PNG not renewed lease of China gold mining
A dispute over mining rights in the Pacific island nation of Papua New Guinea (PNG) led one of China’s biggest mining companies to accelerate a spending spree that left it saddled with debt and facing a potential downgrade by the three major ratings companies.
Zijin Mining Group Co Ltd has splashed more than $1.3 billion on projects at home and abroad since April 24, when the PNG government surprised it and its Canadian joint-venture partner Barrick Gold Corp. by refusing to renew the lease on their mine in Porgera, in the country’s northwest.
PNG cited environmental and social issues that independent experts have backed, and the nation appears to have been within its rights, given that the lease expired last year. But the move has been linked to changing political winds in the country and has drawn an angry response from the operators, who had expected the lease to be renewed, with Barrick describing it as “tantamount to nationalization.”