No extension until benefits are guaranteed: Govt

Prime Minister Peter O’Neill has announced there will be no extension of the Memorandum of Agreement (MoA) for the Ramu NiCo mine in Madang Province.

The initial MoA was signed in 2000 and expired in March 2018. It is now due for a review, however the Prime Minister announced last Friday that there will be no agreement until government is sure there is fair benefit for the people and the State.

“The mine agreement has expired and we will renegotiate so that our people benefit most. Bai yumi stap na lukluk tasol ah? Nogat! Nogat! Em blong yumi. Yumi mas gat sampla sher stap insait. Bai yumi stretim, Gavana bai yumi stretim, mark my words. Yumi mas lukautim ol pipol blong yumi pastaim,” O’Neill said. (Will we just stand and watch? No! No! This is for us. We must have some share in this. We will fix this, Governor we will fix this, mark my words. We must first take care of our people.)

He told Governor Peter Yama that they had a big task ahead to negotiate the new terms and conditions of the new agreement.

Yama expressed passionately that the Ramu NiCo mine was the worst ever State negotiated mine with no benefits to the locals in Kurumbukari and Basamuk. Concerns have also been raised that other minerals apart from nickel and cobalt have been extracted and exported.

“The people of Basamuk must have spin off businesses. They must have good roads, good housing, health centres, schools, water supply and electricity. Right now Rai Coast and Usino-Bundi are the least developed districts in the country despite being hosts of the Ramu NiCo mine and also the Ramu Agro Industry for Usino Bundi,” Governor Yama said.

Minister for National Planning, Richard Maru, visited Basamuk last Thursday and met with the mine operator, MCC, and encouraged all stakeholders to now focus on a way forward that will benefit the company, province, landowners and the State.

At the moment, the State is not an equity partner in the mine project. There has not been any corporate tax and no Goods & Services Tax paid by the company since production began in 2012.

Furthermore, there is no benefit sharing agreement for the landowners in the project. Minister Maru said in the future, MoA’s must have benefit sharing agreements where landowners, the host province and the State must have shares in the project. This will be the case for Wafi-Golpu Mine, the Frieda Copper Mine and any other upcoming mines in the country.

“MCC is not the enemy, we are partners in development and so in the negotiations for the new MoA, we must ensure win-win situation for all parties involved,” Minister Maru said.

He said Madang had the economic potential and opportunity to double and triple its internal revenue and become a major economic hub in the Momase region. Minister Maru challenged Governor Yama and all the other MPs from Madang to focus, cooperate, communicate more for the greater good of the province.

Minister Maru is certain MCC has by now recovered its initial investments in the mine. This also explains why the Ramu mine is looking to invest a further US$2 billion to double production. The State, provincial government and landowners must now take up equity in this lucrative mine under the new agreement that the Government will take on together with MCC. The challenge now is to properly identify the landowners and Mineral Resources Authority (MRA) must ensure this exercise immediately by MCC.

In saying that the company must not feel that it has to solve all the problems in the area, Minister Maru encouraged MCC management to participate in the new-look Infrastructure Tax Credit Scheme which will be launched in March. He also urged the company to work with the PNG Government to seek grant funding from the Chinese government to build most needed infrastructure in the Usino-Bundi and Rai Coast districts.

The particular focus would be to build a highway between Erima to Saido and other raods, health and education facilities within these two districts.

The Ramu NiCo mine has a 135km slurry pipeline that runs through Usino-Bundi and Rai Coast districts.

Minister Maru also maintained that mines should do away with the fly-in fly-out arrangement and return to the model of the Bougainville Copper Limited where mining townships must be built at the mine sites.

Governor Yama also supported the position of the Government of Morobe and the Tutumang Government that there shall be no “Fly in Fly Out”, for the Wafi-Golpu Mine Project and other Mines and Resource Projects into the future.

“We will maximize revenue flows from all these projects to go to the local people, landowners and to our Government and to remain in the country. Hospitals, schools, a township and other utility services are built there. There’s no reason why we shouldn’t use this model,” Maru said.

“If we want to allow the revenue from these mines to rotate within PNG and help build our country, in the form of taxes, employment and so on, we must walk away from the fly-in fly-out arrangement.”

Maru said the Government is committed to build a highway from Erima to Saidor in Rai Coast District to assist the people living along these areas access markets and services and is seeking the support of the Chinese government to focus their development grants away from Port Moresby to two the remote districts of Usino-Bundi and Rai Coast, which hosts the only Chinese owned mine in Papua New Guinea, the Ramu NiCo Mine.

A State Negotiation Team will be put together as soon as possible to commence discussion of the future of the mine and its stakeholders, including the State and the landowners.

The Prime Minister himself announced that he will chair the State negotiating team with the Madang Governor as key members of the State Negotiating Team.

Press release