Papua New Guinea Government Commits $16.3 Million to Pacific Lime and Cement's Central Lime Project

PNG Government’s Strategic Equity Investment Highlights Sovereign Support for Central Lime Project

Pacific Lime and Cement Limited announced that the Papua New Guinea Government, through Kumul Mineral Holdings Limited (KMHL), has exercised its equity participation rights under the Project Development Agreement (PDA) signed on 12 March 2026. The State committed US$16.3 million to acquire a 13% equity interest in the Central Lime Project’s special purpose vehicle, Mayur Industrials PNG Limited (MIPL). This marks the PNG Government’s first capital contribution under the PDA framework, which governs the long-term development, fiscal, equity, and regulatory arrangements for both the Central Lime and Central Cement Projects.

The equity stake pricing was determined using a discounted valuation based on the Project’s base-case net present value, incorporating a negotiated sovereign participation discount. This structure reflects a cooperative funding approach between PLC and the PNG Government to establish PNG’s first integrated lime and cement manufacturing platform. The completion of the Shareholders Agreement and Equity Acquisition Agreement formalizes this partnership and reinforces the PNG Government’s commitment to the project’s development and operations.

Government’s Expansion Rights and Central Cement Project Participation

Per the agreement, KMHL retains an option to acquire an additional 5% equity stake in the Central Lime Project for approximately US$6.8 million. This option can be exercised within 180 days of operations commencing, with first quicklime production forecast in Q1 2027. This option allows the PNG Government to increase its stake as the project moves from construction to full commercial production.

Additionally, KMHL holds rights to participate in the Central Cement Project, a separate Stage 2 development. The PNG Government may acquire up to a 30% interest in the Central Cement Project’s special purpose vehicle. This option is exercisable two months before the Final Investment Decision, targeted for Q4 2026, with valuation determined by an independent expert and acquisition discount capped at 15%. The Central Cement Project’s most recent net present value is US$339 million, as previously disclosed by PLC.

PLC’s Integrated Lime and Cement Platform and Production Timeline

Pacific Lime and Cement Limited is developing PNG’s first integrated lime and cement manufacturing platform, centered on the Central Lime and Central Cement Projects. The company holds a 99-year lease over approximately 5,200 hectares within a Special Economic Zone, which grants a legislated 10-year exemption from payroll tax, import/export duties, and corporate income tax. This fiscal advantage offers significant competitiveness for developing and operating these industrial facilities. The integrated platform aims to create a comprehensive domestic supply chain for essential construction materials within Papua New Guinea.

Construction activities are progressing as the company prepares for initial quicklime production, expected in Q1 2027. Concurrently, PLC is advancing final preparations for the Cement Final Investment Decision, targeted for calendar year 2026. The project timeline anticipates Central Lime construction will wind down as Central Cement activities ramp up in the first half of 2027, enabling efficient capital use and operational coordination between the two projects.

Trade Defence Legislation and Benefits for Local Manufacturing in PNG

The PNG Government recently enacted Trade Defence legislation to safeguard domestic industries against unfairly traded imports. PLC is engaging with relevant authorities, aligning processes with international frameworks such as the International Monetary Fund and World Trade Organization. This legislative framework fosters a supportive environment for domestic manufacturing and offers potential protection for locally produced lime and cement against imported alternatives.

KMHL Managing Director Mr Sarimu Kanu stated that this investment will reduce PNG’s dependence on imported quicklime from distant markets like the Middle East and Asia, enabling local production of high-quality, cost-competitive products by Papua New Guineans. The locally sourced quicklime is expected to support copper-gold and nickel processing facilities across PNG while enhancing the durability of roads and critical infrastructure nationwide. Special Advisor to the Prime Minister Mr Isaac Lupari emphasized that the Central Lime Project is vital for reducing import reliance, strengthening local supply chains, and ensuring national infrastructure development is supported by reliable, high-quality local inputs.

PLC’s Diverse Portfolio and Community Engagement Commitment

Beyond the Central Lime and Central Cement Projects, Pacific Lime and Cement Limited’s diversified portfolio includes industrial sands, nature-based forestry carbon credits, and renewable energy initiatives. The company also holds approximately a 16.3% stake in copper-gold explorer and developer Adyton Resources Corporation, listed on the TSX-V under ticker ADY. This diversified approach provides multiple revenue streams and positions PLC to contribute to economic development across the Asia-Pacific region.

PLC is dedicated to engaging host communities and adhering to internationally recognized environmental, social, and governance (ESG) standards throughout its projects. The equity participation arrangements under the PDA framework, which include both PNG Government investment and landowner participation, ensure that the Central Lime Project’s economic benefits are shared directly with the people of PNG. This reflects PLC’s commitment to sustainable development and long-term community partnerships.

Managing Director Highlights Sovereign and Institutional Support

PLC Managing Director Mr Paul Mulder described the PNG Government’s investment as a landmark milestone that strengthens the sovereign and institutional foundations of the company’s development efforts. He noted that this capital commitment reflects over a decade of collaboration among PLC, the PNG Government, and project-area landowners, demonstrating strong alignment in delivering PNG’s first integrated lime and cement manufacturing industry. With construction advancing and government investment secured, institutional and sovereign backing for the projects is evident.

Mr Mulder emphasized that the Central Lime Project is among Papua New Guinea’s most significant nation-building industrial developments, reflecting both the scale of capital investment and the strategic importance of establishing domestic production of essential construction materials. The PNG Government’s equity partnership adds credibility and reduces sovereign risk, while landowner participation ensures alignment with local communities and sustained operational support.

Capital Structure and Valuation Impact of Government Participation

The equity interest acquired by KMHL was priced at a discounted valuation based on the Central Lime Project’s base-case net present value, including a negotiated sovereign participation discount. This pricing approach aligns with standard practices in resource and industrial projects where host governments participate in equity. The discount reflects the government’s strategic interest and willingness to enter at a reduced valuation to align incentives and demonstrate commitment.

The government participation structure, combining immediate investment with options for future expansion, enables phased capital deployment. The initial US$16.3 million investment provides significant funding for the Central Lime Project, while options for an additional 5% in the lime project and up to 30% in the cement project allow the PNG Government to increase its stake as operational milestones are met. This phased approach follows best practices in large-scale industrial project financing.

Production Timeline and Cement Final Investment Decision Milestones

PLC is targeting first quicklime production in Q1 2027. The 180-day period for KMHL to exercise its option for an additional 5% equity in the Central Lime Project begins from this production start date, meaning the government’s decision on expanding its stake will occur in the first half of 2027. This timing aligns with the overall project schedule and provides a clear milestone to assess performance and confirm expanded participation.

Simultaneously, PLC is advancing final preparations for the Cement Final Investment Decision, targeted for Q4 2026. Completion of the Cement FID will trigger the two-month exercise window for KMHL’s participation rights in the Central Cement Project, enabling the PNG Government to finalize its equity stake in the project’s second phase. The timeline anticipates Central Lime construction winding down as Central Cement construction ramps up in early 2027, optimizing capital and operational efficiency across the integrated platform.