3 Feb 2009

PNG gold company closes mine

12:22 pm on 3 February 2009

While gold prices continue to outshine other commodities, two lucrative gold mines at the opposite ends of Papua New Guinea have stopped their production.

Barrick Gold's Kainantu mine in PNG's Eastern Highlands province this week closed operations and stood down most of its employees so the company can focus on further exploration.

And angry landowner groups demanding 25 million dollars worth of housing projects and maintenance costs have shut down Lihir Gold Limited, on the Lihir island in PNG's New Ireland province.

A spokesman for Barrick Gold, the world's biggest gold mining company, says the company is disappointed it has to "mothball" its mid-sized mine.

Barrick will now spend 7.8 million US dollars through 2009 on further exploration.

The closure of the Lihir mine comes in the same week the company reported it has maintained its full-year forecast of 850,000 ounces of gold for the 2008 calendar year.

A Lihir Gold Limited spokesman Joe Dowling hoped a resolution would come this week.