Lloyds Metals aims reopening of copper mine in Papua New Guinea

Lloyds Metals and Energy Ltd. on Tuesday said the wholly owned unit will “pursue a long-term cooperation and mining agreement in respect of the Panguna mine in Papua New Guinea.” The local authorities have chosen the rapidly expanding Indian company as their preferred partner for the huge project, defeating competition from China’s considerably larger CMOC Group Ltd.

The action is a part of a global rush for copper as the trend toward electrification is predicted to increase demand for the metal in the coming years. According to Bloomberg, the ambition for economic development in Bougainville, a poor group of South Pacific islands that are currently an autonomous entity within PNG but are aiming for independence, is also reflected in the discussions surrounding the future of the inactive asset.

The company that owns the rights for the mine site, Bougainville Copper Ltd., announced last month that it and Lloyds had reached a non-binding agreement that gave the Indian company a ninety-day window to do due diligence. Nearly 73% of BCL is under the authority of the Autonomous Bougainville Government.

An estimated 5.3 million tonnes of copper and 19.3 million ounces of gold make up Panguna’s remaining reserves, which at current prices would be worth over $160 billion. However, local demonstrations over revenue sharing and environmental damage led to the mine’s closure in 1989 while it was owned by Rio Tinto Group. This led to a civil war that claimed up to 20,000 lives. In 2016, Rio sold its 54% stake in BCL.Also Read: Dow Jones 600 points away from record; Tech rally drives S&P, Nasdaq to new peaks

During a Wednesday earnings call, Lloyds described Panguna as a “very rich copper and gold deposit” and stated that its new PNG company is “very active.” Investors were warned that the company is still in talks with the government about purchasing the property.

CMOC, the leading provider of cobalt from two massive operations in the Democratic Republic of the Congo and one of the world’s largest producers of copper, was BCL’s first choice to revitalise Panguna.

When President Ishmael Toroama, who has been in charge of Bougainville since 2020, and his cabinet supported Lloyds, that plan was derailed. A memorandum of agreement centred on development potential was signed by the corporation and the autonomous region in November.

Lloyds has made investments in two joint ventures in Congo that might eventually produce 100,000 tonnes of copper annually, according to the business. Last year, the company also produced around 22 million tonnes of iron ore in India.

The company shares closed the previous trading session in red, with a loss of ₹20.80 or 1.17%, taking the overall value to ₹1,763.00.