Post Courier | April 16, 2018
PARLIAMENT has made amendments to the Ok Tedi Agreement to allow the company access to US$35 million (K116m) to sustain its operations and growth.
Prime Minister Peter O’Neill, who introduced the Ok Tedi Continuation, Ninth Supplemental Agreement Act in Parliament last week, said Ok Tedi Mine Limited is obliged to establish a reserve account to be kept in US dollars in an account approved by the company and the State.
He said to meet that purpose a fund (referred to as the financial assurance fund, or FAF, was established. The sole purpose of the FAF is to ensure funds are set aside to meet the mine closure obligations.
“On a regular basis (every four years from the time it was first done in 2009), Ok Tedi Mining Limited reviews the mine closure liability, with such review being independently audited, and submitted to the MRA and CEPA for approval,” Mr O’Neill said
He said the most recent review and audit was completed in 2017 with the approved mine closure estimate being $196 million.
He said the FAF currently has a balance of approximately US$231 million and is therefore over funded by approximately US$35 million.
“OTML, operating as a commercial entity, has high value opportunities to better use those funds for sustainment and growth investments in the business, and would like the ability to withdraw excess funds subject to approval by the State.”