THE Porgera gold mine in Enga can now be reopened following the signing of the shareholders’ agreement and security deed by the Mineral Resources Enga (MRE) in Port Moresby last Thursday. Developer Barrick Niugini Ltd(BNL) says the agreement is the only thing delaying the restart of mine operations. BNL and Kumul Minerals Holdings Ltd had signed the agreement in April. BNL chief executive officer Mark Bristow said they would start the incorporation of the new project company – New Porgera Ltd – once all agreements had been signed. Below are three views on the impact of the Porgera mine on the economy.
Bank South Pacific Financial Group Limited chief executive officer Robin Fleming:
IT is important to accelerate the reopening of the multi-billion kina Porgera gold mine project in Enga from a foreign exchange (FX) perspective. Both Porgera and the Ok Tedi mine in Western are key contributors of FX for the country. Notwithstanding the agreements that were signed last week, it will really be important to start to accelerate the reopening of the Porgera mine.
From a foreign exchange perspective, it is a key contributor along with Ok Tedi.
There are a couple of factors that inform a long term view. The two main ones which are the key gas projects – P’Nyang and the Papua LNG.
Those projects are moving very closely towards a final investment decision maybe in the third or fourth quarter of next year. That alone will stimulate the economy significantly.
If we get through to the end of 2023 to 2024, the foreign exchange dynamics should start to change, GDP activities should start to change.
Our branch in Porgera continues to remain close due to security concerns and we are hopeful that the recent announcements of the various agreements with Barrick and SML’s will mean that there will be an increased presence in that area as they start to towards preparing themselves towards the recommissioning of the mine.
This will enable us to move our staff back into Porgera as well.
So between Porgera and the two gas projects, the medium to long-term prospects of the economy remain sound.
There are some inflationary pressures and one of the challenges that the Government and the bank of PNG will find is that the normal response for inflation is to increase interest rates.
But because the economy is relatively flat, they want to be cautious about not stifling the investment demand which required to support those key projects whilst at the same time ensuring that the inflation while is important, can be mitigated as much as possible which requires some adjustments to foreign exchange policies as well as the monetary policy.
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| Porgera Mine PNG |
Porgera Chamber of Commerce and Industry president Nickson Pakea:
The long waiting shareholders’ agreement was signed which gives the people of Porgera the confidence that the mine is about to be open.
The mine development forum also needs to be signed and that will bring light into Porgera and the country as a whole.
It has been more than two years since the mine was closed and there have been law and order issues which also affected the livelihood of the people.
Ongoing tribal fighting and killing has also painted a very bad name for Porgera.
We welcome the recent signing of the shareholders’ agreement which is developing confident and we hope to see the opening taking place soon.
After the opening, this will bring good news to the struggling economy and the also gives benefits to the people where they can make a new beginning and focus on a better future.
We are now waiting on the signing of the mine development forum and this will give us the confidence and restoration.
Businesses have been affected and cash flow has become a major concern.
We are prepared to see the opening of the mine and wanted to participate meaningfully.
Enga governor and MRE director Sir Peter Ipatas:
The resettlement of the special mining lease (SML) and the lease for mining purposes (LMP) landowners needed to be addressed by the Government.
It has taken us a long time to actually come to signing the document because if you see the PPCA (project commencement agreement), there was an allocation of the free carry but not specified, we insisted that it be written down on paper so that everyone in the Porgera valley and the country know what the split is in terms of equity that has been agreed to.
The next key issue is resettlement, we can’t have our people continue to live in the SML area, because they are living in the SML area, the illegal miners are also being accommodated.
Now that there is provision in the agreement for resettlement, we have signed off, but we want to also take it up to the State to ensure that resettlement does take place quickly, for 30 years there has been no relocation, very little resettlement, this time we want to see real resettlement,” he said.
We have signed because it is in the national interest but our issues need to be addressed including the number one issue of resettlement.
The National / Pacific Mining Watch