Barrick Niugini, the majority owner and operator of the Porgera gold mine, has announced that it will be retrenching most of its workforce over the coming weeks. Meanwhile, Papua New Guinea’s government seems intent of finding a new operator for the mine.
River sampling. Credit: Porgera Joint Venture
Barrick Niugini said that, despite the government’s 24 April decision not to extend the company’s special mining lease, it had maintained its Porgera workforce ‘on a temporary basis in the hope that the dispute over this decision could be resolved’.
But the President and Chief Executive of Barrick Gold Corporation, Mark Bristow, said this had led to a ‘financially untenable situation for the company’. He cited the PNG government’s alleged repeated refusal to ‘enter into meaningful discussions about the issue’.
Bristow said only essential services personnel required for the care and maintenance program would be retained.
‘We understand that the loss of employment will have a significant impact on workers, their families and the Porgera community, as well as on the economy of Enga Province and the nation,’ he said. ‘We sympathise with them and we share their frustration at the situation the government has created. We will continue diligently to seek a resolution to this issue.’
‘The government intends to reopen the mine under a new arrangement with a new operator as soon as the court issues are settled with Barrick.’
According to Barrick, most of the 116 expatriate employees have already been retrenched, while 2650 PNG nationals will have their employment terminated prior to the end of July at a projected cost to the company of K180 million (US$52 million).
The PM responds
In a letter responding to concerns expressed by the PNG Road Transport Association, Acting Chief of Staff in the Prime Minister’s office, Lamech Palaso, said that the government had ‘anticipated a smooth transition to a new operator’, and that this would have occurred ‘without interruption to the mine operations and business flow’.
‘The government strategy is based on a philosophy that privately owned mining companies, whether multinational mining corporations or locally owned, have nothing special to offer PNG.’
‘The government intends to reopen the mine under a new arrangement with a new operator as soon as the court issues are settled with Barrick,’ the letter said. It claimed that the government would be considering freight subsidies and SME loan facilities to support the transport sector once the ‘court action is settled.’
The disputing parties are due back in PNG’s National Court in July.
Earlier this month, Parliament amended PNG’s Mining Act in a move that looks likely to make it easier for the State to play a more active role in mining sector.
Industry concerns
Meanwhile, Gerea Aopi, President of the Chamber of Mines and Petroleum, has reportedly said that recent amendments to the Mining Act ‘diminish the role of foreign and local private sector investors with privileges accorded to Kumul Minerals or other state-owned entities.’
He said the changes ‘increase tenure risk for existing exploration tenement holders,’ noting that ‘many’ are Papua New Guinean explorers, who may have to offload development rights to a state entity.
‘The government strategy is based on a philosophy that privately owned mining companies, whether multinational mining corporations or locally owned, have nothing special to offer PNG and that exploration and mining can be more profitably conducted by state-owned companies,’ Aopi added.
Gold prospects
Porgera gold mine. Credit: Barrick
In spite of Porgera situation, gold miner Barrick Gold appears to be in a strong position financially. The company’s share price has increased from $US12 in May 2019 to $US25.73.
According to Forbes, the company’s merger with mining giant Randgold Resources in early 2019 has sharply increased the company’s gold revenues. The spread of the coronavirus is ‘proving to be a boon for major gold miners like Barrick Gold,’ said Forbes.
According to Fitch Ratings, China’s Zijin Mining, the other joint venture partner in the Porgera mine, plans to ‘ramp up gold production from its other assets to make up the shortfall from the potential loss of Porgera.’
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Hope and pray that God will decide using our God fearing leader Jame Marape for the future of Pogera. Barrick have to leave
It not just about the mining lease. Does the government has the money to buy the equipment?
BNL has a contractual obligation to remove all equipment if it’s not purchased. Who going to buy the equipment? It’s also has obligation to remove all buildings. The government end up with nothing. Who will support all the people who rely on the mine for a income while decision Les are being made.
This is a step forward for Porgera people, the Enga Prov. Govt and PNG as a whole.. we can give a try here rather then if later who will do it..
Papua New Guinea government step in and run the show the resources is in our country, do the same as OTML try own/operate mining company for our own as an asset for Papua New Guinea
It’s PNG gold. It’s our gold. We make the decision. It’s the gold that pays for everything not the company. And yes, the government is the people no matter what. Let’s fight for something real now.
Let’s all support PNG through National Empowerment.
Thank you.
Here comes the Chinese
Gutpela
We stand by the words of PM, “short term pain for long term gain”.
#Enoch philip#
You have not seen whats yet to come you have the services there today becouse of BNL not the government the government services stop at wabeg and never reached you so who maintains the road from wabeg to hagen to porgera that allows services to reach you?who gives you the power to sleep under light?government??
Watch what happens after 27th july then see who takes care of you..
You can never servive without BNL and nor will all of you see any benefits as it all started with one mans greed your land owner leaders have made you to suffer now also will the government let you down as shares will never be as the sugar talks spoken.
Tingim money em god blo ground ya ol tupla man go pass ba kism upla ogeta ba keke pekpek tasol.
With Barrick no powerline to Porgera, No road sealing to Porgera, No resettlement for SML Landowners..By virtue of a Special Mining Lease given to a Developer NO LANDOWNER REMAINS IN THE SML AREA.THEY MUST BE RELOCATED..THATS THE MEANING OF “SPECIAL MING LEASE” SML
..HOW IN THE WORLD DID BARRICK ALLOWED PEOPLE TO LIVE ONTOP OF A UNDEGROUND MINE..WHERE EVERY DAY IS A NIGHTMARE.?
K500 MILLION ROYALTY TO LANDOWNERS IN 30 YEARS?..THATS K50 A MONTH FOR 10,000 SML POPULATION….IS THAT EQUAL LANDOWNER PARTICIPATION?…
BARRICK HAS BEEN TORTURING THE LANDOWNERS, EPG AND THE STATE..ONLY PORGERA WAS BIG ENOUGH FOR ALL OF PNG 4 MILLION ..ONLY NOW 8 MILLION
PACK UP AND GOOOOOOOO…BARRICK IS NOT A GENUINE DEVELOPMENT PARTNER OF PNG..IF IT WAS THE LANDOWNERS WOULD HAVE BEEN RELOCATED TO ELSEWHERE..BUT BARRICK MANIPULATED THE MOA AND MDC..SHE SILENTLY SANG THE VICTORY SONG ALL NIGHT LONG AND CONTINUED FOR 30 YEARS UNTIL “TAKE BACK PNG”
Enga need money, Png need money. The png kina value is not good at all. Now it’s time for Png to step up. Thank you Png government. Do the right thing. God will be with you Png.
Another Venezuela…
If any one is to suffer, it is Barrick, its employees, its few contractors including transporting companies. Otherwise everyone is ok.
Barrick made more than enough to survive. Its the PNG stakeholders and peo people who will feel the pince because of one man’s lunacy to make PNG RICHEST BLACK CHRISTIAN COUNTRY under his slogan TAKE BACK PNG..PNGeans be prepared. The worst is yet to come. Only then we will know the real truth..
Indeed
This will have zero impact to the people of Enga and its economy because we have neve seen any tangible benefit from Barrick for the last 30 years in operation. We can still survive without Barrick.