The fire attack at the Kainantu Gold Mine last week has seriously threatened investor confidence in a big way, according to Mineral Resources Authority Managing Director, Philip Samar.
In a media conference yesterday, Samar said the attack on the mine developer K92 Mining Inc, which was a new company to PNG and who invested millions of kina to revive the mine, had serious implications.
He said the company spent the last two years carrying out maintenance at the mine site and only began selling in July, of which the true benefits were yet to be seen when the attack occurred.
“It’s really discouraging,” said Samar.
“There will be people (investors) watching and wondering what’s going to happen next.”
According to K92 Mining Inc, K120 million (US$40 million) was injected to restart the mine while its total annual operating expenditure sits at K77 million per annum.
There have also been payments to landowners to the tune of K2 million while local landowner contracts total K738,000.
Samar said with such level on investment, any outstanding issues must be addressed through the proper channels and not by landowners taking the law into their own hands.