Beyond mining: interview with Ok Tedi’s Nigel Parker


On a visit to the Ok Tedi mine, we met with Nigel Parker, the man tasked with managing Ok Tedi Mining Limited through the final years of the mine’s life.

OTML is currently undergoing a corporate restructure. What does that entail and where has it reached?

The corporate restructure is looking at our core activities. When this company started 30 years ago, there was nothing here in Tabubil. Legally, for instance, we had to have a hospital. Now, we are looking at entering into an arrangement with Divine Word University so that we can have it positioned as a teaching hospital. We are looking at the hospital to continue operating beyond OTML as a sustainable medical facility in this part of the world.

In fact, there are a lot of activities in our business that now have natural owners other than ourselves. We are here to position these non-core activities as sustainable businesses for the future. We and PNGSDP have a company called the Ok Tedi Development Foundation Limited, which we have now made independent. It is a benevolent institution: OTML, or anyone else, can make a contribution or donations that are both tax exempt to OTDF and tax deductible for the donor. OTDF has purchased vessels on behalf of the communities, using community funds, to service the communities of the Fly River and these are under construction now.

What about the future of OTML as a mining company?

OTML is an extraordinary asset to this country. It would be a great shame to see this asset wither by simply mining out this ore body and doing nothing else. We have the view that we should be leveraging this company into other mining and exploration activities to support PNG. We have some of our own mining leases to the north of here that we are actively exploring. We have some leases under application in New Ireland, and some joint venture agreements with Frontier Resources, an Australian listed mining company. This strategy is directed at transitioning the company from a single project company into a mining and exploration company.

How do you go about managing the change in the culture of OTML? It must be a challenge?

We are changing the culture from that of a project that was very much finishing to that of a culture in which we are repositioning the business so that it will benefit the sons of the sons of the sons. My approach to management is very clear: I expect my people to make decisions within their authority levels and to be accountable and responsible. That is quite new for Papua New Guineans as they are accustomed to having expats sitting at the top. I am seeing some real changes where people are just getting on and doing it. Changing this culture from a manager’s perspective is an interesting one.

What are your own aspirations for the future of Western Province?

This is probably the wealthiest province in PNG in terms of revenue per capita, but if you look at the physical side of the province it is probably the poorest in infrastructure development and services. We need to leave a positive sustainable legacy.

 ‘This is probably the wealthiest province in PNG in terms of revenue per capita, but if you look at the physical side of the province it is probably the poorest in infrastructure development and services.’

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We are fortunate now we have a very good Provincial Administrator who is working very closely with us and we are also engaging far more positively with PNGSDP, partnering with them and using our management and engineering capacity in the Province to get projects implemented. Going forward, we are interested in influencing infrastructure development, and roads in particular because roads enable commerce. Down at Aiambak, OTDF has a rubber nursery and there are thousands of seedlings. We set up the plantations and the villagers tap them, but for them to get the rubber from Lake Murray to Kiunga takes 18 hours via river. We need to provide the roads; the villagers won’t tap the rubber now because all their income goes towards freight. Once you start to enable commerce, the people are pretty industrious.

Another enabling project is power. We are fortunate that there is gas down at Stanley near Kiunga. Here at Ok Tedi, we have hydropower with diesel back up. Power is very expensive because of the diesel: if our hydro is down, we can consume half a million litres of diesel a day. We have to bring it from Port Moresby, 800 km up river to Kiunga and 150 km up the road. We have to have enabling transmission line infrastructure between Kiunga and Tabubil so that, when gas comes on in 2013, a combination of parties can turn the gas into electricity. Once you have that, you have 29 villages with power at a reasonable price then it can spread out. Up until now, we have been producing the electricity in Kiunga and giving it away for free. We are starting to change that. The infrastructure that enables commerce is the next step forward.

This article first published in PNG’s Western Province 2012

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