Lihir Mine a Symbol of Mining Industry’s Renewed Vigor

In Dust Control, EK35®, EnviroKleen®, Mine & Quarry, Soil-Sement® by Jim Silva

Recent innovations at this enormous mine in Papua New Guinea have transformed the operation into a highly lucrative venture.

The Lihir mine in Papua, New Guinea is one of the world’s largest gold mines — but until recently, the $7.5 billion project still had some pressing operational wrinkles to iron out. Well last year, the Financial Times reported that major changes brought massive growth in annual profits, a trend that mirrored gains made by other companies in recent years.

Over the course of 2017 alone, Lihir managed to double its annual financial returns, producing a record 900,000 ounces of gold. By the end of the year, it was expected to produce 3.9 billion kina in revenue (or $1.2 billion USD). Lihir’s recent resurgence is just one of many promising signs that are giving many in the industry hope that boom times are ahead.

A Shift Towards More Efficient Operations

Newcrest, Lihir’s owner and operator, was able to solve the mine’s challenges by shifting its focus from securing investments to making operations more efficient. The company rebuilt seawalls, installed monitors to more quickly track equipment failures, and reprogrammed the autoclaves used to burn off sulphur from gold. Recalibrating the autoclaves alone has significantly reduced their production costs: an ounce of gold now takes $913 to produce, down from a whopping $1,328 in 2013.

Lihir’s transformation is just one example of the recent revitalization of the precious metal sector. Indeed, a recent Citigroup survey estimates that the sector’s four largest companies will generate $167 billion in revenue over the next three years.

The Lihir mine’s reserves might last as long as 25 years, so its sudden return to profitability bodes well for the industry at large. Newcrest and other companies will have to continue investing intelligently in cost-efficient approaches to maintenance and worker safety, but their path towards continued profits is far clearer today than it was just a few short years ago.

Investing in Your Mine’s Operations

It’s clear from the example set by the Lihir mine that smart investment in technologies that make mines safer and more efficient are key to maintaining stable growth.

At Midwest Industrial Supply, Inc., we’ve worked with industry leaders for more than four decades to provide effective solutions to operational challenges on worksites throughout the world. Our patented dust control agents like Soil-Sement® EnviroKleen® and EK35® are designed to settle into the surface of haul and access roads and trap dust within them, reducing PM10 and PM2.5 emissions by as much as 95%. Most importantly, we work directly with you to develop a dust control program that meets your specific needs. Our turnkey application plans and managed services programs are designed to help you achieve the right level of dust control for your worksite’s unique conditions.

The Lihir mine’s growth is good news for everyone in mining. If companies follow Newcrest’s lead by investing in streamlining operations through innovative technology — like Midwest’s dust control products and application programs — the entire industry has a rosy future ahead of it.

Jim is Midwest’s Business Unit Manager for Global Mining. He is experienced in operations management, asset management, and business improvement.