Papua New Guinea is set to take 55 per cent of the total benefits from the Wafi-Golpu copper/gold project in Morobe, Prime Minister James Marape says.
Marape highlighted this following the signing of a framework memorandum of understanding (MoU) on Thursday by the State and project partners, Harmony Gold Mining Ltd and Newcrest Mining Ltd.
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| signing of a Wafi-Golpu framework memorandum of understanding (MoU) |
According to the partners, the MoU represents a significant step forward in progressing and signing a mining development contract (MDC) for the K18.5 billion project.
Marape said the project would anchor the country’s economy for the next 40 years and beyond.
“It took us a while to get to this point in time,” he said.
“This MoU shows how the state negotiated with investors.
“The team negotiated fair and hard with the investors without compromising their (investors) rate on return on their investments.
“All in all, if you look at the pie split, on the harvest that will take place against a price of US$1,200 (about K4,220) an ounce (28.3g).
“It is a good project on the upside, we now move to see that 55 per cent state take when you put in equity, royalty tax, including the two per cent premium on fiscal stability.
“We are embarking on a least costly, the minimal impact to the environment.
“The developers for the first time, have put into provision a facility of over US$394 million (about K1.38 billion) as a facility for social infrastructure programmes in the project area footprint.
“That’s also part of the 55 per cent gain.
“When you break it down to equity, they hold 35 per cent each while the country has 30 per cent.”
According to WGJV, the MOU sets out key terms to be included in MDC, which is a prerequisite for a Special Mining Lease (SML), including:
STATE equity participation, royalty rate, tax package and term and scope of the SML;
KEY terms for other related agreements with the State, including provision for stability to underpin the significant long-term investment required to develop and operate the project;
COMMITMENTS for the WGJV to invest in infrastructure and social development projects that will deliver long-term benefits to local communities; and,
THE framework for the parties to progress the permitting of the Wafi-Golpu project as quickly as practicable in accordance with applicable regulatory processes.
Suresh Vadnagra, chief technical and projects officer representing Newcrest Mining Ltd, said: “Wafi-Golpu is one of the world’s best undeveloped copper and gold deposits.
“It is recognised globally for its potential and it promises to deliver substantial economic benefits.”
Harmony Gold Southeast Asia chief executive officer Johannes van Heeden Harmony said: “This is going to be a team effort.
“This is the first step of the partnership where we will see this magnificent project developed.”
The National / Pacific Mining Watch
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