“Newcrest Mining Gets Straight Talk from Governor Sir Julius Chan.”
The New Ireland Government, represented by the Governor Sir Julius Chan and most of the PEC members and senior administration officials, and Senior Executive Management of the Lihir Gold Mine, including the General Manager Chris Jordaan and his team, have pledged to work together and communicate regularly to serve the people of Lihir and New Ireland.
This follows open and frank discussions held between the two parties, in the presence of Mining Minister Johnston Tuke, on Lihir from the 27th to the 28th of January.There is a standing agreement between the Provincial Government and Newcrest that quarterly briefings will be held.
However, managerial changes at Lihir and other issues have meant that Tuesday’s meeting was the first in almost a year of particular interest were the figures for the royalties.
The New Ireland Team pointed out that gold prices have risen steadily for the past six months from about $US1250 per ounce to almost $US1600 per ounce, and wondered why royalties have not been higher.
The Lihir Management responded that both November and December payments were lower than usual because the mine was undergoing periodic maintenance and was therefore only operating at about half normal capacity.
However, they said that if gold prices hold at current levels or increase, royalty payments can be expected to be at least 25% higher than they have averaged in the last several years.
The New Ireland Team also sought information on total production, total revenue and projected income tax payments on the basis of operations in the last six months of 2019.
Lihir Management responded that both the Quarterly Report and the Half Yearly Report were due within the next few days and would provide that information.
Governor Sir Julius Chan emphasized that it was important for Newcrest “to provide us with accurate and honest information on production and earnings. You ask the landowners to be transparent with how they spend their royalties by going through their books, and we understand where you are coming from, but it is just as important for the landowners, and all the New Ireland Stakeholders, to be able to have a clear picture of what is in your books so we can verify the required level of payments for royalties and other benefits.”
Sir Julius further said that “it is in the best interest for all of us to work together and to provide transparent and accurate information. If we do that, we will be able to maximize the benefits from the mine to both New Ireland and the company.”
Mr. Jordaan and other executives of Newcrest and Lihir indicated that they were in full agreement with the directions proposed by Sir Julius. They conveyed that they would endeavor to communicate regularly to ensure positive relations with the Community and Provincial Government.
Mining Minister Johnston Tuke told the Newcrest Management that he intends to make amendments to the Mining Act because there are areas that are not providing a level playing field for Government and the company. One area of concern is provisions for mine closure.
“The amendments to the Mining Act will also include mine closure plans because, as history has shown in locations such as Misima, when the mines close the locals are simply cut off and are often forced to return to the standard of living they had before the mine began operations.”
The Minister further stated that “I also have the duty to make sure that the amount produced and revenues realised are made known so that all stakeholders benefit fairly as agreed to in the terms of the mining agreements.”
During separate meetings held by Governor and Minister with Lihir landowners, the main concerns raised by the locals were the lack of progress on the revision of the Lihir Mining Memorandum of Agreement (MoA), the need for a Mine Closure Agreement and monitoring of Gold leaving the Island so they can independently verify the accuracy of the royalties they are being paid.
The locals are wholeheartedly in support of the endeavor by the New Ireland Government to change the Mining Act to ensure more equitable benefit sharing. They also fully support the early submission of the Revised Lihir MoA – which has been signed by all New Ireland Stakeholders, including the NIG, the LLA and LMALA, the landowners association – to the NEC for approval.
Sir Julius said to the landowners: “We in the Government will do these things because they are the right things to do. We must do it because we have to leave the world better then when we found it.
We must change the law to give the landowners the right of ownership. That right has existed for forty thousand years. That right was given to you by God, and you are the guardians of the wealth God put in your land. The Malagan Declaration and New Ireland Declaration captures all these rights in policy form.
We want to transfer wealth away from the Government to the people of New Ireland. When the people are rich, Government will be rich. That is the most basic policy of this Government. If the people benefit, the entire province, the entire country will benefit.”
In conclusion, Sir J said “My Government never sleeps. We will continue to design policies that will sustain you into the future.
We have planted a Tree of Development that has many branches, a branch of Free Education, a branch of Pensions for the Elderly and Disabled, a branch of Ward Level Projects, a branch of Roof Over Heads. We will continue to nurture the Tree of Development.
All I ask is that you help us. Do not cut down the Tree of Development. If we nurture that Tree, we will all have a bright and prosperous future.”