Lihir halted by unrest

NEWCREST Mining’s problematic Lihir gold operation in Papua New Guinea was forced to shut down over the weekend due to “illegal actions” by some community members.
Lihir halted by unrest Lihir halted by unrest Lihir halted by unrest Lihir halted by unrest Lihir halted by unrest

The plant was phased down in accordance with the PNG Mine Safety Act, and was shut down for around 36 hours.

Newcrest said there was some lost production but it maintained 2015 financial year guidance of 680,000-720,000 ounces of gold.

The operation resumed Monday evening.

Newcrest said the Mineral Resource Authority had previously provided notice that only it had the power to disrupt mining activity and any action outside of that is deemed illegal.

The recent actions, initiated by a small subset of community and local commercial interests, was not authorised by the MRA.

Newcrest said it was engaging with the MRA and other stakeholders, and last month agreed to an audit process to be led by the MRA.

"The continued, predictable and lawful operation of the Lihir gold mine and plant contributes to the long-term sustainable benefit of all stakeholders, including the host community," Newcrest said.

"Newcrest is committed to working with landowners and all levels of government to create that outcome."

Lihir is Newcrest's largest mine but has consistently underperformed.

The operation hit a run-rate of 11.1 million tonnes per annum in the March quarter and the company is targeting 12Mtpa by the end of June.

The mine produced 179,000oz gold at all-in sustaining costs of $A1391 per ounce in the March quarter.

Australian media have reported the cause of the unrest was from local landowners, who resorted to a traditional Lihirian custom for dispute resolution - the planting taboo ginger plants, or gorgors, in and around the mine.

A mobile police squad was flown to the island on Sunday to remove the gorgors.

Reasons cited for the move by landowners were breaches of mine development activities, environmental damage, tender issues and the review of an integrated benefits package.

Chairman of the Lihir Mining Area Landowners Association James Laketan told ABC Australia that the move was a "peaceful way of saying we have a dispute and we must come to the table and negotiate and resolve any issues relating to this dispute".

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