Tag Archives: MRDC

Ok Tedi funds not safe: MRDC a milking cow for people in Waigani

O’Neill clears air on K200m mine fund

The National aka The Loggers Times | 18 July 2018

PRIME Minister Peter O’Neill told Parliament yesterday that well over K200 million from OK Tedi Mine is currently accumulating in the Community Mine Continuation Agreement (CMCA) and non-CMCA trust accounts for the people of Western.

He said this in response to questions from Middle Fly MP James Donald on why Government had made a decision to transfer money in the CMCA and the non-CMCA trust accounts to Mineral Resource Development Company (MRDC).
Donald said he was very concerned because MRDC was a “milking cow” for people in Waigani.

“I asked the prime minister earlier on and he had given me and the people of Western province assurance that the funds were in safe hands,” he said.

“An NEC decision in June 2017 has stated that after the audits of the CMCA and the non-CMCA trust accounts, the balance of the funds, will be transferred to MRDC.

“I am very concerned that the prime minister has lied to me and the people of Western.

“MRDC is a milking cow for Waigani people and the funds are now in the wrong hands.”

O’Neill said what the Government tried to do was to correct gross mismanagement and misuse of funds in the CMCA and non-CMCA trust accounts over the past years.

He said hundreds of millions of kina belonging to Western people under CMCA and non-CMCA trust accounts had been mismanaged over the years.

“Those funds have never reached the people,” O’Neill said.

“That’s why we are trying to correct and stop this nonsense going on.

“The government has put a ban on the CMCA and non-CMCA trust accounts and conducted an audit.”


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Resource Owners Welcome PM’s Address

PNG Prime Minister Peter O’Neill (AAP)

“Their statements are a truthful admission and acknowledgement of the injustices suffered by the landowners of major resource exploitation projects in the country since colonisation”

Post Courier | April 4, 2018

The president of the Resource Owners Federation of PNG Jonathan Paraia has welcomed sentiments expressed by two important persons in the mining and petroleum sectors of the country.

Mr Paraia claimed that Mineral Resources Development Company (MRDC) managing director Augustine Mano and Prime Minister Peter O’Neill have expressed disappointment in the current benefit sharing arrangement between resource-owners, the government and resource developers.

Mr Paraia praised the Prime Minister and Mr Mano for their views on landowners and Papua New Guineans not benefitting enough and participating in the development and extraction of their mineral and petroleum resources.

“Their statements are a truthful admission and acknowledgement of the injustices suffered by the landowners of major resource exploitation projects in the country since colonisation,” Mr Paraia said.

He said the State laws on acquiring ownership of all minerals and petroleum resources held under the surface of the land without paying just compensation to the customary owners is unjust.

Mr Paraia said it was first introduced by the colonial governments and later adopted by the Independent State of Papua New Guinea, even though those laws are in breach of Section 53 (prohibition of unjust deprivation of property) of the Constitution of Papua New Guinea.

He said although a United Nations declaration in 2007 resolved for member governments to remove such unjust laws and restore the ownership of all land and resources acquired by the member States without paying compensation to their traditional owners.

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Benefit Sharing Resonated At 2nd Petroleum And Energy Summit

