SINGAPORE/BEIJING, April 29 (Reuters) – China’s Zijin Mining has warned Papua New Guinea that its failure to renew the lease of a gold mine it jointly owns with Barrick Gold Corp there could damage bilateral relations.
Papua New Guinea on Friday said it would not renew a 20-year mining lease at its Porgera gold mine, citing environmental damage and social unrest even as gold prices have soared to more than seven-year highs.
Barrick (Niugini) Limited (BNL), the local venture in which both miners have a 47.5% stake, suspended operations on Saturday, saying the government had not given it formal notification that it would not renew the lease, or any details of a planned transition.
Zijin, which is a state-controlled company, said that Papua New Guinea needed to conduct negotiations to extend the mining lease in good faith, and that a failure to resolve the issue could impair relations between the two countries.
“As a Chinese enterprise, Zijin would like to contribute to the existing good economic, trade, cultural and inter-governmental relations between China and PNG,” Chen Jinghe, chairman of Zijin’s board said in a letter addressed to Papua New Guinea’s Prime Minister James Marape.