The existing mines in the country are expected to provide over K25.5 billion in benefits from 2017 onwards.
Mining Minister, Byron Chan, said this during the signing of the revised mining project Memorandum of Understanding (MoA) for Ok Tedi.
Chan, however, said this figure will exceed once Wafi and Frieda come into production in five years’ time.
“I have been working closely with the government team to approve these MOAs that have been completed for existing mines and new mines and for the State’s commitments, amounting to K155 million over the next 5 years under each of the MOAs,” he said.
Out of the eight operating mines in PNG, six MOAs have been reviewed, with only three approved by the NEC; they are Ok Tedi, Tolukum and Simberi projects.
The revised Ok Tedi MOA was signed on Tuesday (06th June) while the signing of the revised Tolukuma mine is scheduled for Thursday (June 8th) in Port Moresby
MOAs are unique to PNG and are essentially benefit sharing agreements.
They are provided for under the Mining Act 1992 and are an outcome of negotiations that are initiated through an MOA Review process for operating mines, and initiated within the development forum process for new mines that the Minister for Mining convenes for new mining projects that have been permitted for development in PNG.
Parties to these agreements (MOAs) are the State, the developer, provincial and local level governments and the landowners of the mine lease areas.
The main benefits that are negotiated for distribution and management under the MOAs are royalties, special support grants and infrastructure projects within the impact area, and generally within the mine area communities and the host provinces.
The other benefits include employment and training, business development for mine area communities and the tax credit scheme projects.
MOAs are implemented over an agreed period of between 3 to 5 years, following which they are then reviewed and upon approval, take effect for the next operating period.