In the past copper, gold and silver have been the mainstays of the PNG economy.
But there is now a new generation of mining companies looking for non-traditional minerals.
Greg Anderson is Executive Director of the PNG Chamber of Mines and Petroleum, the organiser of this week's PNG Mining and Petroleum Investment Conference in Sydney.
He told Jemima Garrett the Chinese-owned Ramu nickel project, which goes into full-production next month, is the first a suite of new- miners looking for non-traditional minerals.
Presenter: Jemima Garrett
Speaker: Greg Anderson, Executive Director of the PNG Chamber of Mines and Petroleum
ANDERSON: That's a big step forward for us and the diversity of minerals and that widens our production base from the traditional copper, gold and silver, so that's a very exciting step forward. But there's a whole range of explorers now looking further than that into all sorts of metals. We've now got mineral sand, several people looking at mineral sand. These deposits have been known for quite sometime, but there's a new generation of exploration going on. Even rare earths, coal and coal seam gas for the first time. And coal, we've had known coal deposits for quite a long time, but noone's really taken a serious look at them. They've always been thought to be non-commercial and low quality, but the coal seam gas era has changed the value of a lot of these things, so there's several serious players looking at that potential.
GARRETT: So how much potential do you see for these non-traditional minerals?
ANDERSON: Well, it's early days yet, but the fact that people are looking and diversifying into these other commodities is a good thing for us and the further we can widen our minerals base, obviously the better protection we've got about fluctuations in commodity prices and the more expertise, more technical knowledge we gain, the different skills that are gained. It's a huge number of pluses for us.
GARRETT: You mentioned the interest in rare earths, in Papua New Guinea. They produce radioactive waste when they're mined. Is Papua New Guinea in a position to monitor that sort of difficult mining?
ANDERSON: Well, it's such early days. The very grassroots exploration, it's I guess the country's not really faced up to that issue at this stage, but we've always had good environmental standards and the Department is going through a complete overhaul at the moment and it's being converted to a statutory authority, which we're supporting strongly. It will be a user pays concept, but the result will be a far larger, far better manned organisation, better paid for the staff and a lot more capability. So there's steps forward going on in the environmental area, but it is, you're right, if it's successful, it would be a new issue that PNG would have to deal with and it's been an issue that some countries have faced overseas at the moment.
GARRETT: As well as the non-traditional minerals, Papua New Guinea has a huge pipeline of new generation copper and gold projects. With the softening of prices for metals and the slowing of China, aren't they likely to have problems getting finance?
ANDERSON: Well, I must admit I've got some concerns. We've had a hugely successful conference and an enormous turn up. But I do see some stress amongst some of our, particularly our junior players who do not have production. It's very difficult now in the marketplace to raise money and option issues and so rights issues have been largely unsuccessful or have given poor results. So it's not easy for our juniors to raise money and some of them are in a stress situation. The big new projects, yes, the same thing. The big porphyry coppers that we've got coming on. They're multi, multibillion dollar projects and financing is going to be a serious challenge, yes, you are right.
GARRETT: Are these projects likely to face a challenge big enough to stop them going ahead?
ANDERSON: We've got three major ones lining up. If we get one of them, I think that's a really big success, immediately if we get one of them.
These projects have been around for a long time and they're actually going through another generation of exploration, which has given us to the feasibility or will give us to the feasibility stage and that's a big achievement. Now, if they don't get funding immediately and they sit on the shelf, so to speak, for another few years or another cycle, that still means we've advanced these enormously, but I'd be surprised if we don't get one of them across the line at least.
GARRETT: Which of the projects do you think are most likely to get across the line?
ANDERSON: Well, the Frieda River one. X-Strata is completing that now and they have announced that they wish to have a sale or a partial sale, so it's already public knowledge that they're effectively looking for another partner or a sale, complete sale. Marengo who is completing the Yandera Project feasibility study. They've already got a MOU agreement with a Chinese partner, so that looks very positive. The Golpu project is very, very robust project and we certainly expect that to go ahead and it's one of the greatest discoveries in the Southern Hemisphere in recent years and it's gone ahead in leaps and bounds and that will be one of the world's great copper, gold mines, no doubt about it in the future and a long term production base for Papua New Guinea