Porgera mine restart on hold until agreement executed by all

THE delay in re-opening the Porgera gold mine in Enga means the deprivation of benefits to stakeholders and increasing care and maintenance cost.
The recent spate of violence including killings and the destruction of properties in the Porgera Valley pose security risks to the people living near the mine site.
Care and maintenance cost between US$10 million and US$12 million (about K35 million and K42 million) a month.
That figure will increase when the security cost is included.
Barrick Gold president and chief executive officer Mark Bristow arrived in Port Moresby this month as a part of his regular quarterly visit to all Barrick operations globally
During his three-day visit to PNG, Bristow met with Prime Minister James Marape and visited Porgera to meet with the landowners and business owners, church leaders and community representatives.
The mine is into its third year of care and maintenance.
Its resumption is awaiting the completion of the Shareholders Agreement by the Mineral Resource Enga Ltd (MRE).
Bristow said Barrick continued to maintain regular talks with the State negotiation team in the hope that the MRE would sign the agreement at the earliest possible date.
Around 50 landowners representing areas affected by the Special Mining Lease (SML), Lease for Mining Purpose (LMP), Porgera Landowners Association (PLOA) and MRE attended the meeting with Bristow.
Bristow told them the Porgera project commencement agreement (PPCA) provided a 1 per cent increase to the royalty rate to 3 per cent, plus an additional 10 per cent free-carry equity to be shared by the province and the wider project-impacted landowners.
This is on top of the 2.5 per cent held by Enga and the SML landowners through the MRE.
The PPCA demonstrates that the BNL and the Government are committed to providing more tangible benefits for project-impacted landowners and Enga.
Once the MRE signs the agreements, the first step is to incorporate the new project company, New Porgera Ltd and submission of a new SML application to the Mineral Resources Authority.
Before leaving Port Moresby, Bristow said: “All we need is for the shareholder’s agreement to be signed so we can create a new company (and) apply for the mining lease.
“We have already spent US$338 million (about K1.19 billion) for holding that place in neutral where we can.
“We can’t operate but we can maintain.
“Care and maintenance is costing us US$10 to US$12 million a month (about K35 million and K42 million).”
Bristow said Barrick worked closely with host nations.
“It’s about sharing benefits equally,” he said.
“Porgera has substantial life. Reserves are over 10 years, with potential to go over.”
He said Enga was “a tough place”.
“I’ve had discussions with the prime minister (James Marape) and he has promised to mobilise more security because that is what we need,” he added.
Bristow became president and chief executive officer of Barrick on Jan 1, 2019, following the completion of the merger with Randgold Resources.
Previously, since its incorporation in 1995, he was the chief executive officer of Randgold following his pioneering exploration work in West Africa.
He subsequently led Randgold’s growth through the discovery and development of high quality assets into a major international gold mining business.
Bristow played a pivotal role in promoting the emergence of a sustainable mining industry in Africa.
“I built a company, Randgold Resources, a sub-Saharan African focused company
“The relationship between the two companies is that I modelled Randgold on the original Barrick which is very entrepreneurial, focused on value and quality assets.
“So over a period of two and a half years (2015- 2018), I negotiated a merger with Barrick.
“We combined the two companies. Why?
“Because of some challenges.
“Porgera was a challenge.
“Barrick was struggling with a massive debt of US$12 billion (about K42 billion).
“Porgera was too complicated.
“So they sold half (shares) to Zijin (Mining Group Company Ltd).
“When I got involved I recognised the value of Porgera.
“Simplistically, I’m African-born.
“I believe in emerging markets.
“And my mantra in asset quality overrides jurisdiction.”
During his career, Bristow has held board positions at a number of global gold mining companies.
He holds a doctorate in geology from Natal University in South Africa.