With only 10 years of estimated current mine life, Ok Tedi Mining is working hard to optimise production and maximise profit at Papua New Guinea’s largest copper mine, says CEO Peter Graham.

The Ok Tedi mine pit. Credit: OTML

The Ok Tedi mine is in transition, with a current mine life estimated to be 10 years, according to OK Tedi Mining’s Chief Executive Officer Peter Graham.

The company is ramping up their exploration process, ‘drilling in areas within the special mining lease that can be developed quickly,’ he told a recent resources conference.

‘Updating the operating models, developing new approaches to assessing the grade (value) of its deposits, optimising and revising the pit shape,’ are key, he said, stressing that it was ‘imperative’ to find additional resources adjacent to the current pit.

‘Between 2013 and 2018, the company increased production by 68 per cent’

Graham also mentioned that they have explored ‘more than 4500 different scenarios and analysed each of those cases.’ The aim, he said, is to gain access to ‘higher value material’ in the mine ‘as soon as practicable’ in order to maximise profit.

‘We need to be very selective in what we mine and this has an impact on mine life.’

Implementation 

Ok Tedi’s Peter Graham

In 2016, the temporary closure of the mine due to drought meant that the strategy could be redefined and, in 2017 and 2018, the focus has been on implementation.

He said metal grades have halved since 2000 and ore blends have become more complex and more difficult to manage.

‘We are looking to stay in “best quartile”.’

‘We have more than our fair share of challenges, particularly those related to the physical environment, which make operations on a day-to-day basis quite complex.

‘We have complex geotechnics (analysis of the geology), seismicity and heavy rainfall: nine to 11 metres of rain a year.

‘But Ok Tedi is blessed with a very good ore body, supportive shareholders and a committed work force.’

‘Between 2013 and 2018, the company increased production by 68 per cent, increased the amount of ore processed by 10 per cent and reduced gross costs by 22 per cent.

‘Since starting operations in 1984 to the end of 2017, Ok Tedi has produced 4.75 million tonnes of copper and 14.6 million ounces of gold and 31.4 million ounces of silver.’

‘We need to be very selective in what we mine and this has an impact on mine life.’

Over that period, Graham said, Ok Tedi has contributed on average almost eight per cent of PNG’s annual Gross Domestic Product.

Dividend

Ok Tedi announced in late January that a final dividend of K200 million would be paid to its shareholder, Kumul Minerals Holdings, this month.

Graham said: ‘After payment of the final dividend, Ok Tedi will retain adequate cash reserves to fund exploration and resource development investments, meet normal sustaining capital requirements, and complete the balance of the K700 million in-pit crusher replacement project whilst remaining debt free.’