Government Refuses Extension of Porgera’s Special Mining Lease

The Government has refused an application by Barrick Niugini Limited  to extend the existing Special Mining Lease (SML) for the Porgera Gold Mine for another 20 years. Barrick Niugini Limited, has been operating the Porgera mine since 2006.

Prime Minister, James Marape, when announcing the   National Executive Council (NEC) decision of 11 March 2020, said this was based on the recommendation from the Mining Advisory Council (MAC).

 “The government has carefully considered the recommendation by MAC, and consistent with the MAC’s decision, and in the best interest of the State, especially in lieu of the environmental damages claims and resettlements issues, the Special Mining Lease (SML) will not be renewed.” “The Mining Advisory Council is an independent committee under the Mining Act , and they have thoroughly and carefully gone through the application and came up with the recommendation to reject the application for extension,” Mr Marape said.

The National Executive Council has agreed to enter into a transitional arrangement with the existing mine operator with priority being given to the development of an exit plan for Barrick, that considers all outstanding issues. The Exit Plan to be agreed will take into account the value of assets, settlement, future management and operation of the Mine as well as addressing legacy matters such as resettlement , environmental issues and tax liabilities .

“This decision ensures continuity of mine operations whilst we finalise longer term arrangements,” Prime Minister Marape said. The State Negotiation Team to be led by Chief Secretary. Ambassador Isaac Lupari has been directed by the   NEC to immediately commence and complete negotiations to give effect to the transitional arrangements.

“Of course, our landowners and the Enga Provincial Government will be consulted widely during the transitional period in regard to both benefit sharing arrangements, and equity participation once the ownership of the mine, both during the transition period and then into full ownership period.

“I want to assure the people of Papua New Guinea that this decision has been made in the best interest of our country and in full compliance to our existing laws. The lease expired and in accordance with our Mining Act, the Mining Advisory Council (MAC) has refused the application for the renewal of the lease. “I request Barrick Niugini Limited, to prepare for negotiations with our State Negotiation Team (SNT) for operations in the transition period until full exit at a time convenient to all parties.”

“The Wafi Golpu mine and all other resource projects on the horizon will be advanced within the existing legal parameters of our country, and we are moving to progress Wafi Golpu mining, P’ynang and Papua LNG as our three priority projects. “Despite the threats imposed by COVID-19, work in these sectors of our economy must proceed full steam ahead,” Mr Marape said.

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