NATIONAL ACHIEVEMENTS

NEW PORGERA DEAL BRINGS GREATER SHARE TO PNG.

A new deal has been brokered between the Government of PNG and Barrick Nuigini Limited for PNG to get a fair share of benefit from the Porgera gold mine.

Before the Government acquired this new 20-year special mining lease, it had no stake in the joint venture. The Government’s plan not to renew the previous lease over the mine was to gain a greater share for the country. Under the previous Porgera Joint Venture, Barrick Gold had 47%, Zinjin mining had 47.5% and the Enga Provincial Government held just 2.5% and the Porgera Landowners also 2.5%.

Under the new deal, the equity split is 51% and 49% in favour of PNG stakeholders and the opportunity for landowners to increase their equity beyond with the additional 10% free equity paid for by Barrick.

Enga Governor and People’s Party leader Sir Peter Ipatas described the Marape led Government as bold and decisive in negotiating a new deal for the country.

“I am proud to say that Enga Province has supported those efforts,” he said.

In January this year, Enga Provincial Executive Council endorsed a new proposed framework for the mine affirming that it is an important step towards reopening the mine this year.

Porgera Gold Mine started operations just after the shutdown of the Panguna Mine in Bougainville, Porgera opened in 1990 and began producing a million ounces of Gold a year.

At the time, the government owned 20% of the Ok Tedi Mine and 19.1% of the Panguna mine in Bougainville.

Porgera has had a rich history dating back to 1938 when alluvial Gold mine was first reported through early exploration. The first European contact with the Porgera area was in late 1938 when gold was discovered in Porgera River by John Black in March 1939. The mine began production in 1990 and was developed and operated by Piacer Dome which was acquired in 2006 by Barrick Gold.

Porgera has become a Government priority as part of its take back PNG policy under Prime Minister James Marape.

In April 2021, during the signing of the new agreement with BNL Marape said the new agreement does not give away any tax concessions, which means the state is able to collect taxes upfront.

“There is an applicable 30% Corporate Income Tax to the project. An additional 2% is paid for fiscal stability which had previously been conceded by the State will now apply,” he said.

Marape said that in terms of community obligations, Barrick will pay US$3million (K10.6m) annually for 10 years to Porgera Sustainable Development Fund and a further US$15million (K53.3 million) upfront to appropriate categories of Landowners.

“The biggest possibility in the agreement is that the state retains the right to acquire the full 49% of the shares in 10 years’ time at fair value and that Barrick will finance the required start-up of the mine, “ Marape added.

To this date, the mine is not yet operational but necessary steps are being taken to open the mine but with the hike in gold prices, the PNG Government is set to benefit well from the new Porgera deal. Sir Peter Ipatas has called n all Porgera landowners to unite and support the Government’s new vision for Enga Province and the country.

Ends//

18th March 2022