Pacific Gold Mine to Restart as Barrick Agrees to Minority Stake

(Bloomberg) -- Operations at the Porgera gold mine are set to resume later this year after Barrick Gold Corp. and Papua New Guinea reached an agreement that will see the miner take a minority stake in the operation.

The mine will be held in a new joint venture, owned 49% by Barrick Niugini Ltd. -- co-owned by Barrick and China’s Zijin Mining Group Co. -- and 51% by Papua New Guinea stakeholders, according to a statement on Friday. Barrick will operate the mine, which has been on care and maintenance since April last year after the government didn’t renew its special mining lease.

Barrick, the world’s second-largest gold producer, said in October it would grant the state a bigger stake in Porgera as part of an in-principle agreement that would allow the mine to re-open. That marked a thaw after a months-long standoff that escalated to legal challenges and tested Prime Minister James Marape’s pledge to obtain a greater share of Papua New Guinea’s resources wealth.

Marape swept to power in 2019 with a pledge to get a better deal out of multinationals looking to develop the country’s rich minerals and fossil fuel resources. He also criticized resources deals done by previous governments, and had a public falling out with Exxon Mobil Corp. in early 2020 over a multi-billion dollar gas export project.

Porgera accounted for about 5% of Barrick’s total production prior to being put on care and maintenance last year. The company was forced to lower its annual output forecast for 2020 due to the disruption at the mine.

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