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Barrick cuts power supply at PNG mine amid legal standoff

Credit: REUTERS/CHRIS HELGREN

Barrick Gold Corp will reduce power supply to townships near its Porgera gold mine in Papua New Guinea, the mine's operator said on Thursday, to save costs amid a deepening standoff with the government over mining rights.

SINGAPORE, July 16 (Reuters) - Barrick Gold Corp ABX.TO will reduce power supply to townships near its Porgera gold mine in Papua New Guinea, the mine's operator said on Thursday, to save costs amid a deepening standoff with the government over mining rights.

Canada's Barrick, the world's second-biggest gold miner, was refused an extension of its expired lease on the mine in April, with the government citing unrest and pollution concerns.

It stopped production and said in a statement from mine operator Barrick (Niugini) Ltd that "due to necessary cost reductions" electricity the mine provides free to nearby communities would from Friday only be supplied for 12 hours a day.

Barrick is challenging the lease refusal and the reduction in power supply may increase pressure on the government to find a solution.

Barrick and China's Zijin Mining Group 601899.SS each own 47.5% of the Porgera mine and last week approached the World Bank's International Centre to try to settle the dispute.

A spokesman for PNG Prime Minister James Marape had no immediate response on Thursday. Marape has previously said the government intended to operate the mine itself.

(Reporting by Tom Westbrook Editing by Robert Birsel)

((tom.westbrook@tr.com; +65 6318 4876;))

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