Service companies hopeful of improving mining conditions
Services companies and contractors are often a casualty of a mining industry downturn. We talk to companies servicing the sector in Papua New Guinea about how they have coped with the downturn, and the potential for a turnaround.
Despite difficult conditions in Papua New Guinea’s mining industry, Lihirian landowner company, Anitua Mining Services, is hopeful of a rebound and is considering a number of new opportunities that would grow its project portfolio.
Mining-focused companies in PNG continue to face challenges as the country’s minerals sector struggles to recover from a downturn that has been felt on a global scale.
While conditions have been forecast to improve, with Deloitte PNG saying in its November budget analysis that the mining sector will grow by 12% in 2015 as new strategic mining plans take effect, Anitua Mining Services general manager Mark Edwards believes a rebound in PNG will take more time.
Edwards says over the past 18 months in particular Anitua Mining Services had felt the effects of the industry downturn in PNG.
‘Conditions will improve but it is going to take time—it is the same throughout PNG—IT has been a bit of a roller coaster but I don’t think the industry here has been hit as hard as it has been elsewhere in Australia,’ Edwards tells Business
Despite an outlook that will require patience, Edwards says the Anitua mining services team was currently considering a number of new projects to bolster its portfolio.
‘PNG is actually presenting itself with quite a few opportunities (for us) at the moment. We have to make sure what we choose is sustainable and it is going to be the right thing by the landowners—at the end of the day we work for the Lihirians,’ Edwards explains.
Engineering company Kramer Ausenco is another that has been affected by the mining downturn, with Chief Executive Officer Frank Kramer saying the lower activity had probably been the ‘most notable aspect’ of the company’s performance in 2014.
Kramer adds that there is no sign of a rapid change to these conditions, but PNG’S major mines do have the potential to deliver a lift in activity.
‘The really large mineral resources projects—wafi Golpu and Frieda River—they’re still just ticking along, there’s no definitive sign that anything significant is going to happen,’ Kramer says.
‘Lihir, which is a brownfield site also, can actually kick back up more quickly if the Newcrest people decide to do something with it, and that’s got a much shorter response time than the green field sites.’
While investment into exploration and mining expansions has fallen, operational optimisation continues to be a key part of strategic plans for mining companies.
Allcommcr PNG managing director Luke Byer says there has been quite a significant increase in mining companies seeking out the ICT services it provides.
‘Mining is something that has always been on our radar and we have seen that area grow. Communications are of key importance to them,’ Byer says.
‘We are finding work with the more established miners in the country. Some of the more junior miners and their exploration projects are only in their infancy and have been wound back or shelved until market conditions improve. But certainly .the more established miners are already there, already active and they know what they want.’
‘Conditions will improve but it is going to take time’