• Pacific Lime & Cement is developing PNG's first integrated lime & cement production facility
• Strategic advantages include coastal location 24km from Port Moresby with 400 million tons of high-grade limestone resource at surface, zero strip ratio, and 75% freight distance advantage over Southeast Asian competitors
• Market opportunity encompasses 250-300k tons annual domestic PNG demand (70-75% of phase one capacity) plus export potential to Australia and Pacific region, with PNG consuming only 33kg cement per capita versus 250-700kg in developing nations
• Government support secured through Special Economic Zone status providing 10-15 years corporate tax relief and fiscal incentives for downstream processing, with community development agreements including infrastructure, jobs, and equity participation
• Equity-funded construction of $80+ million phase one (two quick lime kilns) underway with 18-month timeline, targeting $150-200 million EBITDA at full capacity while maintaining debt-free structure for operational flexibility

Pacific Lime & Cement represents a compelling investment opportunity in Papua New Guinea's underdeveloped industrial materials sector, positioning itself as the country's first integrated lime and cement producer. With construction underway on its flagship project and significant government backing, the company aims to capture PNG's entire import market while establishing a platform for regional expansion.

Leadership

Managing Director Paul Mulder brings three decades of resources experience to Pacific Lime & Cement, including 15 years with BHP across steel mills, coal mines, and iron ore operations, followed by private equity work with KKR and leadership of Gina Rinehart's energy infrastructure assets.

"I built asset prosecuted at a transaction circle USD$1.26 billion. We sold the assets for everything from concept all the way through to definitive feasibility studies ready for financial investment decision."

The company evolved from Mayur Resources, which Mulder founded and subsequently listed before renaming as Pacific Lime & Cement. This 10-year development journey reflects the comprehensive approach required for major industrial projects in emerging markets, particularly given PNG's regulatory and infrastructure challenges.

Resource Base & Operational Advantages

Pacific Lime & Cement's competitive positioning stems from exceptional resource quality and strategic location. The company controls 400 million tons of high-grade limestone resource located directly on PNG's coast, with the material literally "sticking out of the ground 150m" according to Mulder. This surface exposure eliminates stripping requirements, significantly reducing operational costs compared to traditional mining operations.

The project's coastal location provides substantial logistical advantages. "Our distance from our quarry to our wharf is about 800m, not 200km," Mulder noted, contrasting with Southeast Asian competitors located inland. The facility sits 24km from Port Moresby adjacent to an $18 billion LNG facility, placing it at the heart of PNG's industrial infrastructure.

These geographic advantages translate into a 75% freight distance advantage over current suppliers, creating a compelling value proposition for PNG's industrial customers who currently import all lime requirements from Malaysia, Thailand, and Vietnam.

Market Dynamics & Import Replacement Strategy

PNG's lime market presents a classic import replacement opportunity, with annual demand of 250-300,000 tons representing 70-75% of Pacific Lime & Cement's planned phase one capacity. The country's major gold miners and nickel producers currently source all lime requirements from Southeast Asia, creating vulnerability in supply chains and higher costs.

"PNG as a country desperately needs bulk commodities and downstream processing. They don't have any cement and lime integrated of their own at all for their whole country for 10-11 million people."

This market gap provides significant first-mover advantages, particularly given the technical nature of lime products and customers' preference for supply security.

The company's import replacement strategy leverages both economic and regulatory advantages. Major mining companies operating in PNG have committed to support local industry when competitive on price and quality - criteria Pacific Lime & Cement expects to meet given its cost structure and technical capabilities.

Interview with Paul Mulder, MD of Pacific Lime & Cement

Government Support

Pacific Lime & Cement has secured PNG's first industrial downstream Special Economic Zone, providing substantial fiscal incentives for its integrated approach.

"The government is very supportive in that it comes with fiscal regimes and tax relief, 10-15 years corporate tax relief, and other import duty reliefs."

This regulatory support reflects PNG government recognition of the need to attract capital in competition with Southeast Asian nations. The Special Economic Zone framework specifically rewards downstream processing and value-addition, aligning perfectly with Pacific Lime & Cement's integrated lime-to-cement strategy.

Community engagement has been equally comprehensive, with formal Community Development Agreements providing infrastructure, employment, and equity participation for landowners. The company has invested in legal representation for communities and structured joint ventures ensuring long-term partnership rather than traditional extractive relationships.

