11 Apr 2012

Doubts surround viability of PNG's Frieda mine project

6:03 pm on 11 April 2012

The Swiss-based mining company Xstrata is expected to announce shortly that it will not be going ahead with its proposed Frieda river gold and copper mine in Papua New Guinea.

Papua New Guinea Mine Watch reports that the costs of building the required hydro-electricity plant for Frieda have blown out, causing Xstrata to consider cancelling the whole project.

The Frieda River copper-gold project is located near the head of the Sepik River on the border of East and West Sepik Provinces.

The size of the mineral deposits around the mine site means that it was projected to be bigger than the neighbouring Ok Tedi mine.

Xstrata holds a 74 percent interest in the project and a local company, Highlands Pacific, has a stake of nearly 20 percent.

Highlands Pacific's other mining interest in PNG, the Ramu nickel mine in Madang, has been closed down by the PNG government over concerns about its slurry pipeline.