Management of trust funds worry Ok Tedi Mining

By PETER ESILA
THE management of trust funds is a big concern for Ok Tedi Mining Ltd (OTML), says managing director and chief executive Musje Werror.
Werror, who is also the Ok Tedi Development Foundation (OTDF) chairman, said this during a Papua New Guinea Chamber of Mines and Petroleum workshop in Port Moresby last week.
“The big concern for us is the management of trust funds, I mentioned that the communities have invested K104 million,” he said.
“We will get all of that back by the end of this year, and we will double it by mine closure, but who is going to be around to manage those funds.”
“Because those funds will convert into development funds at mine closure, and as you know in PNG, the history of trust funds is not good, once they drive it, it is gone.
“By the end of this year, they are going to recover that K104 million, which means the next 10 years is all going to be the cream for them, and we are looking at possibly another K100 million on top of the initial investment they did (in 2012) plus the asset values as well, the community is going to have good value from the investment funds.”
Werror spoke about OTML’s plans for sustainability post-closure.
“That (management of trust funds) is a big challenge for us.”
Werror said all facilities in the mining township of Tabubil were managed by OTML.
“In Kiunga, where it is a government town, we still provide electricity and water services, and it costs us K2 million a month to keep Kiunga running,” Werror said.
“We have the highway linking Tabubil to Kiunga, it is a 136km road and we have been spending K30 million per annum maintaining their road.
“Who is going to be able to fund that road and keep that road open?
“We have gone through the mine closure process for many years and unfortunately at this point in time we have not landed on who is going to take over some of these public infrastructure assets, and the concern is that we are running out of time.
“We have created a new department called the social and sustainability department, and its focus now is to work on this issue.
“We are now reviewing and developing our strategy around this.”
Werror said the focus areas included a timely and orderly transition of public assets and services to third parties prior to the mine’s closure; sustainability of umbrella companies; employees and contractors transition plan; settlers plan with over 15,000 settlers on the outskirts of Tabubil town; provincial delivery vehicle — OTDF or others; management of trust funds and sustaining community programmes.