It could be worth extra US$3m to the mine

Baeau Tai
Lihir Gold Limited on Lihir island is at the forefront of Papua New Guinea’s efforts to cash in on carbon trading because it is switching from diesel to geo-thermal power.

The company, established in the late 1990s to develop one of the largest undeveloped gold deposits in the world, is to get into the worldwide trade in carbon credits—the economic spin-off from the Kyoto Protocol—the international agreement designed to reduce carbon dioxide emissions into the atmosphere.

The international organisation responsible for the administration of global emission trading confirmed that Lihir Geothermal Power project had been registered under the Clean Development Mechanism of the Kyoto Protocol.

Lihir Gold Ltd, located 700 kilometres north-east of Port Moresby, now becomes the first company in Papua New Guinea to be granted the right to accumulate and trade carbon credits, following the development of its environmentally friendly geothermal power generation facility.

Lihir could be reducing gas emissions by about 280,000 tonnes a year.

The company currently generates 36 megawatts of power via geo-thermal power resources and is in the process of adding another 20 megawatts to take it up to 56 megawatts—meeting all of Lihir’s current electrical power requirements.

Lihir is amongst only 200 in the world that have got this sort of status. At current world prices, carbon credits could be worth approximately US$3 million per year in additional revenues for Lihir Gold.

Lihir Gold Limited has also been identified as one a few hot stocks trading on the POMSoX (Port Moresby Stock Exchange) and so as Oil Search Limited, whose share price has risen from K7.58 to K9.50 since the opening of the 2006 trading.

Other locally listed companies such as the New Britain Palm Oil, Bank South Pacific and Credit Corporation are also performing well.

Meanwhile, giant Ok Tedi Copper mine in Papua New Guinea has received no indication from the PNG government about its intention to shut down its operations in 2010.

Managing Director of Ok Tedi copper mine, Keith Faulkner said the scheduled mine life is 2012. He clarified this after the PNG local media reported that PNG’s Deputy Prime Minister, Sir Moi Avei, had said that cabinet had voted to shut down the mine in 2010.

Avei, who is also the Minister for Petroleum and Energy, reportedly told stakeholders that cabinet’s decision was made after Ok Tedi failed to come up with practical solutions to its environment management plan.

Faulkner said Avei’s comments were taken out of context.

“The scheduled mine life is 2012 and we have no indication from government of any change to that. And there is no reason to believe it would be any different. We are addressing the environmental issues as best as we can,” said Faulkner.

Avei also dismissed the report saying both the government and the OK Tedi management are under pressure over how to respond to the mine’s increasing acid rock drainage which is damaging the ecosystems along the Ok Tedi and Fly rivers.

He said Ok Tedi is doing its best to address the problem and he denied that cabinet wants to shut down the operations early.

“The Ok Tedi mine is proposed to close about 2012, if my memory serves me right. But cabinet’s concern is finding an environmental solution. The board is supposed to come to cabinet with a concrete proposal of the environmental solution,” Avei said.