Who will reap the benefits of mining 100 billion kina of gold from Wafi-Golpu?

Soon, if not already, Newcrest Mining (and Harmony Gold) will be trying to convince communities in Morobe Province, Papua New Guinea that there is not much profit to be shared with mining affected communities. They will talk about competitive pressures, commodity cycles, the need to reduce the cost of production…

So, let’s see how well Newcrest are doing;
1. Recent reports from Newcrest show an underlying profit of $498 million AUD and the retirement of significant debt. With $446 million (pre tax) coming from Lihir.
2. The company-wide all in sustaining cost was $994 per ounce, with a profit of $601 for each of the 2.36 million ounces of gold they mined. A return of over 1.1 billion dollars.

Newcrest shares 26 million ounces of gold with Harmony Gold at Wafi-Golpu. At today’s price that’s worth $42,000,000,000 AUD or 100 billion kina. Add on the 13 million tonnes of copper and 48 million ounces of silver, and the proposed mine is looking very rich indeed.

Now that’s total value, not profit and it will take many years to mine and some will never be recovered – but how much will be returned to local communities and shared with the LLG’s, Morobe Province and PNG?

Wafi-Golpu sign

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