OCTOBER 17TH 2021
Prime Minister Hon. James Marape has reaffirmed his Government’s commitment to the early restart of Porgera Gold Mine in Enga with Barrick Niugini Ltd (BNL) as an equity partner and operator.
He announced this after the Government and BNL signed the Porgera Project Commencement Agreement at Government House on Friday (October 15th 2021) evening as a crucial step towards restart of mining operations at Porgera.
BNL will now start work on getting the mine restarted, including getting employees on site, as soon as possible with full operations to start in April 2022.
The Prime Minister announced that a proper Development Forum would be held in Enga in December to discuss landowner benefits before mine restart.
“This is a key milestone in our journey towards reopening Porgera Gold Mine and for it to be in operation for the next 20 years,” PM Marape said.
“Today was a tick off of what was a key requisite of the Framework Agreement signed in April.
“The Commencement Agreement allows us to go into the finer details of what will lead into the Operatorship Agreement, the Fiscal Stability Agreement and the Shareholder Agreement.”
Governor-General Sir Bob Dadae officiated at the signing by Kumul Mineral Holdings Ltd (KMHL) Chair Nellie James and Barrick Gold Senior Vice-President Woo Lee, and witnessed by PM Marape, Enga Governor Hon. Sir Peter Ipatas, State Ministers, and representatives of KMHL and Mineral Resource Enga Limited.
The Porgera Project Commencement Agreement formalises the terms of the commercial and financial arrangements contained in the Framework Agreement signed in April.
These terms include the following:
- PNG stakeholders and BNL will share the economic benefits generated over the life of mine on a 53/47 per cent basis;
- BNL will finance the capital required to restart the mine;
- An increase in equity will be allocated to a broad group of landowners who are the customary owners of the land where Porgera is located; and
- The State will retain the right to acquire the remaining 49 per cent of the mine from BNL at fair market value after 10 years.
The Government and BNL have agreed that their negotiation teams will continue to engage intensively over the coming weeks to ensure that all remaining conditions required for the recommencement of operations at Porgera can be met as quickly as possible.
PM Marape assured Porgera landowners, and those who live in the footprints of the project, people of Enga and PNG that his Government had not been “resting”.
“This is not a light, minor project; this is a substantial mining project that comes within the ambit of the 1991 Mining Act,” he said.
“Within this context, we have taken time to ensure that our national interests are protected, as well as investor interests are protected.
PM Marape thanked all involved including Barrick Gold, landowners, Enga Provincial Government, the State Negotiating Team led by Treasury Secretary Dairi Vele, KMHL, Treasury, Department of Prime Minister and NEC, and other stakeholders.
He also made mention of the Department of Mining and Mineral Resources Authority for their valuable input.
***
