The Papua New Guinea government has exercised its equity participation rights in Pacific Lime and Cement's Central Lime Project, acquiring a 13% stake for US$16.3 million under the Project Development Agreement signed in March.
Pacific Lime and Cement (ASX: PLA; PNGX: PLC) said the investment will be held through the state's nominee, Kumul Mineral Holdings Ltd. The company and the state have executed the required Shareholders Agreement and Equity Acquisition Agreement, giving the government a 13% interest in Mayur Industrials PNG Ltd, the project's special purpose vehicle.
The equity acquisition was priced at a discounted valuation based on the project's base-case net present value, reflecting a negotiated sovereign participation discount.
Kumul Mineral Holdings also retains an option to acquire an additional 5% stake in the Central Lime Project for about US$6.8 million. The option may be exercised within 180 days after operations commence, with first quicklime production forecast for the first quarter of 2027.
The state also holds the right to acquire up to a 30% interest in the Central Cement Project special purpose vehicle. That option can be exercised two months before the project's targeted final investment decision in the fourth quarter of 2026. The Central Cement Project has a disclosed net present value of US$339 million, with the final valuation to be determined by an independent expert.
The investment marks the first capital commitment by the PNG government under the Project Development Agreement framework, which governs the development, fiscal, equity and regulatory arrangements for the Central Lime and Central Cement projects.
Pacific Lime and Cement Managing Director Paul Mulder described the investment as a milestone that strengthens the sovereign backing for the project.
"The PNG Government's decision to invest directly in the Central Lime Project is a landmark milestone that further strengthens the sovereign and institutional foundations of what we are building," Mulder said.
He said the investment reflects more than a decade of collaboration between the company, the government and project-area landowners, and ensures that the project's economic benefits will be shared directly with Papua New Guineans.
Kumul Mineral Holdings Managing Director Sarimu Kanu said the project would reduce PNG's dependence on imported quicklime from the Middle East and Asia by supplying locally manufactured products for the country's mining and infrastructure sectors.
"We are proud to support this nation-building project and its long-term contribution to PNG's economic growth," Kanu said.
The announcement comes after the recent passage of Papua New Guinea's trade defence legislation, which establishes a framework to protect domestic industries from unfairly traded imports.
Special Adviser to the Prime Minister Isaac Lupari said the new trade defence measures would help strengthen domestic manufacturing and reduce reliance on imported construction materials.
Pacific Lime and Cement said it is preparing for first quicklime production while progressing work toward a final investment decision for the Central Cement Project later this year. Construction activities are expected to transition from the lime project to the cement project during the first half of 2027.
