OTML: The cash machine

Business, Main Stories


OK TEDI Mining Ltd (OTML) has paid K13 billion to the National Government, Fly River provincial government and impacted communities since the first gold pour in 1984.
If the mine extends beyond 2013 to 2020, OTML will pay  more than half the benefits of the PNG liquefied natural gas (LNG) project, according to OTML managing director Alan Breen.
During last year’s mining and petroleum conference hosted by PNG Chamber of Mines and Petroleum, Mr Breen lamented at the lack of development in the local communities and the Western province despite payment of large amounts of money annually.
According to OTML the break-down of benefits to date were: mine area village royalties, K214 million; Fly River provincial government royalties, K301 million; Government taxes K5.165 billion; tax on salaries and wages, K580 million; dividends to the State, K2 billion; PNG Sustainable Development Program, K3.388 billion; in-country purchasing, K3 billion; and health services K160 million.
The funds are paid in line with the 2001 9th supplemental agreement and other commitments which were also part of an Act of Parliament.
On this, Mr Breen says the question on lack of development should be best asked to the recipients of the substantial benefits.
“A lot of the money is tied up in trusts and banks rather than being used to develop the services and infrastructure the province and the nation so desperately needs.
“It concerns me that we are not seeing the benefits on the ground where it matters most.”
“Despite this massive accumulated benefits, the deterioration of health, education and infrastructure services in Western province has continued.
“It is not that funding is not available but, as I mentioned, that substantial funds are sitting unused in trust accounts and banks,” he said.
For  that reason, Mr Breen is among those who oppose the Kondra Bill – the proposed amendments to the Mining Act to make landowners own resource projects. 
The proposed change is “unfair and inequitable” and would not deliver national benefit, only to a relative few people.
“Something is not working,” he said.
Records show that various disagreements led to its local leaders threatening a “bows and arrows war” against the giant mine at the start of mining, class-case against the mine over environmental damages, withdrawal of BHP from the mine and replacing its 52% equity with PNG Sustainable Development Program and now questions relating to lack of development in Western -rovince and impact communities.