Mine closure unnecessary: Barker

By DALE LUMA
THE closure of the Porgera gold mine in Enga last April has had unnecessary, devastating economic impact on the lives of so many people, according to an economist. Executive director with the Institute of National Affairs Paul Barker was responding to the handing over of the mine’s framework agreement by Prime Minister James Marape to Barrick Niugini Ltd president and chief executive Mark Bristow last weekend. Barker said the US$300 million (K1.052 billion) to open the mine showed the massive cost to revive with more than a year of lost jobs, contract, revenue and foreign exchange. Bristow had said the cost of restarting the mine would be US$300 million, with care and maintenance of the mine alone costing BNL US$120 million (K421 million). An additional US$180 (K625million) is needed to restart the mining operations. “So much lost and now so much capital reinvestment before costs are recovered and profitable earnings and positive tax contributions can be restored,” Barker said. “This has had such an unnecessary but devastating economic impact on the lives of so many, but also the economy of the country for remote gains in the future. “This serves as a model of how not to proceed with prudent resource sector planning and governance. “The focus seems to be on achieving a greater equity stake, which over the years had been dropped in return for equity in Oil Search and the Papua New Guinea LNG. “While many would argue that a greater tax cut is a preferable and lower risk option for the State (unavailable to businesses) and enables government to better focus on its core responsibilities of delivering public goods and essential services and it’s regulatory and oversight functions.”