NEW Ireland Governor Sir Julius Chan has likened the seven-year period that Lihir Gold Limited (LGL) failed to record a profit and reward shareholders as “the years the locusts have eaten”.
The last time LGL paid dividends was in 2003.
In an interview last Friday, Sir Julius, who took office in 2007, said he had fought to ensure that his people were given the benefits under the Lihir memorandum of agreement.
He said his people were “looking forward to a big dividend payment because that will compensate for the years the locusts have eaten”.
Sir Julius was responding to revelations by LGL chief executive officer Arthur Hood last Thursday of the company’s intention to “start paying out regular dividends” citing gains in the gold price and better performance at its operations.
“We are now closer than ever to start paying out regular dividends,” Mr Hood was quoted on Bloomberg as saying.
“Now is the time you should be rewarding shareholders with potentially dividends, capital returns or both,” he said.
Sir Julius said the wait was long enough.
After years of sitting and watching the gold miner take out wealth from the island and “give the province almost nothing in return”, the payments when made would bring comfort to the people.
He said he could not explain how, with the yearly increase on the world market of the much sought-after commodity, LGL had failed to report a profit and reward its shareholders accordingly since its inception in 1995.
“We have to look very seriously into the operations of the mine, and figure out how expenditures have been made and directed over the years which has resulted in the province continuing to lose out despite Lihir Gold Limited’s direct tax contribution to the State.
“Almost K4 billion to K5 billion over the last 13 years,” he said.
The former prime minister, who has returned to offer a new lease of life for his people through the Malangan Declaration, said while the provincial government did not hold shares in the project, under the agreement, it could have projects locked in and funded and because LGL had not declared a profit, it had stopped funding any infrastructural projects in the province.
“I am concerned with the way LGL is investing money.
“If LGL is going to invest in projects it will have to invest in projects that are profitable and not diminish profits on unprofitable projects.
“That is not acceptable. “We want a profitable mine that will benefit us,” he said.