Lihir Gold Mine, Papua New Guinea

The Lihir gold mine is on the island of Lihir, in Papua New Guinea's (PNG) New Ireland Province, about 700km north east of Port Moresby. The principal asset of Lihir Gold Ltd, the mine was managed by a subsidiary of Rio Tinto until late 2005, since when it has been operated directly by Lihir Gold.

GEOLOGY AND RESERVES

Lihir Island consists of five miocene-pleistocene volcanic units, of which three are volcanic calderas and two are sequences of mafic volcanic rock that predate the three volcanoes. Remnant geothermal activity is present in the Luise caldera, evidenced by hot springs and fumeroles.

The orebody is contained in a hydrothermally-altered porphyry gold system with the gold hosted in volcanics, intrusives and breccias within the caldera. The majority of the gold is contained in sulphides.

Currently defined gold mineralisation occurs near the centre of the caldera. Exploration since 1983 has defined several adjacent and partly overlapping deposits; Lienetz, Minifie, Coastal and Kapit with adjacent satellite deposits of Borefields and Camp. The bulk of the known mineralisation is in Minifie and Lienetz. All of the deposits except Minifie are connected by areas of low-grade mineralisation.

End-2004 proven and probable reserves were 188Mt grading 3.48g/t gold, giving a total gold content of 21Moz. Recent re-evaluation of the reserve in the light of higher gold prices has resulted in an increase to 23.6Moz, despite the production of 1.25Moz in the intervening period.

MINING

Lihir is an open-pit mine consisting of two adjacent overlapping pits. With the current reserve, mining will take place for 13 years, during which the higher grade ore will be fed directly for processing and lower grade ore will be stockpiled. This will be processed during the following 17 years, giving a total projected life of 30 years. Most of the ore contains refractory sulphides requiring oxidation before cyanide leaching.

Hydrothermal activity and a high water table create a major water problem and the water table is lowered by borehole pumping. The mine produced 7.95Mt of ore in 2006, plus 48.2Mt of waste rock, with the mining rate having been increased in order to compensate for lower ore grades.

The mining fleet now consists of five O&K RH-200 face shovels and 33 Caterpillar 785B haul trucks. From 1996 to 2000, Lihir's mining was carried out under contract by the Thiess-Roche joint venture; from April 2000, Lihir Gold took over mining operations itself. Recent work has involved sequential mining of the Lienetz orebody, which will form the focus of production until 2010.

ORE PROCESSING

The Lihir processing facility at Putput treats sulphide and oxide ore. The crushing and conveying plant receives run-of-mine ore for crushing and sizing before stockpiling. The ore reclaim and grinding circuit feeds stockpiled ore into a SAG mill for wet grinding. A pre-oxidation circuit receives the thickened slurry in three tanks where carbonates are removed before the ore is pumped to the autoclaves for pressure oxidation of sulphide ores. The ore is then cooled from 200°C and depressurised in the flash and quench systems.

The oxidised ore is then neutralised before carbon-in leach (CIL) recovery of gold from the slurry. Gold is electro-won from the pregnant leach solution, dried and smelted into doré ingots. Waste slurry is thickened prior to cyanide detoxification before it is discharged through a submerged tailings line.

A flotation circuit for sulphide ore recovery was commissioned in 2000 and was expanded during 2006, giving a plant capacity of over 6Mt/y of ore and an output capacity of 800,000oz/y of gold.

The company is now carrying out a feasibility study into expanding processing capacity to more than 1Moz/y from 2010, with provisional cost estimates of $500–550m.

PRODUCTION

In 2006, Lihir treated 4.3Mt of ore at an average grade of 5.14g/t gold, producing 650,811oz of gold. Total material movement was 56.2Mt, a record. The target for 2007 is to move over 60Mt of ore and waste, with an output of over 800,000oz. As in previous years, low-grade ore was stockpiled for future treatment. Total cash costs of production during 2006 were $397/oz.

In 2005, a 36MW geothermal power plant was commissioned, with the company continuing to evaluate potential geothermal steam resources as a means of reducing its dependence on imported fuel. Cost savings of $25m were achieved in 2006. The plant is being expanded to 56MW, with further annual fuel savings of $15–20m anticipated.

ENVIRONMENT

Lihir works closely with the PNG Government in implementing its environmental monitoring and management plan. This now incorporates a mine closure plan and acid rock drainage prevention systems.

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