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Barrick looking to boost gold output at Papua New Guinea JV


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Barrick looking to boost gold output at Papua New Guinea JV

Barrick Gold Corp. plans to upgrade its Porgera gold joint venture in Papua New Guinea to tier-one status as the gold major aims to boost production by at least 18% if it can renew the mining lease "on a reasonable basis," Reuters reported Jan. 15, citing CEO Mark Bristow.

The government of Papua New Guinea is eyeing a larger stake in the mine, an issue that is expected to impact negotiations over Barrick's application for a 20-year mining lease renewal, according to Reuters.

The country's decision on the lease renewal may set a precedent for global miners including Australia's Newcrest Mining Ltd. and St Barbara Ltd., which are looking at new mines or expansions in the country, the report said.

Bristow said the company is willing to make concessions, similar to its deal with the Tanzanian government over Acacia Mining PLC, to appease the government. However, the CEO ruled out a possible sale of Porgera, saying it fits Barrick's investment criteria, the newswire added.

Barrick is also facing a backlash over environmental and social issues at the mine, which is allegedly polluting water resources and sparking local conflicts. Seven people have reportedly died at the mine since September 2019, including three illegal miners who were killed in clashes in December 2019.

The company has pledged to relocate villagers whose lands are occupied by the mine and explore ways to improve mine waste management, Bristow said.

Barrick and Zijin Mining Group Co. Ltd. each own a 47.5% stake in the mine. The remaining 5% is held by Mineral Resources Enga, a company owned by the government, and local landowners.

Barrick defines tier-one assets as capable of producing 500,000 ounces of gold per annum at a low cost for at least 10 years, according to Reuters. Barrick and Zijin's combined 2018 output at Porgera was 421,500 ounces.