Protest over the sharing of benefits from the PNG LNG project

Post Courier | March 22, 2018

The 2nd Petroleum and Energy summit in Port Moresby concluded yesterday with many local presentations condensed around the need for better benefit sharing arrangements for PNG.
Several industry players in the country including Kumul Petroleum Holding Limited (KPHL), Mineral Resources Development Company (MRDC) and the Gas Project Coordination office called for greater benefits for gas landowners, host provincial governments and the State to reflect the equity sharing arrangement in the mining industry.
Also in line with the greater benefits is the opportunity for domestic market obligation to be made mandatory, a lesson learnt from the PNG LNG project to help in the growth and development of the Nation.
In relations to equity and royalty distribution, the State is entitled to 22.5 percent from gas while in the mining the State’s equity is 30 percent.
From the 22.5 percent equity, a two percent draw-down is offloaded to landowners, important stakeholders in terms of project security while in Mining five percent is offloaded to landowners.
In this distribution arrangement, the state has to cater for the overall population of the country, while the landowners’ benefits are then subdivided and shared among the different beneficiaries.
During the recent Petroleum and Energy Summit, director of the Gas Coordinating office, Peter Koim said the 22.5 per cent is insufficient.
He said: “I think the state equity in petroleum projects is insufficient, I think there is a room for 30 percent equity by Government, or if not, put five percent on market for other PNG companies to buy to all the rest of PNG to participate and benefit from their resources as stipulated in the constitution,” he said.
Managing director of MRDC, Augustine Mano agreed that the two percent free carry from the State equity for the landowners is insufficient and when distributed among the beneficiaries, it is insufficient.
He said there is a need to change the equity percentage distribution for equal footing benefits by increasing the percentage.
He added that provincial governments have been excluded in the equity benefits sharing arrangement and the change should also look at including the provincial government as beneficiary and equity participant and also to increase the equity benefits for the landowners, something the state and the development partners can sit and discuss.
While the monetary benefits are not enough for the beneficiaries including the State, there is also a need in all agreements to capture domestic market obligations (DMO) for the benefit of the country.
It is a decision that the Government will maintain to ensure there is provision for DMO in any future agreements, Communication and Energy Minister Sam Basil told potential investors during the summit.
Minister Basil said if there is no DMO in a project agreement then there will be no project. If any investor that wants to invest does not agree with the DMO, then they are not welcome.
Kumul Petroleum Holding Limited managing director Wapu Sonk said his company is committed and would want the country to benefit from its resources through the development of further LNG in PNG.
He said to meet the Government’s policy as captured in the Vision 2050, about 70 percent of the country’s household should be powered but so far only 15 percent is covered.
Therefore he said KPHL believes in gas reserves to allow for clean and cheap gas for energy to supply the domestic market to meet the vision of the Government.
KPHL as the mandated entity to deal, manage and negotiate on behalf of the State on all petroleum developments issues, will need to diversify the use of LNG for energy needs in the country.
He said besides the household energy needs, industrial development is critical for the long term to provide employment and open up opportunities and the diversification for the extractive industries through the DMO.
Although there is no policy provision catered for domestic market obligations, the new White Paper gas and energy policy submission would cater for the inclusion of it in all future projects.
This includes the third party pipeline access, an opportunity for the state company to develop LNG stranded fields to use existing pipeline for the domestic consumption for energy and other petroleum products.
Mr Sonk said a recent study carried out shows that they can optimise the opportunities to serve the domestic needs.
Out of 10 industries, the basic industries (mostly agricultural) needs more energy usage and the role of KPHL is to look at domestic market to have enough gas to underpin development using gas from stranded fields, by accessing the existing pipeline (third party pipeline access).
Mr Sonk said so far KPHL with a joint partnership argument with Oil Search are building a 57.8 MW gas power supply plant in Port Moresby, through their joint venture company NiuPower to meet the energy needs in the city.
He added that the two companies have entered into another joint venture to distribute domestic LNG throughout the coastal towns of PNG, also through NiuEnergy.
According to Sonk, they hope to invest in a domestic LNG vessel to distribute fuel and other domestic LNG throughout PNG to meet local demand.

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Flaws In Landowners Benefits says Mano

Jeffrey Elapa | Post Courier | March 21, 2018

There are fundamental errors in the distributions of the royalties and equities to the landowners and provincial governments, Mineral Resources Development Company managing director Augustine Mano said.

Mr Mano said MRDC as the fund manger of the petroleum and mining equities of landowners believes the distribution and percentage given to the landowners and provincial governments were not sufficient when distributing the shares to the many groups.

He said the 2 percent was not enough and there was a need to relook at the benefits for the provincial governments and landowners,

He said in the mining projects, the landowner equity was about 5 per cent and another 25 per cent for the state, a total of 30 per cent but in the petroleum projects it was not the case.

He said after 26 years there was a need to change the way benefits were going to the affected landowners and provincial governments.

He said a benchmark was set in the Kutubu oil project, the first petroleum project when it was given 6.75 per cent where the landowners were given 4.05 per cent equity and provincial government 2.7 per cent but that was never followed in subsequent projects.

“In the petroleum projects like Moran, Gobe and Hides, the provincial governments have missed out equity and there is a need to increase equities to cater for the provincial governments and also the equities for the landowners,” Mr Mano said.

He said that ttimes and expectations had changed over time and needs a complete change in the way the equities and royalties had been offered to the landowners and the provincial government with the increasing in demand.

Mano said another project was that the landowners’ identification was a major problem which the stakeholders should address before production.

He said as a result, more than K450 million was still parked in the trust account because the matters had gone back to court following the failure of the State and the developers to do proper identification.

“You are dealing with my landowners who are voiceless and they have to have sufficient funds,” he said.

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Proposed policy to declare mining revenue

Cedric Patjole | PNG Loop | October 9, 2017

The Department of Mineral Policy and Geohazards Management (DMPGH) says it is working to introduce a policy for stakeholders in the mining industry to declare any revenue received or made from mining projects.

