19 Jan 2011

Huge gains for PNG government in copper and gold scheme

11:44 am on 19 January 2011

The PNG government stands to benefit from its decision to grant a Canadian company a deep sea mining lease to explore for copper and gold in the southwestern Pacific Ocean.

Nautilus Minerals has been granted the twenty year lease to develop its copper-gold project by searching for mineral deposits across almost 60 square kilometres of sea floor in the Bismark Sea.

Our correspondent in PNG says the company has indicated it believes there is approximately 870,000 tonnes of copper and gold in the area.

Alex Rheeney says the government is almost certain to take up its option to take a 30 percent stake in the project as a joint venture partner.

He says that means the government will have to contribute funds to the project, but it also stands to benefit.

"That will be a huge gain for the government and with the fact that the OK Tedi mine in Western Province is on its way out, and with the mine scaling down its operations, this is a major boost for the PNG economy."