Amended bill gives mine right to access fund


Ok Tedi Mine Ltd will now be able to access the additional funding of US$35 million (K111m) kept under the financial assurance fund (FAF) to invest in the expansion of the mine and its operations.
Parliament on Friday passed an amended bill for Mining Ok Tedi’s continuation of its Ninth Supplementary Act 2018.
Prime Minister Peter O’Neill told Parliament that Ok Tedi was obliged under the code to establish a reserve account approved by the company and the state.
He said the fund was established to ensure that money was set aside to meet mine closure obligations.
O’Neill said on a regular basis (every four years since 2009) OTML reviewed the mine closure liability, with such review being independently audited and submitted to the Mineral Resources Authority and Conservation Environment Protection Authority for approval.
He said the most recent review and audit were completed last year, with the approved mine closure estimated at US$196 million.
“The FAF currently has a balance of approximately US$231 million and is therefore over-funded by approximately US$35 million,” O’Neill said. “OTML has high-value opportunities to better use those funds for sustainment and growth investments in the business and would like the ability to withdraw excess funds subject to approval by the state.
“In addition, withdrawal of excess funds could make a contribution to easing foreign exchange pressures as they could, for example, be sold into the commercial foreign exchange market and converted to kina.
“The cost as it presently stands has no mechanism to enable the withdrawal of any excels funds, including even earnings on those funds which are credited to the FAF.”
O’Neill said the amendments to the legislation now provides the means for excess money to be released from the FAF to OTML, subject to recommendation by the company’s board and subsequent approval by the state.