Kumul Minerals’ critical role

Papua New Guinea’s mining sector is mature and respected.

Papua New Guinea rates ahead of several Australian states for attractiveness to investors. Gavin Wendt, Founding Director of resource analysts Minelife says PNG’S standing is good internationally. He says that mining projects in PNG ‘are not exceptionally difficult’ compared with many other countries.

‘There are certainly opportunities in PNG, but companies always look for much bigger, higher grade, more commercial projects to justify the risks,’ observes Wendt. ‘In the last fiveto-10 years, the political situation has settled down.’

Kumul Mineral Holdings (KMH), the entity that holds mining assets on behalf of the state, can take up equity in projects. Peter Graham, Chairman and Independent Director of KMH) says KMH will be looking to make some big plays, potentially taking large stakes in proposed new projects.

‘ We are preparing to invest in some of the more attractive mining investments that we see coming up: most notably, Wafi-golpu and possibly Frieda River as well. Kumul Minerals has the right, if not the obligation, to invest up to 30 per cent equity based on the payment of past costs and obviously a share of future costs in project development. They are world-class resources and they will certainly stand on their merits.’

Wendt believes the interest shown by KMH is critical. ‘I think companies always like to see government involvement in projects and it is probably better to have them involved right from the start. So long as it is done on commercial terms. If the costs are shared on a reasonable basis, it advantages the company.’ 