PNG government and Barrick Gold make break through in negotiations to reopen Porgera Mine

 

Barrick Gold Corporation says it notes the statement released by Prime Minister James Marape yesterday announcing an imminent agreement to reopen Porgera Mine in Enga Province.

It says the mine was on ‘care and maintenance’ since April 2020.

Barrick and the PNG government have held constructive discussions on a framework agreement for recommissioning Porgera.

“The agreement under discussion is in line with the principles announced in October, providing for a joint venture between Barrick Niugini Limited (BNL) and the government of PNG to operate Porgera going forward on the basis of increased PNG ownership and a fair sharing of economic benefits,” Barrick said.

“BNL would continue as the operator of the mine. We remain hopeful that we will reach agreement with the PNG Government on a long-term partnership that will see the reopening of Porgera in the near future.”

Prime Minister James Marape released a statement yesterday saying the government is poised to sign an agreement with Barrick Gold to reopen the Porgera Mine.

The state rejected Barrick to renew its mining lease in April 2020 forcing the mine to close and many employees were laid off.

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Marape however said yesterday there has been a break through in negotiations with Barrick to continue as an operator and exit after 10 years with the new Porgera agreement.

He said the country should receive a “far superior deal” than the last 31 years from 1989 to 2021.

“I’m announcing to our country that within the principles of my Government, which includes getting more from our natural resources, we are in a better position now to sign an agreement with Barrick for what will be a new Porgera,” Marape said.

“I can assure our country that this is a far superior and better deal, meaning our landowners and Enga Provincial Government will get more, and the balance of equity through Kumul Minerals will mean we hold majority in equity.

“Other benefits includes securing an increased and upfront tax with no concession as is the case with other resource projects, an increase in royalties as well as a better handle on environment and resettlement issues at Porgera and a Barrick exit option.

“Those are some core issues I was not going to compromise on and I am happy to announce that we are almost there.”

Marape said state owned Kumul Minerals Holdings, since being granted the Special Mining Lease over Porgera, could have started but many court cases Barrick has filed caused delays to reopen Porgera hence the government entered into these negotiations.

“We realised that these court cases could have dragged on for years, so we have reached out for a possible commercial negotiation with Barrick,” he said.

“Today, as I speak, I am happy to announce to the country that Government has not compromised our core principles of ‘Take Back PNG’ resources.

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“Those principles were outlined to Barrick as conditions to start commercial negotiations. “

“And to date, under Mr Mark Bristow of Barrick Gold, they viewed our nation’s principles with respect.

“We are almost at the point of signing an agreement with Barrick. “

Marape said if  the last round of negotiation is good, then he intends to meet Enga Provincial Government and all SML and LMP plus impact area landowners at the earliest to discuss the benefit sharing.

“Let me assure my landowners: there is more for you.

“Let me assure Enga: there is more for you.

“Let me assure PNG: we are restarting Porgera to a better deal for all of us, with better project economics for the county.

“To those who questioned Government and Kumul Minerals Holdings on why this turn in Porgera, I inform all that we have every capacity to operate Porgera like we are doing in Ok Tedi right now.

“But with Barrick’s court cases, we had to go down this path,” Marape said.

The Porgera Joint Venture is an open pit and underground gold mine located at an altitude of 2,200-2,600 metres in the Enga Province, about 600 kilometres north-west of Port Moresby. BNL is a joint venture company in which Barrick and Zijin Mining Group each own 50 per cent.

Barrick says a further statement will be issued once a final agreement is reached with the PNG government.


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