Speech by Mining Minister Byron Chan at the China Mining Conference

05/11/2012 23:04


PNG Mining Minister Hon Byron Chan, MP. Picture courtesy

of the Namatanai Electorate blog



5th November, 2012



3-6 November 2012 – Tianjin, China







His Excellency, Xu Shaoshi, Minister for Land and Resources of the People’s Republic of China

Tianjin municipal government

Honourable ministers and dignitaries from around the world

Conference organisers,

Mining companies and investors,

Conference delegates and guests,

Ladies and gentlemen,


Trading partnership – PNG/China

Papua New Guinea highly values its relationship with China since formalizing diplomatic relations on 12 October 1976. Our relations since then has grown from strength to strength.

The bilateral relations between PNG and china have over the years developed and expanded considerably in the areas of bilateral trade, direct foreign investment, development cooperation and technical assistance.

Regular exchange of high level visits by leaders from both countries have also consolidated and fostered these mutually beneficial relations to greater heights.

Papua New Guinea also values its trade and economic relations with China. Both countries concluded a memorandum of understanding (MOU) on trade and economic cooperation in 1990 and a framework on trade in July 1996. This provides the basis for both countries to further explore and enhance the trade and economic relations between our countries.

China is PNG’s sixth largest trading partner with total bilateral trade valued at USD$1.4 billion or approximately RMB 9 billion.

China is an important source of investment in Papua New Guinea with approximately USD$2 billion or approximately RMB 12 billion. More and more Chinese enterprises have been investing in PNG since 2007. China continues to invest in PNG through its state-owned and corporate entities such as China Metallurgical Construction Corporation (MCC), the Ramu nickel mine, Sinopec, China National Building Material (CNBM), and Huawei Technologies.

Papua New Guinea is also pleased that China’s development and technical assistance constitutes an important aspect of our bilateral cooperation. China is currently PNG’s third largest bilateral and donor and has over the years contributed well over USD$ 412 million or approximately RMB 3 billion in grant aid for many projects in various sectors in PNG

May I take this opportunity to express PNG’s gratitude to the Chinese government for its generosity in contributing towards enhancing the development efforts and welfare of Papua New Guinea.

Overview of the Mining and Exploration Sector

It is a pleasure to be here today to address this eminent mining conference on behalf of my government and my people of Papua New Guinea.

Papua New Guinea is a mineral dependent economy. The other economic sectors are yet to be fully developed to complement mining.

Today, more than 60 per cent of the country’s export income comes from the mining sector. In a year, the mines in Papua New Guinea produce on average 60 tonnes of gold, 180,000 tonnes of copper and 70 tonnes of silver to contribute about K9 billion (USD$4 billion) to the country’s economy.

We currently have 9 operating mines in the country producing gold, copper, silver, nickel and cobalt.  These mines are operated by some of the largest mining companies in the world such as Barrick, Newcrest, Harmony and MCC of China.

This next slide gives you an indication of the forecasted production figures from all the mines for 2012. Our only copper mine - Ok Tedi copper project - is currently heading towards closure and therefore production is expected to be lower than 200,000 tonnes.

On the exploration front, Papua New Guinea has an exciting range of advanced projects in the pipeline to come on stream within the next five years. They are;

  • SOLWARA 1 - commences in 2013-2014 producing gold, silver and copper and is the first deep sea mining project in the world making PNG the first nation to have granted a license for this new pioneering venture.
  • YANDERA - commences in 2015-2030 producing copper, gold and molybdenum.
  • FRIEDA RIVER - commences in 2016, 20 year mine life producing copper, gold and silver. Estimated project cost is US$5 billion.
  • WAFI – scheduled to commence in 2019 for 30 plus years producing copper, gold and silver and is projected to be one of the largest copper operations in the world. Estimated project capital cost is US$5 billion initially to commissioning and a similar amount over the 30 plus years of its operation.

At this juncture, I also wish to inform this conference that we are seeing new interest in exploration for other minerals such as:

  1. Nickel
  2. Chromite
  3. Molybdenum
  4. Industrial minerals
  5. Geothermal
  6. Coal, and
  7. Rare earths

Mineral Policy and Legislative Reviews

For the purposes of this conference, I also wish to inform this forum that a major exercise undertaken by my Ministry is the mineral policy and legislation review exercise that the government has undertaken in the mining industry. This includes the review of the Mining Act 1992, the Mining (Safety) Act 1977 and the Mineral Policy of PNG and the development of the offshore mining policy.
The review exercise is ongoing and my department is still working on the draft for finalization prior to processing before parliament’s deliberation. I will list some of the new proposed provisions that are not in contention and which I can confidently say will be included in the new legislation.

Under tenement administration and compliance, the following will be covered; 

  • Online application and approval processing.
  • Increase tenure of exploration licenses from 2 years to a period of up to 5 years.
  • Expeditious consideration of license applications with specified time frames to be internationally competitive and attractive.

Under policy requirements, the following will be covered;

  • Community awareness and consultations to be a mandatory requirement and to enable the development of the socio-economic and environmental impact assessment guidelines.
  • Provincial government and landowner participation to be improved to allow for more consultations and participation in the project development process.
  • Benefits distributions to be clearly defined to avoid ambiguity and for consistency.

The government will complete the review exercise by mid-2013 with the intention of bringing these amended laws into force by 2014.

In conclusion, I would like to sum up by saying that;

  • My government is committed to strengthening the cordial bilateral relations between PNG and China and to enter into further mutual cooperation.
  • Mining has been the back bone of our economy for a long time and the government will continue to support and provide a stable environment for sustained growth in the sector.
  • As a responsible government, we are committed to continue to make improvements to our current mining policies and legislations to ensure stakeholders optimize benefits derived from the sector.
  • The mineral potential of the country is huge and we would welcome interested companies to visit our country. 

I thank you all for your attention.