PORT MORESBY: Mineral Resources Authority (MRA) Managing Director Jerry Garry has raised concerns over the significant decline in alluvial gold mining, an industry that once generated K650 million annually in exports. Speaking during the Papua New Guinea Resources Week at the University of PNG, Garry questioned whether gold smuggling might be contributing to the sudden drop in production.
“Are we looking at gold smuggling activities in the country?” Garry asked, highlighting the need to probe the issue. He pointed out that the alluvial sector, often overlooked, was once a major contributor to the economy, outperforming established industries such as forestry. “We seem to undermine the people working in the creeks and rivers, but when you look at it, at one stage they exported close to more than K640 million worth of gold,” Garry said.
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| Alluvial Gold Mining Faces Decline: Concerns Over Potential Gold Smuggling in PNG [Photo By MRA] |
The decline in the alluvial gold sector is stark. From around 80,000 ounces of gold, production has plummeted to 36,200 ounces last year. Garry emphasized the need to understand this decline: “I am probing this to find out how this number has drastically dropped; we are talking about close to K500 million worth of gold.”
Meanwhile, Garry provided updates on major mining projects, including the Wafi-Golpu project. He indicated that the Mining Development Contract negotiations were nearing conclusion, with only a few outstanding matters left to address. Once the contract is signed, the special mining lease (SML) will be issued. “It is important because it forms part of the grant of the SML. It also guides how the project will be operated, so it is a critical part of the project,” Garry explained.
Regarding the Porgera mine, Garry reported that four shipments of gold bars had been exported, totaling just over 33,000 ounces of gold. He also highlighted the promising future of the K92 mine in Kainantu, Eastern Highlands. “After the stage three expansion of K92 mine, we will probably produce almost 400,000 to 500,000 tonnes of gold equivalent per annum, which will match the production output from Porgera mine,” Garry said.
Additionally, Garry noted that regulatory powers for the mining business had been transferred to the Autonomous Region of Bougainville (Arob), with the exception of mining safety. “So you have all the powers under Arob to regulate your mining business,” he said.
In a related update, Department of Petroleum and Energy Secretary David Manau reported that up to the end of May, PNG had exported around K6 billion worth of metals. This underscores the significant economic impact of the mining sector on the country’s economy.
The concerns raised by Garry about the alluvial gold sector highlight the need for a closer examination of potential illegal activities and a renewed focus on supporting this vital industry. The future of PNG’s mining sector hinges on addressing these issues and ensuring sustainable and transparent practices.
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