A Chinese state-backed company has spent more than $A1 billion to acquire the mines and port facilities on three of Papua New Guinea's islands.

Lingbao Gold — a mineral-resources group listed on the Hong Kong stock exchange — agreed to pay St Barbara, an Australian-listed gold producer, $A453 million to obtain its controlling interests in a lucrative gold mine on Simberi Island, located in the New Ireland province.

It also is forking out an additional $A842 million, according to multiple financial reports, for an 80 per cent stake in the Simberi site and its associated exploration licences on the Tabar Islands.

Financial analysts say Lingbao has bought at a higher valuation than Kumul Minerals Holdings Ltd earlier this year after the Papua New Guinean state-owned company acquired a 20 per cent share in the asset for a $A100 million price tag.

Lingbao's investment came soon after China Molybdenum unsuccessfully attempted to partner with Bougainville Copper Ltd to restart of the dormant Panguna mine, which had been closed since 1989 following a civil war in the autonomous region which is now seeking independence from PNG.

That Chinese company was blocked in favour of an Indian rival, Lloyds Metals and Energy Ltd, which was considered an inferior bidder over lacking the technical ability to mine either gold or copper at the site following advice from the majority-owned Bougainville state miner.

The controversial decision forced an investigation from the global Organised Crime and Corruption Reporting Project, which found Bougainville President Ishmael Toroama accepted an offer from Lloyds to pay for his wife's life-saving kidney surgery before signing the contract.

It is the second time Lingbao has invested in gold projects in PNG.

Lingbao has cited Beijing's flagship Belt and Road infrastructure commitment as the key factor behind the billion-dollar investment in the PNG islands amid dual cooperation from Simberi Gold Ltd and the PNG government.

For the New Ireland economy, there is expected to be a significant rise in royalties which are due to commence on July 1, 2027, after Lingbao provided guarantees for its royalty payment obligations.

Lingbao announced it would become the dominant employer on Simberi Island, while the Chinese President, Xi Jinping, also recognised the Belt and Road initiative was integral for a "golden decade" for his country.

The acquisition means the Chinese group will expand the Simberi mine and build a wharf, which will enable larger ships to dock.

Lingbao will also acquire mineral exploration leases on Tatau and Big Tabar islands, both south of the smaller Simberi Island.