ENGA Governor Peter Ipatas has called for a review of the Mining Act and mineral policy to ensure fair and equitable distribution of benefits to resource owners.
He said resource owners were not benefiting because of unjust exploitation of their minerals.
The current mining policy was being driven by the industry and did not benefit local resource owners, Ipatas said during the Highlands regional mineral policy and legislative reviews and sector policy development forum in Mt Hagen yesterday.
He added the Government did not have the capacity to properly monitor and regulate the mining industry, resulting in the ongoing disputes between the state, project developers, provincial governments and landowners.
“There is a serious lack of policy direction to cover many new issues arising in the industry, leading to ongoing issues and disputes that require government intervention and direction,” Ipatas said.
“The lack of visible socio-economic development and public infrastructure investments in resource provinces leading to perception, that the resources development projects are promoting local economic activity and sustainable development and earning of mineral exploitation may have been squandered.”
The governor said in the case of Enga, the Porgera gold mine was commissioned at the time of the Bougainville crisis.
He said the mine had brought substantial revenue for the developer, Porgera Joint Venture (PJV), and made available much development resources to the national, provincial and the local communities for more than 12% of PNG’s gross domestic products (GDP) for the last 20 years.
“The Porgera mine was issued a 30 year Special Mining Lease (SML) and was expected to wound up in 2008 with actual closing in 2012,” he said.
“However, the mine life has been extended until 2023 with further explorations yielding good results with consequence that mine would extend.”
Ipatas said PJV in 1989 estimated that it would mine 8.98 million ounces of gold, earning K3.143 billion during the mine life.
“Of the large earnings, the distribution of benefits has not really been equitable for the Enga provincial government and Porgera landowners,” he said.
“From 1990 to 2012, the provincial government received about K204 million in royalties, special support grants (SSG) and so and this is about 1% of the total earning.”
He said apart from that about K52 million in SSG to the provincial government was still outstanding.
Ipatas said from 1990 – 2012 the provincial government has received K204 million in royalties, SSG and others, since 1990 which is only a 2% of the total earning.
“What I’m asking now is can a 3% of earning be distributed among the provincial government and the landowners,” he said.
Ipatas said this clearly showed that landowners and the state did not get much benefit from the minerals and resources extracted from the soil.
“The government needs to ensure that there is an equitable sharing of benefits of the exploitation of the mineral resources,” Ipatas said.
He said the role of the government in regulating the distribution of mineral wealth derived from their development was very important in any mineral policy framework.