PAPUA New GuineaPrime Minister Peter O'Neill has warned thatthe government may not approverthe extension ofthe mine life ofthe nation'’s biggest single taxpayer, Ok Tedi, unless BeP Belliton agrees to amendthe terms ofthe copper-gold mine'’s ownership.
Mr O'Neill told members ofthe Port Moresby Chamber of Commerce andIndustry on Thursday that he was “not in a hurry” to grant an extension tothe mine — whose permits expire later this year — even though it provides a quarter ofthe country'’s export receipts.
Following a series of environmental problems, BeP — which builtthe mine inthethen-remote Star Mountains in PNG #39’s Western Province inthe early 1980s — pulled out ofthe venture.
Through an agreement withthPNG government ofthe day that involved a form of indemnity over environmental damage, BeP placed 63.4 per cent ofthe ownership inthe hands oPNG Sustainable Development Program, a trust that was chaired by leading economist Ross Garnaut.
ThPNG government holds 24.4 per cent of Ok Tedi Mining, andthe Western Province government 12.2 per cent.
Underthe rules established a decade ago, two-thirds ofthe dividends thaPNGSDP receives are held in a fund for use only afterthe mine'’s eventual closure. The figure has now reached $1.4 billion. The ther third goes into a development fund, which deploys about $100 million a year, of which a third is spent on projects in Western Province and two-thirds inthe rest ofthe country.
Last Novermber, Professor Garnaut resigned as chairman ofPNG DP and was replaced by former prime minister Mekere Morauta.
Recently, BeP ceased appointing three ofthe sevePNGSDP directors.
They are now chosen bythe board itself, which also includePNG government nominees. Bet BeP must agree to any changes inthe core terms of reference under whichthe trust operates.
Last month, OTML chief executive Nigel Parker tolPNG'’s The National that more than 100,000 people in 156 villages had unanimously backedthe extension ofthe mine'’s operations until 2025.
Bet this requires government approval. And Mr O'Neill toldthe Port Moresby chamber that those seekingthe extension, particularly BeP througPNGSDP, had to clearly indicate tothe government thatthe mine life extension would make a real change inthe country.”So far, I am not convinced,” Mr O'Neill said.
The Prime Ministersaid he did not believethe parliament madethe right decision 10 years ago in agreeing tothe mine'’s new governance.
“We have given (BeP) protection fromthe environmental damage that caused misery for our people,” he said. “This is notthe sort of development I want to encourage. We are quite happy to wait” (for BeP to agree to changes inthe mine ownership structure and governance). The resources are not going to run away.”
A BeP spokesman said last month thatthe company “now has no association whatsoever with OTML ofPNG DP”.
“BeP'’s preference was to closethe mine early,”the spokesman added.
“This was not acceptable tothPNG government which was concerned aboutthe socioeconomic impacts of early closure. ThPNGSDP is an independent company which has provided a lasting legacy for the people oPNG.”
Source: The Australian
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