Exploration expenditure drops

Exploration expenditure in the mineral sector has dropped by more than half between 2012 and 2015.

According to a survey carried out by the Chamber of Mining and Petroleum, focusing between 2012 and 2015, mineral expenditure dropped from a peak of K944.3 million in 2011 to K325.5 million in 2015.

This is a direct result of the number of exploration licenses (ELs) in PNG falling steadily due to the global downturn in commodity prices.

In an update of the mineral sector, the PNG Chamber of Mines and Petroleum says ELs and applications for ELs dropped when commodity process began dropping in between 2011 and 2012.

According to the Chamber, at the end of 2012 the Mineral Resources Authority’s (MRA) records show 177 granted ELs and 379 applications waiting processing.

However, as of April this year, granted ELs stand at 131 with 81 applications.

This means mineral exploration expenditure in the country has significantly declined as well.

The chamber said feasibility studies for the proposed Frieda River and Wafi –Golpu projects increased exploration expenditure by K69.3 million in 2015 from the previous year, but overall was still below 2013.

And preliminary results from its 2016 mineral exploration survey indicate that total exploration expenditure has fallen to around K170 million, while grassroots exploration again shows the greatest decline to about K20 million.

The Chamber says the direct impact of this decline is significant at the provincial and local level.

This is because mineral exploration is labour intensive and utilises many local workers in remote parts of the country, so the drop in exploration activity has an effect on the rural economy.

Author: 
Cedric Patjole