MAC: Mines and Communities

After the Lihir landslide

Published by MAC on 2005-10-14

After the Lihir landslide

Ben Sharples, Mining

October 14, 2005

Lihir disasterFULL production is expected to resume early next month at Lihir Gold's operations in Papua New Guinea after a landslide last Sunday ruptured a pipeline and killed two employees.

Lihir investor relations manger Joe Dowling told the company was looking to access catchment areas close to the plant, including creeks and dams, to supply sufficient water to partially fire up the processing plant.

Dowling refused to comment on a report by analysts at Credit Suisse First Boston which said the stability in the area that collapsed was being queried as long as 12 months ago.

A mine visit by analysts in October 2004 noted a site newsletter that "discussed ground movement in the area around the northern end of the Kapit stockpile and incinerator that was being monitored by the geotechnical team twice daily", it said.

"In this context, one must question the safety of other areas until now assessed as geotechnically stable. This includes the mine and intended sea wall to enable recovery of deeper gold," the report by CSFB analysts Michael Slifirski and Julian McCormack said.

Dowling said the company did not have an estimate of how long it would take to stabilise the landslide area, but the company was "monitoring it continually and won't be doing anything until it's safe".

Lihir was forecast to produce around 700,000 ounces in 2005, the majority in the second half of the year.

The impact of the slope failure on the forecast has yet to be quantified.

"We are doing what we can to ensure that we maximise production in the current quarter and we'll give an update in due course," Dowling said.

The PNG Mines Department is investigating the landslide.

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