Papua New Guinea OPPOSITION Leader Belden Namah says there is nothing to celebrate on the Porgera mine reopening as the same deal could have been reached last year.
“The deal, which Prime Minister James Marape is celebrating is no deal, that was the offer on the table right from the start,” he said.
Namah said if Marape had bothered to listen to the heads of Barrick and Zijin Mining, the co-owners of the Porgera venture, then he would not have closed the mine and would have averted the hardship caused to mine workers and dependent businesses in Enga and PNG as well as the impact on the economy.
He asked if the Marape Government would compensate those who had lost their jobs and those businesses that had lost revenue as well as the Enga government and landowners who had lost royalty payments because of the shutdown.
Namah also questioned the real value of the Government’s stake in the mine.
“How much is 51 per cent equity in Porgera gold mine worth?” he said.
“How does the State fund that component with its current total debt overhang at about US$11 billion (K38.59bil) or nearly 50 per cent of GDP and a budget financing gap in 2021 alone of K6.23 billion.
“The fiscal responsibility act ceiling has been moved, under the Marape administration, from 39 per cent to 45 per cent to 50 per cent with sights now set at nearer 59 per cent.” Namah said while Barrick Niugini Ltd had the means to finance the reopening of the mine could the national government and other shareholders hold their end up.
“Under the arrangement just agreed to, Barrick will finance the restart of the mine.
“That it can do. And it can finance 64 per cent of shareholder’s equity including 10 per cent free carry equity for landowners. Barrick Niugini Ltd, jointly owned by Barrick Gold of Canada and China’s Zijin Mining, has both the capital and the credit rating to borrow for its share of the deal if it has to.
“But where does mineral resources Enga get its money to finance its five per cent of shares?
“And where does Kumul Mineral Holdings get its funds for its 36 per cent? How do they do this without impacting PNG’s fragile debt to GDP ratio and sent its fiscal responsibility Act ceiling into a tailspin?
“If, as some opinions are held present, the equity will be paid by way of plough-in from future earnings, then how long will it be before Papua New Guinea pays of its debt and is able to see any real cash at all?”
The National / PacificMiningWatch
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