Govt eyes waste disposal fee

Business

By DALE LUMA
THE State is looking to collect a US$2 (about K7) per tonne waste disposal fee and a two per cent social licence fee for the K18.4 billion Wafi-Golpu gold and copper mine in Morobe, according to the Mineral Resources Authority (MRA).
Managing director Jerry Garry told The National that this was part of additional fiscal instruments that the state negotiation team had imposed on the term sheet for negotiations of a mining development contract.
Garry said negotiations between the state and developers were expected to reconvene next week with the completion of a mining development contract expected in the next two months followed by a decision to grant or refuse the Special Mining Lease (SML) application.
“In as far as Wafi-Golpu is concerned, we have been waiting for an independent financial modelling to be done by our external experts in government forum.
“The technical team has come back to us in late December with an updated financial model for the Wafi-Golpu project.
“We were specifically asking for additional fiscal instruments that the state negotiation team has imposed in the term sheet for negotiations of a mining development contract.”
Garry said there were some fiscal instruments outside of the existing laws that the State wanted to see outside of the mining development contract.
“Two of the instruments are what we termed as a US$2 per tonne fee for the waste disposal fee to cover essentially what is termed as financial assurance,” he said.
“Financial assurance is demanded in every mining project because in the event of a sudden mine closure, the money will be used by the government for demobilising and cleaning up the mining operation.
“We recognise that mines do not close as and when according to the planned schedule.
“As part of the mine closure obligations and best global practice adopted around the world, in light of the fact that there can be sudden closures and many governments around the world ask operators to set aside funds. So for that they have imposed US$2 per tonne on the waste disposal that will be paid by the operators.
“That’s a new fiscal instrument outside of the existing law that has been introduced into the term sheet for the mining development contract.
“The other is called the two per cent social licence fee.
“The state negotiation is looking at imposing a two per cent social licence fee based on annual gross revenue of the total value of mineral export for social licence.”
Garry said the two per cent social licence fee that would generate revenue to meet the social obligation for mining communities and relieve the State from this obligation.

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