Secretary Harry Kore told Loop PNG that the policy idea came about during consultations for the Revised Mining Act.

He said while there are reports of mining revenue generated, a lot of locals impacted by mining activities claim to not see any tangible results.

Kore said the policy will ensure stakeholders such as provincial governments, authorities such as the Mineral Resources Authority (MRA), Mineral Resources Development Cooperation (MRDC), as well as landowner association chairmen and landowner company CEOs declare revenue received for the bene t of all.

“You fail to do that and you will be held accountable and you will be penalised under the law. So it becomes a practise. Every quarter they just declare their interest. We know that so much money goes to our landowners but whether it trickles down to the peoples is another thing,” said Kore.

The policy idea is similar to a draft legislation currently being drawn up by the PNG Extractive Industry Transparency Initiative to make mandatory all revenue from the mineral, petroleum and gas sectors to be fully disclosed as per good governance standards.

Kore said they are yet to have formal discussions regarding the policy idea however, there is cooperation and the policy complements that of the work the EITI is undertaking.

Secretary Kore added that one of the agendas of the policy is to ensure there is sustainability in how revenue is invested back in the country.

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MRDC Joins PNG EITI Multi Stakeholder Group

The Mineral Resource Development Company has joined EITI – but the last Annual Return MRDC filed with the Registrar of Companies was for 2012 – and even that was done five years late! 

Shows their commitment to transparency and good governance!

What a joke EITI is!

Post Courier | June 1, 2017

Mineral Resources Development Company (MRDC) has joined the Papua New Guinea Extractives Industry Transparency Initiative (PNGEITI) multi-stakeholders group (MSG).

MRDC acts as a trustee shareholder for beneficiary landowners and provincial governments as per provisions under the Oil and Gas Act, and the Mining Act.

“MRDC joined the MSG in 2016, following recommendations in the PNG EITI Report 2013.”

“As a result of increased engagement in the EITI process, MRDC provided data for the PNG EITI Report 2014.”

“Given the importance and value of the assets they hold for the people of PNG, we congratulate them for taking this step towards greater transparency,” PNG EITI head of secretariat Lucas Alkan said.

Mr Alkan in noting the important role MRDC played in managing revenues for landowners and provincial governments in resource projects said the public should to be made aware of the processes and channels that are involved in the disbursement of benefits.

“One way MRDC can become transparent on how much it receives and manages is through its active participation in the EITI process as a reporting agent as well as a MSG member,” Mr Alkan said.

“Landowner concerns over benefits from resources are sometimes topical and as a result misunderstanding arises from these.”

“We see that the MSG is becoming robust in its discussion and activities towards coming up with best options on improving the EITI reporting process.”

“And we see that this can make way for greater transparency in the revenue management in the country,” Mr Alkan said

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Western Province people given 33% mining shares


The National Government has fulfilled its commitment gifting the people of Western Province shares in Ok Tedi Mine

Sounds great, but will the people actually see any improvement in their lives?

Charles Yapumi | LOOP PNG | January 23, 2017

The historic benefit sharing agreement (BSA) signing happened in Alotau on the weekend between the six mine area villages and the 152 villages from the Community Mine Continuation Agreement (CMCA) regions will share the 33 per cent direct equity interest in OTML. 

The National Executive Council’s (NEC) decision relating to the granting of the free equity was made in 2014.

The benefit sharing Memorandum of Agreement (MoA) took over two years of negotiation amongst landowners, the Fly River Provincial Government and the State.

The breakup of the shares will see CMCA group owning 12 per cent, the Mine Area Villages 9 per cent while the Fly River Provincial Government (FRPG) will own 12 per cent.

 “Now you’ve got one third direct participation. It is for the first time in the history of this country and it’s a big decision the Government has made for landowners to have direct participation in OTML,” Chief Secretary to the Government, Isaac Lupari said.

According to the MoA signed, 40 per cent of the benefits from the respective shares will be paid in cash to landowners while the other 40 per cent will go towards investment purposes and 20 per cent will go towards infrastructure development programs and projects.

MRDC’s Managing Director Augustine Mano said it was not an easy part but to manage the interests is a huge responsibility on MRDC.

“Thank you for the confidence given to us to manage your interest. We will do our best. We will not let you down,” Mano said.

The Fly River Provincial Government is yet to sign the MoA and will do so at a later date. Once all parties have signed, the agreements will be submitted to NEC for approval for the transfer of the shares in OTML.

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