PM may have been misled over TGM
AS trustee shareholder for PNG and chairman of Petromin, Prime Minister Sir Michael Somare may have been misled by the management as to the true value as well as cost of acquiring the Tolukuma gold mine.
If the consideration was a “nominal value”, which may mean K1 as suggested by former mining minister Sam Akoitai or the book value of the mine, then the State may well have been loaded with past, present and future liabilities for the price that it paid through Petromin.
At least the past liabilities should have been avoided and present liabilities apportioned whilst Petromin takes on future liabilities arising from its operations of the mine.
Such a result could only have been arrived at if there was a proper due diligence applying rigorous risk assessment.
At least three key issues in the public sphere should have attracted the Petromin management.
First is technical. This is the mine’s 13th year of operation even though its mine life is six years.
The reason for this is that the extent of the mineral reserve has not been defined with any level of certainty to go beyond six years at any one time after the mining lease was granted in the 1990s.
The second issue is the environmental health and safety of the workers and the impact on the people.
Petromin is undertaking a study after the transaction which is bad business practice, at least from the State’s perspective.
Finally, there is the question of the registration of the transaction for purposes of security of tenure.
The Mineral Resources Authority is unconstitutional and therefore, legally not in operation to advise the minister to approve the transaction and to register it upon approval.
This core issue alone may explain why Emperor Mines Ltd could not entice any international mining company to be interested in and to acquire Tolukuma gold mine.

James Wanjik, (Former secretary for Mining), Port Moresby
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