Barker discusses the impacts of closure of PNG's Porgera Gold Mine

 THE closure of the Porgera gold mine in Enga, Papua New Guinea for a year has not only affected job loss and revenue but also caused extensive deterioration to the mine site, economist Paul Barker says.

Barker, who is also the executive director for the Institute of National Affairs, said this included water entering the mine, deterioration of plant and equipment all of which cost a lot of money to be restored.

Paul Barker
Paul Barker 

He told The National that if the Government planned to be the majority shareholder and, therefore, beneficiary of the mine, clearly the State would have to pay its share in rehabilitating the mine site.

Barker said this following the announcement by Prime Minister James Marape earlier this week that the Government was poised to sign an agreement with Barrick Gold Corporation to reopen the mine, 12 months after its closure over the rejection of renewing the mining lease by the State.

“It’s a year now since the decision by the Government advising Barrick and their partners that their operating licence would not be renewed,” he said.

“This caused a devastating impact in terms of loss of jobs, contracts, company earnings and, therefore, tax revenue from both corporate tax, salaries and wages tax and foreign exchange earnings. At the worst possible time, when the Covid-19 was impacting the economy and revenue and when gold prices reached record levels, when most other commodity prices were really low.

“The impact on households who lost jobs and savings and contractors and employees of contractors across Enga and down the Highlands Highway to Lae, would have been tragic, widespread and hard hitting, highlighting that there are much better ways to go about resource project agreements to achieve the objectives of the Government and other parties, notably in improving or shifting the share of benefits from the mine towards the Government and local (non-company and community) interests. “It’s very unfortunate that negotiations and constructive resolution of the issues did not occur prior to last April, especially as clearly the company (Barrick) was willing to dialogue constructively with the Government and agree to arrangements which would substantially enhance local benefits, without the incredibly costly closure for a year.

“It’s good to hear many of the issues have now been addressed and will now be agreed to between the investors and the Government.

“There are clearly other issues which will need to be addressed, including who is going to pay for the rehabilitation of the mine site and restoration of operations.”

The National / Pacific Mining Watch

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