Operations have resumed at Newcrest’s flagship gold mine in Papua New Guinea (PNG) after a dispute with local land owners was resolved.

Australia’s biggest gold miner said normal operations had resumed overnight at the Lihir mine, where production was suspended on Sunday.

Newcrest had been in dispute with the Lihir Mining Area Landowners Association (LMALA) about the benefits the miner pays land owners.

The company on Wednesday said it had met with land owners and government representatives, and worked out a way to resolve their differences.

“The parties have defined a pathway to resolve the causes of the dispute and agreed to work in a renewed spirit of co-operation to conclude the review of the integrated benefits package,” Newcrest said in a statement.

“Mining operations have recommenced and the processing plant is ramping up.”

The open pit Lihir mine is located on Niolam Island, also known as Lihir Island, 900 kilometres north of Port Moresby.

Newcrest recently said its major expansion of the mine was due to be completed in the final quarter of calendar 2012.

Newcrest shares were steady at $26.70.