Ok Tedi losses mount

LOSSES at the Ok Tedi mine are mounting into the tens of millions of kina and growing as the strike by workers continue.
The Ok Tedi mine produces 170,000 tonnes of copper metal and half a million ounces of gold annually from its Mt Fubilan open-cut mine.
It is estimated copper production will be reduced by 450 tonnes and 2010 gold production will be reduced by 1,500 ounces for each day that the strike continues.
The 1,600 union members of the 2,000-strong workforce went on strike on April 1 over the alleged unfair distribution of the shares in success scheme (SISS) payouts.
The week-long strike has been ruled illegal by the Industrial Registrar.
The registrar made the ruling after a meeting with OTML and Ok Tedi Mining and Allied Workers Union (OTMAWU) on Tuesday.
The registrar’s team flew to Tabubil, Western province, and urged all to return to work and let the due process of the law takes its course.
OTMAWU said in a statement it had advised OTML that “the only agenda on this industrial action was purely on the unfair distribution of the current SISS payout”.
“Workers will listen to both the management and the union to return to work if the management will revisit, improve and make the current and upcoming SISS payout a fair distribution,” the union said.
The SISS is a special fund set up to provide an incentive to retain and attract employees to mine closure, administered by an independent trustee and with strict guidelines about the distribution.
OTML managing director Alan Breen said employee retention was seen by Broken Hill Propriety (BHP) as a very critical element of future success when it exited OTML and the SISS funds were set up.
“We have seen the benefit of that over the past three years when many companies have been trying to poach senior people and professionals for resource hungry Australian and international mining companies,” Mr Breen said.
The SISS fund distributes 5.2% of the OTML annual cashflow with 50% going to Part A award employees PG01-08 and the other to Part B employees PG09 and up.
Mr Breen said OTML employees were among the highest paid in the country with substantially more benefits than in other companies.
“When adding base pay of over K23,000, SISS benefit of almost K17,000, plus accommodation, electricity, travel, medical insurance and school fees, the lowest paid award employee earns in excess of K50,000 annually with the majority of award employees earning more than that,” Mr Breen said.
Contrary to the report in The National, Parts A and B employees had already received their SISS payments of over K17,000, which was on average just over 40% of their base salaries.
OTML redistributes its annual cashflow into dividends to shareholders, 82% of which flows to the State and PNG Sustainable Development Program and redistributed in nation-building projects.