PNG Landowner approval of Ok Tedi mine life extension imminent | Pacific Beat

PNG Landowner approval of Ok Tedi mine life extension imminent

PNG Landowner approval of Ok Tedi mine life extension imminent

Updated 5 December 2012, 15:04 AEDT

Papua New Guinea's Ok Tedi Mining Limited says agreements have been signed for an extension of the Ok Tedi mine life by 7 of the 9 affected landowner groups and it expects the last 2 agreements to be signed this week.

OK Tedi CEO, Nigel Parker, made the announcement at the PNG Mining and Petroleum Investment Conference being held in Sydney.

At the same conference Mining Minister, Byron Chan, elaborated on the O'Neill government's plans to reform the mining industry.

Despite previously supporting moves for landowners to own the mineral resource, Mr Chan confirmed that those rights will be staying with the state.

Presenter: Jemima Garrett

Speaker: PNG Mining Minister Byron Chan, Ok Tedi's CEO, Nigel Parker

A review of Outcome Based Education in Papua New Guinea.

GARRETT: The O'Neill government has been under pressure on a number of fronts to ensure more of the benefits of mining get down to the grassroots people.

It has responded with a wide-ranging reform program.

From the industry point of view no proposal has been more controversial than the suggestion that mineral resources should be owned by landowers rather than the state.

Such a proposal would make approving mining projects much more difficult and would see the financial rewards of such projects restricted to a much smaller group of people.

Mining Minister Byron Chan told investors at the PNG Mining and Petroleum Conference that reforms to mineral ownership would be made without changing the PNG constitution.

CHAN: The State will be in charge of the resources so I am going to try and work within the existing legislation to put preference to Papua New Guineans, I suppose who can afford, you know.

GARRETT: So you'd like to see Papua New Guinean businesses more involved in owning the resources?

CHAN: Exactly, Papua New Guineans, Papua New Guinea businesses, Papua New Guinea joint ventures, exactly.

GARRETT: In the past you have supported landowners owning the resource rather than the state, why the change of heart?

CHAN: Well, I've seen the difficulties, I suppose.

GARRETT: Mr Chan told the conference the O'Neill-Dion government is determined to ensure landowners benefit from mining projects and to encourage downstream processing.

Other changes include moves to reduce the maximum size of exploration leases by half and to limit the number of licences an individual can hold to 10.

CHAN: We want to make sure people are committed, companies are committed, everyone is committed to the project and not just holding licence and playing on the stock market. there are some companies that have been playing that game for far too long.

GARRETT: PNG Mining Minister Byron Chan.

The other big announcement during the second day of the PNG Mining and Petroleum and Investment Conference was the imminent approval by landowners of an 11-year extension to mining at the Ok Tedi gold and copper mine in Western Province.

Ok Tedi is the backbone of the PNG economy, providing 16% of government revenue in 2011.

But it is also controversial.

Firstly, due to the massive damage its waste has done to the Fly River system, mainly under the management of BHP, which pulled out of PNG a decade ago and more recently due to a mystery bleeding illness which is said to have been affecting women in the region.

Three Western Province MP's have blamed the illness on chemicals from the mine and called for its closure.

Ok Tedi's CEO, Nigel Parker, told the conference the landowner agreement to the mine life extension came after 3 years of comprehensive consulations with people in the 9 community umbrella groups.

PARKER: Over the last 3 weeks we've negotiated and signed 7 of the communities up to the mine continuation agreements, and this week, starting today, the last 2 are in Tabubil to do that. It has been an absolutely exhilarating process in the last 3 weeks. I have personally signed on the company's behalf those agreements and the people are extraordinarily happy with OTML, with the continuation of the mine and to be quite frank, it is quite inspirational.

GARRETT: Recently we saw the 3 main MPs for the Fly River unequivocally call for the closure of the mine on health grounds and on environmental grounds, how does that sit with the response you are getting from the communities?

PARKER: The community definitely want the mine to continue and are unequivocal about that. As to the politics of it, I really do not know what is driving that. I am sure the elected politicians have the communities at heart and if they do get reports coming through of unidentified medical issues I am sure they would react and possibly that is why they are reacting so much. But the Prime Minister did take a very, very pro-active step some three weeks ago when all this did hit the press and had a specialist medical team, accompanied by a member of WHO, to go into the Province to see if there was any substantiating evidence for the issues that have been reported. Although I haven't seen the report I do understand there are no issues of the like that were being reported. And, in fact, when that was all hitting the press we actually had the communities from those areas in Tabubil negotiating the mine continuation and the general response was 'Mi no save' - 'We are unaware of these sorts of issues of the ilk that were being publicised'.

GARRETT: Nigel Parker has welcomed the O'Neill government's mining reform plans many of which, he says, are based on initiatives instituted by Ok Tedi after BHP left.

PARKER: Things like the financial assurance fund which was put in place so that when mine closure does actually happen that money is there. Now we have US$230 million sitting in that financial assurance fund. It is off balance sheet. That was part of the BHP exit. Minister Chan is talking about embedding that in legislation now for every single mine in Papua New Guinea. It is world leading edge stuff. It was put in place in Papua New Guinea 11 years ago, where nowhere else in the world was this happening. Papua New Guinea embraced this in the OTML legislation, things like mine closure plans. We have one and we are doing an update next year under the legal requirements. We have got the CMCA's and the negotation with the communities, the contribution to the women and children's side of all that. So all this was leading edge innovation that was put in place 11 years ago through the BHP exit, with BHP and the government. this current government now is starting to say 'Wow', that is leading edge and we are going to legislate that in our own mining legislation so we are the leading edge country in regards to mining for all new mines'. So I applaud it. I think it is an absolutely tremendous initiative by the current government.

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