Reopening Porgera mine critical

THE re-opening of Porgera gold mine in Enga later in the year is undoubtedly an eagerly awaited event that many individuals and businesses are looking forward to. Porgera holds promise for improved revenues in an economy that has been under pressure for close to two years now. The reopened mine will see the resumption of businesses directly or indirectly related to the mine’s operations and employees getting back to work. The State, joint venture partners Barrick and Zijin Mining, contractors, landowners and the 5,000 or so employees of the mine would all want to see the mine reopening sooner rather than later. Following the signing of a framework agreement between the State and Barrick Niugini Ltd (BNL) to reopen the mine, landowner representatives have been carrying out community awareness sessions on key aspects and implications of the renegotiated benefits. Landowners and stakeholders in the mine are looking forward to welcoming Prime Minister James Marape and Barrick president Mark Bristow this week, according to a news article in this paper. In the renegotiated terms under the framework agreement, the State will have 51 per cent equity while Barrick gets 49 per cent. Barrick will also own and operate the mine. The new deal secured an additional one per cent royalty taking special mining lease (SML) landowners and Enga government royalties to three per cent. The wider Porgera community also stands to gain with BNL paying K10.6 million annually for 10 years to the Porgera sustainable development fund, and a further K53.3 million up-front to the appropriate categories of landowners. There will be an increase in the equity allocated to a broad group of landowners who are the customary owners of the mine area, with the State to retain the right to acquire the remaining 49 per cent of the mine from BNL at fair market value after 10 years from the resumption of operations later this year. In all, that will be 40 years after the mine has been operating.Unless another one precedes Porgera in the next 10 years, it will be the second major mine to be taken over by the Government, following after the Ok Tedi mine in Western which changed hands a couple of years ago under the previous government. Sad to say, a legacy of both mines is and will be the irreparable damage done to two of the country’s major river systems, the Fly and Strickland. These are realities and perhaps an unfortunate price the country has to pay for the millions of kina in revenue and the varying benefits to the mining communities, the host provinces and the country at large that have flowed from the mines. From what has been reported, the agreement to reopen the mining does not directly address the social and environmental concerns which were part of the rationale to not renew Barrick’s mining lease. Hopefully, the renegotiated and projected economic benefits to local stakeholders would in some way, compensate for those other matters.The closure of the mine has resulted in a number of litigations in the National Court and the International Court for the Settlement of Investment Disputes. The Government’s action was a two-edged sword which caused a loss of revenue to its coffers as well as for the mine’s joint venture partners.Barrick is big enough to have survived without the revenue from Porgera, which is now on track to reopen. It is hoped that the parties have come away from the dispute a lot wiser and better prepared for any future eventuality.