Prime Minister James Marape today acknowledged that much progress has been made in preparation for the Porgera Mine’s reopening since the signing of the Framework Agreement on April 9th, 2021.
He said while reopening the mine is an important outcome sought by all, getting to that point required important regulatory and commercial arrangements to be in place.
The Prime Minister said he recognizes the commitments that the regulators, Barrick and Kumul Mineral Holding Limited have demonstrated to progress important milestones.
He said the engagement with landowners on the details of the benefits and the presentation of the framework agreement in Porgera on June 4, 2021 was an important milestone.
With the Land Owner Consultative Meeting’ held in Wabag on the 8th July, where Special Mining Lease(SML), Lease for Mining Purpose (LMP) and Riverine footprint landowners came in large numbers to be informed of the benefits of the New Porgera.
Based on that strong support, the Mining Department and the Mineral Resources Authority were able to successfully conduct clan validation exercises on the SML and LMP. The validation exercise to appoint the SML Landowners was completed on August 5th.
This was followed by the validation of LMP and Riverine Foot print which saw the nomination of LMPs agents on the 27 August 2021.
The Prime Minister also stated that it was important that all milestones are concluded properly and according to set processes and law to ensure the pathway is cleared for the mine reopening.
There are key legal agreements and commercial discussion and exchanges with the State, Kumul and the Barrick Team, which need to be concluded correctly.
“I am disappointed that our set deadline has now surpassed us. But, I am committed to ensure that the important commercial arrangements under the key agreements are concluded correctly, so that our collective interests as reflected in the framework agreement are fully captured in the commencement agreement and other important agreements.
“We cannot afford to miss anything by rushing through these agreements and unfortunately, there are no short cuts to this.”
PM Marape acknowledged that apart from the Commencement Agreement, which is currently being discussed for finalisation, the teams have been working concurrently on the Operatorship Agreement and the Mining Development Contract, which would secure the commercial arrangements for the New Porgera and its ownership structure going forward.
“Kumul, Barrick and the State Team are progressing this body of work well and it is about 80 per cent complete. There are obviously key issues which both parties will be discussing in the next two weeks with a view of finalising the Agreement for signing.”
He said the conclusion of the commencement agreement would trigger off all other agreements. These include the Operatorship Agreement, the Shareholders Agreement, the Fiscal Stability Agreement and the Mine Development Contract (MDC).
Porgera Mine Pit
Following that, it is also expected that key service contracts including employment, supply and procurement contracts would be concluded and the mine will then be able to recommence operations.
The Prime Minister also acknowledged very strong support from the Enga Provincial Government and the people of Porgera to help finalise the clan agents and said this will ensure that there is project security.
In recognizing this, he foreshadowed that in principle the Government would consider supporting further equity adjustments possibly up to 40 percent-60 percent for the landowners/provincial governments and the State.
This is the same principle my government believes in by empowering provinces and land owners just like we have passed on 40 per cent of Eda Ranu to landowners and provincial governments.
He also accepted that any eventual equity ratio for Porgera would be subjected to important technical and policy discussions, given that important commercial arrangements and economic benefits are based on the agreed split and upon framework agreement.
The Prime Minister also proposed that those considerations must also include any other stakeholders within the footprint of the project as a minimum consideration.
He expressed that at the time of the development forum, those key discussions would be held and built around the revised policy led by the Department of Mineral Policy and Geohazards to guard future equity discussions.
The Prime Minister said: “These are important discussions, which have implications on not just Porgera but other mining projects. We have to understand the technical details that would guide questions on equity for now and into the future.”
“The Government has decided that we are in partnership with Barrick and therefore we remain committed to full terms of the framework agreement. We would like to ensure that all the agreements and arrangements are concluded within this month.”
He called on the State Team and Barrick to stay focused on the important milestones at hand to ensure that the intentions of the Framework Agreement are realized.