Dispute with Lihir landowners shuts down major gold mine

The Australian reports one of the biggest in the world has been shut down by protesting landowners using an unusual, but locally traditional method to signal a property conflict without a dispute resolution Sydney in sight.

The protests had shut down all mine operations at 12.45pm on Sunday by placing gorgor plants around the mine site. According to Lihir Mining Area Landowners Association chairman Peter Suar, this is a traditional activity that is part of the grievance mechanisms used on Lihir island.

The gorgor is a type of ginger that has traditionally been used by clan leaders, in consultation with landowner group members, to settle land disputes peacefully. When the plant is placed around company land, it signals to everyone that the land is off limits and that talks are needed.

The controversy surrounding Newcrest’s goldmine on Lihir island in Papua New Guinea has been growing steadily over the years but exploded once the mine was slated $1.3 billion expansion. The conflict at Lihir comes as Newcrest and its joint venture partner, South Africa's Harmony, are due to update the market today on their large development plan for the Wafi-Golpu gold/copper project on the mainland.

Newcrest told the local market it was "striving for the prompt resolution of the matter and resumption of production" on Lihir, but analysts believe Wafi-Golpu can support annual production of more than 600,000 ounces of gold and 300,000 tonnes of copper.

Stock shares in the company were hit hard initially in response to the closure of the mine, which produced 604,336oz in the year to June, down from 635,610oz in 2011 because of maintenance issues. Newcrest fell as much as 5.85 per cent to $25.63 in the immediate reaction to the closure of its biggest mine.

Newcrest said the landowners required that mine production be suspended until the dispute has been resolved and are actively seeking a mediator Sydney to resolve the crisis.The processing plant remains on stand-by and all facilities have been "secured.” Newcrest is the largest gold producer listed on the Australian Securities Exchange.