Mystery remains over possible new ownership structure for Ok Tedi mine

While Papua New Guinea’s Prime Minister Peter O’Neill says the ‘marriage’ between the two owners of the Ok Tedi copper mine in Papua New Guinea’s Western Province is over, the method of divorce remains a mystery for the time being.

OK tedi mineSpeaking at the weekend, the Prime Minister clarified comments previously reported in the local press that had suggested that the mine’s requested extension would not go ahead.

‘There is no divorce with OK Tedi. OK Tedi is in PNG and we will continue our engagement with them,’ he told reporters in Port Moresby on Sunday. ‘I said the partnership between the owners of OK Tedi—that is the PNG Government and the PNGSDP [Papua New Guinea Sustainable Development Program Ltd]—that partnership will not continue.’

PNGSDP owns 63.4% of Ok Tedi Mining Ltd, with the remainder owned by the State of Papua New Guinea.

O’Neill is reported as saying ‘by 1st January 2014, if the mine life is extended, the OK Tedi mine will be managed under a new structure.’

The Prime Minister did not state what that structure might be, nor how it would be achieved.

The PM’s continued campaign against PNGSDP (Chairman Ross Garnaut was barred from the country before Christmas and subsequently resigned) has been widely reported in neighbouring Australia. The pending mine licence renewal, essential for the mine’s ongoing production, appears to be being used as leverage to negotiate a new relationship with PNGSDP.

While PNGSDP has yet to issue any comment on the Prime Minister’s words, Ok Tedi Mining issued this brief statement last week:

‘The Ok Tedi Mining Limited Managing Director & Chief Executive Officer, Nigel Parker, is aware of the Prime Minister’s statement in Parliament today regarding the Ok Tedi Mine Life Extension but is unable to make further comment at this point in time as it is a matter concerning the State of Papua New Guinea and PNG Sustainable Development Program Limited, as the shareholders of Ok Tedi Mining Limited.’

 

 

 

 

 

 

Comments

  1. Shane P Ila says:

    The PNG government headed by Peter O’Neil must come out clearly and state what strategy it has in place to justify the expropriation of OTML from PNGSDP:-
    1) It must explain how will the Western Province people benefit more from the expropriation of the shares held by PNGSDP under a new structure?

    2) It must explain to PNGeans, how will the government resolve the issue of the discharge of the mine tailings into the Ok Tedi and Fly River systems.

    3) It must explain to PNGeans the programs it will put in place to better the lives of the 100,000 plus people of Western Province, in terms of social, environmental & economic development.

    The PNG Government must show the people of PNG and foreigners that its decision to expropriate OTML from PNGSDP was not based on a “knee jerk” reaction to source funds to plug the budget deficit or repay the USD6.0 billion loan from China’s Exim Bank! (OTML is a cash cow we all know that) The only way the government can get its hands on the 63.4% dividends and the Long Term USD1.0 billion future generation fund in Singapore is to expropriate OTML from PNGSDP. The arguement that “it is for the best interest of the Western Province people” could well be a smoke screen to fool PNGeans and the people of Western Province. The PO government must come up with facts to show that PNGSDP did not deliver to the people of Western Province and the mine landowners what it was mandated to do or provide under its Trust Deed/Constitution, since the exit of BHP Billiton. In the absence of hard evidence from the government, one can deduce that the PO government has a hidden agenda! What will the PO governement do for the people of western Province, that both PNGSDP and BHP Billiton has not already done?

  2. Ian Kuta says:

    The PNGSDP started when Sir Mekere Moraut was then the Prime Minister of PNG. Back then why didn’t he findout about BHP’s involvement in PNGSDP?? And know the days Government wants to take full owner ship of the mine. If the Government takes over then the I strongly believe that the Government must not involve itself too much in the decision making. OTML has made alot of income for PNG and has a good reputation for producing qualified individuals in PNG and overseas. I strongly think that OTML must be run by independent body who can report to the government of the day

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