Jimmy Maladina, the vice-minister assisting the Prime Minister, reaffirmed the Papua New Guinea Government's commitment to the recently negotiated agreements regarding the reopening of the Porgera gold mine. His remarks came in response to statements made by Kompiam-Ambum MP Sir John Pundari last week, scrutinizing various aspects of the agreements.
Maladina addressed Pundari's concerns about the cost implications, commercial terms, debt financing, and the realization of dividends and tax revenue arising from the Porgera project. He emphasized the thoroughness of the negotiations, dating back to June 2021, when a consultative meeting in Wabag outlined the benefits contained within the Porgera project framework agreement.
Highlighting the timeline, Maladina noted that it took approximately two-and-a-half years to finalize the mining development contract in December 2023 following the initial discussions in 2021. He clarified that despite the duration, subsequent agreements, including shareholder and operator agreements, have consistently reinforced and affirmed the benefits outlined in the 2021 agreement.
Explaining the financial aspects, Maladina shed light on Barrick's agreement to lend the PNG shareholders their 51% share of the cost without interest. This agreement allows for repayment from cash generated by the mine's operation. He stressed that this arrangement averted the necessity for Kumul, the Enga government, and landowners to seek loans from financial institutions, avoiding high-interest rates of up to 15%.
"The loan facilitated by Barrick for the mine's restart prevented additional financial burdens and interest repayments for Kumul, the Enga government, and landowners, ensuring dividends are not consumed by loan repayments," Maladina stated.
His comments aimed to provide clarity amidst discussions surrounding the Porgera agreements, underlining the careful considerations and financial arrangements designed to safeguard the interests of stakeholders involved in the revitalization of the gold mine.
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