Petromin to take up state share in Solwara-1

Petromin PNG Holdings Ltd has been nominated to exercise the state back-in right in the Solwara-1 mining project, according to mining minister John Pundari.

Nautilus exploration vessel.-Pictures courtesy of PETROMIN

He made the announcement as Petromin prepares to open its magnificent new Petromin Haus at 2-Mile in Port Moresby on Friday.
Pundari said after consulting prime minister Sir Michael Somare, who is also minister responsible for Petromin, he had exercised his powers under the Mining Act to nominate Petromin, once the state entered the project through the options agreement which was being negotiated with project developer Nautilus Minerals Ltd.
He said based on his advice, Sir Michael had confirmed the nomination under the Petromin Act, conditional on the state entering the project.
“Petromin will now negotiate commercial terms with Nautilus to fund its equity in the project,” Pundari said.
Petromin owns and operates Tolukuma gold mine, the only operating underground narrow vein mine in the country and is venturing into several others.

Solwara drill cores

“I have taken the initiative to nominate Petromin as the state’s nominee to acquire the state’s interest in all upcoming major mining projects that are rapidly advancing into the production stage,” Pundari said.
“These exciting projects include the three upcoming mines: Frieda in East/West Sepik province (copper/gold), Yandera in Madang province (copper/molybdenum) and Wafi-Golpu (copper/gold) in the Morobe province.
“PNG must gain significantly from these projects once these mines begin production.
“I believe the benefits to the state can be greatly maximised if the state participated in these projects as a shareholder.”
Pundari said state equity participation through Petromin would also be beneficial to landowner participation.
“Under the mineral policy, landowners in project areas are entitled to 5% equity in the project to come from the state’s share of equity,” he said.
“The cost of the equity will be negotiated on a case-by-case basis.”
Pundari said the landowner equity would be managed separately by the Mineral Resources Development Company (MRDC), pursuant to its constituent law, the Mineral Resources Development Company Pty Ltd (Privatisation) Act 1996.

Underwater sampling