A drilling campaign covering 1.5 km in Papua New Guinea’s Gulf Province has revealed there is enough high quality coal to run a 50-megawatt power station for 30 years, according to Paul Mulder, CEO of unlisted Brisbane-based miner, Mayur Resources.
Mayur Resources’ Paul Mulder. Credit Mayur Resources.
Mayur Resources has rights to explore a 120 km stretch of land in Gulf Province, close to the Purari and Vailala rivers.
‘Out of the 120 kms we have under tenure, we’ve only drilled the first 1.5 kilometres and that coal is enough to generate a 50 megawatt power station for the next 30 years,’ Chief Executive Officer Paul Mulder tells Business Advantage PNG.
‘If we’re to keep drilling as we intend to, the next five, 10, 15 kilometres will show there’s going to be tens of millions of tonnes of coal there.
‘We know that the coal is some of the cleanest coal in the world, at a 3% in situ ash level.’
By comparison, he says, Australia generates nearly 80% of its electricity through the use of coal with a large portion of coal having 25-30% ash.
‘Its sulphur levels are very, very low on international standards as well, at around 0.5%.’
The mine itself would be open cast, shallow at the surface, using local workers to provide the majority of the support required, he says.
Plan
A four-metre thick coal seam. Credit: Mayur Resources
‘Our objective is to vertically integrate our clean coal resources with a modular power generation unit and work with the PNG government to supply electrons to PNG Power at a significant reduction to current power generation costs,’ he says.
The plan is to start with one power station, in Port Moresby, Lae or Madang, so that the coal could be barged from the Gulf to the station’s location.
‘The cost of the power would be a fraction of the existing diesel and heavy fuel costs, which would give cheaper power to the people of PNG.’
Mayur estimates the operating cost of extracting the coal is US$25 to US$30 per tonne which translates to approximately 10–15 cents per kw/h, after allowing for capital recovery and a return on the investment at the mine and the power station.
He points out that a 50-megwatt power station would help fulfil the government’s stated aim of providing electricity to 70% of Papua New Guinea, from the current level of 11%.
According to the Asian Development Bank, PNG currently has power generation capacity of around 580MW, but will need an estimated 2000MW of installed capacity by 2030 to keep pace with government targets.
Exports
Mulder says because of its low ash quality, PNG coal could also be a viable export resource to China, Korea and India for their own power generation.
Mayur Resources is a privately-owned company with Singapore-registered parent, Mayur Resources Pte Ltd. The company’s tenement portfolio in Papua New Guinea includes coal, heavy mineral sands, copper and gold.
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Climate Change is a global issue. I don’t think coal production is feasible due to the pristine environment that our province possesses. It is a disastrous activity unfriendly to our pristine environment. Can Mayur Resource layout its Environment Strategic Plan. Gulf landowners should not even ponder upon such a dirty business. I would not even take a glimpse of the ESP.
This is my personal comment and opinion:
I like the idea and thanks Mayur for having confidence in the PNG extractive industry and actually invest in drilling programs. It is an advantage to know that the coal here is of high quality and less ash content. Also if the mining goes on, it will be of economic benefits to Papua New Guineans interms of royalty, employment opportunities, training for students and power generation contribution to cater for the gvt’s targeted 2030 and Vision2050 plans of electrifying 75% of the population.
I would also like to express my opinion that if the goes on, it would be nice to not only use all the coal for power generation but consider other markets of the coal as well because practically varied grades or quality of coal will be extracted. The high quality anthracite can be exported or used in other downstreaming process like converting it into fuels through gasification. The bituminous and semi bituminous can be used in the mining metallurgical process as we have lots of mines in PNG. It is the bituminous or 2nd grade coal which is used mainly in industrial boiler to produce electricity.
Then come the part most like to talk about, the environmental effects. Well we have technologies available at reasonable capex if the developer and miner can tap seriously into not only mining but also addressing the impacts. If we can have a working strategy of effectively extracting and burning the coal with minimized environmental footprints, then mining coal in Papua New Guinea is not an issue. I’ll be more than happy to help exploit this resource as I’ll be doing it with care as I’m trained to be an environmental conscious mining engineer.
