Will the Ramu mine be another big rip off – just like Lihir?

With community outrage over revelations about the true size and value of the Ramu nickel deposit still simmering, figures released by the Lihir gold mine in New Ireland province, Papua New Guinea, which delivered a US$500 million profit in 2009, reveal the extent to which other mining companies are profiting from their extraction operations. The Lihir gold mine produced a record 853,000 ounces of gold in 2009 – boosting Lihir Group Ltd’s global production to over one million ounces for the first time (LGL also mines gold in Queensland, Australia and in Cote d’Ivoire in Africa, although the Lihir mine accounts for some 75% of total gold production).

The Lihir mine is also one of the lowest cost mines in the world, according to the company. Total cash costs of the Lihir groups mining operations in 2009 were US$397 per ounce.

With the gold selling price averaging at US$1,000 per ounce during 2009, the company figures reveal that the mine was delivering a profit of over US$600 per ounce of gold produced – over US$500 million in total. A profit of over US$500 million in one year from one mine – yet the company pays no taxes in Papua New Guinea. Perhaps it is no surprise that PNG is ranked as one of the poorest and least developed nations in the world – despite its enormous natural resources which include oil, gas, copper, timber and tuna as well as gold, silver and nickel – when it allows overseas companies to quite literally steal its gold .

The Ramu Nickel operation which is owned and operated by the Chinese will dwarf the Lihir gold mining operation in its size but all the signs are that it will be an even bigger financial disaster for Papua New Guinea.

Source: Ramu Nickel Mine Watch