Gold News

03/09/07: Strike continues to halt production at Lihir Mine

Strikes at the Lihir Mine in Papua New Guinea entered their fourth day today (September 3rd) with the mine now closed and police flown to protect the company's assets.

Yesterday, spokesman for Lihir Joe Dowling confirmed to ABC News that negotiations over working conditions were continuing, denying however that the row with employees was over preferential treatment of expatriate employers.

The Lihir Mine, in the New Ireland province of Papua New Guinea, began to operate in 1997 and now produces over 600,000 ounces of gold per year, making it one of the world's biggest gold mines.

Gold prices rose on the New York mercantile Exchange when the strike began late last week, but an expert affirmed that the Lihir situation will not likely translate into a drop in global gold supplies.

Tatsuo Kageyama, analyst at Kanetsu Asset Management, told Reuters that the effect was largely psychological. "The strike in Papua New Guinea is not expected to affect global supplies, but in the current sentiment, the gold market is more sensitive to this kind of bullish news," he said.

Gold has so far survived well amid the US 'credit crunch', with news of the strike adding to the resilient demand for the precious metal that brought its price to a three-week high on Friday.

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