Developers Newcrest Mining and Harmony Gold have signed a memorandum of understanding with the Papua New Guinea Government for the development of the Wafi-Golpu copper-gold mine in PNG’s Morobe Province. While the MOU indicates negotiations are proceeding well, there is still plenty of work to be done before the project gets a green light from government, local communities and investors.
A Development Forum for the Wafi-Golpu mine held in July 2018. Credit: WGJV
Last week, Newcrest Mining Limited (Newcrest) and its Wafi-Golpu Joint Venture (WGJV) partner Harmony Gold signed a memorandum of understanding with the State of Papua New Guinea over the US$2.8 billion (K9.1 billion) Wafi-Golpu copper-gold project.
Newcrest’s Sandeep Biswas
While the MOU is not a final memorandum of agreement on the mine, Newcrest described it as ‘an affirmation of the parties’ intent to proceed with the Wafi-Golpu Project, subject to finalisation of the permitting process and Newcrest and Harmony Board approvals.’
Under PNG’s 1992 Mining Act, all mining projects in PNG are subject to a lease, which can granted by the government once specified studies and approvals have been completed and permits obtained. Large mine projects with a life of over 20 years, such as Wafi-Golpu, are subject to a Special Mining Lease.
‘The MOU does not determine any issues of benefit sharing between the National and Provincial Governments or landowners’
The MOU establishes the framework for the parties to progress the permitting of the Wafi-Golpu Project ‘as quickly as practicable’ with a view to achieving a Special Mining Lease by 30 June 2019.
‘We have been working constructively with the Government of Papua New Guinea to progress permitting of the project and recently achieved key milestones in this process with completion of our Feasibility Study Update in March 2018 and Environmental Impact Statement in June 2018,’ said Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas in a statement. ‘This MOU builds on that progress and captures our joint understanding of the terms and timeline that we are working towards.’
Benefits sharing
A key component of any final agreement will be a determination on how the direct and indirect benefits of the mine will be shared between government, local landowners and the developers. This process is ongoing, as the developers were keen to emphasise this week.
‘The MOU does not determine any issues of benefit sharing between the National and Provincial Governments or landowners: it only deals with matters between the PNG State and the Developers,’ said Grant Batterham, WGJV General Manager, Social Performance & External Affairs. ‘All matters relating to Morobe Province and the landowners are being dealt with via a separate negotiation and consultation process.”
The clarification was issued in response to concerns expressed local government and community groups in Morobe Province.
‘The main opportunity for Provincial and landowner and aspirations to be discussed is through the Development Forum process facilitated by the Mineral Resources Authority,’ he went on to say. ‘Unfortunately, this process was suspended by the Government of PNG following a court injunction that was issued in August 2018, which arose from an unrelated internal dispute within one of the SML Landowner communities. This injunction has been lifted just this week, and the WGJV looks forward to seeing the Development Forum resume as soon as possible.’
The benefits-sharing agreements reached through the Development Forum process will be documented in a final memorandum of agreement.
Where or how can I obtain a copy of the MOU?
The contract agreements are formalities but main issues still outstanding is the AGREEMENT between the State of PNG and the WGJV CO about the Environment Plan approval for operation. Many stake holders have not agreed on the proposed “deep sea tailing placement” method. The developer WGJV CO needs to provide 2 or 3 alternatives for the stake holders to chose. the DSTP is out of date and is not appropriate to the habitat of Lae & Huon Gulf waters. The EP is very risky and vulnerable to many stake holders in particular the subsistence and commercial fisheries sector and the local maritime people in the region.
See attached protest note from MFCS (Morobe Fisherman Corporative Society)