Less than one year after acquiring Papua New Guinea’s largest gold mine, Newmont Corporation is pushing ahead with plans to increase grades and mine life at Lihir. On the eve of finishing his term as Newmont PNG Managing Director, Alwyn Pretorius takes Business Advantage PNG inside the transition and shares the plans for the island mine’s future.

Sunrise over the Lihir operation. Credit: Newmont

US-headquartered Newmont Corporation was already the world’s largest gold producer before it completed its acquisition (reported at the time as worth US$16.8 billion) of Australia’s Newcrest Mining in November 2023.

The acquisition added five operating mines to its portfolio, including Lihir, Papua New Guinea’s largest gold mine, which is situated in New Ireland province and produced 625,649 ounces gold in 2023. It also obtained a 50 per cent stake in the Wafi-Golpu copper-gold project in Morobe Province.

Newcrest had long stated its ambition for Lihir to produce one million ounces (Moz) of gold annually. But Alwyn Pretorius, on the eve of completing his one-year tenure as Managing Director of Newmont PNG, says Lihir’s new owner is focused on “value over volume.”

“We don’t have any aspirations to produce 1 Moz. What we want is to extract maximum value from the ore body,” he tells Business Advantage PNG.

Reaching full potential

Newmont introduced its Full Potential program at each of the mines it acquired from Newcrest on the day the acquisition was completed, with the aim of identifying and delivering operational efficiencies and creating greater value.

Pretorius says the management team at Lihir identified 25 Full Potential projects, aimed mostly at improving mining conditions, materials handling, processing and total cost of ownership.

“These are not quick solutions. Some will require capital investments and some will take time,” he explains.

He also highlights two important growth projects. Phase 14A will apply steep-wall mining technologies such as long anchors and shotcrete to open up additional high-grade reserve ounces. Meanwhile, the Nearshore Soil Barrier (NSB) will make mining possible below sea level and enable Lihir to access high-grade ore in the Kapit ore body.

Alwyn Pretorius (centre) speaks to an employee. Credit: Newmont

Phase 14A was initially proposed by Newcrest, with a 2023 feasibility study outlining US$296 million in capital expenditure on a nominal basis and a payback period of only 2.9 years. The project is now underway and “should be completed by 2026,” according to Pretorius.

“Steepening up of that wall opens up reserve ounces at the base of the pit, so we can mine deeper and extract more of the ore body. This will result in a significant increase in grades over the next five years, from around 2 grams per tonne (g/t) to about 3 g/t,” Pretorius says.

The Nearshore Soil Barrier was also proposed by Newcrest and is now the subject of a feasibility study under Newmont’s ownership. Combined with the steeper pit slopes, the NSB aims to access 6-7 Moz of the current 17.5 Moz resource, ensuring Lihir’s 16-year life of mine.

If approved, it will see the construction of “an 800 metre-long reinforced concrete wall averaging approximately 30 metres in depth that will basically move the shoreline and enable us to mine below the sea floor,” Pretorius explains.

“It’s a massive civil engineering project. We’re still firming up the numbers. The aim is to start execution of the project around the end of 2025, and it will take up to about 2028 to complete.”

Addressing Lihir’s unique risks

Full Potential was one of three programs introduced by Newmont at its new mines, alongside its Fatality Risk Management and Respect at Work initiatives.

Newmont was able to replicate many processes at Lihir from its other operations around the world, and identified additional fatality risks that are unique to the PNG site.

One is geothermal risk from the geothermally active caldera on which the mine is situated; the other is the risk of drowning posed by the proximity to the sea.

Lihir is PNG’s largest gold mine. Credit: Newmont

“We’re close to the ocean where we do a lot of work, mainly monitoring our deep-sea tailings placement,” explains Pretorius.

The Respect at Work program was similarly tailored to the local context, where it was integrated with the ‘Trupla Meri Trupla Man’ program that had run at Lihir since 2018. Through the program, Lihir employees and contractors receive training about inclusive and respectful behaviours in the workplace.

“It’s a very good program in the PNG context, where there are high levels of domestic violence,” Pretorius says.

“We’ve created an environment where people feel free to speak up, and where we can also provide assistance and support in cases where it’s where it’s needed.”

This article first appeared in the Business Advantage PNG Mining & Energy Special Edition 2024/25, published this month.