mining projects and has taken 10 percent to 30 percent shares in major projects. Royalties from these projects form an important part of the government’s revenues. Negotiations are continuing on most projects regarding the extent of the involvement of the local landowners. Changing claims by local landowners for compensation and share in mining ventures has been a major problem for PNG governments. Concern has been expressed, both within PNG and by environmental groups outside the country, over the failure to control adverse environmental effects, both physical and social, of mining. Mining is highly capital intensive and to date has generated relatively few jobs for PNGans. All copper is exported as copper concentrate and only a small amount of gold is processed in PNG.

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