Frieda River is one of the largest undeveloped copper deposits in the world. Now, the smaller shareholder in the project, in the remote highlands of Papua New Guinea, has cried “foul’ warning that a proposed board spill will give the Chinese government control.
Less than two years after paying $1.2 billion to snap up PanAust, an Australian miner with interests in projects in Laos and Papua New Guinea, Guangdong Rising, a Chinese investment company owned by the Guangdong provincial government of southern China, is angling to gain control over the Mount Frieda gold and copper deposit.
The Frieda River deposit has been under study for development for more than 30 years. Now controlled 80 per cent by PanAust and 20 per cent by Highlands Pacific, it has had a series of owners, from Japanese to American groups, with Swiss trader Glencore the majority owner before it sold to PanAust. All of the owners to date have struggled with the cost of developing the resource.
Located in the remote north-west of PNG, Frieda River is 175 kilometres north-west of the Porgera gold mine and 75km north-east of the Ok Tedi mine.
Development costs have been put at as high as $US6 billion, which is a stumbling block, since few private companies could finance a project of that size, and most banks would baulk at the large sums involved and the associated development risk. One reason for the high cost is the need for a hydro-electric dam to generate the power needed by the project.
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