THE PNG CABINET has approved the arrangement for the government to take up equity in the Solwara1 Project to mine the seafloor.
The project, by Canadian developer Nautilus Minerals, involves mining for gold and copper found in high concentrations over a 59 sq km section of the Bismarck Sea, at depths of about 1,600 metres, 50 km north of Rabaul.
Cabinet approval followed an announcement last month by Mining Minister John Pundari that the government will take its full 30% stake in the venture – at a cost of more than $100 million.
The project will mine rich seafloor deposits and generate over $140 million directly into the economy
The approval of the arrangement has preserved the right of the state to acquire up to 30% equity in the project
This is the first time the government has taken an equity position in a medium scale mining project that will be developed under a mining lease
This now sets a precedent that the state will take equity participation in future mineral projects.
Nautilus Minerals capital investment in the project will be about $387 million over the lifetime of the mine.
Early this year, the government granted a 20-year mine lease for the project as well as set certain conditions in the mining lease to guide and control development.
Source: Papua New Guineas Mine Watch