Expansion into Cement & Building Materials

Beyond lime production, Pacific Lime & Cement's resource base supports a comprehensive building materials strategy. The company controls separate limestone deposits suitable for cement production, with full feasibility studies completed for clinker and cement facilities. PNG's cement consumption of just 33kg per capita compares unfavorably with 250-700kg consumption in comparable developing nations, indicating substantial growth potential.

"There's a direct correlation between GDP per capita and cement consumption," Mulder noted, with the PNG government planning $55 billion in infrastructure projects over the next decade.

The integrated approach extends to concrete batch plants and precast products, potentially creating a "mini-Boral" operation serving PNG's entire construction value chain. This vertical integration strategy maximizes value capture while supporting the government's vision of comprehensive industrial development.

Capital Efficiency

Pacific Lime & Cement has chosen an equity-only funding structure for its $80+ million phase one development, avoiding debt covenants and maintaining operational flexibility. The equity funding approach, while dilutive, enables aggressive expansion given the company's growth projections. Management targets $150-200 million EBITDA at full development, which would support substantial market valuations using building materials industry multiples.

Capital optimization efforts have reduced construction interfaces and partnered with experienced EPC contractors willing to operate facilities during commissioning. This risk mitigation approach, combined with debt-free operations, positions the company for rapid expansion as cash flows develop.

Construction Progress

Construction is advancing on the 18-month timeline with kilns being manufactured and site preparation underway. Key near-term milestones include kiln delivery, completion of earthworks, and expansion of wharf facilities to accommodate international shipping.

Monthly construction updates provide transparency for investors monitoring project progress. The company expects commissioning to be relatively straightforward given the proven nature of lime kiln technology and EPC contractor operational support during the initial 12-15 months.

Stage three wharf development will enable 30-40,000 ton vessels, supporting both domestic distribution and export operations to Australia and Pacific markets where freight advantages remain compelling.

Export Potential & Regional Expansion

While PNG's domestic market provides the foundation, Pacific Lime & Cement's strategic location enables cost-effective export to Australia and Pacific region markets.

"I'm 2 days sail to Brisbane, 5 days to Sydney and 7 days to Melbourne and my competitor's 19 days sail away."

Australian market entry would likely follow the integrated model, establishing concrete batch plants and distribution hubs rather than simply selling bulk lime. This approach maximizes margins while creating barriers to entry for competitors.

The company's resource base can support multiple expansion phases, with incremental capital requirements significantly lower than greenfield development costs. This scalability provides optionality for rapid growth as market opportunities develop.

The Investment Thesis for Pacific Lime & Cement

• First-mover advantage in PNG's $50+ million annual lime import market with 75% freight cost advantage over Southeast Asian suppliers and government commitment to support local industry
• Exceptional resource quality with 400 million tons high-grade limestone at surface requiring zero stripping, located 800m from wharf facilities adjacent to major LNG infrastructure
• Comprehensive government support through Special Economic Zone status providing 10-15 years tax relief, plus Community Development Agreements ensuring social license and operational stability
• Debt-free expansion platform with equity funding enabling rapid scaling from $80 million phase one to potential $150-200 million EBITDA integrated lime-cement-concrete operation
• Export optionality leveraging 2-5 day shipping advantage to major Australian markets compared to 19-day Southeast Asian competitors, supporting premium pricing and market expansion
• Proven management team led by 30-year resources veteran with track record developing and monetizing $1+ billion infrastructure assets across steel, mining, and energy sectors
• Scalable business model with incremental expansion requiring minimal additional infrastructure investment, supporting rapid capacity growth as PNG economy develops and export markets open
• Defensive market position serving essential industrial inputs for mining, infrastructure, and construction sectors with long-term offtake contracts and high switching costs

Pacific Lime & Cement capitalizes on two powerful macro themes: emerging market industrialization and supply chain regionalization. PNG represents a classic case of resource-rich developing economy requiring industrial infrastructure to support mining expansion and economic growth. The country's 33kg per capita cement consumption versus 250-700kg in comparable developing nations illustrates the structural demand opportunity as GDP growth drives infrastructure investment.

Simultaneously, global supply chain disruptions have accelerated regionalization trends, with companies seeking shorter, more reliable supply chains. Pacific Lime & Cement's 75% freight advantage over Southeast Asian suppliers reflects this shift toward regional sourcing, particularly for bulk commodities where transport costs significantly impact landed prices.

The convergence of PNG's industrial development needs with Australia's supply chain security requirements creates a compelling investment thesis. As Mulder noted, 

"We're right on the domestic door of the Port Moresby market, but all around PNG, we're 75% closer than the other importers with regard to freight distance."