Newmont’s Lihir: One of Papua New Guinea’s largest gold mines

Papua New Guinea (PNG) is rich with gold, copper, nickel and cobalt deposits, with mining playing a key role in shaping the country and its economy.

The mineral resources in the country got little attention until the late nineteenth century when prospectors form North Queensland began travelling in search for alluvial gold.

From 1896, there were attempts to exploit the gold loads and although some small mines yielded good results, all were abandoned by 1923.

Unlike many other mining districts in PNG, Niolam island – a geothermally extinct volcano doesn’t have a history of alluvial gold mining.

Gold traces were initially discovered on the island between 1969 and 1974, with a report suggesting the possibility of an environment favourable to epithermal gold mineralisation.

Located on the island is Newmont Corporation’s (ASX: NEM) Lihir mine which is one of the world’s largest producing gold mines.

While Lihir lies on land held variously under customary, State of PNG and private ownership, Newmont has been granted rights to undertaken mining and gold processing activities through negotiations with the state and local governments, plus landowners in the area.

OPERATIONS

Lihir consists of a granted special mining lease, two granted mining leases, one granted exploration licence, five granted leases for mining purposes and three mining easements.

The majority of the ore produced at Lihir is refractory and treated using pressure oxidation before the gold is recovered via conventional leach process.

Operations at Lihir are undertaken using a fleet consisting of seven shovels and 49 haul trucks, with payload ranging from 85t to 135t.

The process plant consists of crushing and grinding followed by partial flotation, pressure oxidation and recovery of gold from washed oxidised slurry using conventional cyanidation.

For tailings management, Newmont uses deep-sea tailings placement in a deep- ocean location.

A 2% royalty is payable to the State on
the realised prices of all gold bullion sold and a production levy of 0.5% is also payable to the PNG Mineral Resource Authority on the gross income from the sale of the minerals.

First beginning production in 1997, 670koz of gold was produced from Lihir in 2023 with 451koz produced to date in 2024.

As of December 31, 2023, Lihir reported 17.5moz of gold reserves and 20.2moz of gold resources.

With this current reserve, Lihir has a total projected life of 16 years.

In January 2023, the Lihir phase 14A feasibility study was approved, endorsing the project into full implementation.

Phase 14A represented an extension of the Phase 14 cutback which involved safely steepening the walls of the pit by using civil engineering techniques to access existing indicated mineral resources.

It will provide an additional high-grade ore source that will displace low-grade stockpile feed which is required as Lihir moves through the transitional zone between FY23 and FY27.

Ore mined from Phase 14A will displace lower grade ore feed to the processing plant, with around 13mt of high and medium grade ore from Phase 14A expected to be fed through to FY26, producing an incremental 400koz of gold.

The lower grade material will be stockpiled and fed progressively over the remaining mine life.

At the completion of Phase 14A, the high wall is expected to be buttressed with backfill to provide long term stability.

SUPPORTING THE COMMUNITY

Employing more than 5100 people, Lihir is an important economic component of Papua New Guinea, supporting local suppliers and businesses as well as contributing to the local economy of the region.

Where possible, Newmont supports PNG- based suppliers and businesses, consistent with its commitments to landowners and the PNG Government.

Newmont also contributes to the local economy, honouring agreements with the government and landowners by providing public infrastructure and services, plus access to health services and supplying electrical power and water to local villages.

Newmont is planning to establish a standalone regional platform with incountry senior leadership dedicated to supporting safe and profitable operations in PNG.

Lihir ring road project

Lihir is a big supporter to community infrastructure projects in PNG and in 2023
work began on the Lihir ring road project.

Work includes upgrading and sealing 27km of road on Niolam Island’s western side between Palie and Zuen.

The national government, which is responsible for the road, granted Lihir approval
to complete the road improvement work under the PNG Infrastructure Tax Credit
Scheme.

Completion of this project will improve socio-economic conditions on Lihir,
enhancing access to essential services such as schools, medical facilities, businesses
and government services.

Wood services

In mid-2024, engineering company Wood was awarded an $18m contract from
Newmont to support its capital works program to improve the condition and
performance of Lihir.

Under the three-year contract, Wood will provide its consulting and engineering services to support and enhance the safe and efficient processing of gold across multiple stages of Lihir’s lifecycle.

The scope of work includes delivering concept and feasibility studies, detailed design and construction management services.

This partnership highlights the importance of leveraging specialised expertise and innovative solutions to optimise mining operations and ensure long-term sustainability.