PNG's OK Tedi Gold-Copper mine reopens with loss of K411 million

Papua New Guinea's  OK Tedi Mining Limited resumes its gold-copper mining operations today after a six-week closure due to the Covid-19 transmission in its area of operation in Western, a spokesperson says.

The company estimates a loss in revenue of K411 million (US$120) over the six weeks.

It also incurred US$10 million (K34.29 million) per week in operating cost. The closure on Aug 6 was to be for only 14 days.

But it was extended because of a spike in coronavirus cases in Tabubil, Western.

There are now 185 confirmed cases in the area – the second highest in the country after Port Moresby (300).

Chief executive officer and managing director Musje Werror said in August the company was “well positioned to withstand the financial impact of the 14-day suspension” it estimated to be around K100 million.

“Beyond this financial impact on OTML, the 14-day shutdown will have broader economic impacts,” he said.

“OTML generates a significant amount of foreign currency inflows into PNG and the suspension is likely to reduce US dollar receipts by approximately $40 million (K137.16mil).

“It will also reduce copper and gold production by approximately 4Kt (karat) and 12Koz (million ounces) respectively.”

On Aug 25, OTML released another statement saying that since the operation was suspended, the company had lost revenue of around US$20 million (K68.58mil) per week which had directly impacted foreign currency inflows into PNG.

“While operations are suspended, OTML continues to incur a significant amount of its normal operating costs, and as a result losses approximating US$10 million (K34.29mil) per week which are being incurred during this time.”

Meanwhile, the company last week paid an interim dividend of K150mil to the State which owns 67 per cent of the project.

Three landowner entities own the other 33 per cent.

The board thanked the employees, contractors and other stakeholders for the strong performance prior to the suspension enabling the dividend to be paid.

The company also announced that the mine life had been extended from 2026 to 2029 following work from the strategic business planning team headed by David Thurston.


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