Malaysian firm to run PNG gold refinery

PETALING JAYA: A Malaysian-owned company, Bestino Golden House (PNG) Pte Ltd (Bestino PNG), has become the first foreign operator of Papua New Guinea's only gold refinery, Metals Refining Operations Ltd (MRO).

Bestino PNG signed a management takeover agreement last Wednesday in Port Moresby with Melanesian Metals Corp, owner of the refinery. The agreement will see Bestino PNG manage the refinery for five years and pay a yearly lease with an annual increase of 15%.

Bestino PNG honorary chairman Prof Bala Shanmugam told StarBiz on Monday that this would mark the company's entry into downstream gold mining activities.

From left: MRO director Kennedy Wemin, Malaysian HighCommission charge d'affaires to PNG Zainal Izran Zahari, ProfBala Shanmugam and Chong Yuk Ming at a recent ceremony forthe takeover of operations by Bestino PNG.

Bestino PNG is a subsidiary of Ipoh-based Bestino Golden House Sdn Bhd, which was incorporated in July 2006 and whose major shareholder is Chong Yuk Ming, a third-generation jeweller and goldsmith.

Bestino Golden House, which has branches in Perak, Kelantan and the Klang Valley as well as offices in Hong Kong and Singapore, deals in gold wafers in Malaysia and the region.

Chong also has business interests in information technology, machinery, advertising, fashion and agriculture.

“Bestino Golden House is a gold trading company with accumulated sales exceeding RM100mil as at last June,” Bala said.

It is the first foreign company to run the gold refinery since it opened in the 1980s. “We plan to have the refinery running at full steam by mid-year,” he said, adding that MRO ceased operations last year after a robbery.

He said the Papua New Guinea government had licensed the company to export gold and that it would sign an agreement on gold mining in July.

“We've been given the rights to mine gold in five tenements,” Bala said, but declined to give details on where these tenements were located.

He said gold mined in Papua New Guinea and the surrounding South Pacific island nations was mainly sent to Perth, Australia, for refining after MRO ceased operations. However, this would change in mid-year when the refinery would be running at full steam.

“Under a local ruling, 30% of all gold mined in the country must be refined by MRO,” Bala said.

The company had plans to expand the refinery's capacity as well as expand into gold mining in other gold-producing countries in the South Pacific region, he added.

The refinery, when operating at full capacity of 16 hours per day, will be able to refine three tonnes of impure ore a month. In 2007, Papua New Guinea produced 2.5 million ounces of gold and is currently one of the world's top five gold-producing countries.

“We're planning to expand the capacity of the refinery next year, depending on how fast the local gold miners are bringing their ore to be refined and how fast we're expanding our mining activities,” Bala said.

Bestino Golden House planned to list abroad by the year-end, he said, adding: “The funds from the listing will be used for the refinery expansion as well as other gold-mining activities.”