Your points here are valid, there is a lot of work to be done. The mining stage might come in the next 10 years or so depending on a lot of factors. However, it is a working progress which we all have to be open minded about it.
Regards
If insitu coal is about 2% ash, it will earn more money by selling it to asian markets than using in a power plantin PNG. Alternatively, PNG can import thermal coal cheaply from Australia. However, PNG needs to improve power production by Hydro.
Geothermal power is feasible from reserves around Madang for itself and possible Lae and some parts of the highlands. New Guinea Islands should harness lots of geothermal reserves around New Ireland and New Britains.
Mayur needs to tell us how coal can provide clean energy? What we know is that anything associated with coal is dirty business. The prestine environment of the Gulf will be decimated forever just to satisfy the whims of a privileged minority. This doesn’t sound to me like good economy. This generation is sacrificing our environment and the future of our children without due care.
I agreed.
Fantastic opportunity to tap into South East Asian countries now that thermal coal price is on moving north again. Fact that PNG is in close proximity to SE as well as better quality it will PNG a very competitive exporter compared to Aust and Indo.
I am interested in buying coal for korea. please contact me.
There are alternative ways to lift Papua New Guinea and Papua New Guineans out of poverty without causing further destruction to the environment.
Denmark has managed to generate 100% of its energy from renewable sources (combine wind, solar, hydro). PNG is geographically well positioned to harness the power of the sun, wind and seas, yet we seem to be jumping as soon as someone waves a bit of cash in our eyes. Why not take the time to fully asses the long term benefits and potential destruction – 30 years is a relatively short period and coal is an unsustainable and very dirty source of energy! Renewables might require a large investment but over time their benefit outweighs the cost and it will not leave a huge whole in the earth like coal does! Have we not seen the environmental degradation of pogera and other open pit mines. Common Papua New Guinea, don’t just jump at offers, you have a precious resource, use it as a bargaining chip to attract better types of investment. Coal is dirty!
i am a land owner from Gulf Province, Waiguna Village, Kotidanga Local Level Government and am interested if we can have a chat regarding coal project in my land.
Even when coal will play a major role in lifting Papua New Guineans out of poverty?
Let’s think of the alternatives…
1)- Nuclear – not possible or viable in PNG. Radioactivity concerns. Not safe in earthquake zones.
2)- Diesel – The most expensive way of making electricity
3)- Wind – Very expensive to maintain. Does not cover peak load.
4)- Solar – Only works in daytime. Does not cover peak load.
5)- Geothermal – no hot spots in ground near Moresby.
6)- Coal. Can provide base load power. One of the cheapest forms of electricity generation. Supports industrial booms in economies. PNG coal is low polluting. No nor blackouts in Moresby.
So, after thinking about it this is the only option that us Papua New Guineans have to move our economy into the future.
If you can think of any alternatives to generate power in PNG then please let me know.
I think that the discovery of coal in PNG is a fantastic thing for our country.
Paul you have not mentioned hydro, the current energy source-about 60percent of total country energy. … There is even a bigger one planned to be erected along the purari river. ….
Hi Grastlk.
Good point. Hydro can be great in some circumstances.
But…
To dam the Purari would cost PGK Billions. That is why the entire project has fallen in a heap. You don’t hear about it much these days do you. The economics behind it have failed. PNG doesn’t need 1,800MW of power. Moresby only needs around 50-100MW of extra power and likewise Lae. Plus exporting that power to Australia would be a joke because Australia is an energy rich continent – Australia doesn’t need any more power.
Plus think of the massive environmental damage damming the Purari would do.
Thousands of square km will be lost.
Fish movements disrupted.
PNG’s 3rd largest river (the Purari) will lose its natural flow.
Whole ecosystems wiped out.
Villages moved and people’s lives affected.
Our people living there will lose their traditional lands.
https://www.internationalrivers.org/economic-impacts-of-dams
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Though it was a great success for the discovery of Coal, I as a citizen perceive coal mining as a very dirty business. I don’t think there is such a thing as clean coal in the world. Tonnes of research carried out on the environmental impact of coal mining around the world have proven to be very bad to the environment and the inhabitants of the area in which coal is extracted. The mining and extraction of coal in PNG will just add to the already deteriorating environmental impacts of the current mines around the country. I personally do not think its a good idea to venture into coal mining.