Papua New Guinea

The Mineral Policy Institute has been working on PNG mining issues for 15 years. Over that time the issues have changed very little, except in the increasing size and impacts of the mining projects. The Government of PNG continues to profit from mining while the local communities bear the negative impacts. While some companies had made improvements, there is much to be done if we are to alleviate the human cost of mining and reduce the environmental damage caused.
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Overview of Mining in PNG

Geography

Papua New Guinea (PNG) comprises the eastern half of the island of New Guinea and about 600 offshore islands. The islands of New Britain, New Ireland and Bougainville are the biggest of these. PNG is the second largest country in the South Pacific region encompassing a land mass of about 465,000 square kilometers, it is second only to Australia. The country is divided into 20 provinces and each of these into various districts. The country is found wholly within the southern tropics. The mainland and larger islands are mountainous and rugged and rise up to 4,500 metres. The climate is tropical and has a strong “wet” and “dry” monsoonal element. Temperatures range from about 20°C – 35°C in the coastal areas but are noticeably cooler in the highlands. The high relief and tropical location dictate a very wet climate and this has resulted in numerous fast flowing river descending to a flatter and often swampy coastal plains. The largest rivers draining the highlands of the main island are navigable for 500-800 km upstream. The Fly River drains southward into the Gulf of Papua and the Sepik River northward into the Bismark Sea. The smaller Ramu River drains North-west and also discharges into the Bismark Sea eastwards of the Sepik. Three-quarters of Papua New Guinea has retained its natural vegetation, which is mainly dense rain forest.  There is alpine vegetation at the tops of many of the highest mountain peaks and lowland swamp.There are 11,000 known species of vascular plants including 1,200 species of trees, and 200 species of ferns. Over half of these are endemic to PNG.

People

The last reliable population census was carried out in 2000. The population was just over four and a half million. Papua New Guinea’s estimated population in 2009 was 6,057,263. The majority of the population live in rural areas. The Highlands region comprising of five provinces (Chimbu, Enga, Southern, Eastern and Western Highlands) is the country’s primary source of national income and export earnings.About 40% of the PNG population lives in the Highlands region. The region is also known for its agricultural exports such as coffee, tea and vegetables and it is also where the mining is, hence the more likely the impacts.

Minerals

The major gold reserves are in the Enga province and almost all oil and gas production is in the Southern Highlands province. PNG minerals sector is still largely based on policy developed in the immediate post-independence years. There is a fundamental premise of state ownership of minerals but a dependence upon foreign investment, technology and expertise. PNG has little of any of these and development of the resource sector so far has not changed this. The intention has been to utilize revenue from the sector to drive broader economic growth. This has not happened.

The Mining Act, 1992 is the main piece of legislation that governs mining activity in PNG. The key point here is noted in Section 5 where it states that:

“All minerals existing on, in or below the surface of any land in Papua New Guinea, including any minerals contained in any water lying on any land in Papua New Guinea are the property of the State and that all licences for leases subject of mining areas are made pursuant to the Mining Act”

The Act also dictates the process for acquiring different types of tenements which are issued by the Mining Minister on recommendation from the Mining Advisory Council (MAC) under the Mining Act 1992. These tenements are: Exploration License, Mining Lease, Special Mining Lease, Alluvial Mining Lease, Lease for Mining Purpose and Mining Easement.

There are currently (May 2010) six operating commercial mines in PNG: Lihir; OK Tedi; Porgera; Simberi; Sinivit, and Tolukuma. Three mines have ceased operation: Panguna (Bougainville); Misima, and Kainantu. Four mines are in advanced stages of development: Ramu; Solwara; Yandera; and, Imwauna. In addition to these mining operations there is an active and widespread exploration. There are currently around 167 mining exploration leases granted over mainland PNG and its islands.  The majority of the area that these cover (about 70%) is concentrated in the Western, Morobe, West Sepik, East Sepik and Central Provinces. In addition, there are a further 71 offshore mining leases. These are concentrated in the Milne Bay, East and West New Britain and Manus Provinces. Terrestrial mining leases cover in excess of 102,000 square kilometres, nearly a quarter of PNG’s land area. There are also many applications for new leases.  Applications for both terrestrial and offshore leases number about half the current leases.

Mining

There has been a long a complex history of environmental issues associated with mining in PNG. Most of these relate to the poisoning of waterways by riverine tailings disposal. Riverine tailings disposal causes sedimentation, mercury, cyanide and other heavy metal contamination. More recently there has a move to Submarine Tailings Disposal (STD). This was first employed at the now closed Misima mine and is happening at Simberi and Lihir.  STD is also planned for Ramu. Solwara, Yandera and Imwauna.  STD has different impacts to riverine of lake tailings disposal. There is an immediate loss of benthic habitat and associated organisms in the area that tailings are dumped. This can lead to local or species extinctions in ecologically sensitive areas, particularly those associated with deep sea geothermal vents. High concentrations of heavy metals can affect fish communities and the local human populations that depend on them. STD is a relatively new form of tailings disposal and its full impacts are yet to be learned.

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Most recently, the notion has been to protect the environment under Papua New Guinea’s Environmental Planning Act (EPA).  The goal of the legislation is to achieve uniform systems of environmental management in accordance with the fourth national goal and Directive Principles under Section 25 of the Papua New Guinea Constitution. The Act allows for the control of projects which may alter the environment. The Act provides the mechanism for environmental planning processes when any proposal is likely to have significant environmental and social impacts. All the Government Departments are bound by EPA, and other environmental legislation can be incorporated within the environmental plan which provides the technical background to applications for the various permits and licenses.

The benefits of mining have not flowed through to local communities. While mines have brought employment there have been a range of social problems. These include loss of native title and displacement from traditional lands, loss of food and water resources due to pollution, violence and other forms of social disruption. These are discussed in the summaries of the individual mines.

Further information on PNG mines can be found on our watutriver, deepseamining and pngmininglegacies websites