PNG to freeze new mining, petro projects

PNG to freeze new mining, petro projects

PORT MORESBY (AFP): Papua New Guinea is to put a freeze on new mining and petroleum projects until legislation governing resource development has been reviewed, a minister said yesterday.

Mining and Petroleum Minister John Kaputin made the surprise announcement at the weekend while addressing a mining exploration conference in the northwestern town of Lae.

Shares of Australian companies linked to mining in Papua New Guinea lost ground yesterday on the back of the disclosure.

Kaputin said that after the Lihir gold project in northwest Papua New Guinea begins production, the government would institute a freeze of between six and 12 months on new projects.

He gave no date for the start of production at Lihir.

The controversial A$1.2 billion (US$800 million) project is the subject of negotiations between the government, the developer, RTZ Corp PLC, and the Malaysian Mining Corp.

Kaputin, who was appointed five months ago, gave no details of the moratorium proposal, saying that it still had to be worked on.

A major area of concern was equity participation, especially by the state and owners of the land on which the resources lay, he said. Other areas of concern include mining-tax regimes and small-mining developments.