Chinese groups target $825m on mining and infrastructure in Solomon Islands

China is to build a swath of infrastructure projects in the Solomon Islands in the south Pacific as part of an $825m programme of works to revive the country’s gold mining industry.

Plans include a port, roads, railways, bridges and a hydropower station, in addition to the reactivation of an abandoned mine, reports Reuters.

The work will be carried out by China State Railway Group and funded – and owned – by Hong Kong-listed Wanguo International Mining in partnership with Chinese-owned Australian developer AXF Group and local landowners in central Guadalcanal.

The proposals were advanced by Beijing at a ceremony held on Saturday, 26 October, at the former Gold Ridge mine on the island of Guadalcanal, which is about 40km southeast of the Solomon Islands’ capital of Honiara.

Xue Bing, China’s ambassador to Papua New Guinea, told those attending the meeting that "only China, proceeding from the friendship and wellbeing of the local people, is ready to overcome all obstacles to undertake this project".

A spokesperson for the Gold Ridge consortium told Radio New Zealand at the ceremony that China Railway had "the mining experience, construction expertise and Pacific experience to make a great contribution to the development of a world class mine in Solomon Islands".

The agreement to build the port was announced in mid-September, after a decision by the Solomons to switch diplomatic ties from Taiwan to Beijing.

The decision to reopen the mine caused comment among sector experts. Australian mining analyst Peter Strachan told Reuters that the investment was "way over the top" for a relatively low-grade gold project with modest reserves.

The Gold Ridge mine once supplied 30% of the islands’ GDP, but last operated in 2014, before flash floods halted production. The facility was sold by its owner, Australian-listed St Barbara, for a nominal A$100 to a landowner group in 2015, which went on to secure interest from Australian-based Chinese company AXF Resources, and then Wanguo.

Walton Naezon, chairman of the Gold Ridge landowner group, told Reuters that Wanguo and AXF Resources, were raising $275m to pay China Rail to bring the mine back into production.

"The balance is the second phase to be approved, which includes things like underground work," said Naezon, referring to the remainder of the contract. He added that China Rail would bring in its own machines and would employ 70% local labour.

Following the Solomons’ change of diplomatic alignment, China attempted to lease the island of Tulagi. A deal was signed but then declared unlawful by the Honiara – a move welcomed by the US, which has been the dominant power in the region since the Second World War.

Image: The Gold Ridge mine (Concrete Evidence)

Further reading:

Story for GCR? Get in touch via email: [email protected]

Latest articles in News