The decision by the Marape-Steven government not to extend the Special Mining Lease on the Porgera gold mine is headed for the courts after the National Court of Justice at Waigani ordered both parties to have discussions to resolve the matter.
Porgera gold mine. Credit: Zijin Mining
Further to the Marape government’s decision not to renew the special mining lease for the Porgera gold mine, legal proceeding are now under way, following an application to Papua New Guinea’s National Court by the mine’s operator, Barrick (Niugini) Limited.
A statement by the Waigani court ordered both the National Government and Barrick (Niugini) Limited (BNL) to work together to ‘ensure that the environment, the integrity of the mine and its land and the rights and interests of the landowners’ are not compromised.’
The statement adds that if the parties cannot reach an agreement by this Friday 8 May, the court will appoint an Accredited Mediator ‘to act as an independent facilitator for their further discussions and negotiations.’ It also called for media and social media outlets to ‘refrain from commenting on this matter’.
In response, BNL released a statement welcoming the court decision.
‘The Court has also ordered that the current status of the mine remain in place, with the developer continuing to maintain the mine infrastructure and assets,’ the statement says.
‘It will undoubtedly impact future investment decisions in PNG – not just within the petroleum and mining industry.’
Zijin Mining, the Chinese company that has a 47.5 per cent stake in the Porgera mine, had already written to Prime Minister James Marape expressing its concerns.
‘If Zijin’s investment in Porgera mine is not properly protected by the PNG government, I am afraid there will be significant negative impact on the bilateral relations between China and PNG,’ Chen Jinghe, Chairman of Zijin’s board, said in the letter.
Ramifications
Zijin Mining’s Jianhua Wang, with Barrick Niugini’s Ila Temu in 2015.
Meanwhile, the PNG Chamber of Mines and Petroleum has expressed concern at the potential impacts of the decision on the PNG economy and international investor confidence in PNG.
‘The Chamber of Mines and Petroleum is firmly of the belief that optimal outcomes for PNG’s national development will come about when the National Government and investors work together to attract capital and bring expertise, training and employment into the resources sector, whilst ensuring a fair return for all parties and helping build a resilient and diverse PNG economic base,’ a Chamber of Mines statement says.
The Chamber of Mines statement says the decision not to renew the Porgera license will have ‘long-term ramifications in terms of global investor confidence’ and threatens the future of the mining industry, which, it says, ‘still has huge potential to continue providing benefits to PNG government and citizens and the country’ in the future.
‘It will undoubtedly impact future investment decisions in PNG – not just within the petroleum and mining industry.
‘In these difficult economic times, PNG needs to remain an attractive investment destination to ensure the PNG economy continues to grow, and prosper and provide opportunities for landowners and citizens, while maintaining the ability to service the nation’s greatly increased public debt burden.’
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