The PNG Government has refused the application by Barrick Limited to extend the current Special Mining Lease (SML) for the Porgera Gold Mine for another 20 Years.
Prime Minister James Marape made the announcement following a National Executive Council decision based on the recommendation of the Mining Advisory Council.
The Prime Minister said in light of long standing environmental and resettlement issues, the Special Mining Lease will not be renewed.
“The Mining Advisory Committee is an independent committee under the Mining Act and they have thoroughly and carefully gone through the application and came up with the recommendation to reject the application for extension,” said Marape.
The Government and Barrick will now enter into a transitional arrangement with Barrick with priority being given to the development of an exit plan for Barrick, that considers all outstanding issues.
The Exit Plan will take into account the value of assets, settlement, future management and operation of the mine, as well as addressing legacy issues of resettlement, environmental issues and tax liabilities.
“The decision ensures continuity of mine operations whilst we finalise longer term arrangements,” said the Prime Minister.
The announcement by the Prime Minister follows recent statements by the Porgera Landowners Association (PLOA) and Barrick calling on the Government to renew the SML application.
Barrick and the PLOA had entered into an agreement on benefit sharing that was detailed in a joint letter delivered to PNG Prime Minister James Marape.
“If the Government makes an unwise decision on SML without listening to the voice of the authentic landowners, we note that we still own the land and no mining can take place without our permission,” the PLOA announcement stated.
“The mine is our garden and, with SML extension on terms fair to the landowners, will continue to provide us with benefits and improvements in the lives of the men, women and children of Porgera and PNG for many years to come.”
Barrick President and Chief Executive Mark Bristow said the agreement woulddeliver significantly more than 50% of the economic benefits to Porgera’s PNG stakeholders.
“Our modelling projects that over the course of the potential 20-year SML extension period, landowners and the local community could receive more than US$1 billion at a gold price of US$1,300 per ounce and PNG as a whole could receive over US$4.5 billion, assuming Porgera’s continued management by BNL,” he said.
Meanwhile the State Negotiation Team led by Chief Secretary, Isaac Lupari, has been directed by t eh NEC to will immediately commence negotiations to effect the transitional arrangements.
The Prime Minister said the Enga Provincial Government and the Landowners will be consulted during the transitional period in regarding to benefit sharing, and equity participation.
“I want to assure the people of Papua New Guinea that this decision has been made in the best interest of our country and in full compliance to our existing laws. The Lease expired and in accordance with our Mining Act, the MAC has refused the application for the renewal of the lease.
“I request Barrick Niugini Limited, who has been operating the mine since 2006 to prepare for negotiations with our State Negotiation Team for operations in the transition period until full exit at a time convenient to all parties,” said the Prime Minister.
Marape also revealed that 10 personnel PNG Defence Force contingent will be stationed at the Porgera Mine area to maintain security over the mine due to increasing incursions by illegal miners. They will be in place during the transitional period.