PNG Prime Minister James Marape announced today (Sunday, February 19, 2023) that the economy is looking good with Papua LNG in Gulf to announce its Front-End Engineering Design (FEED) next week and negotiations on Wafi-Golpu Mine in Morobe nearing competition.
FEED is the process for conceptual development of projects in processing such as Papua LNG.
PM Marape also announced that Porgera Gold Mine would reopen as soon as tax matters of the old Porgera between developer Barrick and Internal Revenue Commission (IRC) were sorted out.
“The two major resource projects of Papua LNG and Wafi-Golpu have not been progressed substantially for more than 20 years with their known resources, but we are now making big strides to get the projects developed,” he said.
“I have just received the very good news that FEED for Papua LNG will be announced next week – which is an indication that the project is moving.
“After the FEED stage is Final Investment Decision (FID). The project developer, TOTAL, has given its full assurance that the project is moving on time and on plan.
“This is very good news for the country.”
PM Marape said an issue with Papua LNG joint-venture partners with PNG LNG partners had been resolved thanks to TOTAL Energy’s leadership - which paved the way for FEED and FID.
He said the good news for PNG was that P’nyang LNG in Western would be developed immediately after Papua LNG – “which means that the country will have eight years of LNG construction involving Papua LNG and P’nyang”.
“I assure both Gulf and Western provincial governments, and landowners, that we will have having consultations with them in the second half of this year,” PM Marape said.
As regards Wafi-Golpu, the Prime Minister said negotiations between the developers and the State Negotiating Team (SNT) were drawing to a close, with a financial agreement and technical aspects of the project to be completed.
“Both joint-venture partners, Harmony and Newcrest, and our SNT, are continuing with their negotiations,” he said.
“Our country must be reminded that once you sign into such long-term agreements, it’s in place for the next 40 years, as in the case of Wafi-Golpu.
“We don’t want to rush headlong into signing an agreement that we will regret later on, such as we have come to regret in Porgera, Ok Tedi, Lihir and Bougainville.
“People may be complaining that our Government is slow, however, we are looking thoroughly through all the fine print so that we maximise revenue for landowners, Morobe Provincial Government and the State.
“I appreciate the patience of both Harmony and Newcrest, and we’re drawing to a close now, with the Financial Framework Agreement to be completed. Once that is done, a mining development contract will be issued, which should be in the first half of this year.”
As regards Porgera, PM Marape said the Government did not have everyday control over IRC’s work IRC had made assessments and had been in conflict with Barrick over their assessment criteria.
“Barrick has asked some fundamental questions, especially on the IRC’s definition of ‘taxable stripping’, in as far as resource harvest is concerned,” PM Marape said.
“Barrick is of the view that the current ‘taxable stripping’ definition is not consistent with practice and law, hence the prolonged dispute, so we had to intervene.
“The laws of our country allow for the arbitration process to be deployed if disputes arises at the end of IRC’s assessment, but in the national interest, we felt that instead of going through a lengthy arbitration process, it was better that we get an independent panel to look into the issue.
“We’ve asked the independent panel to look at the law and current practice, and measure against IRC’s assessment, on Barrick’s SML 1 operation and tax submissions.
“I thank Barrick for paying for care and maintenance of the mine up to this point in time, and is increasing by the day, which is why the independent panel was established to look into the taxation issue and have the mine back in operation at the earliest.”
FM 100 / Pacific Mining Watch