It Costs US$300 million (K1.052 billion) To Restart Papua New Guinea’s Porgera Mine
THE cost of restarting Papua New Guinea’s Porgera mine is around US$300 million (K1.052 billion), Barrick Niugini Ltd (BNL) president and chief executive officer Mark Bristow has revealed.
Bristow said care and maintenance of the mine alone had cost BNL US$120 million (K421 million) and an additional US$180 million (K625mil) was needed to restart mining operations at Porgera. He said the sooner the
mine reopened, the lower the cost. “I just came back from a meeting to restart the mine. “It takes a lot of work to get this mine up and running,” he said. “The world’s mining (industry) is in a boom.
“So we have to compete with a hot industry at the moment.” He also said the company had started a plan to re-employ workers.
“One of the things we were not prepared to do was to put people at risk when the mine was closed,” he said. “So we retrenched everyone who wasn’t required for care and maintenance and paid them their full dues.
“When we start the new Porgera it will be a new vehicle. Those who had been working for us will receive their dues, and then everyone starts (afresh).
“As soon as we finalise the documents and create the new company, we will start with fresh employment. “We want to employ Porgera people first and other Papua New Guineans second.”
Barrick currently employed 800, some of whom were contracted employees. “We need to employ another 800 at the end of this year, then another 1,000.
“I’m back in July, the team is working on the prestart. “In 10 days’ time, we will have all drafts ready for negotiation.” The mine was closed last April due to differences between the Government and BNL.
The National / Pacific Mining Watch
PM Marape, when handing over the agreement to resume mining operations at Porgera to landowners and the Enga Provincial Government, made several announcements on its overarching benefits.
The Prime Minister of Papua New Guinea when handing over Porgera Framework Agreement, outlined that the development forum is proposed to take place this month in Enga where Special Mining Lease (SML), Leases for Mining Purposes (LMP) and all affected areas will get together to split the benefits.
PM Marape hands over Porgera Framework Agreement to landowners and Enga Provincial Government
Department of Prime Minister & NEC | Friday June 4th 2021.
Prime Minister Hon. James Marape today (Friday June 4th 2021) visited Porgera accompanied by State Ministers and Government delegates to announce the new Porgera Framework Agreement.
The agreement was successfully negotiated with Barrick Niugini Ltd (BNL) in April this year.
PM Marape, when handing over the agreement to resume mining operations at Porgera to landowners and the Enga Provincial Government, made several announcements on its overarching benefits.
These include:
1. 51 per cent equity by PNG shareholders for 10 years with the option of buying out Barrick’s 49 per cent at fair value;
2. The State is contributing only 36 per cent to restart the mine with 15 per cent free carry equity, with Barrick paying for 64 per cent cost of restart;
3. The State will contribute no cash to upfront to restart as the 36 per cent equity cash call will be raised by Barrick with zero per cent or no interest charge (so this means Kumul Mineral Holdings (KMHL) or the State will not borrow like previous governments did for PNG LNG Project (IPIC) or Oil Search shares (UBS deal);
4. The State has gained additional 1 per cent extra on top of the 2 per cent for royalties allowed by law,
5. The State has secured full 30 per cent corporate tax (unlike Lihir and other mines like Ramu) plus securing of an additional 2 per cent fiscal stability tax;
6. Better local content for more local contractors and employees;
7. One-off US$15 million start-up seed capital for landowners, and every year going forward a US$3m fund for future generations; and
8. Old Porgera legacies remain in the ‘old Porgera basket’. Going forward Government, KMHL and BNL give assurance of resettlement and care to society and environment.
PM Marape further outlined that the development forum is proposed to take place this month in Enga where Special Mining Lease (SML), Leases for Mining Purposes (LMP) and all affected areas will get together to split the benefits.
Prime Minister thanked to Enga Governor Hon. Sir Peter Ipatas and announced 10 per cent of equity for landowners in Porgera Valley.
Prime Minister Marape will overnight in Porgera tonight and attend church tomorrow (Saturday).
This has become his custom over the last 24 months, unlike past prime ministers.
PM Marape will fly out after Sabbath service in Porgera with the local people.
Ends/
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