The suspension of a second mine in Papua New Guinea has highlighted the impact of the El Nino drought, which is also severely affecting the agriculture industry. Just how long the drought continues for will determine the long-term effects, according to Paul Barker, the Executive Director of the Institute of National Affairs.

Drought Severity Map, 16 October, 2015.Credit; PNG Government Rapid Assessment Team.

The second mine to be suspended because of the drought is the Porgera gold mine in the Highland’s Enga province.

Barrick (Niugini) Ltd, the PNG subsidiary of Canadian gold major Barrick Gold Corp, announced it was suspending operations due to low levels of water in the mine’s reservoir, used in processing the raw ore.

The suspension of Porgera follows just two months after Barrick sold half of its stake in the mine to China’s Zijin Mining Group for almost US$300 million.

It also follows the suspension of operations at the Ok Tedi copper mine in August, due to low levels in the Fly River.

‘The very unusual extended dry conditions that we have seen in recent months have meant that our supplies of production water have run very low, and we have made the decision to shut down our milling and processing plants for the time being to conserve our water supplies,’ said Barrick Niugini.

The UN predicts this El Nino, which began in May 2015, will continue into early 2016.

Palm oil

A dry river in the Highlands. Credit: Tok Pisin service, Radio Australia

A long drought is likely to have significant impact on oil palm production, particularly on New Ireland and New Britain and possibly in Oro and Milne Bay provinces, says the Lowy Institute’s Mike Bourke.

New Britain Palm Oil Country Manager Robert Nilkare says the lower-than-average rainfall has resulted in delays to the company’s replanting program and palms are showing various degrees of water deficiency stress.

‘Our sites at West New Britain, Ramu, Higaturu, Milne Bay and Poliamba have experienced much lower rainfall than usual since the dry weather pattern started in June.

‘Any assistance the Government can offer the agriculture sector in terms of subsidies in fuel and fertiliser, and stronger protection of local industries such as sugar would be beneficial to the people and the country post-El Nino and into the future,’ he said.

But it’s not only the big growers who are affected.

The Chairman of Popondetta Oil Palm Growers Association in Northern Province, Dickson Lomas Daima, says farmers are being hit by a slumping palm oil price, which had dropped below the base market price of K150 per tonne.

He has called on the Government to immediately establish a stabilisation fund to support the oil palm growers in the country.

The Smallholders Extension Support Manager of Hargy Oil Palm Ltd, Chris Tondiwi, has told the Post Courier small growers in West New Britain Province are facing disaster, with food crops drying up, staple crops like taro, sweet potato, tapioca and bananas are producing very little and fires burning gardens.

Coffee

However, the dry conditions have helped the country’s coffee industry, according to John Edwards, General Manager of PNG Coffee Exports. He says the dry conditions have produced a good amount of flowers in some parts of the Highlands, although the plants will need rain in a few weeks’ time to cement a good crop.

The Institute of National Affairs’ Executive Director Paul Barker says the recovery will totally depend on when the drought breaks.

‘If the drought ends soon, recovery would be relatively quick, given suitable support (propagation and distribution of planting materials and so on), but if it lingers on into the New Year we’re into a new agenda, and it would hurt both food and cash crops for a long time,’ he told Business Advantage PNG.

Government response

Prime Minister Peter O’Neill meets drought-stricken farmers in the Southern Highlands. Credit: PM’s office.

The government has acknowledged the problem. Prime Minister Peter O’Neill has warned the current crisis could get even worse, but rejected criticism his government had not done enough.

The government has allocated up to K25 million (US$8.5 million) to conduct four inter-agency rapid assessments, and has provided emergency relief supplies to Western Highland, Enga, Southern Highland and Chimbu provinces, consisting primarily of supplies of rice and tuna.